Document:

Exhibit 10.519

CHIRON CORPORATION

CORPORATE GOVERNANCE GUIDELINES

INTRODUCTION

The Board of Directors of Chiron Corporation
(“Chiron”) is elected by the stockholders of Chiron to serve their interests
through oversight of management and Chiron’s business.  The primary responsibility of the directors
is to exercise their business judgment in the best interests of Chiron and its
stockholders.  The Board, acting on the
recommendation of its Nominating and Corporate Governance Committee, has
developed and adopted these corporate governance principles (the “Guidelines”)
to promote the functioning of the Board and its committees, to promote the
interests of stockholders and to set forth a common set of expectations as to
how the Board, its various committees and individual directors should perform
their functions.  Chiron is party to a
Governance Agreement, dated as of November 20, 1994, with Novartis AG
(“Novartis”), as amended (as it may be further amended from time to time, the
“Governance Agreement”) and these guidelines have been developed in light of,
among other things, that agreement.

BOARD COMPOSITION

The composition of the Board should balance
the following goals:

•                  The size of the Board should facilitate substantive discussions of the
whole Board in which each director can participate meaningfully;

 

 

•                  The composition of the Board should encompass a broad range of skills,
expertise, industry knowledge, diversity of opinion and contacts relevant to
Chiron’s business;

•                  The composition of the Board shall reflect the requirements of the
Governance Agreement;

•                  A substantial majority of the Board shall consist of directors who are
neither officers or employees of Chiron or its subsidiaries nor have a
relationship which, in the opinion of the Board, would interfere with the
exercise of independent judgment in carrying out the responsibilities of a
director, and who are otherwise “independent” under the rules of the Nasdaq
Stock Market, Inc.

SELECTION OF CHAIRPERSON OF THE BOARD AND CHIEF EXECUTIVE OFFICER

The Board is free to select its Chairperson
and Chiron’s Chief Executive Officer (the “CEO”) in the manner it considers in
the best interests of Chiron at any given point in time.  These positions may be filled by one individual
or by two different individuals.

SELECTION OF DIRECTORS

Nominations.  Subject to the
Governance Agreement and the right of Novartis to designate a specific number
of the members of the Board pursuant thereto, the Nominating and Corporate
Governance Committee is responsible for determining 

 

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the
slate of director nominees for election to Chiron’s Board of Directors and the
individuals to fill vacancies occurring between annual meetings of
stockholders.

Criteria.  The Nominating and Corporate Governance Committee shall determine
new nominees for the position of independent director who satisfy the
requirements of the Nasdaq Stock Market, Inc., the Governance Agreement and the
following criteria:

•                  Personal qualities and characteristics, accomplishments and reputation
in the business community;

•                  Current knowledge and contacts in the communities in which Chiron does
business and in Chiron’s industry or other industries relevant to Chiron’s
business;

•                  Ability and willingness to commit adequate time to Board and committee
matters;

•                  The fit of the individual’s skills and personality with those of other
directors and potential directors in building a Board that is effective,
collegial and responsive to the needs of Chiron; and

•                  Diversity of viewpoints, background, experience and other factors.

Invitation.  The invitation to join the Board should be extended by the Board
itself via the Chairperson of the Board and CEO of Chiron, together with an
independent director, when deemed appropriate.

 

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Orientation and Continuing Education.  Management, working with
the Board, will provide an orientation process for new directors, including
background material on Chiron, its business plan and its risk profile, and
meetings with senior management. 
Periodically, management should prepare additional educational sessions
for directors on matters relevant to Chiron, its business plan and risk
profile.

ELECTION TERM

The
Board does not believe it should establish term limits.

RETIREMENT OF DIRECTORS

The
Board does not believe it should establish a mandatory retirement age.  In determining the slate of director
nominees to stand for election or in filling any vacancy, the Nominating and
Corporate Governance Committee will consider the age of each nominee among all
other relevant factors.

BOARD MEETINGS

The
Board currently plans four meetings each year, with further meetings to occur
(or action to be taken by unanimous consent) at the discretion of the
Board.  The meetings will usually
consist of committee meetings and the Board meeting, extended over two or three
days.

The
agenda for each Board meeting will be determined by the Board Chair in
consultation with the Chief Executive Officer. 
The agenda will be prepared by the Corporate Secretary.  Management will seek to provide to all
directors an 

 

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agenda
and appropriate materials in advance of meetings, although the Board recognizes
that this will not always be consistent with the timing of transactions and the
operations of the business and that in certain cases it may not be possible.

 

EXECUTIVE SESSIONS

All
non-management directors will have four regularly scheduled meetings each year,
at which only non-management directors are present.  In addition, to ensure free and open discussion and communication
among the independent directors of the Board, the independent directors will
have two regularly scheduled executive sessions each year, and more frequently
as necessary or desirable, in conjunction with regularly scheduled meetings of
the Board.  The non-management and
independent directors shall designate a presiding director to preside at their
executive sessions.  The presiding
director shall establish the agenda for each of these meetings and may invite
additional participants as appropriate.

THE COMMITTEES OF THE BOARD

Chiron
shall have at least the committees required by the rules of the Nasdaq Stock
Market, Inc. and the Governance Agreement. 
Except to the extent that the Board has delegated or delegates in the
future its authority to a committee, all power and authority of the Board is
reserved by the Board to itself. 
Currently, Chiron’s committees consist of the Audit Committee, the
Compensation 

 

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Committee,
a nominating committee, which at Chiron is called the Nominating and Corporate
Governance Committee, the Stock Option Plan Administration Committee and, as
may be required from time to time under the terms of the Governance Agreement,
a Strategic Planning Committee.

The
Chair of each Committee shall set the agenda for meetings of his or her
Committee.  All directors, whether
members of a committee or not, are invited to make suggestions to a committee
chair for additions to the agenda of his or her committee or to request that an
item from a committee agenda be considered by the Board.  Each committee chair will give a periodic
report of his or her committee’s activities to the Board.

Each
of the Nominating and Corporate Governance Committee, the Audit Committee and
the Compensation Committee shall be composed of directors who are not officers
or employees of Chiron or its subsidiaries or any other individual having a
relationship which, in the opinion of the Board, would interfere with the
exercise of independent judgment in carrying out the responsibilities of a
director, and who are otherwise “independent” and qualified to serve as a
member of such committee under applicable law and under the rules of the Nasdaq
Stock Market, Inc.  The required
qualifications for the members of each committee shall be set out in the
respective committees’ charters.  A
director may serve on more than one committee for which he or she qualifies.

 

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MANAGEMENT DEVELOPMENT AND CEO SUCCESSION

At
least annually, the Board shall review and concur in a succession plan,
developed by management, addressing the policies and principles for selecting a
successor to the CEO, both in an emergency situation and in the ordinary course
of business.  The succession plan should
include an assessment of the experience, performance, skills and planned career
paths for possible successors to the CEO.  
The Board shall receive and review at least annually reports from the
CEO regarding senior management development.

TRANSACTIONS WITH NOVARTIS

The
Governance Agreement governs certain aspects of the relationship between Chiron
and Novartis.  Among other things, under
the Governance Agreement, Chiron will not enter into specified agreements or
transactions with Novartis without first obtaining the approval of the
Independent Directors (as defined in the Governance Agreement) or requisite
stockholder approval.  Such governance
principles of the Governance Agreement will be considered to be incorporated
in, and a part of, these guidelines.

BOARD COMPENSATION

The
Compensation Committee shall review periodically and not less frequently than
every three years, and report to the Board with its recommendations regarding,
the components and amount of Board compensation, including its evaluation of
compensation of boards of similarly situated companies.  In order to align the interests of directors
and stockholders, the Board believes that directors 

 

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should
receive a significant part of their on-going compensation in the form of equity
in Chiron.  Such equity compensation
should consist of restricted share rights which entitle directors to receive
shares of Chiron common stock only upon cessation of service on the Board.  The Board believes that such restricted
share rights, by requiring directors to maintain an ownership interest in
Chiron throughout the directors’ tenure, will firmly align directors’ interests
with the long-term interests of Chiron’s stockholders.  The Board also intends to continue to use
stock option grants in order to attract leading candidates to serve on the
Board, but a significant portion of the stock issued to directors upon exercise
of options should be subject to certain restrictions on transfer to further
align the directors’ interests with the long-term interests of stockholders.

EXPECTATIONS OF DIRECTORS

The
business and affairs of Chiron shall be managed by or under the direction of the
Board in accordance with Delaware law. 
In performing their duties, the primary responsibility of the directors
is to exercise their business judgment in the best interests of Chiron and its
stockholders.  The Board has developed a
number of specific expectations of directors to promote the discharge of this
responsibility and the efficient conduct of the Board’s business.

Commitment and Attendance.  All directors should make all reasonable efforts to
attend meetings of the Board and meetings of committees of which they are
members.  Members may attend by
telephone or video conference (when available) to mitigate conflicts.

 

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Participation in Meetings.  Each director should be sufficiently familiar with the
business of Chiron, including its financial statements and capital structure,
and the risks and competition it faces, to facilitate active and effective
participation in the deliberations of the Board and of each committee on which
he or she serves.  Upon request,
management will make appropriate personnel available to answer any questions a
director may have about any aspect of Chiron’s business.  Directors should review the materials
provided by management and advisors in advance of the meetings of the Board and
its committees and should arrive prepared to discuss the issues presented.

Loyalty and Ethics. 
In their roles as directors, all directors owe a duty of loyalty to
Chiron.  This duty of loyalty mandates
that the interests of Chiron take precedence over any interests possessed by a
director.

Chiron
has adopted a Board of Directors Policy Re: 
Conflicts of Interest (the “Policy”), and a Code of Conduct (the
“Code”), which includes a compliance program for enforcement.  Both the Policy and the Code deal with
activities of directors, particularly with respect to potential conflicts of
interest and the taking of corporate opportunities for personal use.  The Policy provides, among other things,
that conflicts of interest or potential conflicts of interest concerning a
director or the CEO are to be reported to the Nominating and Corporate
Governance Committee.  Directors should
be familiar with the Policy’s and the Code’s provisions in these areas and
should consult with Chiron’s counsel in the event of any issues.

 

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Other Directorships. 
Chiron values the experience directors bring from other boards on which
they serve, but recognizes that those boards may also present demands on a
director’s time and availability and may present conflicts or legal
issues.  Directors should advise the
chairperson of the Nominating and Corporate Governance Committee and the CEO
before accepting membership on other boards of directors or other significant
commitments involving affiliation with other businesses or governmental units.

Contact with Management.  All directors are invited to contact the CEO at any time to
discuss any aspect of Chiron’s business. 
Directors also have complete access to other members of management.  The Board expects that there will be
frequent opportunities for directors to meet with the CEO and other members of
management in Board and committee meetings and in other formal or informal
settings.

Further,
the Board encourages management to, from time to time, bring managers into
Board meetings who: (a) can provide additional insight into the items being
discussed because of personal involvement and substantial knowledge in those
areas, and/or (b) are managers with future potential that the senior management
believes should be given exposure to the Board.

Contact with Other Constituencies.  It is important that Chiron speak to
employees and outside constituencies with a single voice, and that management
serve as the primary spokesperson.

 

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Confidentiality. 
The proceedings and deliberations of the Board and its committees are
confidential.  Each director shall
maintain the confidentiality of information received in connection with his or
her service as a director.

EVALUATING BOARD PERFORMANCE

The
Board, acting through the Nominating and Corporate Governance Committee, should
conduct a self-evaluation at least annually to determine whether it is
functioning effectively.  The Nominating
and Corporate Governance Committee should periodically consider the mix of
skills and experience that directors bring to the Board to assess whether the
Board has the necessary tools to perform its oversight function effectively.

Each
committee of the Board should conduct a self-evaluation at least annually and
report the results to the Board.  Each
committee’s evaluation must compare the performance of the committee with the
requirements of its written charter, if any.

RELIANCE ON MANAGEMENT AND OUTSIDE ADVICE

In
performing its functions, the Board is entitled to rely on the advice, reports
and opinions of management, counsel, accountants, auditors and other expert
advisors.  The Board shall have the
authority to retain and approve the fees and retention terms of its outside
advisors.

 

11Exhibit 10.624

 

[Chiron ltrhead]

 

 

August 12, 2003

 

Craig A. Wheeler

President Chiron BioPharmaceuticals

4560 Horton Street

Emeryville, CA  94608

 

Dear Craig:

 

This letter will serve to confirm changes to
which you and the Company have agreed regarding the $750,000 interest free
forgiveable loan originally promised to you in your offer letter dated August
2, 2001.  As you know, Chiron has
determined that it is unable to make the loan that it originally committed to make
to you in your offer letter and has agreed to make the payments described below
in lieu of that loan.  You recognize
that you have no right to a Company loan in the future.  All other terms of your offer letter remain
the same.

 

In lieu of the forgiveable loan, the Company
agrees to make the following payments to you: 
On the earlier of September 1, 2003 or the date you find a home in the
Bay Area you wish to purchase, the Company will pay you Four Hundred Thousand
Dollars ($400,000.00).  Subsequently,
the Company agrees to pay you Two Hundred Fifty Thousand Dollars ($250,000.00)
on September 1, 2004, Two Hundred Thousand Dollars ($200,000.00) on September
1, 2005 and Two Hundred Thousand Dollars ($200,000.00) on September 1, 2006,
provided that at the time such payments are due, you have not voluntarily left
the employment of Chiron or been terminated for cause.  If the Company terminates your employment
for reasons other than cause, or in the event of a Qualifying Termination (as
that term is defined in the Prospectus Supplement to the 1991 Stock Option Plan
dated February 11, 2002) following a change in control, any remaining
payment(s) due to you would be made at the time of your termination, provided
you execute Chiron’s standard form of release.

 

Please sign below acknowledging your agreement
with the above-stated terms.

 

Very truly yours,

/s/ Linda Short

Linda Short

Vice President, Corporate Resources

 

Acknowledged and Agreed to:

/s/Craig A. Wheeler

Craig Wheeler

Vice President, President, Biopharmaceuticals

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