Document:

Exhibit 10.602

 

Executive Change-in-Control

Severance
Plan

 

Chiron Corporation

 

January 2001

 

(As Amended and Restated
Effective December 1, 2005)

 

TIER I –
Chief Executive Officer

 

 

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

 

3

 

than is such
residence 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 three
(3) times the highest rate of the Participant’s annualized Base Salary in
effect immediately preceding the Change in Control.

 

(b)                           An amount equal to three (3)
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 three (3) 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 three (3) 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
10.611

 

	
  

  

  

  	
   

  	
  Chiron Corporation

  4560 Horton Street

  Emeryville, California
  94608-2916

  510.655.8730

  
	
   

  
	
   

  
	
   

  

 

October 24, 2000

 

CONFIDENTIAL

 

Gene Walther

[Residence address]

 

Dear Gene:

 

We are pleased to confirm
our offer of employment for you to join Chiron Corporation.

 

Chiron’s mission is to
have power over disease – to use biotechnology as a tool for preventing and
treating illnesses. We are counting on you to help us with this work.

 

Your employment offer
with Chiron is as DVP, Commercial Development, Blood Testing reporting to me
initially. Your starting salary will be paid at a bi-weekly rate of $6,923.08
($180,000 annually) as an exempt employee.

 

In addition, you will
receive a $30,000.00 hiring bonus upon initiation of your employment with
Chiron. This bonus will appear in your first paycheck.

 

You will also be eligible
for Chiron’s relocation assistance program. Cathy Gannon, who administers the
program, can provide you with additional details of Chiron’s employee
relocation program. Cathy’s telephone number is 203-926-2404 and her e-mail
address is catherine.gannon@prudential.com

 

You will be eligible to
participate in our stock option program. Subject to the approval of the Board
of Directors, you will be awarded a stock option grant of 20,000 options to
purchase Chiron common stock. The options vest fully over a four-year period,
with the first 25% of the shares vesting at the one-year grant anniversary.
Shares vest on a pro-rated monthly basis over the subsequent remaining three
years of the vesting period. The exercise price of the option will be set at
the fair market value (as defined in the Option Plan) of a share of Chiron
stock on the date the option is approved. We expect the options will be
approved and effective within 90 days of your employment date.

 

You will also be eligible
to participate in Chiron’s Annual Incentive Plan (AIP). The Plan links
corporate, business/functional unit and individual performance metrics to
support the accomplishment of Chiron’s business goals. The Plan, as structured,
has an incentive range for your position from 0% to 60% with a target of 30% of
base pay. Plan participants hired between October 1 and December 30, 2000 will
be eligible to participate in the 2001 plan year. The AIP award, if earned, is
paid in the first quarter of 2002.

 

The information sheets
following your offer letter contain some of the highlights of Chiron’s benefits
programs. You should note that, while this offer is being made under the terms
of our current benefits and compensation programs, changes do occur from time
to time and any system-wide changes that occur will apply to you as well.

 

 

Some of these programs
are effective immediately upon your employment, while others are dependent upon
established enrollment periods. Your group medical insurance benefits generally
start on the first day of the month following your date of hire. If, however,
your date of hire is the first business day of the month, your coverage becomes
effective on that date. Note also that, with few exceptions, Chiron extends
benefits coverage to qualified family members, including opposite- and same-sex
domestic partners. You will have an opportunity to learn more about your
benefits and complete the enrollment paperwork at a benefits orientation held
twice a month. The schedule will be provided for you at new hire orientation.

 

As a part of Chiron’s
routine medical surveillance program, employees with certain project
assignments may be advised to provide a baseline blood sample for archival
storage. The Chiron Occupational Health Department will notify you if a
baseline blood draw is recommended.

 

This offer is contingent
upon your ability, as required by federal law, to establish your employment
eligibility as a U.S. citizen, a U.S. lawful permanent resident, or an
individual specifically authorized for employment in the U.S. by the
Immigration and Naturalization Service. Please read the enclosed notice
specifying the documentation required in this regard. Please bring any required
documentation to new hire orientation. If you have an employment
authorization document (EAD) issued by the Immigration and Naturalization
Service, please contact Inverleith Fruci in Emeryville, California at (510)
923-2516.

 

Under California law,
employment with Chiron is not for any specified term and can be terminated at
any time for any reason by you or Chiron. Any contrary representations which
have been made or may be made to you are superseded by this offer. When you
accept the offer, the terms described in this letter and the Chiron Employee
Invention and Confidential Information Agreement shall constitute the terms of
your employment.

 

Gene, we hope the terms
of this offer are satisfactory and we look forward to a favorable response. If
you have any questions in the meantime, please feel free to contact me. Again,
we think Chiron’s challenge - power over disease - will require all of our best
efforts.

 

Sincerely,

 

	
  CHIRON CORPORATION

  
	
   

  
	
  /s/ Rajen Dalal

  	
   

  
	
  Rajen Dalal

  
	
  President, Blood
  Testing

  

 

Enclosures

 

cc:      Human Resources

 

2

 

Please indicate your
understanding of the terms of this offer and your acceptance of this offer,
along with your confirmed start date, by signing this letter and filling out
the attached packet of forms. In order to
expedite the processing of your employment records, please return the letter
and completed forms to the Chiron Human Resources Department in the enclosed
postage paid envelope as soon as possible. Please keep the copy of
your offer letter.

 

 

	
  /s/ Gene W. Walther

  	
   

  	
  17 Jan’01

  	
   

  	
  22 January 2001

  
	
  Name

  	
   

  	
  Date

  	
   

  	
  Confirmed Start Date

  

 

Please note that new
Employee Orientation for Emeryville-based
employees is typically held every Monday and is scheduled from 9:00AM through
3:00PM. Please meet in the lobby of the Life Sciences building at 5300 Chiron
Way. Enclosed is the Orientation Agenda. Parking is available in any of our
parking lots.

 

In preparation for your
arrival you will need to complete the packet of forms that is enclosed. The completion of the forms in the packet is a
condition of employment and required in order for you to be paid.

 

If, for any reason, you
are not able to attend your scheduled orientation session, or if your actual
start date is on a day other than a Monday, please contact Human Resources
immediately so that you are paid on a timely basis.

 

1.)     See
attached letter from Rajen Dalal dated January 11, 2001.

 

2.)     See
attached summary of January 14 telephone conversation.

 

3

 

	
  

  

  

  	
   

  	
  Chiron Corporation

  4560 Horton Street

  Emeryville, California
  94608-2916

  510.655.8730

  
	
   

  
	
   

  
	
   

  

 

January 11, 2001

 

Mr. Gene W. Walther

[Residence address]

 

Dear Gene:

 

This letter will serve as
an addendum to your letter of employment from Chiron Corporation dated October
24, 2000. There are three specific items you asked me to address. I sincerely
apologize for the delay in doing so.

 

First, there is the
question of Susan Josey reporting to you. I believe we covered this during the
last Commercial Council meeting when we revised the organizational chart to
indicate Susan’s solid line reporting relationship to you, and dotted line
relationship to me. I concur that this relationship makes sense initially, and
suggest we review this in the middle of the year. I will ask Joann to calendar
this.

 

Secondly, you have
impressed upon me a strong desire to report directly to the President. Please
know that this desire has been heard. The reporting relationship is in line
with our present structure, and it is my hope that, as you continue to define
the Division’s strategy with other members of the Commercial Council, you will
participate in organizational design and development issues. I know you will
agree that, in an environment such as ours, there will be high-level
relationship issues that will evolve over time. One such issue is when to add
the position of World-wide Head of Marketing and Sales. If, and when, such a
position is created and filled, we will work with you to structure your
responsibilities such that a direct reporting line to the President can be
maintained.

 

Third, I wish to address
your request for participating in the NAT bonus program. For our mutual benefit
and that of your relationship with other members of the team who have made
direct contributions to the success of this program, my preference would be to
offer you the following.  As a gesture of
good faith, and in appreciation of your contributions, we would like to present
you with an additional bonus in the amount of $50,000. This payment will be
made to you upon signing.

 

Lastly, Gene, we are
eager to have you physically located in the Bay Area so you can participate
fully as an executive member of the blood testing management, assuming all
aspects of leadership required in this role. This offer assumes that you will
make the transition from Seattle to the Bay Area in 2001.

 

1

 

Gene, if you have any
questions regarding the content of this letter, please give me a call. I look
forward to our continued mutual success.

 

Best Regards,

 

	
  /s/ Rajen Dalal

  	
   

  
	
  Rajen Dalal

  
	
  President, Blood
  Testing Division

  

 

RD:jw

 

cc:       Inverleith
Fruci

 

* See attached summary of
January 14 telephone call.

 

2

 

Interoffice
Memo

 

	
  Date:

  	
   

  	
  January
  17, 2001

  
	
   

  	
   

  	
   

  
	
  To:

  	
   

  	
  Rajen
  Dalal

  
	
   

  	
   

  	
   

  
	
  Cc:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  From:

  	
   

  	
  Gene Walther

  
	
   

  	
   

  	
   

  
	
  RE:

  	
   

  	
  Offer
  Letter - Transition/Operational Plan

  

 

As we discussed on Sunday
morning, I had one concern regarding your letter dated January 11th.
This issue was in regard to the timing of my transition from Seattle to
Emeryville. We have agreed that my transition will occur in the later half of
2002 rather than in 2001 as stipulated in your letter.

 

We also discussed the
need for my presence in Emeryville to provide leadership to the team and an
operational plan in this regard. I have suggested that we obtain a two-bedroom
corporate apartment to be shared by the field-based (male) personnel when in
Emeryville. I have spoken with Chyang and he has agreed this would be agreeable
with him as well. Additionally, I will work with the Travel department to
schedule flights well into the future (and perhaps throughout the entire year)
in order to maximize the cost savings and obtain the lowest fares possible. (While
the actual dates are subject to change, due to my flight program status, these
changes should not require additional charges.) We agreed that while I would
not be held to a specific amount of time in Emeryville, I will agree to balance
my time in Emeryville with my personal commitments as best I can.

 

I believe this addresses
the final issue with regard to my hire.

 

	
  /s/ Gene W. Walther

  	
   

  
	
  Gene W. Walther

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