# EDGAR Filing Document

**Accession Number:** 0001114448
**File Stem:** 0001104659-26-004591
**Filing Date:** 2026-1
**Character Count:** 208415
**Document Hash:** a857cc843a4f4f07024188ca729836fc
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001104659-26-004591.hdr.sgml**: 20260116

**ACCESSION NUMBER**: 0001104659-26-004591

**CONFORMED SUBMISSION TYPE**: S-8 POS

**PUBLIC DOCUMENT COUNT**: 5

**FILED AS OF DATE**: 20260116

**DATE AS OF CHANGE**: 20260116

**EFFECTIVENESS DATE**: 20260116

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** NOVARTIS AG
- **CENTRAL INDEX KEY:** 0001114448
- **STANDARD INDUSTRIAL CLASSIFICATION:** PHARMACEUTICAL PREPARATIONS [2834]
- **ORGANIZATION NAME:** 03 Life Sciences
- **EIN:** 000000000
- **STATE OF INCORPORATION:** V8
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** S-8 POS
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 333-198706
- **FILM NUMBER:** 26540085

**BUSINESS ADDRESS:**
- **STREET 1:** LICHTSTRASSE 35
- **CITY:** BASEL
- **STATE:** V8
- **ZIP:** CH 4056
- **BUSINESS PHONE:** 01141613241111

**MAIL ADDRESS:**
- **STREET 1:** LICHTSTRASSE 35
- **CITY:** BASEL
- **STATE:** V8
- **ZIP:** CH 4056

**As filed with the Securities and Exchange Commission on January 16, 2026**

**Registration No. 333-198706**

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**POST-EFFECTIVE AMENDMENT NO. 2**

**TO**

**FORM S-8**

**REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933**

**Novartis AG**

(Exact name of registrant as specified in its charter)

Switzerland N/A <br> (State or other jurisdiction of<br> incorporation or organization) (I.R.S. Employer<br> Identification No.)

**Lichtstrasse 35**

**CH-4056 Basel, Switzerland**

(Address of principal executive offices)

**Novartis AG Long Term Incentive Plan**

**Novartis AG Deferred Share Bonus Plan**

(Full title of the plan)

**Karen L. Hale**

**Chief Legal & Compliance Officer**

**Novartis AG**

**Lichtstrasse 35**

**CH-4056 Basel, Switzerland**

(Name and address of agent for service)

**+41 61 324 1111**

(Telephone number, including area code, of agent for service)

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ⌧ Accelerated filer ◻ Non-accelerated filer ◻ Smaller reporting company ◻

Emerging growth company ◻

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ◻

**EXPLANATORY NOTE**

This Post-Effective Amendment No. 2 (the "Post-Effective Amendment") to the Registration Statement on <u>Form S-8, File No. 333-198706</u> (the "Registration Statement") is filed by Novartis AG for the purpose of filing: (i) the Novartis AG Long Term Incentive Plan, adopted on January 22, 2014, and amended and restated effective January 1, 2026, as Exhibit 4.8 to the Registration Statement; and (ii) the Novartis AG Deferred Share Bonus Plan, adopted on January 22, 2014, and amended and restated effective January 1, 2026, as Exhibit 4.9 to the Registration Statement; and amending certain other sections hereto. No additional securities are being registered.

**PART II**

**INFORMATION REQUIRED IN THE REGISTRATION STATEMENT**

**Item 3.** **INCORPORATION OF DOCUMENTS BY REFERENCE**

The following documents previously filed with or furnished to the Commission by Novartis AG (the "**Registrant**") are incorporated by reference herein and shall be deemed to be part hereof:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Registrant's [Annual Report on Form 20-F for the year ended December 31, 2024, filed with the Commission on January 31, 2025](https://www.sec.gov/ix?doc=/Archives/edgar/data/1114448/000137036825000004/nvs-20241231.htm);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) our Reports on Form 6-K furnished to the SEC on [April 29, 2025](https://www.sec.gov/Archives/edgar/data/1114448/000137036825000010/a250429-6k.htm) (only with respect to (i) the information under "R&D update — key developments from the first quarter" in Exhibit 99.1 thereto and (ii) Exhibit 99.2 thereto), [July 17, 2025](https://www.sec.gov/ix?doc=/Archives/edgar/data/1114448/000137036825000012/nvs-20250630.htm) (film number 251128805) (only with respect to (i) the information under "R&D update — key developments from the second quarter" in Exhibit 99.1 thereto and (ii) Exhibit 99.2 thereto), [July 17, 2025](https://www.sec.gov/Archives/edgar/data/1114448/000117184325004531/f6k_071725.htm) (film number 251130806) (only with respect to the first full paragraph of the Press Release included therein), [October 27, 2025](https://www.sec.gov/Archives/edgar/data/1114448/000117184325006660/f6k_102625.htm), [October 28, 2025](https://www.sec.gov/Archives/edgar/data/1114448/000111444825000003/a251028-6k.htm) (only with respect to (i) the information under "R&D update — key developments from the third quarter" in Exhibit 99.1 thereto and (ii) Exhibit 99.2 thereto) and [November 25, 2025](https://www.sec.gov/Archives/edgar/data/1114448/000117184325007547/f6k_112425.htm).

All documents filed with the Commission by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 (the "**Exchange Act**") subsequent to the date hereof and prior to the filing of a post-effective amendment indicating that all securities offered herein have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference into this Registration Statement and to be a part hereof from the date such reports are filed.

Any statement contained herein or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes hereof or of the related prospectus to the extent that a statement contained herein or in any other subsequently filed document which is also incorporated or deemed to be incorporated herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.

**Item 8.** **EXHIBITS**

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| | |
|:---|:---|
| **Exhibit<br> Number** | **Exhibit** |
| [4.1\*](tm262520d2_ex4-1.htm) | [Articles of Incorporation of Novartis AG, as amended March 7, 2025 (English translation)](tm262520d2_ex4-1.htm) |
| [4.2](https://www.sec.gov/Archives/edgar/data/1114448/000137036825000004/a25013120f-ex1_2.htm) | [Organizational Regulations of Novartis AG, effective January 1, 2025 (incorporated by reference to Exhibit 1.2 to Novartis AG's Annual Report on Form 20-F as filed with the Commission on January 31, 2025).](https://www.sec.gov/Archives/edgar/data/1114448/000137036825000004/a25013120f-ex1_2.htm) |
| [4.3](https://www.sec.gov/Archives/edgar/data/1114448/000110465922127792/tm2227652d1_ex99-a.htm) | [Form of Second Amended and Restated Deposit Agreement among Novartis AG, JPMorgan Chase Bank, N.A., as depositary, and all Holders and Beneficial Owners from time to time of American Depositary Receipts ("ADRs") issued thereunder, including the Form of ADR attached as Exhibit A thereto (incorporated by reference to Exhibit (a) to Novartis AG's registration statement on Form F-6 (File No. 333-198623) as filed with the Commission on December 16, 2022)](https://www.sec.gov/Archives/edgar/data/1114448/000110465922127792/tm2227652d1_ex99-a.htm) |
| [4.4](https://www.sec.gov/Archives/edgar/data/1114448/000110465922127792/tm2227652d1_ex99-a.htm) | [Form of American Depositary Receipt (included as Exhibit A to Exhibit 4.3)](https://www.sec.gov/Archives/edgar/data/1114448/000110465922127792/tm2227652d1_ex99-a.htm) |
| [4.8\*](tm262520d2_ex4-8.htm) | [Novartis AG Long Term Incentive Plan, adopted on January 22, 2014, and amended and restated effective January 1, 2026](tm262520d2_ex4-8.htm) |
| [4.9\*](tm262520d2_ex4-9.htm) | [Novartis AG Deferred Share Bonus Plan, adopted on January 22, 2014, and amended and restated effective January 1, 2026](tm262520d2_ex4-9.htm) |
| [23.1](https://www.sec.gov/Archives/edgar/data/1114448/000137036825000004/a25013120f-ex15_1.htm) | [Consent of Independent Auditors (incorporated by reference to Exhibit 15.1 to Novartis AG's Annual Report on Form 20-F as filed with the Commission on January 31, 2025).](https://www.sec.gov/Archives/edgar/data/1114448/000137036825000004/a25013120f-ex15_1.htm) |
| [24\*](#poa_001) | [Powers of Attorney (included on signature pages)](#poa_001) |
| \* | Filed herewith |

---

**SIGNATURES**

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Post-Effective Amendment No. 2 to the Registration Statement on Form S-8 (File No. 333-198706) to be signed on its behalf by the undersigned, thereunto duly authorized, in Basel, Switzerland on January 16, 2026.

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| | | |
|:---|:---|:---|
| **NOVARTIS AG** | **NOVARTIS AG** | **NOVARTIS AG** |
| By: | /s/ Harry Kirsch | /s/ Harry Kirsch |
|  | Name: | Harry Kirsch |
|  | Title: | Chief Financial Officer |
| By: | /s/ Karen L. Hale | /s/ Karen L. Hale |
|  | Name: | Karen L. Hale |
|  | Title: | Chief Legal & Compliance Officer |

---

**POWER OF ATTORNEY**

Each person whose signature appears below constitutes and appoints Harry Kirsch, Mukul Mehta, Karen L. Hale, Daniel Weiss, Laurent Sigismondi, and each of them (with full power to each of them to act alone), his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment No. 2 to the Registration Statement on Form S-8 (File No. 333-198706) has been signed by the following persons in the capacities indicated on January 16, 2026.

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| | |
|:---|:---|
| **SIGNATURE** | **TITLE** |
| /s/ Vasant Narasimhan | Chief Executive Officer |
| Vasant Narasimhan, M.D. | (principal executive officer) |
| /s/ Harry Kirsch | Chief Financial Officer |
| Harry Kirsch | (principal financial and accounting officer) |
| /s/ Giovanni Caforio | Chair of the Board of Directors |
| Giovanni Caforio, M.D. |  |
| /s/ Simon Moroney | Vice-Chair of the Board of Directors |
| Simon Moroney, D.Phil. |  |
| /s/ Nancy C. Andrews | Director |
| Nancy C. Andrews, M.D., Ph.D. |  |
| /s/ Ton Buechner | Director |
| Ton Buechner |  |
| /s/ Patrice Bula | Director |
| Patrice Bula |  |
| /s/ Elizabeth Doherty | Director |
| Elizabeth Doherty |  |
| /s/ Bridgette Heller | Director |
| Bridgette Heller |  |
| /s/ Daniel Hochstrasser | Director |
| Daniel Hochstrasser |  |
| /s/ Frans van Houten | Director |
| Frans van Houten |  |
| /s/ Elizabeth McNally | Director |
| Elizabeth McNally, M.D., Ph.D. |  |
| /s/ Ana de Pro Gonzalo | Director |
| Ana de Pro Gonzalo |  |
| /s/ John D. Young | Director |
| John D. Young |  |

---

**AUTHORIZED REPRESENTATIVE**

Pursuant to the requirements of the Securities Act of 1933, the undersigned certifies that it is the duly authorized United States representative of the Registrant and has duly caused this Post-Effective Amendment No. 2 to Registration Statement on Form S-8 (File No. 333-198706) to be signed on its behalf by the undersigned, thereunto duly authorized, in East Hanover, New Jersey on January 16 , 2026.

---

| |
|:---|
| /s/ Jaime Huertas |
| Jaime Huertas |

---

## Exhibit 4.1

**Exhibit 4.1**

![](tm262520d2_ex4-1img001.jpg)

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| | |
|:---|:---|
| **2** | Articles of Incorporation of Novartis AG |

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| | | |
|:---|:---|:---|
| **Section 1** | Corporate Name, Registered Office, Purpose and Duration | 3 |
| **Section 2** | Share Capital | 3 |
| **Section 3** | Corporate Bodies | 5 |
|  | A. General Meeting of Shareholders | 5 |
|  | B. Board of Directors | 8 |
|  | C. Auditors | 11 |
| **Section 4** | Compensation of the Board of Directors and the Executive Committee | 11 |
| **Section 5** | Annual Financial Statements, Consolidated Financial Statements and Profit Allocation | 15 |
| **Section 6** | Publications and Place of Jurisdiction | 15 |

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| | |
|:---|:---|
| **3** | Articles of Incorporation of Novartis AG |

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| | |
|:---|:---|
| **Section 1** | **Corporate Name, Registered Office, Purpose and Duration** |
|  | Article 1 |
| Corporate name, Registered office | Under the Corporate name<br> Novartis AG<br> Novartis SA<br> Novartis Inc.<br> there exists a company limited by shares with its registered office in Basel. |
|  | Article 2 |

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| | | |
|:---|:---|:---|
| Purpose | 1 | Purpose of the Company is to hold interests in enterprises in the area of health care or nutrition. The Company may also hold interests in enterprises in the areas of biology, chemistry, physics, information technology or related areas. |
|  | 2 | The Company may acquire, mortgage, liquidate or sell real estate and intellectual property rights in Switzerland or abroad. |
|  | 3 | In pursuing its purpose, the Company strives to create sustainable value. |
|  |  | Article 3 |
| Duration |  | The duration of the Company is unlimited. |

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| | | |
|:---|:---|:---|
| **Section 2** |  | **Share Capital** |
|  |  | Article 4 |
| Share capital |  | The share capital of the Company is CHF 1 035 086 714.83, fully paid-in and divided into 2 112 421 867 registered shares. Each share has a nominal value of CHF 0.49. |
|  |  | Article 5 |
| Shareholders register and restrictions of registration, | 1 | The Company shall maintain a shareholders register showing the last names, first names, domicile, address and nationality (in the case of legal entities the registered office) of the holders or usufructuaries of registered shares. |
| Nominees | 2 | Upon request acquirers of registered shares are registered in the shareholders register as shareholders with the right to vote, provided that they declare explicitly to have acquired the registered shares in their own name and for their own account. Subject to the restrictions set forth in paragraph 6 of this article, no person or entity shall be registered with the right to vote for more than 2% of the registered share capital as set forth in the commercial register. This restriction of registration also applies to persons who hold some or all of their shares through nominees pursuant to this article. All of the foregoing is subject to Article 685d paragraph 3 of the Swiss Code of Obligations. |

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| | |
|:---|:---|
| **4** | Articles of Incorporation of Novartis AG |

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| | |
|:---|:---|
| 3 | The Board of Directors may register nominees with the right to vote in the share register to the extent of up to 0.5% of the registered share capital as set forth in the commercial register. Registered shares held by a nominee that exceed this limit may be registered in the shareholders register if the nominee discloses the names, addresses and the number of shares of the persons for whose account it holds 0.5% or more of the registered share capital as set forth in the commercial register. Nominees within the meaning of this provision are persons who do not explicitly declare in the request for registration to hold the shares for their own account and with whom the Board of Directors has entered into a corresponding agreement. |
| 4 | Corporate bodies and partnerships or other groups of persons or joint owners who are interrelated to one another through capital ownership, voting rights, uniform management or otherwise linked as well as individuals or corporate bodies and partnerships who act in concert to circumvent the regulations concerning the limitation of participation or the nominees (especially as syndicates), shall be treated as one single person or nominee within the meaning of paragraphs 2 and 3 of this article. |
| 5 | After hearing the registered shareholder or nominee, the Board of Directors may cancel registrations in the shareholders register with retroactive effect as of the date of registration if the registration was effected based on false information. The respective shareholder or nominee shall be informed immediately of the cancellation of the registration. |
| 6 | The Board of Directors shall specify the details and give the necessary orders concerning the adherence to the preceding regulations. In particular cases it may allow exemptions from the limitation for registration in the share register or the regulation concerning nominees. It may delegate its duties. |
| 7 | The limitation for registration in the share register provided for in this article shall also apply to shares acquired or subscribed by the exercise of subscription, option or conversion rights. |

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| | | |
|:---|:---|:---|
|  |  | Article 6 |
| Form of shares | 1 | Subject to paragraphs 2 and 4 of this article, the registered shares of the Company are issued as uncertificated securities (in terms of the Swiss Code of Obligations) and as book entry securities (in terms of the Book Entry Securities Act). |
|  | 2 | The Company may withdraw shares issued as book entry securities from the custodian system (Verwahrungssystem). |
|  | 3 | Provided that the shareholder is registered in the shareholders register, the shareholder may request from the Company a statement of his or her registered shares at any time. |

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| | |
|:---|:---|
| **5** | Articles of Incorporation of Novartis AG |

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| | |
|:---|:---|
| 4 | The shareholder has no right to the printing and delivery of certificates. The Company may, however, print and deliver certificates (individual share certificates, certificates or global certificates) for shares at any time. The Company may, with the consent of the shareholder, cancel issued certificates that are returned to the Company. |

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| | | |
|:---|:---|:---|
|  |  | Article 7 |
| Exercise of rights | 1 | The shares are not divisible. The Company accepts only one representative per share. |
|  | 2 | The right to vote and the other rights associated with a registered share may only be exercised vis-à-vis the Company by a shareholder, usufructuary or nominee who is registered in the share register. |
| **Section 3** |  | **Corporate Bodies** |
|  |  | **A. General Meeting of Shareholders** |
|  |  | Article 8 |
| Competence |  | The General Meeting of Shareholders is the supreme body of the Company. |
|  |  | Article 9 |
| General Meetings<br> a. Annual General Meeting |  | The Annual General Meeting of Shareholders shall be held each year within six months after the close of the financial year of the Company. |
|  |  | Article 10 |
| b. Extraordinary General <br> Meetings of Shareholders | 1 | Extraordinary General Meetings of Shareholders shall take place upon request of the Board of Directors or the Auditors. |
|  | 2 | Furthermore, Extraordinary General Meetings of Shareholders shall be convened upon resolution of a General Meeting of Shareholders or if it is required by one or more shareholders who are representing in the aggregate not less than 5% of the share capital and submit a petition signed by such shareholder or shareholders specifying the items for the agenda and the proposals. |
|  |  | Article 11 |
| Convening of General Meetings of Shareholders | 1 | General Meetings of Shareholders shall be convened by the Board of Directors at the latest twenty days before the date of the meeting. The meeting shall be convened by way of a notice appearing once in the Swiss Official Gazette of Commerce |
|  | 2 | The content of a notice of meeting is governed by the law. |

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| | |
|:---|:---|
| **6** | Articles of Incorporation of Novartis AG |

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| | | |
|:---|:---|:---|
|  |  | Article 12 |
| Agenda | 1 | One or more shareholders whose combined shareholdings represent an aggregate nominal value of at least CHF 1 million may demand that an item be included in the agenda of a General Meeting of Shareholders. Such a demand must be made in writing at the latest forty-five days before the meeting and shall specify the items and the proposals of such a shareholder. If an explanatory statement is to be included in the notice of meeting, it must be submitted within the same period and formulated in a short, clear and concise manner. |
|  | 2 | No resolution shall be passed at a General Meeting of Shareholders on matters for which no proper notice was given. This provision shall not apply to proposals to convene an Extraordinary General Meeting of Shareholders or to initiate a special investigation. |
|  |  | Article 12a |
| Electronic Participation | 1 | The Board of Directors may foresee that shareholders who cannot be present at the venue of the General Meeting of Shareholders may exercise their rights through electronic means. |
|  | 2 | The Board of Directors may at any time until June 30, 2028 also order that the General Meeting of Shareholders be held electronically without a venue. |
|  |  | Article 13 |
| Presiding officer, Minutes, Vote counters | 1 | The General Meeting of Shareholders shall take place at the registered office of the Company, unless the Board of Directors decides otherwise. The Chair of the Board of Directors or in the Chair's absence a Vice-Chair or any other member of the Board of Directors designated by the Board of Directors shall take the chair. |
|  | 2 | The presiding officer shall appoint a secretary and the vote counters. The minutes shall be signed by the presiding officer and the secretary. |
|  |  | Article 14 |
| Proxies | 1 | The Board of Directors may issue regulations regarding the participation and the representation at the General Meeting of Shareholders and may allow electronic proxies without qualified signatures. |
|  | 2 | A shareholder can be represented by a legal representative or, by means of a written proxy, by a representative of choice. Furthermore, a shareholder may be represented by the Independent Proxy (in German: *Unabhängiger Stimmrechtsvertreter*). |
|  | 3 | The General Meeting of Shareholders shall elect the Independent Proxy for a term of office lasting until completion of the next Annual General Meeting of Shareholders. Re-election is possible. |
|  | 4 | If the Company does not have an Independent Proxy, the Board of Directors shall appoint the Independent Proxy for the next General Meeting of Shareholders. |

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| | |
|:---|:---|
| **7** | Articles of Incorporation of Novartis AG |

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| | | |
|:---|:---|:---|
|  |  | Article 15 |
| Voting rights |  | Each share provides entitlement to one vote. |
|  |  | Article 16 |
| Resolutions, Elections | 1 | Unless the law requires otherwise, the General Meeting passes resolutions and elections with the absolute majority of the votes validly represented. |
|  | 2 | Resolutions and elections shall be taken either on a show of hands or by electronic voting, unless the General Meeting decides for, or the presiding officer orders, a secret ballot. |
|  | 3 | The presiding officer may at any time order to repeat an election or resolution taken on a show of hands with a secret ballot, if the presiding officer doubts the results of the vote. In this case, the preceding election or resolution taken on a show of hands is deemed not to have taken place. |
|  | 4 | If no election has taken place at the first ballot and if there is more than one candidate, the presiding officer shall order a second ballot in which the relative majority shall be decisive. |
|  |  | Article 17 |
| Powers of the General Meeting |  | The following powers shall be vested exclusively in the General Meeting of Shareholders: |

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| | |
|:---|:---|
| of Shareholdersa) | To adopt and amend the Articles of Incorporation; |
| b) | To elect and remove the members of the Board of Directors, the Chair of the Board of Directors, the members of the Compensation Committee, the Independent Proxy and the Auditors; |
| c) | To approve the management report (if required), the consolidated financial statements and the report on non-financial matters; |
| d) | To approve the financial statements and to decide on the appropriation of available earnings shown on the balance sheet, in particular with regard to dividends (including any repayment of the statutory capital reserves and the approval of interim dividends and the interim financial statements required for such purpose); |
| e) | To approve the aggregate amounts of compensation of the Board of Directors and the Executive Committee in accordance with Article 29 of these Articles of Incorporation; |
| f) | To grant discharge to the members of the Board of Directors and to the members of the Executive Committee; |
| g) | To delist the shares of the Company; and |
| h) | To decide on matters that are reserved by law or by the Articles of Incorporation to the General Meeting of Shareholders. |

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| | |
|:---|:---|
| **8** | Articles of Incorporation of Novartis AG |

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| | | |
|:---|:---|:---|
|  | Article 18 | Article 18 |
| Special quorum | The approval of at least two-thirds of the votes represented is required for resolutions of the General Meeting of Shareholders on: | The approval of at least two-thirds of the votes represented is required for resolutions of the General Meeting of Shareholders on: |
|  | a) | An alteration of the purpose of the Company; |
|  | b) | The consolidation of shares, unless the approval of all affected shareholders is required; |
|  | c) | An increase of the share capital out of equity, by contributions in kind or by way of set off against a receivable and the grant of special rights; |
|  | d) | A restriction or suspension of rights of option to subscribe; |
|  | e) | The introduction of a conditional capital or a capital band; |
|  | f) | An implementation of restrictions on the transfer of registered shares and the removal of such restrictions; |
|  | g) | The creation of shares with increased voting powers; |
|  | h) | The change of the currency of the share capital; |
|  | i) | The introduction of the deciding vote for the presiding officer at the General Meeting of Shareholders; |
|  | j) | A provision in the Articles of Incorporation allowing to hold the General Meeting of Shareholders abroad; |
|  | k) | The delisting of the shares of the Company; |
|  | l) | A change of location of the registered office of the Company; |
|  | m) | The introduction of an arbitration clause in the Articles of Incorporation; |
|  | n) | The merger, split or transformation of the Company under the Merger Act (subject to mandatory statutory provisions); and |
|  | o) | The dissolution of the Company. |

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| | | |
|:---|:---|:---|
|  |  | **B. Board of Directors** |
|  |  | Article 19 |
| Number of Directors |  | The Board of Directors shall consist of a minimum of 8 and a maximum of 16 members. |
|  |  | Article 20 |
| Term of office | 1 | The members of the Board of Directors and the Chair of the Board of Directors shall be elected individually by the General Meeting of Shareholders for a term of office lasting until completion of the next Annual General Meeting of Shareholders. |
|  | 2 | Members whose term of office has ended may be immediately re-elected, subject to paragraph 3 hereinafter. |
|  | 3 | A member shall not serve on the Board for more than 12 years. The Board of Directors may, under certain circumstances and if deemed in the best interests of the Company, recommend exceptions to this rule to the General Meeting of Shareholders. |

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| | |
|:---|:---|
| **9** | Articles of Incorporation of Novartis AG |

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|:---|:---|:---|
|  |  | Article 21 |
| Organization | 1 | The Board of Directors constitutes itself in compliance with legal requirements and taking into consideration the resolutions of the General Meeting of Shareholders. It shall elect one or two Vice-Chairs. It shall appoint a secretary, who need not be a member of the Board of Directors. |
|  | 2 | If the office of the Chair of the Board of Directors is vacant, the Board of Directors shall appoint a new Chair from amongst its members for the remaining term of office. |
|  |  | Article 22 |
| Convening of meetings |  | The Chair shall convene meetings of the Board of Directors if and when the need arises or if a member so requires in writing. |
|  |  | Article 23 |
| Meetings, Resolutions | 1 | The organization of the meetings, including the quorum and the passing of resolutions, is regulated by the Board of Directors in the organizational regulations. |
|  | 2 | The presiding officer shall not have the deciding vote. |

---

Article 24 <br>Powers of the Board of Directors 1 The Board of Directors has in particular the following non-delegable and inalienable duties:

a) The
 ultimate direction of the Company's business and issuing of the necessary directives;

b) The
 determination of the organization of the Company;

c) The
 determination of the principles of accounting, financial controlling and financial planning;

d) The
 appointment and removal of the persons entrusted with the management and representation of
 the Company (including the CEO and the other members of the Executive Committee);

e) The
 ultimate supervision of the persons entrusted with the management of the Company, specifically
 in view of their compliance with the law, Articles of Incorporation, regulations and directives;

f) The
 preparation of the annual report, the compensation report and the report on non-financial
 matters in accordance with the provisions of the law and the Articles of Incorporation, as
 well as further reports which must be approved by the Board of Directors;

g) The
 preparations for the General Meeting of Shareholders and carrying out of the resolutions
 of the General Meeting of Shareholders;

h) The
 filing of a request for a moratorium and the notification to the court in the event of over-indebtedness;

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| | |
|:---|:---|
| **10** | Articles of Incorporation of Novartis AG |

---

i) The
 adoption of resolutions concerning the implementation of changes in share capital to the
 extent that such power is vested in the Board of Directors, as well as resolutions concerning
 the confirmation of changes in share capital and respective amendments to the Articles of
 Incorporation; and

j) All further non-delegable and inalienable duties
 of the Board of Directors provided for by the law.

---

| | | |
|:---|:---|:---|
|  | 2.0 | In addition, the Board of Directors can pass resolutions with respect to all matters which are not reserved to the authority of the General Meeting of Shareholders by law or by these Articles of Incorporation. |
|  |  | Article 25 |
| Delegation of powers |  | The Board of Directors may, within the limits of the law and the Articles of Incorporation, delegate the management of the Company in whole or in part to one or several of its members (including to ad hoc or permanent committees of the Board of Directors) or to third persons (Executive Committee). |
|  |  | Article 26 |
| Signature power |  | The Board of Directors shall designate those of its members as well as those third persons who shall have legal signatory power for the Company, and shall further determine the manner in which such persons may sign on behalf of the Company. |

---

---

| | | |
|:---|:---|:---|
|  |  | Article 27 |
| Organization and powers of the Compensation Committee | 1 | The Compensation Committee shall consist of a minimum of 3 and a maximum of 5 members of the Board of Directors. |
|  | 2 | The members of the Compensation Committee shall be elected individually by the General Meeting of Shareholders for a term of office lasting until completion of the next Annual General Meeting of Shareholders. Members of the Compensation Committee whose term of office has expired shall be immediately eligible for re-election. |
|  | 3 | If there are vacancies on the Compensation Committee, the Board of Directors shall appoint substitutes for the remaining term of office. |
|  | 4 | The Board of Directors shall elect a chair of the Compensation Committee. The Board of Directors shall, within the limits of the law and the Articles of Incorporation, define the organization of the Compensation Committee in regulations. |
|  | 5 | The Compensation Committee has the following powers: |

---

a) Develop
 a compensation strategy in line with the principles described in the Articles of Incorporation
 and submit it for approval to the Board of Directors;

b) Propose
 to the Board of Directors the principles and structure of the compensation plans;

---

| | |
|:---|:---|
| **11** | Articles of Incorporation of Novartis AG |

---

c) Support
 the Board of Directors in preparing the proposals to the General Meeting of Shareholders
 regarding the compensation of the members of the Board of Directors and the Executive Committee;

d) Submit
 the compensation report to the Board of Directors for approval;

e) Inform
 the Board of Directors about policies, programs and key decisions as well as comparisons
 of compensation levels at key competitors;

f) Regularly
 report to the Board of Directors on the decisions and deliberations of the Compensation Committee;

g) Assume
 other responsibilities assigned to it by law, the Articles of Incorporation or by the Board
 of Directors.

---

| | | |
|:---|:---|:---|
|  | 6.0 | The Board of Directors issues regulations to determine for which positions of the Board of Directors and of the Executive Committee the Compensation Committee shall submit proposals regarding compensation, and for which positions it shall determine the compensation in accordance with the Articles of Incorporation. |
|  |  | **C. Auditors** |
|  |  | Article 28 |
| Term, Powers and Duties |  | The Auditors, who shall be elected by the General Meeting of Shareholders each year, shall have the powers and duties vested in them by law. |

---

---

| | |
|:---|:---|
| **Section 4** | **Compensation of the Board of Directors and the Executive Committee** |

---

---

| | | |
|:---|:---|:---|
|  |  | Article 29 |
| Approval of compensation by the General Meeting of | 1 | The General Meeting of Shareholders shall approve annually and separately the proposals of the Board of Directors in relation to the maximum aggregate amount of: |

---

---

| | | |
|:---|:---|:---|
| Shareholders | a) | Compensation of the Board of Directors for the period until the next Annual General Meeting of Shareholders; and |
|  | b) | Compensation of the Executive Committee paid, promised or granted for the following financial year. |
|  | The Board of Directors may submit for approval by the General Meeting of Shareholders additional proposals relating to the same or different periods. | The Board of Directors may submit for approval by the General Meeting of Shareholders additional proposals relating to the same or different periods. |

---

---

| | |
|:---|:---|
| **12** | Articles of Incorporation of Novartis AG |

---

---

| | | |
|:---|:---|:---|
|  | 2.0 | If the General Meeting of Shareholders rejects the proposal of the Board of Directors for the total compensation of the Board of Directors and/or the Executive Committee, the decision on how to proceed shall reside with the Board of Directors. The options for the Board of Directors shall be to either convene an Extraordinary General Meeting to submit a new compensation proposal, or to determine the compensation for the corresponding period on an interim basis, subject to approval at the next Annual General Meeting of Shareholders. |
|  | 3.0 | Notwithstanding the preceding paragraphs, the Company or companies controlled by it may pay out compensation prior to approval by the General Meeting of Shareholders subject to subsequent approval by a General Meeting of Shareholders. |
|  | 4.0 | The Board of Directors shall submit the compensation report to an advisory vote of the General Meeting of Shareholders. |
|  |  | Article 30 |
| Additional amount |  | If the maximum aggregate amount of compensation already approved by the General Meeting of Shareholders is not sufficient to also cover the compensation of one or more members who become members of the Executive Committee during a compensation period for which the General Meeting of Shareholders has already approved the compensation of the Executive Committee, the Company or companies controlled by it shall be authorized to pay or grant to such member(s) an additional amount during the compensation period(s) already approved. The total additional amount for each relevant compensation period for which approval by the General Meeting of Shareholders has already been obtained shall not exceed (in full and not *pro rata temporis*) 40% of the aggregate amount of compensation of the Executive Committee last approved by the General Meeting of Shareholders per compensation period. |

---

---

| | | |
|:---|:---|:---|
|  |  | Article 31 |
| General compensation principles | 1 | Compensation of the non-executive members of the Board of Directors comprises fixed compensation elements only. In particular, non-executive members of the Board of Directors shall receive no company contributions to any pension plan, no performance-related elements and no financial instruments (e.g. options). |
|  | 2 | Compensation of the members of the Executive Committee comprises fixed and variable compensation elements. Fixed compensation comprises the base salary and may comprise other compensation elements and benefits. Variable compensation may comprise short-term and long-term compensation elements. |

---

---

| | |
|:---|:---|
| **13** | Articles of Incorporation of Novartis AG |

---

---

| | | |
|:---|:---|:---|
|  | 3 | Compensation (to non-executive members of the Board of Directors and to members of the Executive Committee) may be paid or granted in the form of cash, shares, other benefits or in kind. Compensation to members of the Executive Committee may also be paid or granted in the form of financial instruments or similar units. Compensation may be paid by the Company or companies controlled by it. The Board of Directors determines the valuation of each compensation element on the basis of the principles that apply to the establishment of the compensation report. |
|  |  | Article 32 |
| Variable compensation | 1 | The variable compensation paid or granted to the members of the Executive Committee in a certain year shall consist of compensation elements from short- and long-term compensation plans (as defined in this Article 32). |
|  | 2 | The short-term compensation plans are based on performance metrics that take into account the performance of the Novartis Group and/or parts thereof, and/or individual targets. Achievements are generally measured based on the one-year period to which the short-term compensation relates. The short-term compensation pay-outs shall be subject to caps that may be expressed as predetermined multipliers of the respective target levels. |
|  | 3 | The long-term compensation plans are based on performance metrics that take into account strategic objectives of the Novartis Group (such as financial, innovation, Shareholder return and/or other metrics). Achievements are generally measured based on a period of not less than three years. The long-term compensation pay-outs shall be subject to caps that may be expressed as predetermined multipliers of the respective target levels. |
|  | 4 | The Board of Directors or, to the extent delegated to it, the Compensation Committee determines performance metrics, target levels, and their achievement. |
|  | 5 | The Board of Directors or, to the extent delegated to it, the Compensation Committee determines grant, vesting, blocking, exercise and forfeiture conditions of the compensation; they may provide for continuation, acceleration or removal of vesting and exercise conditions, for payment or grant of compensation assuming target achievement or for forfeiture in the event of predefined events such as death, disability, retirement or termination of an employment or mandate agreement. |

---

---

| | |
|:---|:---|
| **14** | Articles of Incorporation of Novartis AG |

---

---

| | | |
|:---|:---|:---|
|  |  | Article 33 |
| Agreements with Members of the Board of Directors and of the Executive Committee | 1 | The Company or companies controlled by it may enter into agreements with members of the Board of Directors relating to their compensation for a term not exceeding the term of office of the respective members of the Board of Directors. The Company or companies controlled by it may enter into contracts of employment with members of the Executive Committee for a fixed term not exceeding one year or for an indefinite period of time with a notice period not exceeding 12 months. |
|  | 2 | Contracts of employment with members of the Executive Committee may contain a prohibition of competition for the time after the end of employment if this is commercially justified. The overall consideration for such prohibition shall not exceed the average annual compensation for the three preceding business years. |
|  |  | Article 34 |
| Mandates outside of the Novartis Group | 1 | No member of the Board of Directors may hold more than 10 additional mandates in other companies, of which no more than 4 additional mandates shall be in other listed companies. Chairs of the board of directors of other listed companies count as two mandates. Each of these mandates shall be subject to approval by the Board of Directors. |
|  | 2 | No member of the Executive Committee may hold more than 6 additional mandates in other companies, of which no more than 2 additional mandates shall be in other listed companies. Each of these mandates shall be subject to approval by the Board of Directors. Members of the Executive Committee are not allowed to hold chairs of the board of directors of other listed companies. |
|  | 3 | The following mandates are not subject to these limitations: |
|  | a) | Mandates in companies which are controlled by the Company; and |
|  | b) | Mandates which a member of the Board of Directors or of the Executive Committee holds at the request of the Company or companies controlled by it. No member of the Board of Directors or of the Executive Committee shall hold more than 5 such mandates. |

---

---

| | |
|:---|:---|
| 4 | Mandates shall mean any membership in the board of directors, in the executive board or in the advisory board, or a comparable function under foreign law, in a company with an economic purpose. Mandates in different legal entities which are under joint control are deemed one mandate. |
| 5 | The Board of Directors may issue regulations that may determine additional restrictions, taking into account the position of the respective member. |

---

---

| | |
|:---|:---|
| **15** | Articles of Incorporation of Novartis AG |

---

---

| | | |
|:---|:---|:---|
|  |  | Article 35 |
| Loans |  | No loans or credits shall be granted to the members of the Board of Directors or the Executive Committee. |
| **Section 5** |  | **Annual Financial Statements, Consolidated Financial Statements and Profit Allocation** |
|  |  | Article 36 |
| Financial year |  | The Board of Directors shall prepare for each financial year as of 31 December an annual report consisting of financial statements with a management report if required and the consolidated financial statements. |
|  |  | Article 37 |
| Allocation of profit shown on the balance sheet, Reserves | 1 | The allocation of the profit shown on the balance sheet shall be determined by the General Meeting of Shareholders subject to the legal provisions. The Board of Directors shall submit to the General Meeting of Shareholders its proposals. |
|  | 2 | In addition to statutory reserves additional reserves may be accrued. |
|  | 3 | Dividends which have not been claimed within five years after the due date fall back to the Company and shall be allocated to the general reserves. |
| **Section 6** |  | **Publications and Place of Jurisdiction** |
|  |  | Article 38 |
| Publications | 1 | Notifications to shareholders and external communications of the Company shall be made in the Swiss Official Gazette of Commerce. The Board of Directors may designate additional publication organs. |
|  | 2 | Notices to shareholders may instead or in addition be sent (i) by regular mail to their addresses entered in the share register, (ii) by email or (iii) in any other form that the Board of Directors deems appropriate. |
|  |  | Article 39 |
| Place of jurisdiction |  | The exclusive place of jurisdiction for any disputes arising from or in connection with the shareholdership in the Company shall be at the registered office of the Company. |

---

## Exhibit 4.8

**Exhibit 4.8**

**Novartis AG**

**Long Term Incentive Plan**

Adopted by the Board of Directors on January 22, 2014 and amended thereafter with latest adjustments made on December 18, 2025 with effect in relation to awards made on or after January 1, 2026.

Contents

---

| | | |
|:---|:---|:---|
| **NOVARTIS AG LONG TERM INCENTIVE PLAN** | **NOVARTIS AG LONG TERM INCENTIVE PLAN** | **3** |
| ***1.*** | ***Purpose of the plan*** | *3* |
| ***2.*** | ***Granting of awards*** | *3* |
| ***3.*** | ***Dividends and dividend equivalents*** | *5* |
| ***4.*** | ***Vesting of awards*** | *6* |
| ***5.*** | ***Lapse or forfeiture of awards*** | *8* |
| ***6.*** | ***Cessation of Employment*** | *8* |
| ***7.*** | ***Corporate events*** | *10* |
| ***8.*** | ***Participant rights and obligations*** | *11* |
| ***9.*** | ***Clawback*** | *12* |
| ***10.*** | ***Tax, social security and other charges*** | *12* |
| ***11.*** | ***Transfer of awards*** | *13* |
| ***12.*** | ***Company documents*** | *13* |
| ***13.*** | ***Board's powers*** | *13* |
| ***14.*** | ***Administration and regulations*** | *13* |
| ***15.*** | ***Awards not pensionable etc.*** | *13* |
| ***16.*** | ***Notices*** | *13* |
| ***17.*** | ***Data protection*** | *14* |
| ***18.*** | ***Amendment and termination of the plan*** | *14* |
| ***19.*** | ***Compliance with law and articles of incorporation*** | *14* |
| ***20.*** | ***Applicable law*** | *15* |
| ***21.*** | ***Definitions and interpretation*** | *15* |
| **SCHEDULE A NOVARTIS COMPETITORS** | **SCHEDULE A NOVARTIS COMPETITORS** | **20** |
| **SCHEDULE 1 LONG TERM PERFORMANCE PLAN** | **SCHEDULE 1 LONG TERM PERFORMANCE PLAN** | **21** |
| ***1.*** | ***Application of the Schedule*** | *21* |
| ***2.*** | ***Performance period*** | *21* |
| ***3.*** | ***Performance conditions*** | *21* |
| ***4.*** | ***Cessation of Employment*** | *22* |
| ***5.*** | ***Amendments*** | *23* |
| **SCHEDULE 2 PARTICIPANTS WHO ARE OR BECOME MEMBERS OF THE ECN** | **SCHEDULE 2 PARTICIPANTS WHO ARE OR BECOME MEMBERS OF THE ECN** | **24** |
| ***1.*** | ***Application of this Schedule*** | *24* |
| ***2.*** | ***Definitions*** | *24* |
| ***3.*** | ***Performance conditions and ecn ltpp awards vesting*** | *24* |

---

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

---

| | | |
|:---|:---|:---|
| ***4.*** | ***Blocking Restrictions*** | *25* |
| ***5.*** | ***Cessation of Employment – introduction*** | *25* |
| ***6.*** | ***Cessation of Employment as a result of Retirement*** | *26* |
| ***7.*** | ***Corporate events*** | *26* |
| **SCHEDULE 3 UNITED STATES** | **SCHEDULE 3 UNITED STATES** | **27** |
| ***1.*** | ***Application of this Schedule*** | *27* |
| ***2.*** | ***Grant of Awards – Shares subject to the Plan*** | *27* |
| ***3.*** | ***Definitions*** | *27* |
| ***4.*** | ***Stock Appreciation Rights*** | *27* |
| ***5.*** | ***Consequences of Vesting – Restricted Stock Units*** | *28* |
| ***6.*** | ***Corporate Events*** | *29* |
| ***7.*** | ***Code Section 409A*** | *29* |
| **SCHEDULE 4 SELECT PLAN 2024** | **SCHEDULE 4 SELECT PLAN 2024** | **30** |
| ***1.*** | ***Application of the Schedule*** | *30* |
| ***2.*** | ***Purpose*** | *30* |
| ***3.*** | ***Participants*** | *30* |
| ***4.*** | ***Vesting and other Conditions*** | *30* |
| ***5.*** | ***Definitions*** | *31* |
| ***6.*** | ***Cessation of Employment*** | *31* |
| ***7.*** | ***US Selling restrictions*** | *32* |
| ***8.*** | ***Appendices to the Select Plan*** | *32* |
| **APPENDIX 1 NOVARTIS SELECT PLAN SWITZERLAND** | **APPENDIX 1 NOVARTIS SELECT PLAN SWITZERLAND** | **33** |
| ***1.*** | ***Select Switzerland*** | *33* |
| ***2.*** | ***Select Choices Switzerland*** | *33* |
| ***3.*** | ***Cessation of Employment*** | *33* |

---

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

**NOVARTIS AG LONG TERM INCENTIVE PLAN**

***1.***  ***<u>Purpose of the plan</u>*** 

The purpose of the Plan is to enhance the alignment of the Participants in the Plan with the interests of the Company and its shareholders and to foster long term value creation.

The Rules govern the grant of Awards under the Plan and any sub-plan of the Plan, including the Long Term Performance Plan, the Business Unit Performance Plan, Select 2015 and other forms of long term incentive awards (including special, off cycle and ad hoc awards).

***2.***  ***<u>Granting of awards</u>*** 

2.1 <u>Selection of Participants</u> 

The Board may select any Eligible Employee to be granted an Award.

2.2 <u>Timing of Awards</u> 

Subject to any Dealing Restrictions which prevent Awards being granted, the Board may grant Awards at any time during a Grant Period.

2.3 <u>Decisions relating to Awards</u> 

In respect of any Award (whether Restricted Stock, Restricted Stock Units, SARs or other form of award) the Board will determine:

(a) the type of
 Award to be granted;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) where relevant,
 whether the Award is in respect of Shares or ADIs;

(c) if the Award
 is a SAR, the base value from which the growth in value is to be measured;

(d) if the Award
 does not comprise Restricted Stock, Restricted Stock Units or SARs, the form and terms and
 conditions of any such Award;

(e) subject to Rule 2.4,
 the minimum, target and maximum number of Shares or ADIs to be subject or linked to the Award;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) the Vesting
 Date or Vesting Dates;

(g) whether the
 Award is subject to Performance Conditions and, if so, the terms of such Performance Conditions
 (including the applicable Performance Period);

(h) whether the
 Award (or Shares or other rights comprising the Award) is subject to any holding or blocking
 period and if so the terms of any such period;

(i) whether or not
 the Award will carry Dividend Equivalents and, if so, the form of such Dividend Equivalents;

(j) whether the
 Participant is required to sell sufficient Shares to meet Taxation; and

(k) which, if any,
 Schedules to the Plan will apply to the Award.

2.4 <u>Determining the number of Shares or ADIs subject to an Award</u> 

In order to determine the minimum, target and maximum number of Shares or ADIs subject to or linked to an Award, the Board shall:

(a) divide the relevant
 percentage of salary (as determined by the Board) expressed as a cash sum by the Market Value
 of a Share or ADI (as appropriate) as at the date immediately preceding the Grant Date and
 then, where necessary, round up to the nearest whole Share or ADI; or

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

(b) apply such other
 method as the Board may determine from time to time.

2.5 <u>Change of Performance Conditions</u> 

Notwithstanding Rule 18 (amendment and termination of the Plan), the Board may change a Performance Condition applicable to an outstanding Award if there are circumstances which cause the Board to consider that an altered performance condition would be a fairer measure of performance. Any such altered Performance Condition must be, in all material respects, no easier and no harder to satisfy than the original Performance Condition.

2.6 <u>Award documentation</u> 

Each Award as such will be granted by resolution of the Board and subsequently legally offered by the respective Employer of the Eligible Employee.

Each Participant shall receive a notice of the grant of an Award (either electronically or in hard copy) in such form as the Board shall determine from time to time.

In relation to any Award the Participant is required to accept the grant of the Award to them by providing such acceptance via the service provider's online interface (or in such form as the Board shall determine from time to time) as well as, if required, complete and update the CRS FACTA documentation via the service provider's online interface at the latest within 6 months after he received the notice of the grant of the Award. The Board may determine that the Participant will be reminded of these prerequisites for participation in the Plan. If a Participant does not provide such acceptance and/or CRS FATCA documentation in time (and, if any, after reminders), any Awards granted shall lapse or, in the case of Restricted Stock, the Shares under that Award shall be forfeited without compensation, unless the Board determines otherwise.

Alternatively, the Board may determine that a Participant who receives an Award is deemed (as of the time of receipt) to have accepted the grant and agreed to the Rules (including applicable Schedules) and the terms set out in the notice of the grant of the Award. If this is the case, a Participant may reject his Award within 14 days of receiving the notice of grant of that Award (or such longer period as the Board permits or is otherwise required by law). If a Participant does so reject his Award, then immediately on such rejection that Award shall lapse or, in the case of Restricted Stock, the Shares under that Award shall be forfeited.

2.7 <u>Schedules to the Plan</u> 

The Board may establish such schedules to the Rules as it considers necessary or appropriate. Such schedules may be included in the Plan in such a way that they create special rules applicable to certain Eligible Employees or categories of Eligible Employees and/or to constitute sub-plans to the Plan for Eligible Employees inside and outside Switzerland.

2.8 <u>Policies etc.</u> 

Awards shall be subject to all applicable policies and procedures adopted by the Company from time to time, including without limitation the policies entitled "*Policy for the treatment of awards in the event of a new hire, modified target, assignment or transfer within the Company*" and "*Policy for the grant of equity awards under the Novartis AG Long Term Incentive Plan in circumstances where an employee may leave the Company or has received an unsatisfactory performance or behaviour assessment*".

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

2.9 <u>Delegations</u> 

The Board decided to delegate the following powers with regard the Plan, to the Employer, who decides after consultation with the Global Rewards &/or Global Legal teams at their discretion:

(a) with reference to section 5 (Lapse
of forfeiture of awards);

(b) with reference
 to section 6.6 (Cessation of employment as a result of death or Disability) for the assessment
 of the performance condition if any; and

(c) with reference to section 9 (Clawback).

The Board decided to delegate the implementation and execution of the Plan, including making non-material changes to the Rules themselves, to the Global Rewards &/or Global Legal teams.

***3.***  ***<u>Dividends and dividend equivalents</u>*** 

3.1 <u>Restricted Stock Units and SARs</u> 

A Participant holding an Award of Restricted Stock Units or SARs shall not be entitled to vote, to receive dividends or to have any other rights of a shareholder in respect of such an Award unless and until the Shares comprising the Award are transferred to or acquired by the Participant.

3.2 <u>Restricted Stock</u> 

The Board in relation to an Award of Restricted Stock may determine that the Participant must agree to surrender or waive any right to vote, receive dividends or any other rights of a shareholder in respect of such Award.

3.3 <u>Dividend Equivalents</u> 

If the Board determines that an Award carries Dividend Equivalents:

(a) unless the Board
 decides otherwise, the number of Shares (or notional Shares if the Award is a SAR) subject
 to the Award will be increased by the number of Shares which could have been acquired by
 the reinvestment in the purchase of Shares (at the market value of a Share on each relevant
 dividend payment date) of dividends payable between the Grant Date and the Vesting Date on
 that number of Shares (or notional Shares) subject to the Award that Vests;

(b) if the Board
 decides that Dividend Equivalents would not be on a notional reinvestment basis as described
 in Rule 3.3(a), as soon as practicable after the time an Award vests in full (and Shares
 are transferred or acquired or cash is paid to the Participant) the Company (or the Participant's
 Employer) shall pay to the Participant (in cash or Shares) (subject to all applicable tax
 and social security deductions) an amount equal to the aggregate dividends which would have
 been paid on the Award (including in respect of notional Shares for Awards that are SARs)
 between the Grant Date and the Vesting Date; or

(c) the Board may
 decide that the Dividend Equivalents may be calculated on any other basis.

For the avoidance of doubt, the amount of a dividend, for these purposes is the amount of the gross dividend before taxes.

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

For the purposes of this Rule 3, "market value" shall be determined by the Board on each relevant occasion.

Unless otherwise determined by the Board at any time or times, a Participant is not entitled to receive Dividend Equivalents with respect to the time period between the Vesting Date and the date that the relevant Shares are transferred to or acquired by him or payment in respect of the Award is made.

***4.***  ***<u>Vesting of awards</u>*** 

4.1 <u>General</u> 

Vesting of Awards under the Plan, transfer of Shares or ADIs or payment of cash is subject to any Rules or law that may require otherwise, including Rule 4.6 (dealing restrictions), Rule 4.8 (delivery of Shares or ADIs to a deposit account), Rule 5 (lapse or forfeiture of Awards) and Rule 9 (clawback).

The Board shall determine the number of Shares (or amount of cash in respect of a SAR) comprising an Award that shall Vest on any particular day or days. Furthermore, the Board shall confirm the Performance Condition as satisfied and the appropriate performance payout factor, if there is any applicable.

4.2 <u>Normal Vesting</u> 

Subject to satisfying applicable Performance Conditions to which the Award is subject and the exceptions set out in the Rules, an Award shall Vest on the Vesting Date (or, if there is more than one Vesting Date, as to the relevant number of Shares or relevant cash entitlement in the case of SARs on each Vesting Date).

As soon as administratively possible, the Vested Award(s) will be visible to the Participant via the service provider's online interface. For the avoidance of doubt, this may be some time after the actual Vesting Date.

4.3 <u>Consequences of Vesting – Restricted Stock Units</u> 

As soon as administratively practicable and legally possible after the Vesting and subject to the Board's confirmation of the satisfaction of the Performance Condition and the appropriate performance payout factor, if there is any applicable, the Company shall transfer the number of Shares (or pay or procure to be paid a cash sum if the Board has determined that the RSU is to be settled in cash) in respect of which the Award has Vested to the Participant.

4.4 <u>Consequences of Vesting – Restricted Stock</u> 

As soon as administratively practicable after the Vesting, the restrictions applicable to the relevant Restricted Stock under the Plan shall cease to apply to the extent such Restricted Stock Vests.

4.5 <u>Consequences of Vesting – SARs</u> 

As soon as administratively practicable and legally possible after the Vesting and subject to the Board's confirmation of the satisfaction of the Performance Condition and the appropriate performance payout factor, if there is any applicable, the Company or the Participant's Employer shall pay to the Participant a sum equal to growth in the market value (as determined by the Board) of the number of Vested notional Shares comprising each SAR.

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

4.6 <u>Dealing Restrictions</u> 

If the Vesting of an Award is prevented on any date by a Dealing Restriction, the Award shall Vest on the first day it is not so prevented.

If the transfer of Shares or ADIs (or payment of cash) on or following Vesting is prevented by a Dealing Restriction, the period for such transfer or payment shall start from the first date on which it is no longer so prevented.

Shares received by a Participant on or following Vesting may be subject to Dealing Restrictions. Subject to any such restrictions, a Participant may sell (or may be required to do so) a sufficient number of such Shares to meet Taxation (as defined in Rule 10 (tax, social security and other charges)).

4.7 <u>Fractional entitlements</u> 

Any fractional number of Shares which arises for any reason under the Plan shall be aggregated as at the Vesting Date and rounded up to the nearest whole Share (or, in the case of a SAR, notional Share), unless the Board determines otherwise.

4.8 <u>Delivery of Shares or ADIs to a deposit account</u> 

Subject to Board determination otherwise, all Shares and ADIs transferred to Participants under the Plan shall be transferred to and registered in one single securities account (**Securities Deposit Account**) held in trust by such service provider as is nominated from time to time by the Company.

If a Participant Ceases Employment, the Participant must dispose of or, if possible, transfer from the Securities Deposit Account to a private securities account all of the Shares or ADIs managed by the service provider within the period of three months. If that is not done, the service provider will sell all of the Shares at market value without delay on behalf of the Participant or the Participant's successor and transfer the proceeds less costs of sale to the Participant's last known salary account and such transfer is in full and final satisfaction.

If a Participant Ceases Employment due to death, the period within which the Participant's personal representative or successor in title must dispose of or transfer the Shares is twelve (12) months or such longer period as the Board may determine.

If the Company's contract with the service provider for administration of the Plan ends in circumstances where the Plan continues, the Company will make arrangements for appropriate services to be provided by another service provider that the Company shall instruct at its sole discretion. In such circumstances, each Participant must give all notices and take all steps necessary to end the trust or custody agreement with the old service provider and appoint a new service provider.

The procedures specified above may be altered and other procedures established by the Board.

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

4.9 <u>Lock-In period</u> 

Subject to Rule 4.10, the Board may determine or a Participant may elect at any time (in such form as the Board requires) that Shares or ADIs transferred or to be transferred to him under the Plan are or will be held in the Securities Deposit Account for a fixed period of time (the **Lock-In Period**) during which time such a Participant may not alienate such Shares or ADIs or create any security interest in or encumbrance on such Shares except as may be necessary for the proper administration of the Plan. During the Lock-In Period, the Participant is entitled without restriction to the dividend and voting rights associated with the Shares or ADIs the Participant acquired.

4.10 <u>Cash, Share and ADI alternatives</u> 

The Board may decide to satisfy an Award (including any Dividend Equivalents) by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) paying or
 procuring to be paid to the Participant a sum equal to the market value (as determined by
 the Board) of the number of Shares that would otherwise have been transferred to the Participant
 following the Vesting of that Award;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) delivering
 to the Participant ADIs with a value equal to the market value of the number of Shares that
 would otherwise have been transferred to the Participant following the Vesting of that Award;
 or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) in the case
 of SARs delivering to the Participant Shares or ADIs with a value equal to the cash sum that
 would otherwise have been paid to the Participant following the vesting of that Award.

***5.***  ***<u>Lapse or forfeiture of awards</u>*** 

Subject to Board determination otherwise, Awards lapse or in the case of Restricted Stock are forfeited on the earlier of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) failure
 to meet the Performance Condition or integrity conditions or compliance with company policies;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the
 occurrence of any event described in the Rules resulting in forfeiture or lapse of Awards,
 including under Rule 2 (granting of awards), Rule 6 (cessation
 of employment) and Rule 7 (corporate events); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) failure
 from the Participant to adhere to Rule 2.6 (Award documentation).

Furthermore, the Board may decide to deem that Awards lapse or in the case of Restricted Stock are forfeited if the Participant grossly negligently or intentionally violates his obligations resulting from his employment with his Employer, e.g. breach of confidentiality.

***6.***  ***<u>Cessation of Employment</u>*** 

6.1 <u>Introduction</u> 

This Rule 6 applies where a Participant Ceases Employment.

Notwithstanding any other part of this Rule 6, the Board may, in its discretion with no obligation to do so, allow (on such terms as the Board decides, including, without limitation, the Participant first executing and not revoking a general release of claims acceptable to the Company) a greater proportion of an Award to Vest and/or accelerate the time at which Vesting occurs and/or treat a Participant who has Ceased Employment as having done so within Rules 6.3, 6.4 or 6.6.

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

In the event that Awards are outstanding pursuant to Rules 6.3 or 6.4 and the Participant dies prior to the Vesting of those Awards, then Rule 6.6 shall apply.

6.2 <u>General</u> 

Unless Rule 6.3, Rule 6.4 or Rule 6.6 applies, an Award that has not Vested will lapse or be forfeited on the day the Participant Ceases Employment.

6.3 <u>Cessation of Employment as a result of Retirement</u> 

If a Participant Ceases Employment because of Retirement with the agreement of the Participant's employer, his Award shall, subject to Rule 6.5 and, if so determined by the Board, the Participant first executing and not revoking a general release of claims acceptable to the Company, Vest on the Vesting Date to the extent the Performance Conditions have been met PROVIDED ALWAYS THAT if the Cessation of Employment in respect of which this Rule 6.3 applies occurs on or before the first anniversary of the Grant Date then the extent to which such Award Vests shall be reduced to take account of the proportion of the Performance Period as has elapsed when the Cessation of Employment occurs.

6.4 <u>Cessation of Employment for other good reasons and following sale</u> 

If a Participant Ceases Employment because of:

(a) termination
 of employment by the Participant's Employer (whether or not by notice) other than for
 cause, including misconduct or poor performance;

(b) his
 Employer ceasing to be a member of the Company; or

(c) the business
 for which the Participant works is transferred to a person which or who is not a member of
 the Company,

his Award shall, subject to Rule 6.5 and, in relation to Rule 6.4(a) and if so determined by the Board, the Participant first executing and not revoking a general release of claims acceptable to the Company, Vest on the Vesting Date in respect of a proportion of the Award (corresponding to such proportion of the Performance Period as has elapsed when the Participant Ceases Employment (notwithstanding Rule 6.1)) to the extent the Performance Conditions have been met provided that the Board may determine in the case of leaving for reasons set out in Rule 6.4(b) or Rule 6.4(c) that some or all of the Awards held by relevant Participants shall be exchanged in accordance with Rule 7.2 (exchange of awards).

6.5 <u>Lapse or forfeiture of Awards on joining a Competitor</u> 

Where either Rule 6.3 or 6.4 applies such that Awards are retained by the Participant following Cessation of Employment, the following shall also apply: In the event that the Participant, in the period commencing on such cessation and ending immediately following the relevant Vesting Date, becomes an employee or director (or otherwise provides services to) a Competitor, other than as a direct result of an event within Rule 6.4(b) or Rule 6.4(c), the Awards held by that Participant shall immediately lapse (or in the case of Restricted Stock, shall be immediately forfeited).

Notwithstanding the foregoing, if the Participant Ceases Employment under Rule 6.3 and subsequently becomes a non-executive director of a Competitor – excluding those within the Company's comparator peer group in the global healthcare industry, as listed in Schedule A – the Participant's Awards shall not lapse (or, in the case of Restricted Stock, shall not be forfeited). This exception applies solely and exclusively to this expressly defined circumstance.

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

6.6 <u>Cessation of Employment as a result of death or Disability</u> 

If a Participant Ceases Employment as a result of his death or Disability then Awards held by that Participant shall Vest immediately:

(a) if, as at the
 date of Cessation of Employment, it is impractical to assess performance against the applicable
 Performance Conditions, at target; or

(b) if, as at the
 date of Cessation of Employment, it is practicable to assess performance against the applicable
 Performance Conditions, to the extent the Board determines having regard to performance against
 the applicable Performance Conditions up to the date of Cessation of Employment.

In case of a Participant's death, upon notice to the Company his personal representative or successor in title shall be entitled to, if any, the Vested Awards. Settlement of these Vested Awards to the Participant's personal representative or successor in title excludes any other potential claims of the Participant's estate with regards to the Plan.

6.7 <u>Cessation of Employment – effect on blocking periods</u> 

If Rule 6.3 or 6.4 apply, all Awards held by the Participant will remain blocked until the end of the Mandatory Blocking Period and/or, where applicable, until the end of any Additional Blocking Period.

If a Participant Ceases Employment as a result of his death or Disability all Mandatory and Additional Blocking Periods shall cease to apply immediately.

***7.***  ***<u>Corporate events</u>*** 

7.1 <u>Change of Control</u> 

If a Change of Control occurs or is anticipated to occur, unvested Awards shall Vest at the effective time of such Change of Control (or such earlier date or time that the Board may determine) as follows:

(a) if, as at the
 proposed date of Vesting, it is impractical to assess performance against the applicable
 Performance Conditions, at target; or

(b) if, as at the
 proposed date of Vesting, it is practicable to assess performance against the applicable
 Performance Conditions, to the extent the Board determines having regard to performance against
 the applicable Performance Conditions up to the date of proposed date of Vesting,

PROVIDED ALWAYS THAT if, in respect of an Award, the Change of Control in respect of which this Rule 7.1 applies occurs on or before the first anniversary of the Grant Date then the extent to which such Award Vests shall be reduced to take account of the proportion of the Performance Period as has elapsed when the Change of Control occurs.

Notwithstanding the preceding paragraph of this Rule 7.1, the Board may in its discretion with no obligation to do so, allow a greater proportion of an Award to Vest.

Alternatively, the Board may determine that some or all Awards will be automatically exchanged under Rule 7.2 or may allow Participants to choose Vesting and/or exchange.

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

7.2 <u>Exchange of Awards</u> 

If an Award is exchanged, then:

(a) the exchanged
 award will be in respect of or by reference to shares in any company determined by the company
 offering the exchange;

(b) the exchanged
 award shall have equivalent terms to those of the Award that was exchanged;

(c) the Board may
 determine that any holding or blocking periods shall continue to apply to the exchanged Award;

(d) the exchanged
 award will be subject to the Plan as it had effect in relation to the old Award immediately
 before the exchange;

(e) with effect
 from the exchange, the Rules will apply as if references to Shares are references to
 shares over which the exchanged award has been granted; and

(f) the Rules shall
 apply with such other adjustments as the Board may decide.

7.3 <u>Demerger, variations of share capital and other corporate events</u> 

If the Board becomes aware that the Company is or is expected to be affected by any variation of share capital, rights issue, sub-division, consolidation or reduction of share capital, demerger, distribution (other than an ordinary dividend), liquidation or other event (other than a Change of Control) which, in the opinion of the Board, could affect the current or future value of Shares, the Board may:

(a) adjust Awards
 in such manner as it considers appropriate;

(b) allow Awards
 (for all or some Participants) to Vest in whole or in part, subject to any conditions that
 the Board may impose; or

(c) require some
 or all Awards to be exchanged under Rule 7.2.

***8.***  ***<u>Participant rights and obligations</u>*** 

The rights and obligations of a Participant under the terms of his or her office, employment or contract are not affected by becoming a Participant. These Rules do not form part of, and will not be incorporated into, any contract between a Participant and any member of the Company.

Participants do not have any right to continued employment with the Company as a result of participating in the Plan, nor are they entitled to any compensation or damages if any benefit under the Plan is reduced or cancelled as a result of applying the Rules.

Selection as a Participant refers only to the participation for the one grant year and does not guarantee a right of participation in the Plan in any subsequent year.

Nothing in this Plan confers any benefit, right or expectation on a person who is not an Eligible Employee or a Participant.

The Plan is discretionary and is not part of the any employment contract with the Employer or with the Company. Neither does the Plan create any contract between the Participant and Company, nor does the Plan give rise to a claim or legal entitlement to compensation for the Participant. The Plan may be changed or cancelled by the Board in its absolute discretion. Any future Awards may therefore be changed or cancelled at any time.

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

***9.***  ***<u>Clawback</u>*** 

Participants must adhere at all times to applicable laws, the Articles, the Company's organisational regulations, the Code of Ethics and all applicable Company or Employer policies, procedures and guidelines (including without limitation the "Malus and clawback" practice). If a Participant fails to comply with any such laws, Articles, regulations, Code of Ethics, policies, procedures and/or guidelines in material respects then the Board may determine that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) all or any
 Award (whether vested or unvested) held by the Participant will lapse or be forfeited;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) all or any
 of a Participant's Shares or ADIs transferred to him under the Plan following the Vesting
 of Awards will be forfeited and must be transferred to the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the Participant
 must pay the Company (or such other member of the Company as the Board may determine) gross
 proceeds from the sale of some or all of the Shares or ADIs transferred to him following
 the Vesting of Awards; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) pay to the
 Company (or such other member of the Company as the Board may determine) some or all of the
 gross sums paid to him under the Plan.

Furthermore, all Executive Officers, as defined in the Novartis AG Policy Governing the Recovery of Erroneously Awarded Compensation ("Policy"), which has been adopted by the Board of Directors of Novartis AG to comply with the requirements of United States Securities and Exchange Commission Rule 10D-1 and Section 303A.14 of the New York Stock Exchange Listed Company Manual, will be subject to all of the terms and conditions of that Policy, as amended from time to time.

***10.***  ***<u>Tax, social security and other charges</u>*** 

The Participant indemnifies each member of the Company against all taxes, social security contributions and other levies for which he is responsible that arise in connection with an Award (together "**Taxation**").

If a member of the Company must settle Taxation on behalf of the Participant, where such duties are permitted and/or required by applicable laws, regulations or policies (e.g. tax equalization policies) to be deducted from the Participant's net pay, the member of the Company shall withhold such amount from the current and/or subsequent payrolls and make such arrangements as is considered necessary for such a deduction.

If the available amounts of net pay are not sufficient, the Participant shall be obliged to forward a payment in the appropriate amount to the member of the Company or another designated legal entity to cover the amount of duties.

At the member of the Company's discretion, a number of Shares in respect of which the Award has Vested to the Participant may be sold (Sell-to-Cover) or withheld (Withhold-to-Cover) in order to settle any Taxation. For this purpose, the Participant expressly authorizes the service provider, the Company and the Employer to sell or withhold Shares in an amount that is necessary to cover the Taxation.

The Company and/or the Employer may make such arrangements which it or they consider necessary to meet any liability to pay or account for Taxation (including selling sufficient Shares to meet such liability and accounting for the proceeds of sale to the Company or the Employer). The Participant will promptly do all things necessary to facilitate any such arrangements. Vesting and the transfer of Shares to him can be delayed until he does so.

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

***11.***  ***<u>Transfer of awards</u>*** 

Unless specifically permitted under the Plan or with the prior written consent of the Board, Awards or any rights in respect of any Award may not be transferred, assigned or otherwise disposed of. If Awards (or any rights in respect of Awards) are transferred, assigned or otherwise disposed of or if the Participant becomes bankrupt, they shall lapse or be forfeited immediately.

***12.***  ***<u>Company documents</u>*** 

The Company may (but need not) send to any Participant any documents which the Company sends to its shareholders.

***13.***  ***<u>Board's powers</u>*** 

The exercise of any power or discretion, including refraining from exercise, of the Board concerning the Plan or any Award is absolute and unlimited and may be reasonably exercised at any time, subject always to the principle of good faith. When the Board exercises any of its powers or discretions in a way that will impact a Participant, the Board may (but need not) inform the relevant Participant in such manner as the Board shall determine.

Any decision of the Board in connection with the Plan, the interpretation of the Plan and any related documents and in connection with any dispute relating to the Plan will be final and binding.

***14.***  ***<u>Administration and regulations</u>*** 

The Plan shall be administered by the Board.

The Board may make and vary regulations and policies for the administration and operation of the Plan.

The Board has the right to delegate its powers related to this Plan.

***15.***  ***<u>Awards not pensionable etc.</u>*** 

For the avoidance of doubt, Awards under the Plan are not pensionable and do not count in relation to the calculation of benefit under programs such as life cover, income protection or continuation, medical or such other benefits as the Board may determine.

***16.***  ***<u>Notices</u>*** 

Any notice or other communication under or in connection with the Plan or any Award may be given:

(a) by the Company
 to an Eligible Employee or Participant either personally or sent to him at his place of work
 by electronic mail or other electronic means (including the internet or the intranet) or
 by post addressed to the address last known to the Company (including any address supplied
 by the relevant member of the Company) or sent through the Company's internal postal service;
 and

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

(b) to the Company,
 either personally or by post to the Company secretary.

Items sent by post shall be pre-paid and shall be deemed to have been received 72 hours after posting. Items sent by electronic mail or other electronic means shall be deemed to have been received at the expiration of 24 hours from when they were sent.

The Board may decide the accept notices given by Participants if received after any time stipulated for receipt.

***17.***  ***<u>Data protection</u>*** 

As required by local laws and regulations, Participants are informed about the processing of their personal information in connection with an Award and the general administration of the Plan by the Company and any of their advisers or agents and to the transmission of any such information to other jurisdictions.

***18.***  ***<u>Amendment and termination of the plan</u>*** 

The Board may at any time change the Plan (including amending or adding schedules to the Plan) in any way. Changes may affect Awards already granted provided always that, unless required by law, no such change may be made which is to the material disadvantage of a Participant without that Participant's prior written consent. The Board shall give notice of any changes to any Participant. The Board may terminate the Plan at any time. Termination will not affect existing Awards.

***19.***  ***<u>Compliance with law and articles of incorporation</u>*** 

19.1 <u>Compliance with Law etc.</u> 

The Plan is subject to all applicable laws and the Company's Articles. If such law or the Articles require, the terms of any provision of the Plan and any Award (including any outstanding Award) shall be interpreted and/or amended and applied to the extent required to comply fully with such law or the Articles.

19.2 <u>Swiss law with respect to the compensation of certain executives of listed companies</u> 

The Plan, in particular, is subject to any mandatory provisions of Swiss law pertaining to compensation of governing bodies derived from article 95 paragraph 3 of the Swiss Federal Constitution and the related implementing legislation (the "**Swiss Code Obligation**"). Any interpretation and/or amendment necessary in respect of any provision of the Plan or any Award as a result of applicable law and/or the Articles (whether currently in force or in the future) to the detriment of the Participant shall not give rise to any claims by or other rights whatsoever of the Participant. This applies in particular if the annual general meeting of the Company does not approve the compensation of the Participant which is subject to approval under the Swiss Code of Obligation.

19.3 <u>US Code Section 409A</u> 

If a Participant (other than a Participant whose benefits are provided under the United States Schedule) is subject to the United States Internal Revenue Code ("**US Code**") (a "**US Participant**"), and if benefits under this Plan for such US Participant are not exempt from US Code Section 409A, it is intended that to the maximum extent permitted under all applicable law this Plan will be interpreted and administered to conform to the requirements of US Code Section 409A as they apply to such US Participant.

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

In furtherance of this intent, to the extent that any portion of the benefits provided under the Plan constitutes a "deferral of compensation" under United States Treasury Regulation Section 1.409A-1(b):

(a) any election
 to voluntarily defer such portion shall be made in accordance with the requirements for an
 initial deferral under United States Treasury Regulation 1.409A-2(a);

(b) the substantive
 provisions of Section 4(a) of Schedule United States shall apply to Awards of SARs
 with the "market value" in paragraphs 4(a)(i) and 4(a)(ii) of that
 same Schedule determined pursuant to Rule 22 of the Plan rather than paragraph 4(a)(iii) of
 Schedule United States;

(c) Section 5.2
 of Schedule United States shall apply to Restricted Stock Units, and

(d) the provisions
 of Sections 6 and 7 of Schedule United States shall apply to all such Awards.

19.4 <u>Voluntary Participation</u> 

By accepting any award or grant of securities under this Plan, Participants shall be deemed to represent and warrant to the Company that such Participant's participation in the trade and acceptance of such securities is voluntary and that such Participant has not been induced to participate by expectation of engagement, appointment, employment or continued engagement, appointment or employment, as applicable.

***20.***  ***<u>Applicable law</u>*** 

The Plan is governed by and construed in accordance with the laws of Switzerland, under express exclusion of any provisions of conflict of laws.

The Board may resolve conclusively all questions of fact or interpretation concerning the Plan and has the authority to resolve any dispute of any kind that arises under or in connection with the Plan. In the event a dispute escalates to require resolution by a court, the dispute will exclusively be resolved by the Courts of Basel, Switzerland.

***21.***  ***<u>Definitions and interpretation</u>*** 

In this Plan and in the Schedules to the Plan, unless otherwise required by the Rules:

21.1 <u>Definitions</u> 

**ADIs** means American depositary instruments being either American Depositary Shares or American Depositary Receipts of the Company as specified in the Grant Notice.

**Articles** means the articles of incorporation of the Company as amended from time to time.

**Award** means an award under the Plan (which may be an award of Restricted Stock Units, Restricted Stock, Stock Appreciation Rights or such other form of award referable to the Company's equity as the Board may determine).

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

**Board** means the Company's Board of Directors or, to the extent permitted by applicable law, the Board's delegate or, following a Change of Control, those persons who comprised the Board immediately prior to such Change of Control.

**Cessation of Employment** occurs, for the purposes of the Plan, when a Participant ceases to hold an office or employment with any member of the Company PROVIDED THAT a Participant will not be treated as Ceasing Employment in circumstances in which that Participant is on a leave of absence where the Participant's right to re-employment is guaranteed either by statute or contract and employment is not otherwise terminated during such leave of absence (in which case the Participant will Cease Employment at the time of such termination) and similar terms, such as "**Ceases Employment**" or "**Ceasing to be Employed**", shall be construed accordingly.

**Change of Control** means any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any person
 or group of persons who are acting together purchases or otherwise becomes the beneficial
 owner or has the right to acquire such beneficial ownership (whether or not such right is
 exercisable immediately or subject to passage of time or other conditions) of voting securities
 representing more than 50% of the combined voting power of all outstanding securities of
 the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Company's
 shareholders approve an agreement to merge or consolidate the Company with or into another
 corporation as a result of which less than 50% of the outstanding voting securities of the
 surviving or resulting entity are or will be owned by the former shareholders of the Company;
 or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the Company's
 shareholders approve the sale of all or substantially all of the Company's business
 and/or assets to a person or entity which is not a member of the Company,

provided that an Internal Reorganisation shall not be a Change of Control.

**Code of Ethics** means the code of ethics adopted by the Company which describes the fundamental principles concerning ethical business conduct as amended from time to time.

**Company** means Novartis AG.

**Competitor** means any company or other organisation that is either or both:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) part of
 the Company's comparator peer group of peer companies in the global healthcare industry,
 as listed in Schedule A, as may be updated by the Board at any time without prior notice
 to plan participants, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) in competition
 with the Company or in relation to products and/or clinical areas.

The intent of identifying Competitors under this Plan is, and always has been, to be inclusive of all subsidiaries and affiliates of each such Competitor, and with respect to organisations that are in competition with the Company or in relation to products and/or clinical areas, is also inclusive of investors (including without limitation venture capital and private equity funds or management companies) that "significantly" invest in companies or other organisations that are engaged in activities that are in competition with the Company or in relation to products and/or clinical areas ("Investors"). For these purposes, a company or organisation shall be considered to be an Investor if the Board determines, in its sole and exclusive discretion, that such company or organisation makes significant investments in areas that are in competition with the Company or in relation to products and/or clinical areas. The determination of whether an Investor significantly invests in companies or other organisations that are engaged in activities that are in competition with the Company or in relation to products and/or clinical areas, and therefore is a "Competitor" for the purpose of this Plan, is within the complete, sole and unfettered discretion of the Board, which it can determine at any time without prior notice to plan participants.

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

Notwithstanding the foregoing, for the purposes of this Plan, a company or other organisation (including an Investor) shall not be deemed to be a "Competitor" if it is active in (or for Investors, does not invest in any products and/or clinical areas that are in competition with the Company or in relation to products and/or clinical areas) **no** jurisdiction (or, in connection with products or services, for delivery, sale, marketing, or development in **no** jurisdiction) in which the Company does business. For these purposes, "jurisdiction" means country.

If any part of the definition of "Competitor" is held to be void but would be valid if part of the wording were deleted or reformed, the definition of "Competitor" shall apply with such deletion or revision as may be necessary to make it valid and effective.

**Dealing Day** means a day on which the Swiss Exchange (SIX) or, in relation to ADIs, the national securities exchange in the US on which ADIs are listed, is open for business.

**Dealing Restrictions** means restrictions on the dealing in Shares or the grant of Awards imposed by any law, regulation or Code of Practice (including the Novartis Global Insider Trading Policy, as amended or replaced from time to time) or otherwise.

**Disability** means the Participant is permanently incapable of performing his duties and responsibilities due to illness or accident, in accordance with applicable law, or in the absence of such applicable law, as determined by the Board.

**Dividend Equivalents** means a right to cash or Shares as described in Rule 3.

**Eligible Employee** means any member of the Executive Committee and the Corporate Executive Company or any employee or group of employees of the Company as the Board shall determine.

**Employer** means the member of the Company by or in which the Participant is or, where the context so admits, was an office holder or employed.

**Grant Date** means the date an Award is made as specified in the Grant Notice.

**Grant Notice** means a grant notice provided to a Participant in accordance with the Rules.

**Grant Period** means the period of 42 calendar days commencing:

(a) the day on which
 the Plan is adopted by the Board;

(b) the Dealing
 Day immediately following the day on which the Company announces results for any period;

(c) the day on which
 the Company's annual general meeting is held; or

(d) any day on which
 the Board resolves that exceptional circumstances exist which justify the making of an Award.

**Internal Reorganisation** means any event, offer, scheme, share purchase, merger or arrangement whereby:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) a Change
 of Control occurs; and

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) immediately
 afterwards the share capital of the company then controlling (whether directly or indirectly)
 the Company is owned substantially by the same persons who were shareholders of the Company
 immediately prior to such event, scheme or arrangement in substantially the same proportions.

**Lock-In Period** has the meaning set out in Rule 4.9.

**Market Value** means in relation to a Share or ADI (as appropriate) on any given day:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) if the Shares
 are admitted to trading on the Swiss Exchange (SIX) an amount equal to the closing price
 on that day (or if there is no such price on that day the last preceding day for which such
 price is available);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) if the ADIs
 are listed on a national securities exchange in the US an amount equal to the closing price
 on that day (or if there is no such price on that day the last preceding day for which such
 price is available; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) if the Shares
 are not admitted to trading on the Swiss Exchange (SIX) or the ADIs are not listed on a national
 securities exchange in the US, then such value as is determined by the Board.

**Participant** means an Eligible Employee who is selected by the Board to participate in the Plan and is employed by the Company at the Grant Date.

**Performance Condition** means the condition (whether performance, time based or otherwise) set out in any Schedule or such other condition as the Board determines from time to time.

**Performance Period** means the period over which the Performance Conditions are measured, as determined by the Board.

**Plan** means the Novartis AG Long Term Incentive Plan.

**Restricted Stock** means an award of Shares subject to restrictions in accordance with the Plan.

**Restricted Stock Units** means a right to receive Shares or cash under the Plan (but subject to Rule 4.10 (cash and ADI alternative)).

**Retirement** means the Cessation of Employment:

(a) subject, for
 the purposes of the Plan, to approval by the Employer, after having attained retirement age
 according to the law applicable to the Participant, if any;

(b) on early retirement
 in accordance to applicable local law as approved by the Employer; or

(c) by reason of
 retirement provided that such retirement is approved by the Board and the Employer.

**Rules** mean the rules of the Plan (including all Schedules).

**Schedule** means a schedule to the Rules.

**Service** means the period of continuous employment with the Company ending with the relevant Cessation of Employment for the purposes of the Plan PROVIDED ALWAYS THAT the Board may determine that prior periods of employment with the Company and/or periods of employment with entities outside the Company (but which are subsequently acquired by the Company) may be taken into account.

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

**Share** means a registered share of the Company with a par value of CHF -.50 or, in the case of SARs, notional Shares.

**Stock Appreciation Rights** or **SARs** means an award under the Plan, the future value of which is based on the increase in the value of Shares (from the base value set by the Board at the time an Award is made) which notionally comprises each SAR from the relevant Grant Date.

**Vesting** means:

(a) in the case
 of Restricted Stock Units, a Participant being entitled to receive Shares or cash;

(b) in
 the case of Restricted Stock, restrictions under the Plan ceasing to apply; or

(c) in the case
 of SARs, a Participant being entitled to receive a cash sum based on the growth in value
 of the notional Shares comprising the Award,

and "**Vest**" shall be construed accordingly.

**Vesting Date** means the date an Award vests as determined by the Board and specified in the Grant Notice.

21.2 <u>Interpretation</u> 

Unless the context requires otherwise: words importing the singular include the plural and vice versa; the masculine includes the feminine and vice versa; the word "includes" is not a word of limitation; references to "Schedule" shall refer to the appropriate Schedule to the Plan; headings and boldings are for convenience only and do not affect the interpretation of these Rules.

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

**SCHEDULE A<br> NOVARTIS COMPETITORS**

Where a Participant who retains his or her Awards following termination of Employment according to Rule 6, becomes an employee or director or otherwise provides services to a Competitor as listed or described below (and as defined in Rule 21.1), then all unvested Awards and/ or unexercised Stock Options shall immediately be forfeited under that Rule 6.5 (provided that such Rule 6.5 is applicable to the Award in question):

&nbsp;&nbsp;&nbsp;&nbsp;· AbbVie

&nbsp;&nbsp;&nbsp;&nbsp;· Amgen

&nbsp;&nbsp;&nbsp;&nbsp;· AstraZeneca

&nbsp;&nbsp;&nbsp;&nbsp;· Bristol-Myers
 Squibb

&nbsp;&nbsp;&nbsp;&nbsp;· Eli
 Lilly & Company

&nbsp;&nbsp;&nbsp;&nbsp;· Gilead

&nbsp;&nbsp;&nbsp;&nbsp;· GlaxoSmithKline

&nbsp;&nbsp;&nbsp;&nbsp;· Johnson &
 Johnson

&nbsp;&nbsp;&nbsp;&nbsp;· Merck &
 Co.

&nbsp;&nbsp;&nbsp;&nbsp;· Novo
 Nordisk

&nbsp;&nbsp;&nbsp;&nbsp;· Pfizer

&nbsp;&nbsp;&nbsp;&nbsp;· Roche

&nbsp;&nbsp;&nbsp;&nbsp;· Sandoz

&nbsp;&nbsp;&nbsp;&nbsp;· Sanofi

&nbsp;&nbsp;&nbsp;&nbsp;· Takeda

Each company and organisation identified above is, as it always has been, intended to include all of its subsidiaries and affiliates.

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

**SCHEDULE 1<br> LONG TERM PERFORMANCE PLAN**

***1.***  ***<u>Application of the Schedule</u>*** 

Where Awards are granted under the Long Term Performance Plan (the **LTPP**), then the Rules of the Novartis AG Long Term Incentive Plan (LTIP) shall apply subject to the terms set out in this Schedule.

***2.***  ***<u>Performance period</u>*** 

The Performance Period is the three-year period over which the Performance Conditions are measured ending on 31 December of the year preceding the year in which the Vesting Date of the relevant LTPP Award occurs or such other period as the Board shall determine as set out in the relevant Grant Notice.

***3.***  ***<u>Performance conditions</u>*** 

LTPP Awards are subject to Performance Conditions relating to Net Sales Growth, Core Operating Income Growth and Innovation. Each of the Performance Conditions is subject to an equal weighting percentage of an LTPP Award.

The maximum number of Vested LTPP Awards is 200% of the Awards determined in the Grant Notice before any Dividend Equivalents (with the caps applicable to each specific Performance Condition detailed below). To achieve this maximum, each Performance Condition should have a Performance Factor of 200% i.e. one Performance Conditions cannot compensate for the loss of another.

**<u>Net Sales Growth Performance Condition</u>**

For the purposes of this Schedule:

**"Base Net Sales"** means net sales of the Company for the Financial Year ended 31 December preceding the Grant Date as determined from time to time by the Board; and

**"Net Sales Growth CAGR"** means compound annual growth in net sales over the Performance Period as determined from time to time by the Board and expressed as the percentage change in comparison with the Base Net Sales, which is defined above.

The number of LTPP Awards that are subject to the Net Sales Growth Performance Condition Vesting on the Vesting Date is determined by multiplying the number of granted LTPP Awards that are subject to that Performance Condition with the Net Sales Growth Performance Factor. The Net Sales Growth Performance Factor is determined by the Board based on the following Vesting schedule for all positive values of Net Sales Growth CAGR:

---

| | |
|:---|:---|
| Net Sales Growth CAGR | Net Sales Growth Performance Factor |
| Target Range 1 | 120 to 200 per cent |
| Target Range 2 | 80 to 120 per cent |
| Target Range 3 | 40 to 80 per cent |
| below Target Range 3 | 0 per cent |

---

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

Target Range 1, Target Range 2 and Target Range 3 will be determined by the Board and notified to a Participant in the relevant Grant Notice.

**<u>Core Operating Income Growth Performance Condition</u>**

For the purposes of this Schedule:

**"Base Core Operating Income"** means the core operating income of the Company for the Financial Year ended 31 December preceding the Grant Date as determined from time to time by the Board; and

**"COI Growth CAGR"** means compound annual growth in core operating income over the Performance Period as determined from time to time by the Board and expressed as the percentage change in comparison with the Base Core Operating Income, which is defined above.

The number of LTPP Awards that are subject to the Core Operating Income Growth Performance Condition Vesting on the Vesting Date is determined by multiplying the number of granted LTPP Awards that are subject to that Performance Condition with the COI Growth Performance Factor. The COI Growth Performance Factor is determined by the Board based on the above Vesting schedule for the Net Sales Growth Performance Condition for all positive values of COI Growth CAGR (on the basis that the Vesting Schedule will have the following substituted column headings: the COI Growth CAGR and the COI Growth Performance Factor and that, as noted above, Target Range 1, Target Range 2 and Target Range 3 will be determined by the Board and notified to a Participant in the relevant Grant Notice).

**<u>Innovation Performance Condition</u>**

The Innovation Performance Factor reflects the achievement of the three-year forward-looking Innovation Targets set out for the respective grant of an Award and is determined by the Board as a percentage (**the "Innovation Performance Factor"**).

Innovation Targets focus on key innovation program milestones that will improve future business and/or highly contribute to Company's scientific reputation and are approved by the Board under consultation with Company's CEO and Science & Technology Committee of the Board.

The number of LTPP Awards that are subject to the Innovation Performance Condition Vesting on the Vesting Date is determined by multiplying the number of granted LTPP Awards that are subject to that Performance Condition with the Innovation Performance Factor.

***4.***  ***<u>Cessation of Employment</u>*** 

Rule 6 of the LTIP shall apply save as modified as follows:

6.6 <u>Cessation of Employment as a result of death or Disability</u> 

Rule 6.6 shall apply as follows:

"If a Participant Ceases Employment as a result of his death then the number of LTPP Awards as determined in the Grant Notice and held by that Participant shall Vest immediately in respect of a proportion of the LTPP Award (corresponding to such proportion of the Performance Period as has elapsed when the Participant Ceases Employment as a result of death):

(a) if, as at the
 date of Cessation of Employment, it is impractical to assess performance against the applicable
 Performance Conditions, at target; or

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

(b) if, as at the
 date of Cessation of Employment, it is practicable to assess performance against the applicable
 Performance Conditions, to the extent the Board determines having regard to performance against
 the applicable Performance Conditions up to the date of Cessation of Employment.

In case of a Participant's death, upon notice to the Company his personal representative or successor in title shall be entitled to, if any, the Vested LTPP Awards. Settlement of these Vested LTPP Awards to the Participant's personal representative or successor in title excludes any other potential claims of the Participant's estate with regards to the LTPP."

***5.***  ***<u>Amendments</u>*** 

The Board may at any time change this Schedule. Subject to Rule 2.5 of the LTIP, changes may affect Awards already granted provided always that, unless required by law, no such change may be made which is to the material disadvantage of a Participant without that Participant's prior written consent.

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

**SCHEDULE 2<br> PARTICIPANTS WHO ARE OR BECOME MEMBERS OF THE ECN**

***1.***  ***<u>Application of this Schedule</u>*** 

Unless specifically provided otherwise, this Schedule shall apply to:

(a) Awards granted
 to any Participant who at the relevant Grant Date is a member of the ECN; and

(b) Awards granted
 to any Participant who, after the relevant Grant Date, becomes a member of the ECN.

Where this Schedule applies relevant Awards shall be subject to all the provisions of the Novartis AG Long Term Incentive Plan save as modified below.

***2.***  ***<u>Definitions</u>*** 

For the purposes of this Schedule the following definitions shall apply:

"**ECN**" means the Executive Committee of Novartis AG (including permanent attendees to that committee).

"**Retirement**" means the Cessation of Employment after:

(a) having attained
 age 58 or older, or

(b) in respect of
 those Participants who satisfied the Rule of 60 at December 31, 2015, having attained
 age 55 or older and having completed at least 10 years of Service.

"**Rule of 60**" the sum of the Participant's age plus Service being equal to 60 or more. For the purposes of this definition the Participant's age and his Service shall be whole calendar years as at December 31, 2015.

***3.***  ***<u>Performance conditions and ecn ltpp awards vesting</u>*** 

The paragraph 3 of "Schedule Long Term Performance Plan" shall apply as modified as follows:

In addition, for Executive Committee members, Relative TSR is included to the Performance Conditions previously mentioned.

Each of the Performance Conditions is subject to the following weighting percentage of an LTPP Award:

25% Net Sales Growth

25% Core Operating Income Growth

25% Innovation and

25% Relative TSR

**<u>Relative</u>** **<u>Total Shareholder Return (TSR) Performance Condition</u>**

TSR is calculated using such standard published methodology as the Board may determine from time to time, including share price growth and dividends paid over the Performance Period.

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

TSR is measured against a comparator peer group of peer companies in the global healthcare industry, as per Schedule A. The Board, in its discretion, may alter the constituents of the comparator peer group in such circumstances as it considers appropriate, including where a constituent company is no longer listed on a stock exchange.

The number of LTPP Awards that are subject to the Relative TSR Performance Condition Vesting on the Vesting Date is determined by multiplying the number of granted LTPP Awards that are subject to that Performance Condition with the Relative TSR Performance Factor. The Relative TSR Performance Factor is determined by the Board based on the following Vesting schedule for all positive values of TSR, PROVIDED ALWAYS that the below shall not apply to Awards under the LTPP which were granted prior to the date on which the Participant became a member of the ECN:

---

| | |
|:---|:---|
| TSR performance (percentile)<br> compared to comparator peer group | Relative TSR Performance Factor |
| >75<sup>th</sup> | 200 per cent |
| 50<sup>th</sup> – 75<sup>th</sup> | Straight line interpolation |
| 50<sup>th</sup> | 100 per cent |
| < 50<sup>th</sup> | 0 per cent |

---

In the event of a non-positive TSR value, the Board may reduce the number of LTPP Awards subject to the Relative TSR Performance Condition, which would otherwise Vest.

For the avoidance of doubt, all of the other Performance Conditions set out in paragraph 3 of Schedule Long Term Performance Plan (i.e. the Net Sales Growth Performance Condition, the Core Operating Income Growth Performance Condition and the Innovation Performance Condition) shall continue to apply, as specified in Schedule Long Term Performance Plan.

***4.***  ***<u>Blocking Restrictions</u>*** 

Awards granted to the Chief Executive Officer and Chief Financial Officer are subject to a mandatory blocking period of two years beyond the vesting date (after applicable taxes) ("**Mandatory Blocking Period**").

Furthermore, the Board may offer Participants the opportunity to block Awards in the form of Restricted Stocks after the expiry of the Mandatory Blocking Period ("**Additional Blocking Period**"). The blocking choices and the terms of the blocking will be determined by the Board from time to time.

***5.***  ***<u>Cessation of Employment – introduction</u>*** 

The following in Rule 6.1 shall not apply:

"Notwithstanding any other part of this Rule 6, the Board may, in its discretion with no obligation to do so, allow (on such terms as the Board decides, including, without limitation, the Participant first executing and not revoking a general release of claims acceptable to the Company) a greater proportion of an Award to Vest and/or accelerate the time at which Vesting occurs and/or treat a Participant who has Ceased Employment as having done so within Rules 6.3, 6.4 or 6.6."

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

***6.***  ***<u>Cessation of Employment as a result of Retirement</u>*** 

6.1 Subject to proviso (b) below, Rule 6.3
 shall be deleted in its entirety and replaced with the following:

"If a Participant Ceases Employment because of Retirement with the agreement of the Participant's employer his Award shall, subject to Rule 6.5 and, if so determined by the Board, the Participant first executing and not revoking a general release of claims acceptable to the Company, Vest on the Vesting Date to the extent the Performance Conditions have been met PROVIDED ALWAYS THAT:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the extent
 to which such Award Vests shall be reduced to take account of the proportion of the Performance
 Period as has elapsed when the Cessation of Employment occurs; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) this provision
 of this Schedule shall not apply to any member of the ECN who, as at 1 January 2018,
 satisfied the definition of Retirement, as set out above in this Schedule (irrespective of
 whether or not such Retirement has been approved by his employer). If this proviso (b) applies
 then Rule 6.3 (as set out in the main body of the Plan) shall apply."

6.2 Immediately following Rule 6.3
the following shall be added as Rule 6.3A:

"In determining whether to approve Retirement under Rule 6.3(a), the Board shall take into consideration the Participant's satisfaction of certain conditions, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) whether
 the Participant is leaving the Company in good standing and not for "cause" (for
 example because of dishonesty, misconduct, gross negligence, violation of the Code of Ethics
 or similar reason);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) whether
 the Participant has returned to his Employer all company property in his possession at his
 termination;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) whether
 the Participant has cooperated with his Employer in the orderly handover and transition of
 his duties and responsibilities prior to his date of termination;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) whether
 the Participant has given his written commitment that for one year following his termination
 he will not work for a Competitor and he will refrain from soliciting other employees of
 the Company to terminate their employment; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) whether
 the Participant has affirmed his obligation not to disclose confidential information he received
 during his employment with the Company and to refrain from using any such information for
 any purpose not in Company's business interests."

6.3 At the end of
 Rule 6.6 the following proviso shall be added:

"PROVIDED ALWAYS THAT if, in respect of an Award, the death or Disability in respect of which this Rule 6.6 applies occurs on or before the first anniversary of the Grant Date then the extent to which such Award Vests shall be reduced to take account of the proportion of the Performance Period as has elapsed when Cessation of Employment by reason of death or Disability occurs."

***7.***  ***<u>Corporate events</u>*** 

The following in Rule 7.1 shall not apply:

"Notwithstanding the preceding paragraph of this Rule 7.1, the Board may in its discretion with no obligation to do so, allow a greater proportion of an Award to Vest."

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

**SCHEDULE 3<br> UNITED STATES**

***1.***  ***<u>Application of this Schedule</u>*** 

When Awards under the Plan (including but not limited to Awards under the LTPP and Select Schedules to the Plan) are to be granted the Board may determine that this Schedule applies, in which case such Awards shall be subject to all the provisions of the Novartis AG Long Term Incentive Plan save as modified below.

ADIs subject to the Awards under the Plan are intended to be registered under the United States Securities Act of 1933.

***2.***  ***<u>Grant of Awards – Shares subject to the Plan</u>*** 

Subject to Rule 7.3, the aggregate number of ADIs made subject to Awards under this Schedule may not exceed 13,510,000, plus any ADIs that were not issued under the Plan as of January 1, 2021; plus any ADIs subject to outstanding Awards under the Plan as of January 1, 2021 that on or after January 1, 2021 cease for any reason to be subject to such Awards.

Such ADIs shall be deemed to have been used in payment of Awards whether they are actually delivered or the market value equivalent of such ADIs is paid in cash. In the event any Award is surrendered or terminated, or expires or is forfeited, the number of ADIs no longer subject thereto shall thereupon be released and shall thereafter be available for new Awards under this Schedule.

ADIs comprising Awards under this Schedule or delivered by the Company in settlement of Awards under this Schedule may be derived from authorised and unissued Shares or from Shares or ADIs held in the treasury of the Company or held by another member of the Company or may be purchased on the open market or by private purchase.

**3.**  ***<u>Definitions</u>*** 

For the purposes of this Schedule the following definitions shall apply:

"**Company**" in this Schedule means Novartis Corporation, a New York corporation.

"**Retirement**" the Cessation of Employment after having attained age 55 or older and having completed at least 10 years of Service.

***4.***  ***<u>Stock Appreciation Rights</u>*** 

SARs granted under this Schedule shall be subject to such terms and conditions, not inconsistent with the Plan, as the Board may impose, including, but not limited to, the following:

(a) <u>SARs with Participant discretion to exercise</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Base Value</u>. The Base Value for SARs per ADI subject to a SAR shall not be less than 100% of
 the market value of an ADI at the Grant Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Payment on exercise</u>. On the exercise of a SAR, the Company or the Employer shall pay to the Participant
 an amount equal to the number of ADIs subject to the SAR multiplied by the excess, if any,
 of the market value of one ADI on the exercise date over the Base Value.

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Market value</u>. For the purposes of SARs subject to this Schedule, "market value"
 in paragraphs 4(a)(i) and 4(a)(ii) of this Schedule on a given date means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa) if the ADIs
 are listed on a national securities exchange in the United States, the closing sale price
 reported as having occurred on the primary exchange with which the Shares are listed and
 traded (currently the New York Stock Exchange) on such date or, if there is no such sale
 on that date, then the last preceding date on which such a sale was reported;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb) if the ADIs
 are not listed on any national securities exchange but is quoted on the National Market System
 of the National Association of Securities Dealers Automated Quotation System ()"**NASDAQ** "),
 the trade price of the last sale reported on such date or, if there is no such sale on that
 date, then the last preceding date on which such a sale was reported; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(cc) if the ADIs
 are not listed on a national securities exchange nor quoted on NASDAQ, on a last sale basis
 the amount determined by the Board to be the fair market value based upon a good faith attempt
 to value the Shares accurately.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>Dividend Equivalents</u>. If the Board designates Dividend Equivalents to apply to SARs pursuant to
 Rule 3.3(a), such accumulated Dividend Equivalents shall be paid to the Participant
 immediately upon Vesting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>No deferral of proceeds</u>. Pursuant to the limitations of the United States Treasury Regulation Section 1.409A-1(b)(5)(i)(B)(3),
 a Participant may not defer the proceeds of the exercise of a SAR.

(b) <u>SARs without Participant Discretion to exercise</u> 

If a SAR is granted with a fixed exercise date and the Participant has no discretion to exercise the SAR, Participants may elect to defer the payment of the proceeds of the automatic exercise of the SAR, and any accumulated Dividend Equivalents, to the date later than the payment date specified in the Award provided that the Participant makes such deferred election either as an initial deferral under United States Treasury Regulation Section 1.409A-2(a) or pursuant to the subsequent deferral provisions of United States Treasury Regulation Section 1.409A-2(b). The Board shall determine whether such deferral is in the form of Shares (ADIs) or cash. If deferrals are in Shares (ADIs), unless otherwise directed by the Board such Shares (ADIs), and any accumulated Dividend Equivalents, shall be delivered upon such deferred payment date. If the deferrals are in cash, the cash proceeds of such automatic exercise of the SARs shall be transferred into the applicable non-qualified deferred compensation plan of the Company entity which employs the Participant.

***5.***  ***<u>Consequences of Vesting – Restricted Stock Units</u>*** 

5.1 Participants
 may elect to defer the payment of Restricted Stock Units, and any accumulated Dividend Equivalents,
 to the date later than the payment date specified in the relevant Award provided that the
 Participant makes such a deferred election either as an initial deferral under United States
 Treasury Regulation Section 1.409A-2(a) or pursuant to the subsequent deferral
 provisions of United States Treasury Regulation Section 1.409A-2(b). The Board shall
 determine whether such deferral is in the form of Shares (ADIs) or cash. If deferrals are
 in Shares (ADIs), unless otherwise directed by the Board, such Shares (ADIs), and any accumulated
 Dividend Equivalents, shall be delivered from this Plan upon such deferred payment date.
 If deferrals are in cash, the cash proceeds of such Awards shall be transferred into the
 applicable non-qualified deferred compensation plan of the Participant's employing
 Company in the United States.

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

5.2 Rule 4.3
 shall be amended by inserting the underlined words below:

"As soon as practicable after the Vesting (but no later than the 15th day of the <u>third calendar month after the Vesting)</u> the Company shall transfer the number of Shares (or pay or procure to be paid a cash sum if the Board has determined that the RSU is to be settled in cash) in respect of which the Award has Vested to the Participant".

***6.***  ***<u>Corporate Events</u>*** 

Should the Board determine that adjustments be made to Awards under Rule 7, any such adjustments or modifications must be made in a manner which is consistent with the provisions of section 409A of the United States Internal Revenue Code ("**Code Section 409A**").

***7.***  ***<u>Code Section 409A</u>*** 

7.1 Notwithstanding
 anything under the Plan to the contrary, to the extent applicable, it is intended that the
 Plan as it applies to Participants shall comply with the provisions of Code Section 409A
 and the Plan and all applicable Awards be construed and applied in a manner consistent with
 this intent. In furtherance thereof, any amount constituting a "deferral of compensation"
 under Treasury Regulation Section 1.409A-1(b) that is payable to a Participant
 upon a separation from service of the Participant (within the meaning of Treasury Regulation
 Section 1.409A-1(h)) (other than due to the Participant's death), occurring while
 the Participant shall be a "specified employee" (within the meaning of Treasury
 Regulation Section 1.409A-1(i)) of the Company (as limited by Code Sections 414(b),
 (c), (m) and (o)), shall not be paid until the earlier of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the date
 that is six months following such separation from service; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the date
 of the Participant's death following such separation from service.

7.2 Notwithstanding
 any provision of the Plan to the contrary, to the extent that an Award constituting a "deferral
 of compensation" subject to Code Section 409A shall be deemed to be vested or
 restrictions lapse upon the occurrence of a Change of Control, and if such Change of Control
 does not constitute a "change in control event" (as defined in Treasury Regulation
 Section 1.409A-3(i)), then even though such Award may be deemed to be vested or restrictions
 lapse, payment will only be made to the extent necessary to comply with the provisions of
 Code Section 409A, to the United States Participant on the earliest of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the United
 States Participant's separation from service, the date payment otherwise would have
 been made pursuant to the regular payment terms of the Award; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Participant's
 death.

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

**SCHEDULE 4<br> SELECT PLAN 2024**

***1.***  ***<u>Application of the Schedule</u>*** 

Where Awards are granted under the Select Plan 2024 ("**Select Plan**") either regularly or under special circumstances, then the Rules of the Novartis AG Long Term Incentive Plan (LTIP) shall apply subject to the terms set out in this Schedule.

The Select Plan applies for Select Awards made on or after 1 January 2024.

***2.***  ***<u>Purpose</u>*** 

The purpose of the Select Plan is to provide selected Eligible Employees of the Company or any member of the Company with an opportunity to receive an Award in respect of Restricted Stock and/or Restricted Stock Units, thus providing an increased incentive for such persons to contribute to the future success and prosperity of the Company, enhancing the value of the Shares for the benefit of the shareholders of the Company and increasing the ability of the Company to attract and retain individuals of exceptional skill.

***3.***  ***<u>Participants</u>*** 

(a) Members of the ECN may not be
granted Awards under the Select Plan.

(b) Without prejudice
 to any subsisting Awards, the Board may, from time to time, exclude from participation under
 the Select Plan such category or categories of Eligible Employees as the Board may determine.

***4.***  ***<u>Vesting and other Conditions</u>*** 

(a) Subject to the
 Board determining otherwise the overall staggered Vesting Period of the total Awards granted
 regularly under the Select Plan is 3 years.

(b) With each completed
 year of the 3-year overall staggered Vesting Period, the Participant accrues an entitlement
 equalling 1/3 of the total Awards. The effective date used to determine the partially vested
 Award each year will be calculated backward from the Vesting Date specified in the Grant
 Notice. To the extent necessary, the partially vested Award for the first year is rounded
 commercially to the next whole number.

(c) However, for
 special Awards granted under the Select Plan, like buyout grants, CEO grants and any other
 type of one-off grant, the Vesting Period of such Awards is a 3 year cliff (or alternatively
 as defined on the award agreement/notice itself), i.e. without a staggered vesting.

(d) In the event
 that an Award comprises Select Restricted Stock, the Participant shall be entitled to receive
 all dividends declared in respect of such shares (if any) and, other than in the year in
 which the Award is made if that Award is made after the Company's annual general meeting,
 to vote in any meeting of the Company's shareholders by reference to such shares.

(e) In the event
 that an Award comprises Select Restricted Stock Units, during the Vesting Period the Participant
 shall not, in relation to any shares referable to such SRSU, be entitled to any dividends
 or votes. SRSUs are not tradeable.

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

***5.***  ***<u>Definitions</u>*** 

For the purposes of this Schedule and its Appendices the following definitions shall apply:

"**ECN**" means the Executive Committee of Novartis AG (including permanent attendees to that committee).

"**Select Restricted Stock**" or "**SRS**" shall mean a Share subject to restrictions in accordance with the Select Plan.

"**Select Restricted Stock Unit**" or "**SRSU**" shall mean a right to receive a Share (subject to the Board determining that SRSUs or any of them are to be settled in cash) in accordance with the Select Plan after the expiry of the Vesting Period.

"**U.S. Person**" has the same meaning as set out in Regulation S under the Securities Act of the United States of America provided that "U.S. Person" shall always include any person who is a resident of the United States.

"**Vesting Date**" means in relation to an Award the Vesting Date specified in the relevant Grant Notice.

**"Vesting Period"** shall mean the period between the Grant Date and Vesting Date of an Award.

***6.***  ***<u>Cessation of Employment</u>*** 

Rule 6 of the LTIP shall apply save as modified as follows:

6.3 <u>Cessation of Employment as a result of Retirement</u> 

Rule 6.3 shall apply as follows:

"If a Participant Ceases Employment because of Retirement with the agreement of the Participant's employer his Award shall, provided, if so determined by the Board, the Participant first executes and does not revoke a general release of claims acceptable to the Company, Vest on the date of such Cessation of Employment PROVIDED ALWAYS THAT if the Cessation of Employment in respect of which this Rule 6.3 applies occurs on or before the first anniversary of the Grant Date then the extent to which such Award Vests shall be reduced to take account of the proportion of the Vesting Period as has elapsed when the Cessation of Employment occurs."

6.4 <u>Cessation of Employment for other good reasons and following sale</u> 

"If a Participant Ceases Employment because of:

(a) termination
 of employment by the Participant's Employer (whether or not by notice) other than for
 misconduct or poor performance;

(b) his Employer ceasing to be a member
of the Company; or

(c) the business
 for which the Participant works is transferred to a person which or who is not a member of
 the Company,

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

his Award shall, provided, in relation to Rule 6.4(a) and if so determined by the Board, the Participant first executes and does not revoke a general release of claims acceptable to the Company, Vest on the date of such Cessation of Employment in respect of a proportion of the Award (corresponding to such proportion of the Vesting Period as has elapsed when the Participant Ceases Employment provided that the Board may determine in the case of leaving for reasons set out in (b) or (c) above that some or all of the Awards held by relevant Participants shall be exchanged in accordance with Rule 7.2 of the LTIP (exchange of awards)."

6.5 <u>Lapse or forfeiture of Awards on joining a Competitor</u> 

"Section 6.5 entitled Lapse or forfeiture of Awards on joining a Competitor shall not apply to awards made under this Schedule."

6.6 <u>Cessation of Employment as a result of death or Disability</u> 

"If a Participant Ceases Employment as a result of his death or Disability then Awards held by that Participant shall Vest immediately."

***7.***  ***<u>US Selling restrictions</u>*** 

The Shares subject to the Select Plan (including those received by Participants following Vesting of SRSUs) have not been and will not be registered under the U.S. Securities Act of 1933 and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. Persons except in certain transactions exempt from the registration requirements of the Securities Act. In connection with the acquisition of Shares, each Participant will represent and agree that she/he: is not a U.S. Person; is not purchasing or acquiring the Shares for the account or benefit of any U.S. Person; and has not offered or sold, and will not offer, sell or deliver, any of the Shares within the United States or to, or for the account or benefit of, any U.S. Person except pursuant to registration under the Securities Act or an available exemption from such registration.

***8.***  ***<u>Appendices to the Select Plan</u>*** 

The Board may establish such appendices to the Select Plan as it considers necessary or appropriate. Such appendices may be included in such a way that they create special rules applicable to certain Eligible Employees or categories of Eligible Employees and/or constitute sub-plans to the Select Plan.

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

**APPENDIX 1<br> NOVARTIS SELECT PLAN SWITZERLAND**

***1.***  ***<u>Select Switzerland</u>*** 

Where Awards are granted under the Novartis Select Plan Switzerland ("**Select Switzerland**"), then the Rules of the Select Plan 2024 (forming a schedule to the Novartis AG Long Term Incentive Plan) shall apply subject to the terms set out in this Appendix 1.

***2.***  ***<u>Select</u>***  ***<u>Choices Switzerland</u>*** 

Select Switzerland offers Participants the choice to receive Awards in the form of either:

(a) Select Restricted
 Stock (SRS); or

(b) Select Restricted
 Stock Units (SRSUs).

The Board may determine that Awards in the form of SRS may be subject to a mandatory blocking period ("**Mandatory Blocking Period**"). Furthermore, the Board may offer Participants the opportunity to block Awards in the form of SRS after the expiry of the Mandatory Blocking Period ("**Additional Blocking Period**"). The blocking choices and the terms of the blocking will be determined by the Board from time to time.

***3.***  ***<u>Cessation of Employment</u>*** 

Rule 6 as applied by Schedule Select Plan 2024 shall apply save as modified as follows:

3.1 <u>General</u> 

(a) If upon Cessation
 of Employment the outstanding SRS are forfeited with immediate effect, no compensation is
 paid to the Participant for the loss of the Award. In the event the applicable tax authorities
 decline to reimburse or compensate the personal income tax paid at the time of Award in respect
 of the forfeited SRS, the Company will compensate such cost on such basis as the Board may
 determine subject to receipt of such documentary proof as the Board may reasonably require.

(b) No compensation
 will be paid for the forfeiture of SRSUs.

3.2 <u>Cessation of Employment – effect on blocking periods</u> 

(a) If Rule 6
 of Schedule Select Plan 2024 applies, all SRS held by the Participant will remain blocked
 until the end of the Mandatory Blocking Period and/or, where applicable, until the end of
 any Additional Blocking Period.

(b) If a Participant
 Ceases Employment as a result of his death or Disability all Mandatory and Additional Blocking
 Periods shall cease to apply immediately.

(c) No further Additional
 Blocking periods shall be offered following Cessation of Employment.

LTIP rules – January 22, 2014, and amended thereafter (effective in relation to awards made on or after January 1, 2026)

## Exhibit 4.9

**Exhibit 4.9**

**Novartis AG**

**Deferred Share Bonus Plan**

Adopted by the Board of Directors on January 22, 2014, and amended thereafter with latest adjustments made on December 18, 2025, with effect in relation to awards made on or after that date.

Contents

---

| | | |
|:---|:---|:---|
| **NOVARTIS AG DEFERRED SHARE BONUS PLAN** | **NOVARTIS AG DEFERRED SHARE BONUS PLAN** | **2** |
| 1. | Purpose of the Plan | 2 |
| 2. | Determination of Deferred Share Bonus Awards | 2 |
| 3. | Dividends and Dividend Equivalents | 3 |
| 4. | Vesting of Deferred Share Bonus Awards | 4 |
| 5. | Lapse or forfeiture of Deferred Share Bonus Awards | 6 |
| 6. | Cessation of Employment | 6 |
| 7. | Corporate events | 8 |
| 8. | Participant rights and obligations | 9 |
| 9. | Clawback | 9 |
| 10. | Tax, social security and other charges | 10 |
| 11. | Transfer of Deferred Share Bonus Awards | 10 |
| 12. | Company documents | 10 |
| 13. | Board's powers | 10 |
| 14. | Administration and regulations | 11 |
| 15. | awards not pensionable etc. | 11 |
| 16. | Notices | 11 |
| 17. | Data protection | 11 |
| 18. | Schedules to the plan | 11 |
| 19. | Amendment and termination of the plan | 12 |
| 20. | Compliance with law and articles of incorporation | 12 |
| 21. | Applicable law | 12 |
| 22. | Definitions and interpretation | 13 |
| **SCHEDULE 1 PARTICIPANTS WHO ARE OR BECOME MEMBERS OF THE ECN** | **SCHEDULE 1 PARTICIPANTS WHO ARE OR BECOME MEMBERS OF THE ECN** | **17** |
| 1. | Application of this Schedule | 17 |
| 2. | Definitions | 17 |
| 3. | Lapse or forfeiture of Deferred Share Bonus Awards | 17 |
| 4. | Cessation of Employment – introduction | 17 |
| 5. | Leaving in special circumstances | 17 |
| **SCHEDULE 2 UNITED STATES** | **SCHEDULE 2 UNITED STATES** | **19** |
| 1. | Application of this Schedule | 19 |
| 2. | Grant of Deferred Share Bonus Awards – Shares subject to the Plan | 19 |

---

---

| | | |
|:---|:---|:---|
| 3. | Definitions | 19 |
| 4. | Stock Appreciation Rights | 19 |
| 5. | Consequences of Vesting – Restricted Stock Units | 21 |
| 6. | Corporate Events | 21 |
| 7. | Code Section 409A | 21 |
| **SCHEDULE 3 RETENTION SHARE BONUS AWARDS** | **SCHEDULE 3 RETENTION SHARE BONUS AWARDS** | **22** |
| 1. | Application of this Schedule | 22 |
| 2. | Definitions | 22 |
| 3. | Determination of Retention Share Bonus Award | 22 |
| 4. | Determining the number of shares or ADIs subject to a Retention Share Bonus Award | 23 |
| 5. | Timing of Retention Share Bonus Awards | 24 |
| 6. | Vesting of Retention Share Bonus Awards | 24 |
| 7. | Leaving in special circumstances - Retention Share Bonus Awards | 24 |
| 8. | Change of Control prior to the Vesting Date - Retention Share Bonus Awards | 25 |

---

**NOVARTIS AG DEFERRED SHARE BONUS PLAN**

***1.***  ***<u>Purpose of the Plan</u>*** 

The purpose of the Plan is to retain Eligible Employees.

***2.***  ***<u>Determination of Deferred Share Bonus Awards</u>*** 

2.1 <u>General</u> 

The Board may determine that a proportion of the gross amount payable in respect of an Annual Incentive Award will be provided to the Participant in the form of a Compulsory Deferred Share Bonus Award.

2.2 <u>Voluntary Deferred Share Bonus Awards</u> 

A Participant may, subject to completing such documentation as the Board may specify from time to time within the time limits specified by the Board, decide to receive up to all of any payment (in increments as determined by the Board) in connection with an Annual Incentive Award (other than that part of the Award that is subject to a Compulsory Deferred Share bonus Award) in the form of a Voluntary Deferred Share Bonus Award.

2.3 <u>Decisions relating to Deferred Share Bonus Awards</u> 

In respect of any Deferred Share Bonus Award, the Board shall determine:

(a) whether the
 Deferred Share Bonus Award is in respect of Restricted Stock, Restricted Stock Units or SARs;

(b) where relevant,
 whether the Deferred Share Bonus Award is in respect of Shares or ADIs;

(c) whether or not
 the Deferred Share Bonus Award will carry Dividend Equivalents and, if so, the form of such
 Dividend Equivalents;

(d) the latest date
 by which the Participant must complete a form of acceptance of a Deferred Share Bonus Award;

(e) if the Deferred
 Share Bonus Award is a SAR, the base value from which the growth in value is to be measured;

(f) if the Deferred
 Share Bonus Award does not comprise Restricted Stock, Restricted Stock Units or SARs, the
 form, terms and conditions of any such Deferred Share Bonus Award;

(h) the number of
 Shares, ADIs or notional shares in the case of SARs to be subject or linked to the Deferred
 Share Bonus Award (see Rule 2.4 below);

(i) the Vesting
 Date or Vesting Dates and any conditions to which the Award is subject;

(j) whether the
 Participant is required to sell sufficient Shares to meet Taxation;

(k) which, if any,
 Schedules to the Plan will apply to the Award.

Deferred Share Bonus Plan – January 22, 2014, and amended thereafter

2.4 <u>Determining the number of Shares or ADIs subject to a Deferred Share Bonus Award</u> 

In order to determine the number of Shares or ADIs subject or linked to a Deferred Share Bonus Award, the Board shall:

(a) divide the relevant
 cash sum by the Market Value of a Share or ADI (as appropriate) as at the date immediately
 preceding the Grant Date and then, where necessary, round up to the nearest whole Share or
 ADI; or

(b) apply such other
 method as the Board may determine from time to time.

2.5 <u>Timing of Deferred Share Bonus Awards</u> 

Subject to any Dealing Restrictions which prevent Deferred Share Bonus Awards being granted, the Board shall grant such Compulsory Deferred Share Bonus Awards and Voluntary Share Bonus Awards as soon as practicable within the first Grant Period following the expiry of the Performance Period applicable to an Annual Incentive Award.

***3.***  ***<u>Dividends and Dividend Equivalents</u>*** 

3.1 <u>Restricted Stock Units and SARs</u> 

A Participant holding a Deferred Share Bonus Award of Restricted Stock Units or SARs shall not be entitled to vote, to receive dividends or to have any other rights of a shareholder in respect of such an Award unless and until the Shares comprising the Award are transferred to or acquired by the Participant.

3.2 <u>Restricted Stock</u> 

The Board in relation to a Deferred Share Bonus Award of Restricted Stock may determine that the Participant must agree to surrender or waive any right to vote, receive dividends or any other rights of a shareholder in respect of such Award.

3.3 <u>Dividend Equivalents</u> 

If the Board determines that a Deferred Share Bonus Award carries Dividend Equivalents:

(a) unless the Board
 decides otherwise, the number of Shares (or notional Shares if the Deferred Share Bonus Award
 is a SAR) subject to the Deferred Share Bonus Award will be increased by the number of Shares
 which could have been acquired by the reinvestment in the purchase of Shares (at the market
 value of a Share on each relevant dividend payment date) of dividends payable between the
 Grant Date and the Vesting Date on that number of Shares (or notional Shares) subject to
 the Deferred Share Bonus Award that Vests; or

(b) if the Board
 decides that Dividend Equivalents would not be on a notional reinvestment basis as described
 in Rule 3.3(a), as soon as practicable after the time a Deferred Share Bonus Award vests
 in full (and Shares are transferred or acquired or cash is paid to the Participant) the Company
 shall pay to the Participant (in cash or Shares) (subject to all applicable tax and social
 security deductions) an amount equal to the aggregate dividends which would have been paid
 on the Deferred Share Bonus Award (including in respect of notional Shares for Deferred Share
 Bonus Awards that are SARs) between the Grant Date and the Vesting Date; or

Deferred Share Bonus Plan – January 22, 2014, and amended thereafter

(c) the Board may
 decide that the Dividend Equivalents may be calculated on any other basis.

For the avoidance of doubt, the amount of a dividend, for these purposes is the amount of the gross dividend before taxes.

For the purposes of this Rule 3, "market value" shall be determined by the Board on each relevant occasion.

A Participant is not entitled to receive Dividend Equivalents with respect to the time period between the Vesting Date and the date that the relevant Shares are transferred to or acquired by him or payment in respect of the Deferred Share Bonus Award is made.

***4.***  ***<u>Vesting of Deferred Share Bonus Awards</u>*** 

4.1 <u>General</u> 

Vesting of Deferred Share Bonus Awards under the Plan, transfer of Shares or ADIs or payment of cash is subject to any Rules or law that may require otherwise, including Rule 4.5 (dealing restrictions), Rule 4.7 (delivery of Shares or ADIs to a deposit account), Rule 5 (lapse or forfeiture of Awards) and Rule 9 (clawback).

4.2 <u>Normal Vesting</u> 

Subject to the exceptions set out in these Rules, Deferred Share Bonus Awards shall Vest on the Vesting Date.

4.3 <u>Consequences of Vesting – Restricted Stock Units</u> 

As soon as practicable after the Vesting Date the Company shall transfer the number of Shares (or pay a cash sum if the Board has determined that the RSU is to be settled in cash) in respect of which the Deferred Share Bonus Award has Vested to the Participant.

4.4 <u>Consequences of Vesting – Restricted Stock</u> 

On the Vesting Date the restrictions applicable to the relevant Restricted Stock under the Plan shall cease to apply to the extent such Restricted Stock Vests.

4.5 <u>Dealing Restrictions</u> 

If the Vesting of a Deferred Share Bonus Award is prevented on any date by a Dealing Restriction, the Deferred Share Bonus Award shall Vest on the first day it is not so prevented.

If the transfer of Shares or ADIs (or payment of cash) on or following the Vesting Date is prevented by a Dealing Restriction, the period for such transfer or payment shall start from the first date on which it is no longer so prevented.

Shares received by a Participant on or following the Vesting Date may be subject to Dealing Restrictions. Subject to any such restrictions, a Participant may sell (or may be required to do so) a sufficient number of such Shares to meet Taxation (as defined in Rule 10 (tax, social security and other charges)).

Deferred Share Bonus Plan – January 22, 2014, and amended thereafter

4.6 <u>Fractional entitlements</u> 

Any fractional number of Shares which arises for any reason under the Plan shall be aggregated as at the Vesting Date and rounded up to the nearest whole Share (or, in the case of a SAR, notional Share), unless the Board determines otherwise.

4.7 <u>Delivery of Shares or ADIs to a deposit account</u> 

Subject to Board determination otherwise, all Shares and ADRs transferred to Participants under the Plan shall be transferred to and registered in one single securities account (**Securities Deposit Account**) held in trust by such service provider as is nominated from time to time by the Company.

If a Participant Ceases Employment, the Participant must dispose of or if possible transfer from the Securities Deposit Account to a private securities account all of the Shares or ADIs managed by the service provider within the period three months. If that is not done, the service provider will sell all of the Shares at market value without delay on behalf of the Participant or the Participant's successor and transfer the proceeds less costs of sale to the Participant's last known salary account and such transfer is in full and final satisfaction.

If a Participant Ceases Employment of the Company due to death, the period within which the Participant's personal representative or successor in title must dispose of or transfer the Shares is 12 months or such longer period as the Board may determine.

If the Company's contract with the service provider for administration of the Plan ends in circumstances where the Plan continues, the Company will make arrangements for appropriate services to be provided by another service provider that the Company shall instruct at its sole discretion. In such circumstances, each Participant must give all notices and take all steps necessary to end the trust or custody agreement with the old service provider and appoint a new service provider.

The procedures specified above may be altered and other procedures established by the Board.

4.8 <u>Lock-In Period</u> 

Subject to Rule 4.9, the Board may determine or a Participant may elect at any time (in such form as the Board requires) that Shares or ADIs transferred or to be transferred to him under the Plan are or will be held in the Securities Deposit Account for a fixed period of time (the "**Lock-In Period**") during which time such a Participant may not alienate such Shares or ADIs or create any security interest in or encumbrance on such Shares except as may be necessary for the proper administration of the Plan.

During the Lock-In Period, the participant is entitled without restriction to the dividend and voting rights associated with the Shares or ADIs the Participant acquired.

4.9 <u>Cash, Share and ADI alternatives</u> 

The Board may decide to satisfy a Deferred Share Bonus Award (including any Dividend Equivalents) by:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) paying the
 Participant a sum equal to the market value (as determined by the Board) of the number of
 Shares that would otherwise have been transferred to the Participant following the Vesting
 of that Deferred Share Bonus Award; or

Deferred Share Bonus Plan – January 22, 2014, and amended thereafter

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) delivering
 to the Participant ADIs with a value equal to the market value of the number of Shares that
 would otherwise have been transferred to the Participant following the Vesting of that Deferred
 Share Bonus Award.

***5.***  ***<u>Lapse or forfeiture of Deferred Share Bonus Awards</u>*** 

Subject to Board determination otherwise, Deferred Share Bonus Awards lapse or in the case of Restricted Stock are forfeit on the earlier of the occurrence of any event described in the Rules resulting in forfeiture or lapse of a Deferred Bonus Share Award, including under Rule 6 (Cessation of Employment) and Rule 7 (Corporate events).

In relation to any Award the Participant is required to accept the grant of the Award to him by providing such acceptance via the service provider's online interface (or in such form as the Board shall determine from time to time) as well as, if required, complete and update the CRS FACTA documentation via the service provider's online interface at the latest within 6 months after he received the notice of the grant of the Award. The Board may determine that the Participant will be reminded of these prerequisites for participation in the Plan. If a Participant does not provide such acceptance and/or CRS FATCA documentation in time (and, if any, after reminders), any Awards granted shall lapse or, in the case of Restricted Stock, the Shares under that Award shall be forfeited without compensation, unless the Board determines otherwise.

Alternatively, the Board may determine that a Participant who receives an Award is deemed (as of the time of receipt) to have accepted the grant and agreed to the Rules (including applicable Schedules) and the terms set out in the notice of the grant of the Award. If this is the case, a Participant may reject his Award within 14 days of receiving the notice of grant of that Award (or such longer period as the Board permits or is otherwise required by law). If a Participant does so reject his Award, then immediately on such rejection that Award shall lapse or, in the case of Restricted Stock, the Shares under that Award shall be forfeited.

The Board may decide to deem that Awards lapse or in the case of Restricted Stock are forfeited if the Participant grossly negligently or intentionally violates his obligations resulting from his employment with his Employer, e.g. breach of confidentiality or any compliance issue with company policies.

***6.***  ***<u>Cessation of Employment</u>*** 

6.1 <u>Introduction</u> 

This Rule 6 applies where a Participant Ceases Employment.

Notwithstanding any other part of this Rule 6, the Board may, in its discretion with no obligation to do so, allow (on such terms as the Board decides) a greater proportion of a Deferred Share Bonus Award to Vest and/or to accelerate the time at which Vesting occurs.

In the event that Compulsory Deferred Share Bonus Awards are outstanding pursuant to Rule 6.3 and the Participant dies prior to the Vesting of those Awards, then Rule 6.4 shall apply.

6.2 <u>General</u> 

Unless Rules 6.3, 6.4 or 6.6 apply, a Deferred Share Bonus Award (or any proportion of a Deferred Share Bonus Award) that has not Vested will lapse or be forfeit on the day the Participant Ceases Employment

Deferred Share Bonus Plan – January 22, 2014, and amended thereafter

6.3 <u>Leaving in special circumstances – Compulsory Deferred Share Bonus Awards</u> 

If a Participant Ceases Employment because of:

(a) Retirement with
 the agreement of the Participant's Employer;

(b) termination
 of employment by the Participant's Employer (whether or not by notice) other than for
 misconduct or poor performance

(c) his employer
 ceasing to be a member of the Company;

(d) the business
 for which the Participant works is transferred to a person which or who is not a member of
 the Company; or

(e) any other reason
 if the Board so decides,

his Compulsory Deferred Share Bonus Award shall Vest on the Vesting Date provided that the Board may determine in the case of leaving for reasons set out in Rule 6.3(d) or Rule 6.3(e) that some or all of the Awards held by relevant Participants shall be exchanged in accordance with Rule 7.2 (exchange of awards).

6.4 <u>Cessation of Employment as a result of death or disability – Compulsory Deferred Share Bonus Awards</u> 

If a Participant Ceases Employment as a result of his death or disability then Compulsory Deferred Share Bonus Awards held by that Participant shall Vest immediately on such cessation.

In case of a Participant's death or disability, upon notice to the Company himself or his personal representative or successor in title shall be entitled to, if any, the payment of the annual incentive. Settlement of this incentive to the Participant or his personal representative or successor in title excludes any other potential claims of the Participant's estate with regards to the Plan.

6.5 <u>Lapse or forfeiture of Compulsory Deferred Share Bonus Awards on joining a Competitor</u> 

Where Rule 6.3 applies such that Compulsory Deferred Bonus Awards are retained by the Participant following Cessation of Employment, in the event that the Participant, in the period commencing on such cessation and ending immediately following the relevant Vesting Date becomes an employee or director of (or otherwise provides services to) a Competitor then Compulsory Deferred Share Bonus Awards held by that Participant shall immediately lapse (or on the case of Restricted Stock shall be immediately forfeited).

Notwithstanding the foregoing, if the Participant Ceases Employment under Rule 6.3 and subsequently becomes a non-executive director of a Competitor – excluding those within the Company's comparator peer group in the global healthcare industry, as listed in Schedule A of the Novartis AG Long Term Incentive Plan – the Participant's Compulsory Deferred Share Bonus Awards shall not lapse (or, in the case of Restricted Stock, shall not be forfeited). This exception applies solely and exclusively to this expressly defined circumstance.

Deferred Share Bonus Plan – January 22, 2014, and amended thereafter

6.6 <u>Cessation of Employment – Voluntary Deferred Share Bonus Awards</u> 

If a Participant Ceases Employment for any reason his Voluntary Deferred Share Bonus Awards shall Vest immediately on such cessation.

6.7 <u>Assignments and Transfers</u> 

If a Participant is sent on an international assignment or is transferred to another entity within the Company, this will not be considered as Ceasing Employment under the Plan. The treatment of assignments and transfers is subject to the rules of the "Internal Transfer Policy for Share plans".

***7.***  ***<u>Corporate events</u>*** 

7.1 <u>Change of Control prior to the Vesting Date</u> 

(a) <u>Compulsory Deferred Share Bonus Awards</u> 

If a Change of Control occurs or is anticipated to occur prior to the Vesting Date of a Compulsory Deferred Share Bonus Award then each such Award shall Vest on the Change of Control or at such earlier point as the Board shall determine.

Alternatively, the Board may determine that some or all Deferred Share Bonus Awards will be automatically exchanged under Rule 7.2 or may allow Participants to choose Vesting and/or exchange.

(b) <u>Voluntary Deferred Share Bonus Awards</u> 

If a Change of Control occurs or is anticipated to occur prior to the Vesting Date of a Voluntary Deferred Share Bonus Award then each such Award shall Vest on the Change of Control or at such earlier point as the Board shall determine.

7.2 <u>Exchange of Deferred Share Bonus Awards</u> 

If a Deferred Share Bonus Award is exchanged, then:

(a) the exchanged
 award will be in respect of or by reference to shares in any company determined by the company
 offering the exchange;

(b) the exchanged
 award shall have equivalent terms to those of the Deferred Share Bonus Award that was exchanged;

(c) the exchanged
 award will be subject to the Plan as it had effect in relation to the old Deferred Share
 Bonus Award immediately before the exchange;

(d) with effect
 from the exchange, the Rules will apply as if references to Shares are references to
 shares over which the exchanged award has been granted;

(e) the Rules shall
 apply with such other adjustments as the Board may decide.

7.3 <u>Demerger, variations of share capital and other corporate events</u> 

If the Board becomes aware that the Company is or is expected to be affected by any variation of share capital, rights issue, sub-division, consolidation or reduction of share capital, demerger, distribution (other than an ordinary dividend), liquidation or other event (other than a Change of Control) which, in the opinion of the Board, could affect the current or future value of Shares, the Board may:

(a) adjust Deferred
 Share Bonus Awards in such manner as it considers appropriate;

Deferred Share Bonus Plan – January 22, 2014, and amended thereafter

(b) allow Deferred
 Share Bonus Awards (for all or some Participants) to Vest in whole or in part, subject to
 any conditions that the Board may impose;

(c) require some
 or all Deferred Share Bonus Awards to be exchanged under Rule 7.2.

***8.***  ***<u>Participant rights and obligations</u>*** 

The rights and obligations of a Participant under the terms of his or her office, employment or contract are not affected by becoming a Participant. These Rules do not form part of, and will not be incorporated into, any contract between a Participant and any member of the Company.

Participants do not have any right to continued employment with the Company as a result of participating in the Plan, nor are they entitled to any compensation or damages if any benefit under the Plan is reduced or cancelled as a result of applying the Rules.

Nothing in this Plan confers any benefit, right or expectation on a person who is not an Eligible Employee or a Participant.

***9.***  ***<u>Clawback</u>*** 

Participants must adhere at all times to applicable laws, the Articles, the Company's organizational regulations, the Code of Ethics, and all applicable Company, Company or Employer policies, procedures and guidelines. If, in the reasonable opinion of the Board, a Participant fails to comply with any such laws, Articles, regulations, Code of Ethics, policies, procedures and/or guidelines in all material respects then the Board may determine that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) all or any
 of a Deferred Share Bonus Award (whether Vested or unvested) held by the Participant will
 lapse or be forfeit;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) all or any
 amount of cash received (on a gross basis) under any Deferred Share Bonus Award be paid to
 the Company (or such other member of the Company as the Board may determine);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) all or any
 of a Participant's Shares or ADIs transferred to him under the Plan following the Vesting
 of Deferred Share Bonus Awards will be forfeit and must be transferred to the Company; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the Participant
 must pay the Company (or such other member of the Company as the Board may determine) gross
 proceeds from the sale of some or all of the Shares or ADIs transferred to him following
 the Vesting of Deferred Share Bonus Awards.

Furthermore, all Executive Officers, as defined in the Novartis AG Policy Governing the Recovery of Erroneously Awarded Compensation ("Policy"), which has been adopted by the Board of Directors of Novartis AG to comply with the requirements of United States Securities and Exchange Commission Rule 10D-1 and Section 303A.14 of the New York Stock Exchange Listed Company Manual, will be subject to all of the terms and conditions of that Policy, as amended from time to time.

Deferred Share Bonus Plan – January 22, 2014, and amended thereafter

***10.***  ***<u>Tax, social security and other charges</u>*** 

The Participant indemnifies each member of the Company against all taxes, social security contributions and other levies for which he is responsible that arise in connection with any Deferred Share Bonus Award (together "**Taxation**").

The Company and any employer may make such arrangements it considers necessary to meet any liability to pay or account for Taxation (including selling sufficient Shares to meet such liability and accounting for the proceeds of sale to the Company or the Participant's employer or making deductions from any cash sum payable to the Participant). The Participant will promptly do all things necessary to facilitate any such arrangements and payment of cash. Vesting and the transfer of Shares to him can be delayed until he does so.

***11.***  ***<u>Transfer of Deferred Share Bonus Awards</u>*** 

Unless specifically permitted under the Plan or with the prior written consent of the Board, Deferred Share Bonus Awards or any rights in respect of any such Awards may not be transferred, assigned or otherwise disposed of. If Deferred Share Bonus Awards (or any rights in respect of Deferred Share Bonus Awards) are transferred, assigned or otherwise disposed of or if the Participant becomes bankrupt, they shall lapse or be forfeit immediately.

***12.***  ***<u>Company documents</u>*** 

The Company may (but need not) send to any Participant any documents which the Company sends to its shareholders.

***13.***  ***<u>Board's powers</u>*** 

The exercise of any power or discretion, including refraining from exercise, of the Board concerning the Plan or any Award is absolute and unlimited and may be reasonably exercised at any time, subject always to the principle of good faith. When the Board exercises any of its powers or discretions in a way that will impact a Participant, the Board may (but need not) inform the relevant Participant in such manner as the Board shall determine.

Any decision of the Board in connection with the Plan, the interpretation of the Plan and any related documents and in connection with any dispute relating to the Plan will be final and binding.

The Board decided to delegate the following powers with regard to the Plan to the Employer who decides after consultation with the Global Rewards &/or Global Legal teams at their discretion:

(a) with reference to section 5
(Lapse of forfeiture of awards)

(b) with reference to section 6.4
(Cessation of employment as a result of Death or disability)

(c) with reference to section 9
(Clawback)

The Board decided to delegate the implementation and execution of the Plan, including making non-material changes to the Rules themselves, to the Global Rewards &/or Global Legal teams.

Deferred Share Bonus Plan – January 22, 2014, and amended thereafter

***14.***  ***<u>Administration and regulations</u>*** 

14.1 The Plan shall be administered
by the Board.

14.2 The Board may
 make and vary regulations and policies for the administration and operation of the Plan.

14.3 The Board has
 the right to delegate its powers related to this Plan.

***15.***  ***<u>awards not pensionable etc.</u>*** 

For the avoidance of doubt, any growth in value from the Grant Date of Deferred Share Bonus Awards under the Plan (or the Shares or ADIs comprising such Awards) is not pensionable and does not count in relation to the calculation of benefit under programmes such as life cover, income protection or continuation, medical or such other benefits as the Board may determine.

***16.***  ***<u>Notices</u>*** 

Any notice or other communication under or in connection with the Plan may be given:

(a) by the Company
 to an Eligible Employee or Participant either personally or sent to him at his place of work
 by electronic mail or other electronic means (including the internet or the intranet) or
 by post addressed to the address last known to the Company (including any address supplied
 by the relevant member of the Company) or sent through the Company's internal postal service;
 and

(b) to the Company, either personally
or by post to the Company secretary.

Items sent by post shall be pre-paid and shall be deemed to have been received 72 hours after posting. Items sent by electronic mail or other electronic means shall be deemed to have been received at the expiration of 24 hours from when they were sent.

The Board may decide the accept notices given by Participants if received after any time stipulated for receipt.

***17.***  ***<u>Data protection</u>*** 

Each Participant agrees to the receipt, holding and processing of information in connection with a Deferred Share Bonus Award and the general administration of the Plan by the Company and any of their advisers or agents and to the transmission of any such information outside of the European Economic Area (including, without limitation, to Switzerland and to the United States of America). Each Participant acknowledges that the EU Commission considers that the United States of America (and various other jurisdictions) do not have adequate data protection laws.

***18.***  ***<u>Schedules to the plan</u>*** 

The Board may establish such schedules to the Rules as it considers necessary or appropriate. Such schedules may be included in the Plan so as to apply special rules to categories of Eligible Employees and/or to constitute sub-plans to the Plan for Eligible Employees outside Switzerland.

Deferred Share Bonus Plan – January 22, 2014, and amended thereafter

***19.***  ***<u>Amendment and termination of the plan</u>*** 

The Board may at any time change the Plan (including amending or adding schedules to the Plan) in any way. Changes may affect Deferred Share Bonus Awards already granted provided always that, unless the change is required by law, no such change may be made which is to the material disadvantage of a Participant without that Participant's prior written consent.

The Board shall give notice of any changes to any Participant.

The Board may terminate the Plan at any time. Termination will not affect existing Deferred Share Bonus Awards.

***20.***  ***<u>Compliance with law and articles of incorporation</u>*** 

20.1 <u>Compliance with Law etc</u> 

The Plan is subject to all applicable laws and the Company's Articles. If such law or the Articles require, the terms of any provision of the Plan and any Award (including any outstanding Award) shall be interpreted and/or amended and applied to the extent required to comply fully with such law or the Articles.

20.2 <u>Minder Initiative</u> 

The Plan, in particular, is subject to any mandatory provisions of Swiss law pertaining to compensation of governing bodies derived from article 95 paragraph 3 of the Swiss Federal Constitution (the "**Minder Initiative**"). Any interpretation and/or amendment necessary in respect of any provision of the Plan or any Award as a result of applicable law and/or the Articles to the detriment of the Participant shall not give rise to any claims by or other rights whatsoever of the Participant. This applies in particular if the annual general meeting of the Company does not approve the compensation of the Participant which is subject to approval under the Minder Initiative.

20.3 <u>US Code Section 409A</u> 

If a Participant (other than a Participant whose benefits are provided under the United States Schedule) is subject to the United States Internal Revenue Code ("**US Code**") (a "**US Participant**"), and if benefits under this Plan for such US Participant are not exempt from US Code Section 409A, it is intended that to the maximum extent permitted under all applicable law this Plan will be interpreted and administered to conform to the requirements of US Code Section 409A as they apply to such US Participant.

20.4 <u>Voluntary Participation</u> 

By accepting any award or grant of securities under this Plan, Participants shall be deemed to represent and warrant to the Company that such Participant's participation in the trade and acceptance of such securities is voluntary and that such Participant has not been induced to participate by expectation of engagement, appointment, employment or continued engagement, appointment or employment, as applicable.

***21.***  ***<u>Applicable law</u>*** 

The Plan is governed by and construed in accordance with the laws of Switzerland, under express exclusion of any provisions of conflict of laws.

The Board may resolve conclusively all questions of fact or interpretation concerning the Plan and has the authority to resolve any dispute of any kind that arises under or in connection with the Plan. In the event a dispute escalates to require resolution by a court, the dispute will exclusively be resolved by the Courts of Basel, Switzerland.

Deferred Share Bonus Plan – January 22, 2014, and amended thereafter

***22.***  ***<u>Definitions and interpretation</u>*** 

In this Plan, unless otherwise required by the Rules:

22.1 <u>Definitions</u> 

**ADIs** means American depositary instruments being either American Depositary Shares or American Depositary Receipts of the Company as specified in the Grant Notice.

**Annual Incentive Award** means an award or rights to participate under the Annual Incentive Plan or any other annual bonus arrangement as the Board shall determine.

**Annual Incentive Plan** means the rules of a cash-based incentive plan established by the Board on January 22, 2014 which operates in conjunction with the Plan.

**Articles** means the articles of incorporation of the Company as amended from time to time.

**Award** means a Deferred Share Bonus Award.

**Board** means the Company's Board of Directors or, to the extent permitted by applicable law, the Board's delegate or, following a Change of Control, those persons who comprised the Board immediately prior to such Change of Control.

**Cessation of Employment** occurs, for the purposes of the Plan, when a Participant ceases to hold an office or employment with the Company PROVIDED THAT a Participant will not be treated as Ceasing Employment in circumstances in which that Participant is on a leave of absence where the Participant's right to re-employment is guaranteed either by statute or contract and employment is not otherwise terminated during such leave of absence (in which case the participant will Cease Employment at the time of such termination) and similar terms, such as "**Ceases Employment**" or "**Ceasing to be Employed**", shall be construed accordingly.

**Change of Control** means any of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) any person
 or group of persons who are acting together purchases or otherwise becomes the beneficial
 owner or has the right to acquire such beneficial ownership (whether or not such right is
 exercisable immediately or subject to passage of time or other conditions) of voting securities
 representing more than 50% of the combined voting power of all outstanding securities of
 the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Company's
 shareholders approve an agreement to merge or consolidate the Company with or into another
 corporation as a result of which less than 50% of the outstanding voting securities of the
 surviving or resulting entity are or will be owned by the former shareholders of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the shareholders
 of the Company approve the sale of all or substantially all of the Company's business
 and/or assets to a person or entity which is not a member of the Company,

provided that an Internal Reorganisation shall not be a Change of Control.

**Competitor** has the same meaning as under the Novartis AG Long Term Incentive Plan.

Deferred Share Bonus Plan – January 22, 2014, and amended thereafter

**Compulsory Deferred Share Bonus Award** means a Deferred Share Bonus Award which the Participant must accept in respect of his Annual Incentive Award (or part thereof).

**Company** means Novartis AG.

**Dealing Day** means a day on which the Swiss Exchange (SIX) or, in relation to ADIs, the national securities exchange in the US on which ADIs are listed, is open for business.

**Dealing Restrictions** means restrictions on the dealing in Shares or the grant of Awards imposed by any law, regulation or Code of Practice (including the Novartis Global Insider Trading Policy, as amended or replaced from time to time) or otherwise.

**Deferred Share Bonus Award** means an award under the Plan (and includes both Compulsory and Voluntary Deferred Share Bonus Awards).

**Determination Date** means the date after the Performance Period has ended on which the Board determines whether (and to what extent) a cash amount is payable to a Participant under the Annual Incentive Plan having regard to the relevant Performance Targets.

**Dividend Equivalents** means a right to cash or Shares as described in Rule 3.

**Eligible Employee** means any member of the Executive Committee and the Corporate Executive of the Company or any employee or group of employees of the Company as the Board shall determine.

**Employer** means the member of the Company by or in which the Participant is or, where the context so admits, was an office holder or employed.

**Grant Date** means the date a Deferred Share Bonus Award (as the context requires) is made.

**Grant Notice** means a grant notice provided to a Participant in accordance with the Rules.

**Grant Period** means the period of 42 days commencing:

(a) the Dealing
 Day immediately following the day on which the Company announces results for any period;

(b) the day on which
 the Company's annual general meeting is held;

(c) any day on which
 the Board resolves that exceptional circumstances exist which justify the making of an Award.

**Internal Reorganisation** means any event, offer, scheme, share purchase, merger or arrangement whereby:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) a Change
 of Control occurs; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) immediately
 afterwards the share capital of the company then controlling (whether directly or indirectly)
 the Company is owned substantially by the same persons who were shareholders of the Company
 immediately prior to such event, scheme or arrangement in substantially the same proportions.

**Lock-In Period** has the meaning set out in Rule 4.8.

Deferred Share Bonus Plan – January 22, 2014, and amended thereafter

**Market Value** means in relation to a Share or ADI (as appropriate) on any given day:

(a) if the Shares
 are admitted to trading on the Swiss Exchange (SIX) an amount equal to the closing price
 on that day (or if there is no such price on that day the last preceding day for which such
 price is available);

(b) if the ADIs
 are listed on a national securities exchange in the US an amount equal to the closing price
 on that day (or if there is no such price on that day the last preceding day for which such
 price is available);

(c) if the Shares
 are not admitted to trading on the Swiss Exchange (SIX) or the ADIs are not listed on a national
 securities exchange in the US, then such value as is determined by the Board.

**Participant** means an Eligible Employee who is selected by the Board to participate in the Plan and is employed by the Company at the Grant Date.

**Plan** means the Novartis AG Deferred Share Bonus Plan.

**Restricted Stock** means an award of Shares subject to restrictions in accordance with the Plan.

**Restricted Stock Units** means a right to receive Shares or cash under the Plan (but subject to Rule 4.9 (cash and ADI alternative)).

**Retirement** means the Cessation of Employment after having attained retirement age according to applicable local law, if any, in the Participant's country of employment, or early retirement according to local laws as approved by the employing entity; or at discretion of the Board of Directors the Cessation of Employment as a result of a mutual agreement (as approved by the employing entity) with immediate receipt of a retirement benefit.

**Rules** mean the rules of the Plan (including all Schedules).

**Schedule** means a schedule to the Rules.

**Service** means the period of continuous employment with the Company ending with the relevant Cessation of Employment for the purposes of the Plan PROVIDED ALWAYS THAT the Board may determine that prior periods of employment with the Company and/or periods of employment with entities outside the Company (but which are subsequently acquired by the Company) may be taken into account.

**Share** means a registered share of the Company with a par value of CHF -.50 or in the case of SARs, notional Shares.

**Stock Appreciation Rights** or **SARs** means an award under the Plan, the future value of which is based on the increase in the value of Shares (from the base value set by the Board at the time an Award is made) which notionally comprises each SAR from the relevant Grant Date.

**Vesting** means:

(a) in the case
 of Restricted Stock Units, a Participant being entitled to receive Shares or cash;

(b) in the case
 of Restricted Stock, restrictions under the Plan ceasing to apply;

Deferred Share Bonus Plan – January 22, 2014, and amended thereafter

(c) in the case
 of SARs, a Participant being entitled to receive a cash sum based on the growth in value
 of the notional Shares comprising the Deferred Share Bonus Award,

and "**Vest**" shall be construed accordingly.

**Vesting Date** means the date an Award vests as determined by the Board and specified in the Grant Notice or otherwise as required under the Rules.

**Vesting Period** means the period between the date on which an Award is granted and the Vesting Date.

**Voluntary Deferred Share Bonus Award** means a Deferred Share Bonus Award which is made as a result of the Participant voluntarily electing to receive his Annual Incentive Award (or part thereof) in the form of an award under this Plan.

22.2 <u>Interpretation</u> 

Unless the context requires otherwise: words importing the singular include the plural and vice versa; the word "includes" is not a word of limitation; the masculine includes the feminine and vice versa, headings and boldings are for convenience only and do not affect the interpretation of these Rules.

Deferred Share Bonus Plan – January 22, 2014, and amended thereafter

**SCHEDULE 1<br> PARTICIPANTS WHO ARE OR BECOME MEMBERS OF THE ECN**

***1.***  ***<u>Application of this Schedule</u>*** 

This Schedule shall apply to:

(a) Deferred Share
 Bonus Awards granted to any Participant who at the relevant Grant Date is a member of the
 ECN; and

(b) Deferred Share
 Bonus Awards granted to any Participant who, after the relevant Grant Date, becomes a member
 of the ECN.

Where this Schedule applies relevant Deferred Share Bonus Awards shall be subject to all the provisions of the Novartis AG Deferred Share Bonus Plan save as modified below.

***2.***  ***<u>Definitions</u>*** 

For the purposes of this Schedule the following definition shall apply:

"**ECN**" means the Executive Committee of Novartis AG (including permanent attendees to that committee).

"**Retirement**" means the Cessation of Employment after:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) having attained
 age 58 or older, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) in respect
 of those Participants who satisfied the Rule of 60 at December 31, 2015, having
 attained 55 or older and having completed as at least 10 years of Service.

"**Rule of 60**" the sum of the Participant's age plus Service being equal to 60 or more. For the purposes of this definition the Participant's age and his Service shall be whole calendar years as at December 31, 2015.

***3.***  ***<u>Lapse or forfeiture of Deferred Share Bonus Awards</u>*** 

The words "Subject to Board determination otherwise," at the start of Rule 5 shall not apply.

***4.***  ***<u>Cessation of Employment – introduction</u>*** 

The second paragraph of Rule 6.1 shall not apply.

***5.***  ***<u>Leaving in special circumstances</u>*** 

5.1 Rule 6.3(f) shall
not apply.

5.2 Immediately following Rule 6.3
the following shall be added as Rule 6.3A:

"In determining whether to approve Retirement under Rule 6.3(a), the Board shall take into consideration the Participant's satisfaction of certain conditions, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) whether
 the Participant is leaving the Company in good standing and not for cause (for example because
 of dishonesty, misconduct, gross negligence, violation of this employer's code of ethics
 or similar reason);

Deferred Share Bonus Plan – January 22, 2014, and amended thereafter

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) whether
 the Participant has returned to his Employer all company property in his possession at his
 termination;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) whether
 the Participant has cooperated with his Employer in the orderly handover and transition of
 his duties and responsibilities prior to his date of termination;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) whether
 the Participant has given his written commitment that for one year following his termination
 he will not work for a Competitor and he will refrain from soliciting other employees of
 the Company to terminate their employment; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) whether
 the Participant has affirmed his obligation not to disclose confidential information he received
 during his employment with the Company and to refrain from using any such information for
 any purpose not in Company's business interests."

Deferred Share Bonus Plan – January 22, 2014, and amended thereafter

**SCHEDULE 2<br> UNITED STATES**

***1.***  ***<u>Application of this Schedule</u>*** 

When Deferred Share Bonus Awards under the Plan are to be granted the Board may determine that this Schedule applies, in which case such Awards shall be subject to all the provisions of the Novartis AG Deferred Share Bonus Plan save as modified below.

ADIs subject to the Deferred Share Bonus Awards under the Plan are intended to be registered under the United States Securities Act of 1933.

***2.***  ***<u>Grant of Deferred Share Bonus Awards – Shares subject to the Plan</u>*** 

(a) Subject to Rule 7.3,
 the aggregate number of ADIs made subject to Deferred Share Bonus Awards under this Schedule
 may not exceed 2,780,000, plus any ADIs that were not issued under the Plan as of January 1,
 2021; plus any ADIs subject to outstanding Awards under the Plan as of January 1, 2021
 that on or after January 1, 2021 cease for any reason to be subject to such Awards.

(b) Such ADIs shall
 be deemed to have been used in payment of Deferred Share Bonus Awards whether they are actually
 delivered or the market value equivalent of such ADIs is paid in cash. In the event any Deferred
 Share Bonus Award is surrendered or terminated, or expires or is forfeited, the number of
 ADIs no longer subject thereto shall thereupon be released and shall thereafter be available
 for new Deferred Share Bonus Awards under this Schedule.

(c) ADIs comprising
 Deferred Share Bonus Awards under this Schedule or delivered by the Company in settlement
 of Deferred Share Bonus Awards under this Schedule may be derived from authorised and unissued
 Shares or from Shares or ADIs held in the treasury of the Company or may be purchased on
 the open market or by private purchase.

***3.***  ***<u>Definitions</u>*** 

For the purposes of this Schedule the following definition shall apply:

"**Retirement**" means the Cessation of Employment after having attained age 55 or older and having completed at least 10 years of Service.

***4.***  ***<u>Stock Appreciation Rights</u>*** 

SARs granted under this Schedule shall be subject to such terms and conditions, not inconsistent with the Plan, as the Board may impose, including, but not limited to, the following:

(a) <u>SARs with Participant discretion to exercise</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>Base Value</u>. The Base Value for SARs per ADI subject to a SAR shall not be less than 100% of
 the market value of an ADI at the Grant Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Payment on exercise</u>. On the exercise of a SAR, the Company shall pay to the Participant an amount
 equal to the number of ADIs subject to the SAR multiplied by the excess, if any, of the market
 value of one ADI on the exercise date over the Base Value.

Deferred Share Bonus Plan – January 22, 2014, and amended thereafter

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <u>Market value</u>. For the purposes of SARs subject to this Schedule, "market value"
 in paragraphs 4(a)(i) and 4(a)(ii) of this Schedule on a given date means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa) if the ADIs
 are listed on a national securities exchange in the United States, the closing sale price
 reported as having occurred on the primary exchange with which the Shares are listed and
 traded (currently the New York Stock Exchange) on such date or, if there is no such sale
 on that date, then the last preceding date on which such a sale was reported;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb) if the ADIs
 are not listed on any national securities exchange but is quoted on the National Market System
 of the National Association of Securities Dealers Automated Quotation System ()"**NASDAQ** "),
 the trade price of the last sale reported on such date or, if there is no such sale on that
 date, then the last preceding date on which such a sale was reported; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(cc) if the ADIs
 are not listed on a national securities exchange nor quoted on NASDAQ, on a last sale basis
 the amount determined by the Board to be the fair market value based upon a good faith attempt
 to value the Shares accurately.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <u>Dividend Equivalents</u>. If the Board designates Dividend Equivalents to apply to SARs pursuant to
 Rule 4.3(a), such accumulated Dividend Equivalents shall be paid to the Participant
 immediately upon Vesting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>No deferral of proceeds</u>. Pursuant to the limitations of the United States Treasury Regulation Section 1.409A-1(b)(5)(i)(B)(3),
 a Participant may not defer the proceeds of the exercise of a SAR.

(b) <u>SARs without Participant Discretion to exercise</u> 

If a SAR is granted with a fixed exercise date and the Participant has no discretion to exercise the SAR, Participants may elect to defer the payment of the proceeds of the automatic exercise of the SAR, and any accumulated Dividend Equivalents, to the date later than the payment date specified in the Deferred Share Bonus Award provided that the Participant makes such deferred election either as an initial deferral under United States Treasury Regulation Section 1.409A-2(a) or pursuant to the subsequent deferral provisions of United States Treasury Regulation Section 1.409A-2(b). The Board shall determine whether such deferral is in the form of Shares (ADIs) or cash. If deferrals are in Shares (ADIs), unless otherwise directed by the Board such Shares (ADIs), and any accumulated Dividend Equivalents, shall be delivered upon such deferred payment date. If the deferrals are in cash, the cash proceeds of such automatic exercise of the SARs shall be transferred into the applicable non-qualified deferred compensation plan of the Company entity which employs the Participant.

Deferred Share Bonus Plan – January 22, 2014, and amended thereafter

***5.***  ***<u>Consequences of Vesting – Restricted Stock Units</u>*** 

5.1 Participants
 may elect to defer the payment of Restricted Stock Units, and any accumulated Dividend Equivalents,
 to the date later than the payment date specified in the relevant Deferred Share Bonus Award
 provided that the Participant makes such a deferred election either as an initial deferral
 under United States Treasury Regulation Section 1.409A-2(a) or pursuant to the
 subsequent deferral provisions of United States Treasury Regulation Section 1.409A-2(b).
 The Board shall determine whether such deferral is in the form of Shares (ADIs) or cash.
 If deferrals are in Shares (ADIs), unless otherwise directed by the Board, such Shares (ADIs),
 and any accumulated Dividend Equivalents, shall be delivered from this Plan upon such deferred
 payment date. If deferrals are in cash, the cash proceeds of such Awards shall be transferred
 into the applicable non-qualified deferred compensation plan of the Participant's employing
 Company in the United States.

5.2 Rule 4.3
 shall be amended by inserting the underlined words below:

"As soon as practicable after the Vesting <u>(but no later than the 15<sup>th</sup> day of the third calendar month after the Vesting)</u> the Company shall transfer the number of Shares (or pay a cash sum if the Board has determined that the RSU is to be settled in cash) in respect of which the Deferred Share Bonus Award has Vested to the Participant".

***6.***  ***<u>Corporate Events</u>*** 

Should the Board determine that adjustments be made to Deferred Share Bonus Awards under Rule 7, any such adjustments or modifications must be made in a manner which is consistent with the provisions of section 409A of the United States Internal Revenue Code ("**Code Section 409A**").

***7.***  ***<u>Code Section 409A</u>*** 

7.1 Notwithstanding
 anything under the Plan to the contrary, to the extent applicable, it is intended that the
 Plan as it applies to Participants shall comply with the provisions of Code Section 409A
 and the Plan and all applicable Deferred Share Bonus Awards be construed and applied in a
 manner consistent with this intent. In furtherance thereof, any amount constituting a "deferral
 of compensation" under Treasury Regulation Section 1.409A-1(b) that is payable
 to a Participant upon a separation from service of the Participant (within the meaning of
 Treasury Regulation Section 1.409A-1(h)) (other than due to the Participant's
 death), occurring while the Participant shall be a "specified employee" (within
 the meaning of Treasury Regulation Section 1.409A-1(i)) of the Company (as limited by
 Code Sections 414(b), (c), (m) and (o)), shall not be paid until the earlier of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the date
 that is six months following such separation from service; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the date
 of the Participant's death following such separation from service.

Deferred Share Bonus Plan – January 22, 2014, and amended thereafter

7.2 Notwithstanding
 any provision of the Plan to the contrary, to the extent that a Deferred Share Bonus Award
 constituting a "deferral of compensation" subject to Code Section 409A shall
 be deemed to be vested or restrictions lapse upon the occurrence of a Change of Control,
 and if such Change of Control does not constitute a "change in control event"
 (as defined in Treasury Regulation Section 1.409A-3(i)), then even though such Award
 may be deemed to be vested or restrictions lapse, payment will only be made to the extent
 necessary to comply with the provisions of Code Section 409A, to the United States participant
 on the earliest of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the United
 States participant's separation from service, the date payment otherwise would have
 been made pursuant to the regular payment terms of the Award; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the Participant's
 death.

**SCHEDULE 3<br> RETENTION SHARE BONUS AWARDS**

***1.***  ***<u>Application of this Schedule</u>*** 

The Rules of the Novartis AG Deferred Share Bonus Plan shall apply to an award granted in the form of a Retention Share Bonus Award granted or to be granted under this Schedule as if it were a Compulsory Deferred Share Bonus Award, except as set out in this Schedule. Where there is any conflict between the Rules and this Schedule, the terms of this Schedule shall prevail.

***2.***  ***<u>Definitions</u>*** 

For the purpose of this Schedule the following definition shall apply:

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| | |
|:---|:---|
| "**Initial Conditions**" | means the condition or conditions determined by the Board and applicable to the calculation of the Initial Value. |
| "**Initial Period**" | means the period over which the Initial Conditions are measured, as determined by the Board. |
| "**Initial Value**" | means the notional cash values applicable to the Participant and attributable to a Retention Share Bonus Award as at the expiry of the applicable Initial Period. |
| "**Retention Share Bonus Award**" | means an Award granted under this Schedule to the Plan. |

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***3.***  ***<u>Determination of Retention Share Bonus Award</u>*** 

For the purposes of this Schedule, Rule 2.1 shall not apply and shall be replaced by the following:

"(a) The Board may determine that an Award will be provided to the participant in the form of a Retention Share Bonus Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Where the Board determines that a Participant
 shall be granted a Retention Share Bonus Award, it shall also determine:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the minimum, target and maximum Initial
 Value; and

Deferred Share Bonus Plan – January 22, 2014, and amended thereafter

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the Initial Conditions applicable to
 such Initial Value (unless the Board has delegated setting such conditions, in which case
 they shall determine the overall structure, approach and principles to be applied)."

***4.***  ***<u>Determining the number of shares or ADIs subject to a Retention Share Bonus Award</u>*** 

For the purposes of this Schedule, Rule 2.4 shall not apply and shall be replaced by the following:

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| | |
|:---|:---|
| "(a) | Following the expiry of the Initial Period, the Board shall grant a Retention Share Bonus Award. The number of Shares or ADIs subject or linked to such Award ("X") shall be determined by the Board as follows: |

---

X = <u>A</u> <br> B

Where:

A subject to adjustments below, is the Initial Value as adjusted by the Board to take into account the satisfaction or otherwise of the Initial Conditions following the expiry of the Initial Period; and

---

| | |
|:---|:---|
| B | is Market Value of a Share or ADI (as appropriate) as at such date as the Board may determine as soon as practicable following the expiring of the Initial Period rounded up, where necessary, to the nearest whole Share or ADI, |

---

provided that the Board may apply such other method of calculation as it may determine from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If during the Initial Period the Participant's
 role and/or responsibilities have been altered, then:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) A
 (as determined in Rule 2.4(a) above) may, at the discretion of the Board and in
 such manner as the Board may determine from time to time, be adjusted to reflect such alteration
 in role and/or responsibilities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the
 Board may, at its discretion, determine that any or all of A (where relevant, as adjusted
 in accordance with Rule 2.4(b)(i)) is paid in cash, subject to the appropriate deductions,
 to the Participant as soon as practicable following determination of the cash sum payable.
 In this event, A in Rule 2.4(a) shall be that part of A not settled in accordance
 with this Rule 2.4(b)(ii);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In the event that Rule 2.4(b)(ii) applies
 and any part of the Initial Value is settled in accordance with that Rule, then that Participant
 shall have no right to receive any further benefit or payment or to receive Shares or ADIs
 in respect of that of the Initial Value."

Deferred Share Bonus Plan – January 22, 2014, and amended thereafter

***5.***  ***<u>Timing of Retention Share Bonus Awards</u>*** 

For the purposes of this Schedule, Rule 2.5 shall not apply and shall be replaced by the following:

"Subject to any Dealing Restrictions which prevent Retention Share Bonus Awards being granted, the Board shall grant such Retention Share Bonus Awards as soon as practicable within the first Grant Period following the expiry of the Initial Period."

***6.***  ***<u>Vesting of Retention Share Bonus Awards</u>*** 

Immediately following Rule 4.1, the following shall be added as Rule 4.1A:

"To the extent that the Initial Conditions are not met, there shall be no entitlement to receive a Retention Share Bonus Award."

***7.***  ***<u>Leaving in special circumstances - Retention Share Bonus Awards</u>*** 

For the purposes of this Schedule, Rule 6.3 and Rule 6.4 shall apply where a Participant Ceases Employment following the expiry of the Initial Period but prior to the Vesting Date applicable to a Retention Share Bonus Award.

Immediately following Rule 6.3, the following shall be added as Rule 6.3A:

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| | |
|:---|:---|
| "(a) | If a Participant Ceases Employment during the Initial Period otherwise than because of a reason set out in Rule 6.3(a) to (e) or Rule 6.4 then the Participant shall have no right to receive any cash payment or a Retention Share Bonus Award. |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) If a Participant Ceases Employment
 during the Initial Period because of a reason set out in Rule 6.3(a) to (e) or
 Rule 6.4 then the Board shall, by reference to the Initial Value applicable to that
 Participant, determine the cash sum payable to the Participant as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) if the Participant, prior to Cessation
 of Employment, is not required to undertake employment duties for a defined period ("Garden
 Leave") then in respect of that part of his Initial Value which relates to the applicable
 period of Garden Leave:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa) that element of his Initial Value which
 is referable to individual conditions shall be settled at target; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb) that element of his Initial Value which
 is referable to business conditions shall be settled:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A) if, as at the date of Cessation of Employment,
 it is impractical to assess the relevant business conditions, at target; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B) if, as at the date of Cessation of Employment,
 it is practical to assess the relevant business conditions, to the extent the Board determines
 having regard to the relevant business conditions up to the date of such cessation;

Deferred Share Bonus Plan – January 22, 2014, and amended thereafter

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) to the extent that (i) above
 does not apply then:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa) if, as at the date of Cessation of
 Employment, it is impractical to assess the relevant conditions, at target; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb) if, as at the date of Cessation of
 Employment, it is practical to assess the conditions, to the extent the Board determines
 having regard to progress towards satisfying such conditions up to the date of such cessation,

PROVIDED ALWAYS THAT settlement of the Initial Value shall be reduced to take account of the proportion of the Initial Period during which the Participant was an Eligible Employee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) In the event that Rule 6.3A(b) applies
 and any part of the Initial Value is settled in accordance with that Rule, then that Participant
 shall have no right to receive any benefit or payment or to receive Shares or ADIs in respect
 of that Award."

**8.**  ***<u>Change of Control prior to the Vesting Date - Retention Share Bonus Awards</u>*** 

For the purposes of this Schedule, Rule 7.1(a) shall apply where a Change of Control occurs following the expiry of the Initial Period but prior to the Vesting Date applicable to a Retention Share Bonus Award.

Immediately following Rule 7.1(a), the following shall be added as Rule 7.1A:

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| | |
|:---|:---|
| "(a) | If a Change of Control occurs or is anticipated to occur during the Initial Period then the Initial Value shall vest on the Change of Control or at such earlier point as the Board shall determine and the Board shall determine the cash sum in respect of such Initial Value that is payable as follows: |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) if, as at the date of the Change of Control, it is impractical to assess the Initial Conditions, at target; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) if, as at the date of the Change of Control, it is practicable to assess the applicable Initial Conditions, to the extent the Board determines having regard to progress towards satisfying such conditions up to the date of the Change of Control,

PROVIDED ALWAYS THAT payment shall be reduced to take account of the proportion of the Initial Period as has elapsed when the Change of Control occurs and during which the Participant was an Eligible Employee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In the event that Rule 7.1A(a) applies
 and a Participant's Initial Value is settled in accordance with that Rule, then that
 Participant shall have no further right to receive any benefit or payment or to receive Shares
 or ADIs in respect of that Award."

Deferred Share Bonus Plan – January 22, 2014, and amended thereafter