Document:

Exhibit 10.512

 

Executive Change-in-Control

Severance
Plan

 

Chiron Corporation

 

January 2001

 

(As Amended and Restated
Effective December 1, 2005)

 

TIER II –
Executive Committee Members

 

 

Contents

 

	
  Article 1.
  Establishment, Term, and Purpose

  	
  1

  
	
   

  	
   

  
	
  Article 2.
  Definitions

  	
  1

  
	
   

  	
   

  
	
  Article 3.
  Participation

  	
  5

  
	
   

  	
   

  
	
  Article 4.
  Severance Benefits

  	
  5

  
	
   

  	
   

  
	
  Article 5.
  Form and Timing of Severance Benefits

  	
  7

  
	
   

  	
   

  
	
  Article 6.
  Excise Tax Equalization Payment

  	
  8

  
	
   

  	
   

  
	
  Article 7.
  The Company’s Payment Obligation

  	
  9

  
	
   

  	
   

  
	
  Article 8. Arbitration

  	
  9

  
	
   

  	
   

  
	
  Article 9.
  Successors and Assignment

  	
  10

  
	
   

  	
   

  
	
  Article 10.
  Miscellaneous

  	
  10

  

 

i

 

Chiron
Corporation

Executive Change-in-Control Severance Plan 

(As Amended and Restated Effective December 1, 2005)

 

Article
1. Establishment, Term, and Purpose

 

1.1                         Establishment
of the Plan. Chiron Corporation (hereinafter referred to as the “Company”)
hereby establishes a change-in-control severance plan to be known as the “Chiron
Corporation Executive Change-in-Control Severance Plan” (the “Plan”).

 

1.2                         Term of
the Plan. This Plan will commence upon December 9, 2000 (the “Effective
Date”) and shall continue in effect for two (2) full calendar years. However,
at the end of such two (2) year period and, if extended, at the end of each
additional year thereafter, the term of this Plan shall be extended
automatically for one (1) additional year, unless the Committee delivers
written notice six (6) months prior to the end of such term, or extended term,
to each Participant, that the Plan will not be extended. However, in the event
a Change in Control occurs during the original or any extended term, this Plan
will remain in effect, solely with respect to obligations relating to such
Change in Control, for the longer of: (i) two (2) years beyond the month in
which such Change in Control occurred; or (ii) until all obligations of the
Company hereunder have been fulfilled, and until all benefits required
hereunder have been paid to Participants.

 

The Plan was amended and restated effective December
1, 2005, to comply with the provisions of Section 409A of the Internal Revenue
Code (the “Code”). The Plan is intended to comply with the provisions of Code
Section 409A and shall be administered and operated in conformity with those
provisions and applicable Treasury Regulations.

 

1.3.                      Purpose of
the Plan. The purpose of the Plan is to provide certain key employees of
the Company with greater incentive to remain in the employ of the Company,
particularly in the event of any possible change or threatened change in
control of the Company.

 

Article
2. Definitions

 

Whenever used
in this Plan, the following terms shall have the meanings set forth below and,
when the meaning is intended, the initial letter of the word is capitalized.

 

2.1                         “Base
Salary” as of any date means the annual rate of a Participant’s base
salary, excluding amounts received under incentive or other bonus plans,
computed before any deferrals or pre-or post-tax payroll deductions.

 

2.2                         “Beneficial
Owner” shall have the meaning ascribed to such term in Rule 13d-3 of
the General Rules and Regulations under the Exchange Act.

 

2.3                         “Beneficiary”
means the persons or entities designated or deemed designated by the
Participant pursuant to Section 9.2 herein.

 

2.4                         “Board”
means the Board of Directors of the Company.

 

1

 

2.5                         “Cause”
means:

 

(a)                            The
Participant’s willful and continued failure to substantially perform his/her
duties with the Company (other than any such failure resulting from Disability
or occurring after issuance by the Participant of a Notice of Termination for
Good Reason), after a written demand for substantial performance is delivered
to the Participant that specifically identifies the manner in which the Company
believes that the Participant has willfully failed to substantially perform
his/her duties, and after the Participant has failed to resume substantial
performance of his/her duties on a continuous basis within thirty (30) calendar
days of receiving such demand;

 

(b)                           The
Participant’s material act of dishonesty, fraud or embezzlement against the
Company, unauthorized disclosure of confidential information or trade secrets
of the Company or an affiliate (whether or not in violation of any
confidentiality agreement) or other willful conduct (other than conduct covered
under (i) above) that is
demonstrably injurious to the Company, monetarily or otherwise; or

 

(c)                            The
Participant’s having been convicted of a felony.

 

For purposes of this
subparagraph, no act, or failure to act, on the Participant’s part shall be
deemed “willful” unless done, or omitted to be done, by the Participant not in
good faith and without reasonable belief that the action or omission was in the
best interests of the Company.

 

2.6                         “Change in
Control” of the Company shall be deemed to have occurred as of the first
day during the term of this Plan that any one or more of the following
conditions is satisfied and regulatory approval has been granted if necessary:

 

(a)                            The “beneficial
ownership” (as defined in Rule 13d-3 under the Exchange Act) of securities
representing more than thirty percent (30%) of the combined voting power of all
securities of the Company is acquired, directly or indirectly, by a Person
(other than the Company, any trustee or other fiduciary holding securities
under an employee benefit plan of the Company or an affiliate thereof, or any
corporation owned, directly or indirectly, by the stockholders of the Company
in substantially the same proportions as their ownership of stock of the
Company); or

 

(b)                           During
any period of two (2) consecutive years, individuals who at the beginning of
such period constitute the Board of Directors and any new director (other than
a director designated by a person who has entered into an agreement with the
Company to effect a transaction described in paragraph (a) or (b) of this
section) whose election by the Board of Directors or nomination for
election by the Company’s stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof;
or

 

(c)                            The
stockholders of the Company approve a definitive agreement to sell or otherwise
dispose of all or substantially all of its assets, or adopt a plan for
liquidation, provided that such sale or liquidation has not been abandoned.

 

2

 

Notwithstanding
anything else contained herein to the contrary, in no event shall a Change in
Control be deemed to have occurred by reason of a purchase, or series of
purchases of Company stock by Novartis or its successor such that the acquiring
entity remains subject to the terms of that certain Governance Agreement dated
as of January 5, 1995, as amended through December 9, 2000, provided the
acquiring entity’s Company stock holdings, direct or indirect, in the
aggregate, represent seventy-nine percent (79%) or less of the combined voting
power of all outstanding Company securities.

 

However, in no
event shall a Change in Control be deemed to have occurred, with respect to the
Participant, if the Participant is part of a purchasing group that
consummates the Change-in-Control transaction. The Participant shall be deemed “part
of a purchasing group” for purposes of the preceding sentence if the
Participant is an equity participant in the purchasing company or group (except
for: (i) passive ownership of less than three percent (3%) of the stock or
other equity of the purchasing company; or (ii) ownership of equity
participation in the purchasing company or group which is otherwise not
significant, as determined prior to the Change in Control by a majority of the
nonemployee continuing Directors).

 

2.7                         “Code”
means the United States Internal Revenue Code of 1986, as amended, and any
successors thereto.

 

2.8                         “Committee”
means the Compensation Committee of the Board or any other committee appointed
by the Board to perform the functions of the Compensation Committee for
purposes of administering this Plan.

 

2.9                         “Company”
means Chiron Corporation, a Delaware corporation, or any successor thereto as
provided in Article 9 herein.

 

2.10                  “Disability”
means complete and permanent inability by reason of illness or accident to
perform the duties of the occupation at which the Participant was employed when
such disability commenced, where inability is expected to last one year or
longer.

 

2.11                  “Effective Date”
means the date of this Plan set forth above.

 

2.12                  “Effective Date
of Termination” means the date on which a Qualifying Termination occurs
which triggers the payment of Severance Benefits hereunder.

 

2.13                  “Exchange Act”
means the United States Securities Exchange Act of 1934, as amended.

 

2.14                  “Good Reason”
shall mean, without the Participant’s express written consent, the occurrence
of any one or more of the following:

 

(a)                            The assignment of the
Participant to duties materially inconsistent with the Participant’s
authorities, duties, responsibilities as an employee of the Company, or a
material reduction in the nature or status of the Participant’s authorities,
duties, or responsibilities than those in effect immediately preceding the
Change in Control;

 

(b)                           The Company’s requiring the
Participant to be based at a location which is at least fifty (50) miles
further from the Participant’s current primary residence than is such residence

 

3

 

from the
Company’s current headquarters, except for required travel on the Company’s
business to an extent substantially consistent with the Participant’s business
obligations as of the Effective Date;

 

(c)                            A
material reduction in the Participant’s Base Salary or bonus opportunity as in
effect on the Effective Date or as the same shall be increased from time to
time;

 

(d)                           A
material reduction in the Participant’s level of participation in any of the
Company’s short- and/or long-term incentive compensation plans, or employee
benefit or retirement plans, policies, practices, or arrangements in which the
Participant participates immediately preceding the Change in Control; provided,
however, that reductions in the levels of participation in any such plans shall
not be deemed to be “Good Reason” if the Participant’s reduced level of
participation in each such program remains substantially consistent with the
average level of participation of other executives who have positions
commensurate with the Participant’s position.

 

For purposes
of this Plan, long-term incentive plans shall mean the Chiron Executive
Long-Term Incentive Plan, the 1991 Stock Option Plan, and any other similar
plans instituted by the Company;

 

(e)                            The
failure of the Company to obtain a satisfactory agreement from any successor to
the Company to assume and agree to perform this Agreement, as contemplated in
Article 10 herein; or

 

(f)                              Any
termination of Participant’s employment by the Company that is not effected
pursuant to a Notice of Termination.

 

The existence
of Good Reason shall not be affected by the Participant’s temporary incapacity
due to physical or mental illness not constituting a Disability. However, the
occurrence of an event set forth in (a) through (f) above shall not constitute
Good Reason if the Company has cured such event within fifteen (15) days of
receipt of written notice from the Participant that such event has occurred and
constitutes Good Reason.

 

2.15                  “Notice of
Termination” shall mean a written notice which shall indicate the specific
termination provision in this Plan relied upon, and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Participant’s employment under the provision so indicated.

 

2.16                  “Participant” means
an employee of the Company who fulfills the eligibility and participation
requirements, as provided in Article 3 herein.

 

2.17                  “Person”
shall have the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group”
as provided in Section 13(d).

 

2.18                  “Qualifying
Termination” means any of the events described in Section 4.2 herein.

 

4

 

2.19                  “Severance
Benefits” means the payment of severance compensation as provided in Section 4.3
herein.

 

2.20                  “Target Bonus”
shall mean the target bonus amount established under the Company’s annual
incentive plan.

 

Article
3. Participation

 

3.1                         Eligible
Employees. Individuals eligible to participate in the Plan shall include
all key employees of the Company, as determined by the Committee in its sole
discretion.

 

3.2                         Participation.
Subject to the terms of the Plan, the Committee may, from time to time, select
from all eligible employees those who shall participate in the Plan.

 

Article
4. Severance Benefits

 

4.1                         Right to
Severance Benefits. A Participant shall be entitled to receive from the
Company Severance Benefits, as described in Section 4.3 herein, if (i)
there has been a Change in Control of the Company, (ii) within twenty-four (24)
calendar months following the Change in Control, a Qualifying Termination of
the Participant has occurred, and (iii) Participant has executed a Release, as
described in Section 4.8 herein. The benefits provided under this Plan shall be
reduced to the extent similar benefits are provided under the Chiron
Corporation Executive Officer Severance Plan or any other severance protection
arrangements provided by the Company either as a plan or in the form of
individual agreement or contract.

 

The
Participant shall not be entitled to receive Severance Benefits if he/she is
terminated for Cause, or if his/her employment with the Company ends due to
death or Disability or due to a voluntary termination of employment by the
Participant without Good Reason.

 

4.2                         Qualifying
Termination. The term Qualifying Termination means any of the following
events:

 

(a)                            An
involuntary termination of the Participant’s employment by the Company for
reasons other than Cause, death or Disability pursuant to a Notice of
Termination delivered to the Participant by the Company;

 

(b)                           A
voluntary termination by the Participant for Good Reason pursuant to a Notice
of Termination delivered to the Company by the Participant; provided that, if
upon receiving such Notice of Termination, the Company requests that the
Participant remain an employee for a period ending no later than six (6) months
following the date of the Change in Control (the “Transition Employment Period”)
with compensation and benefits equal to or greater than the Participant’s
compensation and benefits immediately before the Qualifying Termination (or, if
more favorable to the Participant, immediately before the Change in Control),
the Participant will not be deemed to have a Qualifying Termination unless he
or she remains employed throughout the Transition Employment Period or
Executive’s employment earlier terminates due to death, Disability or
involuntary termination by the Company for reason other than Cause.

 

5

 

4.3                         Description
of Severance Benefits. In the event the Participant becomes entitled to
receive Severance Benefits, as provided in Sections 4.1 and 4.2
herein, the Company shall pay to the Participant and provide him/her with the
following:

 

(a)                            An
amount equal to two (2) times the highest rate of the Participant’s annualized
Base Salary in effect immediately preceding the Change in Control.

 

(b)                           An
amount equal to two (2) times the Participant’s highest target bonus
established for the year immediately preceding the Change in Control.

 

(c)                            An
amount equal to the Participant’s unpaid Base Salary, any unpaid bonus earned
before the year in which the termination occurs, a pro rata amount of the
Participant’s Target Bonus for the year in which the termination occurs, and
accrued but unused paid time off in accordance with company policy through the
Effective Date of Termination.

 

(d)                           A
continuation of the welfare benefits of medical, dental, vision, life and
accidental death and dismemberment, and disability insurance coverage for two
(2) full years after the Effective Date of Termination. All benefits shall be
provided to the Participant at the same premium cost, and at the same coverage
level, as in effect as of the Participant’s Effective Date of Termination. However,
in the event the premium cost and/or level of coverage shall change for all
employees of the Company, or for management employees with respect to
supplemental benefits, the cost and/or coverage level, likewise, shall change
for the Participant in a corresponding manner. The Company may satisfy its
obligation to provide a continuation of health care benefits by paying that
portion of the Participant’s premiums required under Consolidated Omnibus
Budget Reconciliation Act (“COBRA”) that exceed the amount of premiums that the
Participant would have been required to pay for continuing coverage had he or
she continued in employment. The period of continuation of health benefits will
in all events count towards the period for which health care coverage is
required to be provided under COBRA. If the Company is not reasonably able to
continue these benefits under the Company’s plans, the Company may provide
similar coverage under other vehicles or may, in lieu thereof, pay the
Participant an amount equal to the value of these benefits.

 

The
continuation of these welfare benefits shall be discontinued prior to the end
of the two (2) year period in the event the Participant has available
substantially similar benefits at a comparable cost from a subsequent employer,
as determined by the Committee.

 

(e)                            All
long-term incentive awards will vest in accordance with the terms of the plan
or program under which they were granted.

 

The aggregate
vested benefits accrued by the Participant as of the Effective Date of
Termination under all other savings and retirement plans sponsored by the
Company shall be distributed pursuant to the terms of the applicable plans.

 

4.4                         Termination
for Disability. Following a Change in Control of the Company, if a
Participant’s employment is terminated due to Disability, the Participant shall
receive his/her Base Salary through the Effective Date of Termination, at which
point in time the Participant’s benefits

 

6

 

shall be
determined in accordance with the Company’s disability, retirement, insurance,
and other applicable plans and programs then in effect.

 

4.5                         Termination
for Death. Following a Change in Control of the Company, if the Participant’s
employment is terminated by reason of his/her death, the Participant’s benefits
shall be determined in accordance with the Company’s survivor’s benefits,
insurance, and other applicable programs of the Company then in effect.

 

4.6                         Termination
for Cause or Other Than for Good Reason. Following a Change in Control of
the Company, if the Participant’s employment is terminated either: (a) by the
Company for Cause; or (b) by the Participant (other than for Good Reason under
circumstances giving rise to a Qualifying Termination described in Section
4.2(b) herein), the Company shall pay the Participant his/her full Base Salary
and accrued but unused paid time off in accordance with company policy through
the Effective Date of Termination, at the rate then in effect, plus all other
amounts to which the Participant is entitled under any compensation plans of
the Company, at the time such payments are due.

 

4.7                         Notice of
Termination. Any termination of employment by the Company or by the
Participant for Good Reason shall
be communicated by a Notice of Termination.

 

4.8                         Release. The
Severance Benefits are in consideration of Participant’s release of all claims
against the Company and its employees and agents, in the form provided by the
Company and in substantially the form as attached hereto as Exhibit A (the “Release”).
If the Participant does not properly execute the Release within forty-five (45)
days of the Notice of Termination or if the Participant effectively revokes it,
he or she will not be entitled to any Severance Benefits.

 

Article
5. Form and Timing of Severance Benefits

 

5.1                         Form and
Timing of Cash Severance Benefits. The Participant may elect to receive the
cash Severance Benefits described in Sections 4.3(a), 4.3(b), and 4.3(c)
herein in a single lump sum or in the form of salary continuation pursuant to
the Company’s normal payroll practice. The election must be made on or prior to
December 30, 2005 on such forms as provided by the Company and shall
become irrevocable once made. If no election is made on or prior to
December 30, 2005, the cash severance payments shall be made in a lump sum.
Any lump sum payments shall be paid, and salary continuation payments shall
commence, as soon as practicable following the latest of (i) the Effective Date
of Termination, (ii) the date that the Participant executes the Release or
(iii) the last day following Participant’s execution of the Release that the
Participant may, by its terms, revoke, but in no event beyond thirty (30) days
from such date.

 

5.2                         Deferred
Commencement Date for Key Employees. Notwithstanding any provision to the
contrary in the Plan, to the extent required to avoid a prohibited distribution
under Code Section 409(A)(2), no Severance Benefits to which the Participant
becomes entitled under the Plan shall be made prior to the earlier of (i) the
expiration of the six (6)-month period measured from the date of the
Participant’s “separation from service” (as defined under Code Section 409(A)
and regulations thereunder) or (ii) the death of the Participant if the
Participant is at the time a “key employee” within the meaning of that term
under Code Section 409A. Upon the expiration of the applicable Code Section
409(A)(2) deferral period, all Severance Benefits otherwise payable in a lump
sum and

 

7

 

deferred
pursuant to this section shall be paid in a lump sum. All Severance Benefits
deferred under this section and otherwise payable in the form of salary
continuation shall be paid by the end of the first month following the
expiration of the Code Section 409(A)(2) deferral period. In the event of the
Participant’s death, any Severance Benefits deferred under this section shall
be paid to the personal representative of the Participant’s estate as soon as
practicable but in all events within sixty (60) days after the date of the Participant’s
death. For purposes of determining the individuals who will be key employees
under the Plan, the identification date shall be December 31 of each calendar
year.

 

5.3                         Withholding
of Taxes. The Company shall be entitled to withhold from any amounts
payable under this Plan all taxes as legally shall be required (including,
without limitation, any United States federal taxes and any other state, city,
or local taxes).

 

5.4                         409A
Compliance. Notwithstanding any other provisions to the contrary, the Participant
will not receive any payments or benefits under the Plan earlier than permitted
by Code Section 409A or later than the latest date permitted by Code Section
409A in order to avoid taxation under Code Section 409A.

 

Article
6. Excise Tax Equalization Payment

 

6.1                         Excise
Tax Equalization Payment. In the event that the Participant becomes
entitled to Severance Benefits or any other payment or benefit under this Plan,
or under any other agreement with or plan of the Company (in the aggregate, the
“Total Payments”), if all or any part of the Total Payments will be subject to
the tax (the “Excise Tax”) imposed by Section 4999 of the Code (or any similar
tax that may hereafter be imposed), the Company shall pay to the Participant in
cash an additional amount (the “Gross-Up Payment”) such that the net amount
retained by the Participant from the Total Payments and the Gross-Up Payment
after deduction of any Excise Tax upon the Total Payments and any federal,
state, and local income and employment tax, penalties, interest, and Excise Tax
upon the Gross-Up Payment provided for by this Section 6.1 (including
FICA), shall be equal to the Total Payments. Such payment shall be made by the
Company to the Participant as soon as practicable following the latest of (i)
the Effective Date of Termination (or, with respect to any Total Payments to a
key employee deferred under Section 5.2 herein, the end of the Code Section
409A deferral period) or (ii) the date that the Participant executes the
Release or (iii) the last day following Participant’s execution of the Release
that the Participant may, by its terms, revoke, but in no event beyond thirty
(30) days from such date.

 

6.2                         Tax
Computation. For purposes of determining whether any of the Total Payments
will be subject to the Excise Tax and the amounts of such Excise Tax:

 

(a)                            Any
other payments or benefits in the nature of compensation received or to be
received by the Participant in connection with a Change in Control of the
Company or the Participant’s termination of employment (whether pursuant to the
terms of this Plan or any other plan, arrangement, or agreement with the
Company or otherwise) shall be treated as “parachute payments” within the
meaning of Section 280G(b)(2) of the Code, and all “excess parachute payments”
within the meaning of Section 280G(b)(1) shall be treated as subject to the
Excise Tax, unless in the opinion of tax counsel as supported by the Company’s
independent auditors and acceptable to the Participant, such other

 

8

 

payments or
benefits (in whole or in part) do not constitute parachute payments, or unless
such excess parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered within the meaning of Section
280G(b)(4) of the Code in excess of the base amount within the meaning of
Section 280G(b)(3) of the Code, or are otherwise not subject to the Excise
Tax;

 

(b)                           The
amount of the Total Payments which shall be treated as subject to the Excise
Tax shall be equal to the lesser of: (i) the total amount of the Total
Payments; or (ii) the amount of excess parachute payments within the meaning of
Section 280G(b)(1) (after applying clause (a) above); and

 

(c)                            The
value of any noncash benefits or any deferred payment or benefit shall be
determined by the Company’s independent auditors in accordance with the
principles of Sections 280G(d)(3) and (4) of the Code.

 

For purposes
of determining the amount of the Gross-Up Payment, the Participant shall be
deemed to pay federal income taxes at the highest marginal rate of federal
income taxation (including the effects of applicable phase-outs of deductions
and other benefits) in the calendar year in which the Gross-Up Payment is to be
made, and state and local income taxes at the highest marginal rate of taxation
in the state and locality of the Participant’s residence on the Effective Date
of Termination.

 

6.3                         Subsequent
Recalculation. In the event the Participant ultimately owes more Excise Tax
on the Total Payments and the Gross-Up Payments than computed by the Company
under Section 6.1 herein, the Gross-Up Payment shall be recalculated based
on the actual Excise Tax. Any such additional Gross-up Payments shall be made
as soon as practicable following the date of such recalculation and in all
events prior to March 15 of the calendar year following the year of
determination of such additional payments.

 

Article
7. The Company’s Payment Obligation

 

The Company’s
obligation to make the payments and the benefits provided for herein, to the
extent that the Participant qualifies for such payments and benefits under the
terms of this Plan, shall be absolute and unconditional, and shall not be
affected by any circumstances, including, without limitation, any offset,
counterclaim, recoupment, defense, or other right which the Company may have
against the Participant or anyone else.

 

The
Participant shall not be obligated to seek other employment in mitigation of
the amounts payable or arrangements made under any provision of this Plan, and
the obtaining of any such other employment shall in no event effect any
reduction of the Company’s obligations to make the payments and arrangements
required to be made under this Plan, except to the extent provided in
Section 4.3(d) herein.

 

Article
8. Arbitration

 

Any dispute or
controversy arising under or in connection with this Plan shall be settled by
arbitration, conducted before a panel of three (3) arbitrators sitting in a
location selected by the

 

9

 

Participant
within fifty (50) miles from the location of his/her employment with the
Company, in accordance with the rules of the American Arbitration Association
then in effect.

 

Judgment may
be entered on the award of the arbitrator in any court having proper
jurisdiction. All expenses of such arbitration, including the fees and expenses
of the counsel for the Participant, shall be borne by the Company.

 

Article
9. Successors and Assignment

 

9.1                         Successors
to the Company. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation, or otherwise) of all or
substantially all of the business and/or assets of the Company or of any
division or subsidiary thereof to expressly assume and agree to perform the
Company’s obligations under this Plan in the same manner and to the same extent
that the Company would be required to perform them if no such succession had
taken place.

 

9.2                         Assignment
by the Participant. This Plan shall inure to the benefit of and be enforceable
by the Participant’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees, and legatees. If the
Participant dies while any amount would still be payable to him/her hereunder
had he/she continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Plan to the
Participant’s Beneficiary. If the Participant has not named a Beneficiary, then
such amounts shall be paid to the Participant’s devisee, legatee, or other
designee, or if there is no such designee, to the Participant’s estate.

 

Article
10. Miscellaneous

 

10.1                  Employment
Status. Except as may be provided under any other agreement between the
Participant and the Company, the employment of the Participant by the Company
is “at will,” and may be terminated by either the Participant or the Company at
any time and for any or no reason, subject to applicable law.

 

10.2                  Beneficiaries.
The Participant may designate one or more persons or entities as the primary
and/or contingent Beneficiaries of any Severance Benefits owing to the
Participant under this Plan. Such designation must be in the form of a signed
writing acceptable to the Committee. The Participant may make or change such
designations at any time.

 

10.3                  Severability.
In the event any provision of this Plan shall be held illegal or invalid for
any reason, the illegality or invalidity shall not affect the remaining parts
of the Plan, and the Plan shall be construed and enforced as if the illegal or
invalid provision had not been included. Further, the captions of this Plan are
not part of the provisions hereof and shall have no force and effect.

 

10.4                  Modification.
No provision of this Plan may be modified, waived, or discharged unless such
modification, waiver, or discharge is agreed to in writing and signed by the
Participant and by an authorized member of the Committee, or by the respective
parties’ legal representatives and successors, except to the extent necessary
to comply with Code Section 409A and other legislation..

 

10

 

10.5                  Applicable Law.
To the extent not preempted by the laws of the United States, the substantive
laws of the state of California, without regard to conflict of law principles,
shall be the controlling law in all matters relating to this Plan. [End of Plan]

 

11Exhibit 10.523

 

CHIRON CORPORATION

 

AMENDMENT NO. 1 TO THE
 2004 STOCK COMPENSATION PLAN

 

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

 

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

 

“(1)                            AUTOMATIC SHARE RIGHT AWARD. Each Eligible
Director shall receive an annual share rights grant (the “Automatic Share Right
Award”) on the last business day of April each year (the “Automatic Grant
Date”). However, with respect to the 2002 year, share rights shall be granted
on June 30, 2003. An Automatic Share Right shall be fully vested and
entitle the holder to receive a number of shares of Common Stock following
cessation of service on the Board pursuant to his or her election, as described
below. The number of share rights subject to each Automatic Share Right Award
shall be that number of shares (rounded to the nearest whole share) equal to (i) $160,000
divided by (ii) the Fair Market Value of one share of Common Stock on the
date of grant; provided that each Eligible Director who was newly elected or
appointed on a date after the previous year’s Automatic Grant Date (or, with
respect to the June 30, 2003 grants, after June 30, 2002), will
receive in lieu thereof on the current Automatic Grant Date, an Automatic Share
Right Award for a pro rata number of whole shares of Common Stock determined by
multiplying $13,333 by the number of calendar months (calculated to the nearest
whole month, but not to exceed 12) between the continuing Eligible Director’s
election or appointment date and the current Automatic Grant Date and dividing
the product by the Fair Market Value of one share of Common Stock on the
Automatic Grant Date. In the event of a Change in Control which occurs on a
date other than the Automatic Grant Date, each Eligible Director who is not to
continue to serve as an Eligible Director following the Change in Control shall
receive, on the effective date of the Change in Control, an Automatic Share
Right Award for a pro rata number of whole shares of Common Stock determined by
multiplying $13,333 by the number of calendar months (calculated to the nearest
whole month, but not to exceed 12) between the last Automatic Grant Date prior
to the Change in Control and the effective date of the Change in Control and
dividing the product by the Fair Market Value of one share of Common Stock on
the date of the Change in Control.

 

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

 

“(4)                            DISTRIBUTION ELECTIONS. Each Eligible Director shall elect to receive a
distribution from his or her Share Right Account either (i) within thirty
(30) days following his or her termination of Board service or (ii) on February 1
of the year following the year of his or her termination of Board service, and
to receive payments from his or her Share Right Account either (i) in the form of
a single lump sum or (ii) in up to ten (10) annual installments. Such
election must be filed (i) before July 30, 2003 for directors
eligible to receive Automatic Share Rights in the 2003 year, (ii) for all
Eligible Directors first eligible to receive Automatic Share Right Awards in
2004, before the date of grant of the first Automatic Share Right and (iii) for
all Eligible Directors first eligible to receive Automatic Share Right Awards
after 2004, by the end of the calendar year immediately preceding the year of
the award. An election will apply to any 

 

 

and
all Automatic Share Right Awards received by the Eligible Director and will
remain in effect until all payments from the Eligible Director’s Share Right
Account have been made. An election made after 2004 shall become irrevocable on
December 31 of the calendar year in which it is made. An Eligible Director
may change the distribution election in effect for his or her Share
Right Account by submitting that change to the Compensation Committee or its
delegate in writing. However, the subsequent election shall have no force or
effect and shall not become effective until the expiration of the 12-month
period measured from the filing date of such election. In addition, such
election shall be valid only if (A) such election defers any distribution
for at least 5 years after the date that the distribution would have otherwise
been made or commenced in the absence of such subsequent election and, (B) in
the case of a scheduled distribution to be made in installments, such election
is made at least twelve (12) months before the date of the first of the
scheduled payments. In no event may any change to the distribution
election in effect for a Share Right Account result in any acceleration of the
distribution of that account under Code Section 409A. Notwithstanding the
foregoing, each Eligible Director may change
his or her prior election with respect to the time and form of
distribution of his or her Share Right Account by submitting the new election
on such form as provided by the Corporation on or prior to December 30,
2005.”

 

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

 

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

 

(i)                                     The
“beneficial ownership” (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934) of securities representing more than thirty percent (30%)
of the combined voting power of all securities of the Company is acquired,
directly or indirectly, by a Person (other than the Company, any trustee or
other fiduciary holding securities under an employee benefit plan of the
Company or an affiliate thereof, or any corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company); or

 

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

 

(iii)                               The stockholders of the
Company approve a definitive agreement to sell or otherwise dispose of all or
substantially all of its assets, or adopt a plan for liquidation, provided that
such sale or liquidation has not been abandoned.

 

2

 

Notwithstanding anything
else contained herein to the contrary, in no event shall a Change in Control be
deemed to have occurred by reason of a purchase, or series of purchases of
Corporation stock by Novartis or its successor such that the acquiring entity
remains subject to the terms of that certain Governance Agreement dated as of November 20,
1994, as amended, provided the acquiring entity’s Corporation stock holdings,
direct or indirect, in the aggregate, represent less than seventy-nine and
nine-tenths of a percent (79.9%) of the combined voting power of all
outstanding Corporation securities.”

 

4.                                       Except as otherwise amended hereunder, the
provisions of the 2004 Stock Compensation Plan shall continue in full force and
effect.

 

3

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