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Exhibit 10.509    
    

 
 

DESCRIPTION OF CHIRON CORPORATION'S
  2003 EXECUTIVE OFFICERS VARIABLE COMPENSATION PROGRAM    
    

Decisions
on compensation (base salary and variable compensation) of Chiron Corporation's ('Chiron' or the 'Company') executive officers are made by the Compensation Committee of the Board of
Directors. 

For
2003, the Compensation Committee continued the Company's approach that base salaries for executive officers should be measured by reference to the median (50th percentile) of salaries for
benchmark positions in comparator companies. Further, the Compensation Committee provided that a significant portion of total cash compensation (salary plus variable compensation) in the form of
annual variable cash compensation potential should be 'at risk,' dependent upon individual, business unit and overall Company performance. Variable cash compensation for executive officers overall was
targeted to yield total cash compensation at the 50% percentile, but with the opportunity to significantly exceed the 50% percentile of total cash compensation as shown by comparative data, in the
case of outstanding Company, business unit, and individual performance. 

The
Compensation Committee based its decisions regarding variable compensation for executive officers upon its evaluation of performance against pre-established performance metrics developed at the
Company, business unit and functional or corporate unit level. 

Variable
compensation for the Chairman and Chief Executive Officer is based on the performance of the Company as measured against the pre-established Company metrics composed of financial objectives
and significant research and business milestones. 

Executive
officers responsible for business units or major functional or corporate units are eligible for variable compensation based on the pre-established Company metrics and on the achievement of
their respective business, functional, or corporate unit metrics. 

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Exhibit 10.509

DESCRIPTION OF CHIRON CORPORATION'S 2003 EXECUTIVE OFFICERS VARIABLE COMPENSATION PROGRAMQuickLinks
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Exhibit 10.623    
    

[CHIRON
LETTERHEAD] 

CONFIDENTIAL 

Dear
John, 

        As
you are aware, we are in the process of reorganizing our business in the United Kingdom, with the result that Chiron Corporation Limited will be transferring part of its U.K. business
to an Italian company, Chiron Vaccines Holding s.r.l. (the "Company"). 

New Employer  

        The practical consequence of this reorganization is that from 1 July 2003 you will be employed by Chiron Vaccines
Holding s.r.l.—UK Branch. However, with the exception of the name and identity of your employer, your existing terms and conditions of employment will otherwise be
unaffected, and your period of continuous employment with Chiron Corporation Limited will be preserved for employment law purposes. 

        The
principal effect to your personal affairs arising from this transfer is that you will become subject to taxation on your income under both the Italian tax regime and that of the U.K. 

Tax Equalization  

        Chiron intends to apply the following policy in respect of this transfer regarding your tax liabilities during your employment: 

	(i)
	Hypothetical Tax.    An employee's hypothetical tax is the applicable income tax and National Insurance contributions that
the employee would have paid in the normal course, with respect to his salary, bonus and any other benefits (including, without limitation, the value of share options granted) provided by the
employer, if he had remained employed by a U.K. registered and resident company.

	(ii)
	General Procedure and Calculation of Hypothetical Tax.    The Company will bear your overall worldwide tax burden to the
extent it exceeds your hypothetical tax liability upon advice of third party tax consultants, which tax consultants reserve the right to recommend that certain tax filing positions be taken and that
various elections be made on your British and/or Italian individual income tax returns in order to reduce your tax burden. If you decide not to accept these tax filing recommendations, you will then
bear the additional tax cost related to not taking the tax positions and/or elections recommended by Chiron. 

Any
U.K. and Italian tax liabilities incurred by you, with respect to your salary, bonus and any other benefits provided by the Company, in excess of the hypothetical tax liability, will be paid by
Chiron. 

	(iii)
	Tax Position Challenges.    It is our objective that any employee covered by the Company's tax equalization policy pay the
least amount of tax legally possible. It is recognized that the tax laws of many jurisdictions (in this case, the U.K. and Italy) are not always straightforward. Accordingly, the amount of tax an
employee owes to a jurisdiction may vary based upon how the relevant tax law is interpreted and applied to the employee's facts and circumstances. In such situations, it is our policy to engage
professional tax advisers with the objective of paying the least amount of tax legally possible. 

It
is recognized that a taxing jurisdiction may challenge tax positions that achieve our policy of tax minimization. If a tax position taken with respect to an employee is challenged, we will pay all
the professional costs involved with the examination and defence of the position, and any taxes, penalties or interest resulting from the position. 

This
tax equalization of any tax underpayments, penalties and interest also applies if it is attributable to a period of time during which the employee was employed by the Company, even if the
employee is no longer employed by the Company when the investigation or tax deficiency arises. 

Reimbursement and Indemnity  

        In accordance with the tax equalisation policy outlined above, we would like to assure you that Chiron Vaccines Holding s.r.l. will: 

	(i)
	at
all times promptly reimburse you for any additional taxation or costs incurred by you or for which you may be held liable as a result of this change of employer, so
that your net earned income and level of benefits are unchanged and will continue to be unaffected by the double taxation regime arising from your contract of employment with the Company. This
reimbursement obligation applies equally to any final payment (e.g., redundancy payments) that may be made arising from the termination of your contract of employment;

	(ii)
	indemnify
you on demand for any costs, fees or expenses reasonably incurred by you or which may be levied by any relevant authority in connection with such double
taxation treatment, whether in the U.K. or Italy, and both during and after your employment; and

	(iii)
	meet
the cost of all reasonably required professional advice and support for any additional administrative or legal obligations with which you may be required to
comply (for example, the preparation and submission of tax returns), in the U.K. and in Italy, both during or after your employment, so far as these administrative and legal obligations are linked
with or arise from your contract of employment. This provision applies also to necessary professional support in any audit by, or litigation with, any tax authority connected with or arising from your
contract of employment, in the U.K. or in Italy, both during or after your employment. 

        The
obligation to reimburse and indemnify contained above is given by the companies below for and on behalf themselves and any successor or assignee group company to which either of them
or their respective business and assets may at any time succeed or be assigned. 

        If
you have any questions in relation to this variation to your contract of employment, please contact Katrien Nachtergaele. To acknowledge your agreement to the change of employer
outlined above, please sign and date the attached duplicate of this letter and return to Katrien. 

Yours
sincerely, 

/s/  JOHN A. LAMBERT      

John
A. Lambert

For and on behalf of Chiron Corporation Limited 

Giuseppe
M. Marini

For and on behalf of Chiron Vaccines Holding s.r.l. 

	 
	 	 

	/s/  GIUSEPPE MARINI      
	 	 

I
confirm that I have read the above letter and agree to the variation of my contract of employment as stated. 

	 
	 	 
	 	 
	 	 

	Signed:	 	/s/  JOHN A. LAMBERT      
	 	Dated:	 	1st July 2003.

	John A. Lambert	 	 	 	 

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Exhibit 10.623QuickLinks
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Exhibit 10.625    
    

[CHIRON
LETTERHEAD] 

January
26, 2004

John
A. Lambert

Vice President; President, Chiron Vaccines

Chiron Vaccines, Florey House

Robert Robinson Avenue,

The Oxford Science Park,

Oxford OX4 4GA

England, United Kingdom 

Dear
John, 

        As
we have discussed, this letter shall serve to amend your employment letter agreement dated July 1, 2003. 

New Employer  

        Effective immediately, in addition to being an employee of Chiron Vaccines Holding s.r.l., you are also an employee of Chiron Corporation Limited, PowderJect
Technologies Limited, Chiron UK-1 Limited and Evans Vaccines Limited. All other existing terms and conditions of your employment will otherwise be unaffected, and your period of continuous employment
with Chiron Corporation Limited will not change. 

        There
will be no principal effect to your personal financial affairs arising from this transfer. 

        If
you have any questions in relation to this amendment to your contract of employment, please contact me. To acknowledge your agreement to this change, as outlined above, please sign
and date this letter where indicated below and return to me. 

Very
truly yours, 

/s/  HOWARD PIEN     

Howard
Pien

Chief Executive Officer 

        I
confirm that I have read the above letter and agree to the amendment of my contract of employment as stated. 

	 
	 	 
	 	 
	 	 

	Signed:	 	/s/  JOHN A. LAMBERT      
 John A. Lambert	 	Dated:	 	28th January 2004.

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Exhibit 10.625

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