Document:

Exhibit 4.2

 

		 

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                           Regulations
                           of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG

                            

                           (Organisationsreglement)

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                            

                           February
1, 2020

                            

                            

                            

                           

 

	Novartis
    AG
	4002
    Basel, Switzerland
	 
	©
    February 2020, Novartis AG

 

     

    
	 1	 	Regulations of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG

    

  

	 	 	Table
    of Contents	 
	 	 	 	 
	Section
    1	 	Scope
    of the Regulations, Organization in general	2
	 	 	 	 
	Section
    2	 	General
    Provisions	2
	 	 	 	 
	Section
    3	 	Meetings
    of the Board, the Board Committees and the Executive Committee	3
	 	 	 	 
	Section
    4	 	Board
    of Directors	4
	 	 	 	 
	Section
    5	 	Executive
    Committee	8
	 	 	 	 
	Section
    6	 	Internal
    Audit	9
	 	 	 	 
	Section
    7	 	Effectiveness,
    Amendments	10
	 	 	 	 
	Appendix
    I	 	Board
    Committees Charter	11
	 	 	 	 
	Appendix
    II	 	Independence
    Criteria for the Board and the Board Committees	23
	 	 	 	 
	 	 	Abbreviations
    and Definitions	26

 

All references
to individuals apply to both male and female persons.

 

     

    
	 2	 	Regulations of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG

    

 

	Section
    1	 	Scope
    of the Regulations, Organization in general
	 	 	 
	 	 	Article
    1
	Scope	 	These
        Regulations govern the internal organization as well as the duties, powers and responsibilities of the following executive
        bodies and persons of the Company:

        –
        Board and its Committees

        –
        Chairman

        –
        Vice-Chairman

        –
        CEO

        –
        Executive Committee (including its sub-committees) and

        –
        Internal Audit

	 	 	 
	 	 	Article
    2
	Company
    Structure	 	The
    Company is a holding company, which directly or indirectly owns a global group of companies that conduct the Business. To
    ensure proper functioning of the Business in the interests of the Company and its shareholders and
    to comply with various requirements imposed by relevant laws and regulatory authorities, the Board shall supervise and, where
    necessary and appropriate, provide overall strategic direction for the Business.
	 	 	 
	Section
    2	 	General
    Provisions
	 	 	 
	 	 	Article
    3
	Duty
    of Care and Loyalty	 	Each
    Director or Executive is under the duty to carry out his/her responsibilities with due care and to safeguard and further the
    interests of the Group, the Company and its shareholders, including the creation of long-term value.
	 	 	 
	 	 	Article
    4
	Conflict
    of Interest	 	Each
        Director or Executive arranges his/her personal and business affairs so as to avoid an actual or apparent Conflict of
        Interest.

         

        No
        Director or Executive shall participate in decisions and resolutions on matters, which affect, or reasonably might affect,
        his/her interests or the interests of a person close to him/her (but he or she may participate in the discussion). If
        the Director or Executive is in a position of a permanent Conflict of Interest or any other non-solvable situation that
        hinders him/her in carrying out his/her duties to the full, he/she shall offer his/her resignation.

         

        Each
Director or Executive must make a notification immediately, if the circumstances change so that it might affect or appear to affect
the Director’s or Executive’s independence. In case of a new mandate, notification must occur prior to accepting such
new mandate.

 

     

    
	 3	 	Regulations of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG

    

 

	 	 	Required disclosures include (but are not limited to):

	 	 	(i)	a material change (or contemplated change) of his/her business or professional
        affiliations or responsibilities; and/or
	 	 	(ii)	 any change of circumstances that may affect or appear to affect his/her independence
        or give rise to a Conflict of Interest.
	 	 	 	 
	 	 	Disclosure must be made by:
	 	 	(i)	the
Chairman to the Chairperson of the GNCRC; and by
	 	 	(ii)	
        a Director or the CEO to the Chairman; and by
	 	 	(iii)	an
Executive to the CEO.
	 	 	 	 
	 	 	

The Chairman, the CEO and the Chairperson of the GNCRC, respectively, must review the disclosures and inform the Board, respectively the ECN, with a corresponding proposal for appropriate mitigating measures, if any.

	 	 	 
	 	 	Article 5
	Confidentiality	 	Each Director and Executive keeps at all times strictly confidential all information – except information already in the public domain – relating to the Company and/or the Group, which the member has learned during the exercise of the duties. This obligation and duty continues even after the expiration of the term of office.

 

Documents of the Company and/or the Group must be returned by the Director or Executive at the latest on expiry of the term of office. If required, e.g. in case of legal proceedings, the Director or Executive can access relevant documents at the office of the Corporate Secretary.

	 	 	 
	Section 3	 	Meetings of the Board, the Board Committees and the Executive
    Committee
	 	 	 
	 	 	Article
6

	No
                                         Representation of Members

         
	 	A
    Director or Executive who is not able to participate in a Board, Board Committee or an Executive Committee meeting may not
    be represented by another Director or Executive or any other person.
	 	 	Article
    7
	Quorum,
                                         Majority

        Requirements
	 	Unless
                                         stated otherwise in these Regulations, the presence in person, by telephone, by video
                                         conference or other technical means of a majority of the members is required for any
                                         meeting.

         

        If
the chair does not participate, the meeting will be chaired by the deputy or, in his/her absence, by any member appointed by the
other members as ad hoc chair.

        

 

     

    
	 4	 	Regulations of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG

    

 

	 	 	

Resolutions require the affirmative majority of the votes cast. If an item is, however, not on the agenda, resolutions are passed by an affirmative vote of at least two thirds of the Directors or Executives, present at a meeting.

 

In the event of a tie on any issue, (i) in a Board Committee, the full Board decides the issue, and (ii) in the Executive Committee, the CEO decides the issue.

	 	 	 	 
	 	 	Article 8
	Circular
                                         Resolutions

         
	 	A proposal for a circular resolution must be communicated to all members, giving a deadline for responding, and is only deemed to have passed if:

	 	 	(i)	more than two-thirds of all members cast a vote or give written notice
        that they abstain (written notice can include email notice);
	 	 	(ii)	an absolute majority of all members casting a vote approve the proposed
        resolution; and
	 	 	(iii)	no member requests a meeting within the deadline for responding in relation to the
subject matter of the proposed resolution.
	 	 	 	 
	 	 	A circular resolution must be recorded under a separate heading in the minutes of the following meeting.
	 	 	 	 
	 	 	Article 9
	Secretary,
    Minutes	 	The Board and the Board Committees each appoint a secretary, who need not be a member of the body.

 

The secretaries of the Board and the Board Committees, and the General Counsel in case of the Executive Committee, keep the meeting minutes, which contain all resolutions adopted at the meeting and the key decision-making factors.

	 	 	 
	 	 	Article 10
	Application
    to other Bodies	 	Articles 3 – 9 apply analogously to all other management committees of the Company and their members.
	 	 	 
	Section
4	 	Board of Directors
	 	 	 
	 	 	Article 11
	Independence	 	The majority of the Directors have to meet the independence criteria set forth in Appendix II.
	 	 	 
	 	 	Article 12
	Duties
    of the Board	 	The
                                         Board is the ultimate executive body of the Company.
	 	 	 
	 	 	It
        shall resolve all Business matters, which are not reserved to the authority of the General Meeting or to other executive
        bodies of the Company by law, the Articles, or these Regulations.

 

     

    
	 5	 	Regulations of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG

    

 

		 	

In
particular, the Board has the following duties:

	 	 	a)	The
    ultimate direction of the Business, including, without limitation, the taking of resolutions and the giving of instructions
    or overall guidance regarding the following matters (where applicable, the duties of the Board are further defined and specified
    in internal regulations):
	 	 	 	–	The strategy upon
    recommendation of the Executive Committee.
	 	 	 	–	The entry into new
    areas of activity and withdrawal from existing areas of the Business; acquisitions and divestments of companies, participations
    in companies or businesses, or incorporations or liquidations of companies or businesses, if such matters are of fundamental
    significance to the Business.
	 	 	 	–	The
    opening and closing down of sites of fundamental significance to the Business.
	 	 	 	–	The
    initiation and settlement of legal proceedings of funda- mental significance to the Business.
	 	 	 	–	The
    setting of financial targets.
	 	 	 	–	The review and approval
    of corporate policies that are fundamental to the Group, as determined by the Chairman and the CEO.
	 	 	 	–	The adoption from
    time to time of further regulations and instructions regarding the organization of the Business and the duties and responsibilities
    of the executive bodies.
	 	 	b)	The
    determination of the organization of the Company and the Group.
	 	 	c)	The
    manner of governance of the Group.
	 	 	d)	The
    regular review of the Group’s culture.
	 	 	e)	The
    review of the Group’s risk management system and of the most significant risks and how these are managed.
	 	 	f)	The
    determination of the Group’s accounting system, financial controls and financial planning.
	 	 	g)	The
    review and approval of the annual report of the Company and of the Group, incl. the Compensation Report.
	 	 	h)	The
    nomination or appointment, removal, determination of duties and responsibilities, and succession plans of the following persons
    (subject to the powers of the General Meeting):
	 	 	 	–	Vice-Chairman
	 	 	 	–	Board Committee
    members and Chairpersons
	 	 	 	–	CEO
	 	 	 	–	Executives
	 	 	 	–	Independent Proxy
	 	 	 	–	Such other persons
    as the Board may determine, from time to time, as having significant impact on the Business.

 

     

    
	 6	 	Regulations of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG

    

 

	 	i)	The
    composition of the Board, including the appropriate skills and experiences to be considered in succession planning.
	 	j)	The
    designation of those persons who have signatory power for the Company and the manner in which such persons may sign on behalf
    of the Company.
	 	k)	The
    ultimate supervision of the persons entrusted with the management of the Business, specifically in view of their compliance
    with laws, the Articles, these Regulations and other applicable regulations, directives and instructions.
	 	l)	The
    preparations for the General Meeting and carrying out the resolutions of the General Meeting, including the preparation of
    the proposals to the General Meeting related to the compensation of the Board and of the Executive Committee and to the Compensation
    Report, as per the Articles.
	 	m)	The
    notification of the court if liabilities exceed assets.
	 	n) 	The
    adoption of resolutions concerning an increase of the share capital to the extent that such power is vested in the Board (article 651
    paragraph 4 CO), as well as resolutions concerning confirmation of capital increases and related amendments to the Articles.
    The adoption of such resolutions shall be exempted from the majority requirement outlined in article 7.
	 	o) 	The
    determination of (i) the compensation strategy and of the principles, structure and design of compensation plans for the Executive
    Committee, (ii) the long-term incentive/equity plans, (iii) the compensation of the Directors and of the CEO to be presented
    to the shareholders, and of the terms of employment of the CEO, (iv) the Group and divisional financial, strategic and operational
    targets and the evaluation of target achievement.
	 	p)	The
    determination of the maximum aggregate amount or maximum partial amounts of compensation, in the event the General Meeting
    has not approved a proposal of the Board, as per the Articles.
	 	q) 	The
    determination of (i) whether or not a Director is independent, based on a proposal by the GNCRC, and (ii) whether or not the
    ACC Directors meet the financial literacy and expertise standards.
	 	r)	The
    decision on appropriate measures in case of a disclosure in accordance with article 4 of these Regulations.
	 	s)	The
    approval of other business, if such business exceeds the authority delegated from time to time by the Board to the Board Committees
    or to the Executive Committee.
	 	 	 
	 	 	Article
    13
	Delegation
                                         of Management

         
	 	Where
    not stipulated as a Board responsibility in the law, the Articles or these Regulations, the Board delegates the management
    of the Business to the Executive Committee, pursuant and subject to these Regulations.

 

     

    
	 7	 	Regulations of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG

    

 

	 	 	Article
    14
	Meetings,
        Agenda

         
	 	The
        Board meets at the invitation of the Chairman as often as may be required.

         

        Invitations
        for Board meetings contain the meeting agenda and are sent out at least five business days in advance, except for urgent
        matters. Also, any Director may request a meeting for a specific purpose or the inclusion of a certain item on the agenda.

	 	 	 
	 	 	Article
    15
	Right
        to Request

        Information
	 	Directors
    have full and unrestricted access to the management and employees of the Group in the execution of their duties. 
	 	 	 
	 	 	Article
    16
	Independent
        Advisors

         
	 	The
    Board has the authority to retain independent advisors for any matters within the scope of its responsibilities.
	 	 	 
	 	 	Article
    17
	Evaluation
        of Board Performance

        
	 	The
    Board conducts an annual evaluation of the performance of the Board, of the Board Committees and of the Chairman.
	 	 	 
	 	 	Article
    18
	Board
        Committees

         
	 	The
    Board may establish ad hoc Board Committees and has the following permanent Board Committees:
	 	 	–	 Audit and Compliance Committee Compensation Committee
Governance, Nomination and Corporate Responsibilities Committee
	 	 	–	Risk Committee
and
	 	 	–	Science &
Technology Committee
	 	 	 
	 	 	The
    composition and duties of the permanent Board Committees are set forth in Appendix I.
	 	 	 
	 	 	Article
    19
	Chairman	 	In
    addition to other duties described in these Regulations and the Articles, the Chairman has the following duties:
	 	 	 
	 	 	a)	Provides
leadership to the Board in its governance role, coordinating the tasks within the Board.
	 	 	b)	Coordinates, together with the Chairpersons,
the work of the Board Committees.
	 	 	c)	Establishes
and keeps a close working relationship with the CEO, providing advice and support while respecting the fact that the day-to-day
management responsibility is delegated to the Executive Committee led by the CEO.
	 	 	d)	Promotes
effective relationships and communication between the Board, the CEO and the Executive Committee.
	 	 	e)	Takes the
lead in crisis situations.
	 	 	f)	Together
with the CEO, ensures effective communication with shareholders, other stakeholders and the general public; and
	 	 	g)	Works closely with the CEO in
evaluating Executives and in establishing succession plans for key management positions.

 

     

    
	 8	 	Regulations of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG

    

 

	 	 	Article 20
	Vice-Chairman	 	In
    case and as long as the Chairman is incapacitated, the Vice-Chairman assumes all of the Chairman’s responsibilities.
	 	 	 
	 	 	If
    the Chairman is not independent, the Vice-Chairman will be tasked by the Board with the following duties:
	 	 	a)	Chairs the
sessions of the independent Directors; and
	 	 	b)	Leads the
independent Directors in case of a crisis or matter requiring their separate consideration or decision.
	 	 	 
	 	 	Every
    independent Director may request separate meetings of the independent Directors if the need arises.
	 	 	 
	Section
    5	 	Executive
    Committee
	 	 	 
	 	 	Article
    21
	CEO	 	In
    addition to other duties that may be assigned by the Board, the CEO, supported by the Executive Committee, has the following
    duties:
	 	 	 
	 	 	a)	Overall responsibility
for the management and performance of the Business.
	 	 	b)	Leads the
Executive Committee.
	 	 	c)	Builds and
maintains an effective Executive Committee and proposes adequate succession planning to the Board.
	 	 	d)	Represents Novartis, in coordination
with the Chairman, with major customers, financial analysts, investors and the media.
	 	 	 	 
	 	 	Article
    22
	Members
        of

        Executive
        Committee
	 	The
    Executive Committee is headed by the CEO. It consists of such members as appointed or removed by the Board.
	 	 	 
	 	 	Article
    23
	Duties
        of Executive

        Committee
	 	The
    Executive Committee is responsible for the management of the Business. In particular, and without limitation, the Executive
    Committee has the following duties:
	 	 	 
	 	 	a)	Regularly assess the achievement
of the targets for the Business.
	 	 	b)	Submit proposals to the Board or
to one of the Board Committees for approval for items, requiring such approval based on these Regulations or further internal
regulations.
	 	 	c)	Implement the decisions taken by
the Board or the Board Committees.

 

     

    
	 9	 	Regulations of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG

    

 

	 	 	d)	Prepare and
submit quarterly and annual reports for the attention of the Board or the Board Committees, and keep the Board or the Board Committees
informed of all matters of fundamental significance to the Business and/or that are relevant to allow the Board or the Board Committees
to fully perform their duties.
	 	 	e)	Implement
modifications to the organization of the Business to ensure efficient operation of the Business and achievement of optimized consolidated
results.
	 	 	f)	Ensure appropriate
external stakeholder management, including an effective internal and external communication strategy.
	 	 	g)	Ensure that
management capacity, financial and other resources are provided and used efficiently.
	 	 	h)	Deal with such other matters as
are delegated by the Board or a Board Committee to the Executive Committee.
	 	 	 	 
	 	 	Article
    24
	Sub-committees
    of the Executive Committee	 	The
    Executive Committee may delegate duties as stipulated in article 23 above to other executives and committees and may
    empower them to further delegate their responsibilities and authorities. Each such delegation must be in writing, and clear
    responsibilities and accountabilities must be established. The CEO ensures proper reporting to the Executive Committee as
    needed.
	 	 	 
	Section
    6	 	Internal
    Audit
	 	 	 
	 	 	Article
    25
	Duties
    of Internal Audit	 	The
    Internal Audit has to:
	 	 	 
	 	 	a)	Carry out
operational and system audits, assisting the Divisions and Cross-Divisional Units in the accomplishment of objectives by providing
an independent approach to the evaluation, improvement, and effectiveness of their risk management and internal control framework.
All Divisions, Cross-Divisional Units and subsidiaries of the Group are subject to audit.
	 	 	b)	Prepare reports
regarding the audits it has performed, and report to the ACC and to the CEO material irregularities, whether actual or suspected,
without delay.
	 	 	c)	Perform such other functions and
audits as assigned to it by the Board, the ACC or the CEO.

 

     

    
	 10	 	Regulations of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG

    

 

	Section
    7	 	Effectiveness,
    Amendments
	 	 	 
	 	 	Article
    26
	Effectiveness,
    Amendments	 	These
    Regulations come into effect on February 1, 2020 and replace former regulations of the Board, the Board Committees and the
    Executive Committee.
	 	 	 
	 	 	These
    Regulations may only be amended or replaced by the Board.

 

	 	 	 	 
	 	 	 	 
	 	 	Dr.
    Joerg Reinhardt 	Dr.
    Charlotte Pamer-Wieser
	 	 	Chairman
    	Corporate
    Secretary

 

     

    
	 11	 	Regulations of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG

    

 

	Appendix
    I: 	 	Board
    Committees Charter	 
	Section
    1	 	General
    Provisions	12
	Section
    2	 	Roles
    and Responsibilities of the Board Committees	 
	 	 	-     
    Roles and Responsibilities of the ACC	13
	 	 	-     
    Roles and Responsibilities of the CC	16
	 	 	-     
    Roles and Responsibilities of GNCRC	19
	 	 	-     
    Roles and Responsibilities of RC	21
	 	 	-     
    Roles and Responsibilities of the STC	22

 

     

    
	 12	 	Regulations of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG

    

 

	Section
    1	 	General
    Provisions
	 	 	 
	 	 	These
    General Provisions contain additional organizational requirements for Board Committees in addition to the rules set forth
    in the Regulations.
	 	 	 
	 	 	Article
    1
	Composition	 	The
        ACC, the GNCRC, the RC and the STC each consist of a minimum of 3 members. The CC consists of a minimum of 3 and a maximum
        of 5 members.

         

        The
        Board elects the Chairpersons of the Board Committees.

	 	 	 
	 	 	Article
    2
	Independence,

        Qualifications
	 	Each
    Director of the ACC, CC and GNCRC has to meet the independence criteria set forth in Appendix II.
	 	 	Each
    ACC member must further be financially literate, including at least one member who has accounting and related financial management
    expertise (“audit committee financial expert”), as such qualifications are interpreted by the Board in its business
    judgment.

 

	 	 	The
    “audit committee financial expert” must have
	 	 	(i) 	an understanding of generally accepted accounting
principles and financial statements;
	 	 	(ii)	the ability to assess the general application of
such principles in connection with the accounting for estimates, accruals and reserves;
	 	 	(iii)	experience preparing, auditing, analyzing or evaluating
financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the
breadth and complexity of issues that can reasonably be expected to be raised by the Group’s financial statements, or experience
actively supervising one or more persons engaged in such activities;
	 	 	(iv)	an understanding of internal control
over financial reporting; and
	 	 	(v)	an understanding of audit committee
functions.
	 	 	 	 
	 	 	Article
    3
	Coordination between
    ACC and RC	 	The
    Chairpersons of the RC and the ACC shall generally be appointed as members of the other Committee. To the extent appropriate,
    the Chairpersons of the ACC and the RC coordinate the work of the ACC and the RC, in particular to ensure that there are as
    few as possible overlaps.

 

     

    
	 13	 	Regulations of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG

    

 

	 	 	Article
    4
	Meeting
    Participations and Interactions	 	Each
                                         Board Committee may invite to its meetings other Directors, Executives and such other
                                         persons, as the respective Board Committee deems appropriate to carry out its responsibilities.
                                         The Chairman may attend the Board Committee meetings in consultation with the relevant
                                         Chairperson.

 

Special
rules apply to the presence of the following persons at Board Committee meetings:

	 	 	(i)	An
    Executive shall not be present during the decision on his/her own pay at a CC meeting; or
	 	 	(ii)	Anyone
    with a personal interest in the matters to be discussed will be excluded from the ACC, GNCRC, RC and STC meeting, respectively.
	 	 	 	 
	 	 	Article
    5
	Advisors,

                                    Investigations
	 	The
    Board Committees shall have the authority to obtain advice and assistance from internal or external legal, accounting or other
    advisors. The ACC shall have the authority to conduct or authorize investigations into any matter within the scope of its
    responsibilities. 
	 	 	 	 
	 	 	Article
    6
	Debriefing
    to the Board	 	The
    Board Committees regularly report to the Board on its deliberations and decisions and on the items set forth in Section 2
    of this Appendix I. Other matters will be reported, as the Board Committees deem appropriate.
	 	 	 	 
	Section
2	 	Roles
    and Responsibilities of the Board Committees
	 	 	 	 
	 	 	Roles
    and Responsibilities of the Audit and Compliance Committee (ACC)
	 	 	 
	 	 	Article
    7
	ACC’s
    Mission Statement	 	The
    ACC assists the Board in monitoring the:
	 	 	(i)	integrity
    of the financial statements of the Group;
	 	 	(ii)	External
    Auditor’s qualifications and independence;
	 	 	(iii)	performance
    of the Internal Audit function and of the External Auditor; and
	 	 	(iv)	compliance
    by the Group with legal and regulatory requirements.
	 	 	 	 
	 	 	Article
    8
	ACC’s
    Role and Responsibilities	 	The
    ACC has the following roles and responsibilities:
	 	 	Regarding
    the External Auditor
	 	 	1.	Evaluate
    the qualifications, performance and independence of the External Auditor, including considering whether the External Auditor’s
    quality controls are adequate and whether the provision of permitted non-audit services is compatible with maintaining the
    External Auditor’s independence, taking into account the opinions of management and Internal Audit.

 

     

    
	 14	 	Regulations of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG

    

 

	 	 	2.	 Ensure rotation of the audit partners of the External Auditor at least every five years. Consider whether, in order to ensure continuing auditor independence, it is appropriate to adopt a policy of rotating the external auditing firm on a regular basis. 
	 	 	3.	On behalf of the Board, which has fully delegated this task to the ACC, (1) select and nominate the External Auditor for election by the General Meeting, and (2) be directly responsible for the supervision and compensation of the External Auditor (including the resolution of any disagreement between management and the External Auditor regarding financial reporting). 
	 	 	4.	On behalf of the Board, which has fully delegated
this task to the ACC, pre-approve all auditing services, internal control-related services and non-audit services permitted under
applicable statutory law, regulations and listing requirements to be performed for the Group by its External Auditor.
	 	 	5.	Obtain and review a report from the External
Auditor at least annually regarding (1) the External Auditor’s internal quality- control procedures, (2) any material issues
raised by the most recent quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental
or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm,
(3) any steps taken to deal with any such issues, and (4) all relationships between the External Auditor and the Group.
	 	 	6.	Discuss with the External Auditor the results
of their audits, any unusual items or disclosures contained in the audits and the matters required by Public Company Auditing
Oversight Board Auditing Standards No. 1301, as revised, and request a formal written statement from the External Auditor
documenting such discussion.
	 	 	Regarding Internal Audit
	 	 	7.	Review the significant reports to management,
prepared by the Internal Audit department and management’s responses and supervise the remediation of open audit issues.
	 	 	8.	Review periodically the adequacy of the organizational
structure, budget and appointment or replacement of the senior Internal Audit executives.
	 	 	9.	Discuss with the CEO, as needed, the Internal
Audit department’s responsibilities, staffing and any recommended changes in the planned scope of the Internal Audit.

 

     

    
	 15	 	Regulations of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG

    

 

	 	 	Regarding
    Financial Reporting and internal controls
	 	 	10.	Review
    and discuss with management and the External Auditor the Company’s and Group’s quarterly and annual financial
    statements (including the sections on Operating and Financial Review and Prospects) to consider significant financial reporting
    issues and judgments made in connection with the preparation of the Company’s and Group’s financial statements,
    including any significant changes in the Company’s or Group’s selection or application of accounting principles.
	 	 	11.	On
        behalf of the Board, which has fully delegated this task to the ACC, approve the Company’s and Group’s quarterly
        financial statements for the first three quarters of each calendar year and the corresponding financial results releases.
        The Board remains responsible for the approval of the annual financial statements of the Company and the Group and of
        the corresponding financial results releases.

	 	 	12.	Review
    and discuss with management and the External Auditor their assessment of the effectiveness of the Group’s internal controls,
    disclosure controls and procedures for financial reporting and whether any changes are appropriate in light of such assessment.
	 	 	13.	Review
    and discuss (1) all significant deficiencies in the design or operation of internal controls which could adversely affect
    the Group’s ability to record, process, summarize and report financial data, including any material weaknesses in internal
    controls, (2) any fraud, whether or not material, that involves management or other employees who have a significant role
    in the Group’s internal controls, and (3) any significant changes in internal controls or in other factors that could
    significantly affect internal controls, including any corrective actions with regards to significant deficiencies and material
    weaknesses.
	 	 	14.	Review
    such other matters in relation to the Group’s accounting, auditing, financial reporting and compliance with law and
    internal policies.
	 	 	Regarding
    Significant Legal Matters and Regulatory Risks
	 	 	15.	Review
        major issues regarding the status of the Group’s material legal matters, as well as major legislative and regulatory
        developments that may have significant impact on the Group.

        

	 	 	Regarding
    an Effective Compliance Program
	 	 	16.	Review
    at least annually the processes and procedures used by management to execute an effective compliance program.
	 	 	17.	Review
        at least annually compliance by Novartis associates with those Group policies falling into the subject matter expertise
        of the ACC.

 

     

    
	 16	 	Regulations of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG

    

 

	 	 	18.	Review
    updates from the Company’s SpeakUp office regarding whistleblowing activities and trends.
	 	 	19.	Establish
    procedures for (a) the receipt, retention and treatment of complaints received by the Group regarding accounting, internal
    accounting controls or auditing matters, and (b) the confidential, anonymous submission by employees of the Group of concerns
    regarding questionable accounting or auditing matters to the SpeakUp office.
	 	 	Other
	 	 	20.	Annually
    review the financial literacy of each ACC member to determine whether he/she meets the applicable legal standards, confirm
    the audit committee financial expert, and propose to the Board the appropriate determination and its disclosure.
	 	 	21.	Annually
    review and reassess the adequacy of Articles 7 - 8 of this Appendix I and submit proposed changes to the Board for approval.
	 	 	 	 
	 	 	Roles
    and Responsibilities of the Compensation Committee (CC)
	 	 	 	 
	 	 	Article
    9
	CC’s
    Mission Statement	 	The
    CC assists the Board concerning, but not limited to, the:
	 	 	(i)	compensation
    philosophy and strategy;
	 	 	(ii)	design
    of the compensation plans;
	 	 	(iii)	compensation
    of the Chairman, the Directors and of the CEO and other members of the Executive Committee. The CC has oversight of the remuneration
    policy for the wider employee population;
	 	 	(iv)	preparation
    of the Compensation Report and other relevant disclosures.
	 	 	 	 
	 	 	Pay
    for performance is one of the guiding principles of the compensation strategy of the Group. The Group aims to reward those
    associates who achieve competitive business results and exemplify the Group values and behaviors. The compensation strategy
    strives to strengthen the performance-oriented culture and to reinforce entrepreneurial behavior resulting in contributions
    that motivated and dedicated associates make to sustain superior business results whilst holding executives accountable for
    behavior that displays innovation, quality, performance, collaboration, courage and integrity.
	 	 	 	 
	 	 	Article
    10
	CC’s
    Role and Responsibilities	 	The
    CC has the following responsibilities:
	 	 	1.	Develop
    a compensation strategy in line with the principles described in the Articles, and submit to the Board for approval.

 

     

    
	 17	 	Regulations of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG

    

 

	 	 	2.	Develop the principles and design of compensation plans, long-term incentive/equity plans, pension arrangements and benefits for
the Executives and the Directors, and submit to the Board for approval.

	 	 	3.	Support the Board in preparing the proposals to the General Meeting regarding the compensation of the Directors and the
        Executives.
	 	 	4.	Prepare the Compensation Report and submit to the Board for approval.
	 	 	5. 	Propose to the Board the contractual terms (if any) and compensation of the Directors (incl. the Chairman) and the CEO.
	 	 	6. 	Determine, after consulting with the CEO, the terms of employment, promotion or termination of the other Executives (except
    for the CEO).
	 	 	7. 	Develop the terms of, and administer, the Group’s long-term incentive/equity compensation plans, including the weightings,
    payout curves and caps for the chosen performance measures.
	 	 	8. 	Together with the RC, assess whether the Group’s incentives for associates below Executive Committee level are appropriately
    aligned to business performance and do not encourage excessive risk taking.
	 	 	9. 	Determine the critical performance measures (financial, strategic and operational) that inform how well the Group and its
    Divisions are performing in relation to the business strategy for incorporation into the incentive plans, as well as any measures
    relating to Environmental, Social and Governance (ESG).
	 	 	10. 	At the start of each performance period, review, after Board approval, the Group and divisional financial, strategic, operational
    and individual targets for Executive Committee members and direct reports to the Chairman. Incorporate these targets into
    the short-term and long-term incentive/equity compensation plans.
	 	 	11. 	Periodically review and propose to the Board for approval a peer group(s) of companies for executive compensation comparisons.
	 	 	12. 	At the start of each performance period, approve the target total direct compensation levels and the mix of compensation (fixed/variable,
    short/long-term, individual/Group/Division, and cash/equity) for Executive Committee members and direct reports to the Chairman
    taking into consideration pay and conditions for the wider population of Group associates.

 

     

    
	 18	 	Regulations of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG

    

 

	 	 	13. 	At the end of each performance period, taking into consideration the Board’s evaluation of Group and divisional performance
    against targets established at the beginning of the performance cycle, approve performance results under the incentive plans,
    evaluate individual performance, approve the amount of compensation earned by Executive Committee members and recommend the
    amount of compensation earned by the CEO to the Board for approval taking into account the overall performance of the Business
    and, if appropriate, making adjustments to the formulaic outcome of any incentive plans, within the plan Rules.
	 	 	14. 	Consider and decide whether there is a need for malus and/or clawback provisions to be exercised and, if so, the extent and
    form of the malus and/or clawback.
	 	 	15. 	Incorporate the recommendations of the STC for the establishment of innovation targets under incentive compensation plans
    at the start of each performance cycle and measurement of achievement thereof at the end.
	 	 	16. 	Periodically assess the effectiveness of the executive short-term and long-term incentive plans in relation to the Group’s
    strategic objectives, values and pay-for-performance principles.
	 	 	17. 	Work together with other Board Committees, including the ACC, RC and the STC to ensure that executive compensation is correctly
    aligned to performance and is not structured in a way that could lead to inappropriate risk taking.
	 	 	18. 	Annually assess the level of Board compensation against the peer group and other relevant companies and submit to the Board
    its recommendations for the compensation of Directors and the compensation and terms of employment of the Chairman.
	 	 	19. 	Establish executive and director stock ownership guidelines and stock trading policies, and monitor compliance with such policies.

	 	 	20.	
        Inform the Board about policies, programs and key decisions as well as statistical comparisons and benchmarking of compensation
        levels against key competitors and regularly report to the Board on the decisions and deliberations of the Compensation
        Committee. 
	 	 	21.	In collaboration with the Chairman, oversee communication and engagement on executive compensation matters with shareholders
    and their advisors, including shareholder voting on Board and Executive Committee compensation, and assess the voting results
    on executive compensation matters of the most recent General Meeting.
	 	 	22. 	Be kept informed of the remuneration of the workforce and related policies and keep abreast of any developments. 

	 	 	23.	Annually assess the engagement and performance of compensation consultants or other outside advisors engaged by the CC
        and their independence in relation to any potential conflicts of interest.

 

     

    
	 19	 	Regulations of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG

    

 

	 	 	24. 	Keep abreast of regulatory and corporate governance best practice requirements regarding Board, Executive Committee and other
    senior executive compensation.
	 	 	25.	Keep
abreast of market trends and consideration of external factors that may influence pay in terms of design, structure, quantum,
disclosure etc.

	 	 	26.	Establish an annual calendar of activities for the upcoming year, including special projects to be undertaken by the CC.
	 	 	27.	Review and reassess the adequacy of Articles 9 - 10 of this Appendix I and submit proposed changes to the Board for approval.
	 	 	28.	Assume other responsibilities assigned to it by law, the Articles and by the Board.
	 	 	 	 
	 	 	Roles and Responsibilities of the Governance, Nomination and Corporate Responsibilities Committee (GNCRC)
	 	 	 	 
	 	 	Article 11
	GNCRC’s
    Mission Statement	 	The GNCRC assists the Board in fulfilling its responsibilities with respect to the:

	 	 	(i)	governance of the Group;
	 	 	(ii)	identification of individuals who are qualified to become (or be re-elected as) Directors or the CEO; and
	 	 	(iii)	corporate and social responsibilities of the Group.
	 	 	 	 
	 	 	Article 12
	GNCRC’s
    Roles and Responsibilities	 	The GNCRC has the following roles and responsibilities:
	 	 	In General
	 	 	1.	Review periodically the Articles and the Regulations and recommend to the Board changes thereto in respect of good corporate
    governance and fostering shareholders’ rights.
	 	 	2. 	Consult with the Chairman in carrying out the duties of the GNCRC.
	 	 	3. 	Prepare and annually review succession plans for the Chairman, the Vice-Chairman, Directors, Board Committee members, Chairpersons
    and the CEO, and make proposals to the Board for the election and the re-election by the Board respectively by the AGM for
    the Directors, the Chairman and the CC Directors.
	 	 	4. 	Make proposals to the Board for the election of the Independent Proxy.
	 	 	5. 	Recommend such other actions not set out below regarding the governance of the Group that are in the best interests of the
    Group and the Company’s shareholders, as the GNCRC deems appropriate.

 

     

    
	 20	 	Regulations of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG

    

 

	 	 	Board Composition
	 	 	6. 	Review the composition and size of the Board in order to ensure the Board has the proper expertise and consists of persons
    with sufficiently diverse backgrounds.
	 	 	7.	Determine the criteria for selection of the Chairman, Directors and Board Committee members. The GNCRC considers factors such
    as (i) personality, skills and knowledge, (ii) diversity of viewpoints, professional backgrounds and expertise, (iii) business
    and other experience relevant to the Business, (iv) the ability and willingness to commit adequate time and effort to Board
    and Board Committee responsibilities, (v) the extent to which personality, background, expertise, knowledge and experience
    will interact with other Directors to build an effective and complementary Board, and (vi) any disclosures made under article
    4 of the Regulations, in particular whether existing board memberships or other positions held by a candidate could lead to
    a Conflict of Interest.
	 	 	8.	With the participation of the Chairman, actively seek, interview and screen individuals qualified to become a candidate for
    the position as a Director, for recommendation to the Board.
	 	 	9. 	Assess and recommend to the Board as to whether Directors should stand for re-election. For its assessment, the GNCRC considers,
    among other things, age limit, contributions to the Board and the Company, and ability and willingness to commit adequate
    time to the Board and Board Committee matters.
	 	 	Board Committees
	 	 	10. 	With the Chairman, make recommendations to the Board for the creation of additional Board Committees or a change in mandate
    or dissolution of Board Committees.
	 	 	11. 	With the Chairman, periodically review the composition of the Board Committees. When doing so, the GNCRC takes into account
    whether a Board Committee member is suitable for the tasks of the respective Board Committee, including an envisioned quorum
    of independent Committee members, if applicable.
	 	 	12. 	With the Chairman, periodically review the chairmanships of the Board Committees.
	 	 	Conflicts, Other Directorships and Board member
	 	 	13. 	Review directorships and consulting agreements of Board members for conflicts of interest.
	 	 	14. 	Annually submit to the Board a proposal concerning the determination of the independence status of the Directors and the corresponding
    disclosure.
	 	 	Corporate Responsibilities of the Group
	 	 	15. 	Oversee the Group’s strategy and governance on corporate and social responsibility. 

 

     

    
	 21	 	Regulations of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG

    

  

	 	 	16.	Oversee
    key issues related to corporate and social responsibility that may affect the Business and the Group’s reputation.
	 	 	17.	Oversee
    the Company’s participation in the UN Global Compact.
	 	 	18.	Review
    and discuss emerging trends with regard to corporate responsibility.
	 	 	19.	Advise
    the Board and provide counsel to the management on corporate responsibility.
	 	 	20.	Approve
    the Novartis in Society Report.
	 	 	 	 
	 	 	Roles
    and Responsibilities of the Risk Committee (RC)

 

	 	 	Article
    13
	RC’s
    Mission Statement	 	The
    RC will assist the Board in ensuring that risks are properly assessed and professionally managed by:
	 	 	(i)	overseeing
    the Group’s risk management system and processes; and
	 	 	(ii)	reviewing
    the Group’s risk portfolio and related actions implemented by management.
	 	 	 
	 	 	Article
    14
	RC’s
    Role and Responsibilities	 	The
    RC has the following role and responsibilities:
	 	 	 
	 	 	1.	Ensure
    that the Group has implemented an appropriate and effective risk management system and process.
	 	 	2.	Ensure
    that all necessary steps are taken to foster a culture of risk-adjusted decision-making without constraining reasonable risk
    taking and innovation.
	 	 	3.	Together
    with the CC, assess whether the Group’s incentives for associates below Executive Committee level are appropriately
    aligned to business performance and do not encourage excessive risk taking.
	 	 	4.	Review
    with management and Internal Audit the identification, prioritization and management of the risks, the accountabilities and
    roles of the functions involved with risk management, the risk portfolio and the related actions implemented by management.
	 	 	5.	Inform
    the Board on a periodic basis on the risk management system and on the most significant risks and how these are managed.
	 	 	6.	Review
    such other matters in relation to the Group’s risk management, as the RC may, in its own discretion, deem desirable
    in connection with its responsibilities described above.
	 	 	7.	Keep
    itself up to date on risk management best practices. The Chief Ethics, Risk and Compliance Officer, or his/her designee, is
    expected to update the RC at least once a year on developments in this area.

  

     

    
	 22	 	Regulations of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG

    

 

	 	 	Roles
    and Responsibilities of the Science & Technology Committee (STC)
	 	 	 
	 	 	Article
    15
	STC’s
    Mission Statement	 	The
    STC (i) oversees the science and technology strategy, including digital and data related innovation, (ii) evaluates and challenges
    the effectiveness and competitiveness of innovation-related functions, (iii) reviews and discusses emerging scientific trends
    and activities critical to the success of science and innovation, and (iv) reviews the R&D portfolio.
	 	 	 
	 	 	Article
    16
	STC’s
    Role and Responsibilities	 	The
    STC has the following role and responsibilities:
	 	 	1.	Monitoring
    emerging scientific, data-related, technological and research trends and issues, and bringing recommendations to the Board.
	 	 	2.	Informing
    the Board on a periodic basis about critical developments for the success of the portfolio and for scientific, technological
    and research activities as well as benchmarking.
	 	 	3.	Assisting
    the Board with setting the Company’s strategy for science, data, technology and research.
	 	 	4.	Assisting
    the Board with oversight and evaluation of the performance of the scientific, technological and research teams within the
    Company in relation to the strategy.
	 	 	5.	Review
    of performance and proposed targets in the area of science, technology and research.
	 	 	6.	Reviewing
    such other matters in relation to science, data, technology and research as the STC may, in its own discretion, deem desirable
    in connection with its responsibilities.

 

     

    
	 23	 	Regulations of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG

    

 

	Appendix
    II	 	Independence
    Criteria for the Board and the Board Committees
	 	 	 
	 	 	Independence
    of the Directors
	 	 	The
    GNCRC annually submits to the full Board a proposal concerning the determination of the independent status of all Directors.
    For purposes of such assessment, the GNCRC considers all relevant facts and circumstances of which it is aware.
	 	 	 
	 	 	In
    order to be considered independent, a Director shall not have any material relationship with the Group other than his/her
    service as a Director.
	 	 	 
	 	 	I.
    Material Relationships
	 	 	1.	A
    Director will not be considered independent if
	 	 	–	The
    Director or his/her immediate Family Member owns more than 10% of the stock of the Company;
	 	 	–	The
    Director has received direct compensation (other than for former service as an interim Chairman ) of more than USD 120 000
    p.a. (other than dividends or Board/Board Committee fees and retirement or deferred pay for prior service, provided such compensation
    is not contingent in any way on continued service) from the Group within the last three years;
	 	 	–	A
    Family Member has received direct compensation of more than USD 120 000 p.a. (other than compensation received for service
    as an employee other than an executive officer) from the Group within the last three years;
	 	 	–	The
    Director is, or has been within the last three years, an employee of the Group;
	 	 	–	A
    Family Member is, or has been within the last three years, an executive officer of the Group;
	 	 	–	The
    Director is a current partner or employee of the External Auditor of the Group;
	 	 	–	A
    Family Member is a partner of the External Auditor or is an employee of the External Auditor and works on the Group’s
    audit;
	 	 	–	The
    Director or a Family Member is a former partner or employee of the External Auditor who personally worked on the Group’s
    audit during the last three years;
	 	 	–	The
    Director or a Family Member is, or has been within the last three years, employed as an executive officer of an enterprise
    while any of the present Executives serves or has served on that enterprise’s compensation committee;
	 	 	–	An
    enterprise has made payments to or received payments from the Group for goods, property or services in an amount that exceeds,
    in any of the last three fiscal years, the greater of USD 1 million or 2% of the enterprise’s consolidated
    gross revenues, and

	 	 	-  
    	The
    Director is a board member or employee of that enterprise or holds more than 10% of the shares in that enterprise; or
	 	 	-   
    	A
    Family Member is a board member or executive officer or holds more than 10% of the shares in that enterprise.

 

     

    
	 24	 	Regulations of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG

    

 

	 	 	2.	In
    addition to the independence criteria set forth above for all Directors in Section 1, an ACC Director will not be considered
    independent if 
	 	 	–	The
    ACC Director or his/her spouse, minor child, minor stepchild, or child or stepchild sharing the ACC Directors’ home,
    accepts any salary or consulting, advisory or other compensatory fee (other than Board/Board Committee compensation) from
    the Group;
	 	 	–	The
    ACC Director is a partner, a member, an officer such as a managing director, executive officer or occupies a similar position
    in an enterprise that provides advisory services such as accounting, legal, investment banking or financial advisory services
    to the Group;
	 	 	–	If
    an ACC Director simultaneously serves on the audit committees of more than two public companies other than the Company’s,
    then the GNCRC must determine that such simultaneous service would not impair the ability of such Director to effectively
    serve on the ACC.

 

		 	3.	In
                                         addition to the independence criteria set forth for all Directors in Section 1, above,
                                         when making its assessment as to the independent status of a CC Director, the GNCRC considers
                                         whether the CC Director receives compensation from any person or entity that would impair
                                         his or her ability to make independent judgments about the Executive compensation.

 

	 	II.
    Immaterial Relationships
	 	Unless
    the GNCRC concludes in its assessment to the contrary, a relationship is presumed not to impair the independence of a Director
    if

 

		 	–	The
                                         Director or a Family Member received from the Group, during the last fiscal year, personal
                                         benefits (other than the coverage of travel expenses incurred by a Family Member in connection
                                         with meetings of the Board) having an aggregate value of less than USD 5 000;
	 	 	–	A
                                         Family Member is an employee but not an executive officer of the Group, unless the Family
                                         Member is an ACC Director’s spouse, minor child, minor stepchild or child or stepchild
                                         sharing the ACC Director’s home;

 

     

    
	 25	 	Regulations of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG

    

  

		–	The
                                         Director or a Family Member is a board member or executive officer of a non-profit organization
                                         and the Group’s contributions to such organization did not exceed, in any of the
                                         last three fiscal years, the greater of USD 1 million or 2% of the organization’s
                                         consolidated gross revenues;
		–	An
                                         enterprise in which the Director or a Family Member is a director, executive officer
                                         or employee has been indebted to the Group in connection with a transaction in the ordinary
                                         course of business or in an amount that did not exceed USD 100 000 during the last fiscal
                                         year;
		–	The
                                         Director or a Family Member serves on the board of another enterprise at which an Executive
                                         or another Director also serves as board member.

 

The
enumeration of relationships mentioned in this Section II is merely exemplary. The fact that a particular relationship is not
listed does not mean that the relationship affects the independence of a Director.

  

     

    
	 26	 	Regulations of the Board of Directors, the Board Committees and the Executive Committee of Novartis AG

    

 

	 	 	Abbreviations
    and Definitions
	 	 	 
	ACC	 	Audit
    and Compliance Committee of the Board
	Appendix
    I 	 	Appendix
    I to these Regulations which forms an integral part of these Regulations (Board Committees Charter)
	Appendix
    II	 	Appendix
    II to these Regulations which forms an integral part of these Regulations (Independence Criteria for the Board and the Board
    Committees)
	Articles
    	 	Articles
    of Incorporation of the Company 
	Board
    	 	Board
    of directors of the Company 
	Board
    Committee(s)	 	Any
    or all committee(s) of the Board
	Business	 	Business
    operations conducted by the Group
	CC	 	Compensation
    Committee of the Board
	Chairman	 	Chairman
    of the Board 
	Chairperson(s)	 	Any
    or all Director(s) who chair(s) a / the Board Committee(s) 
	CO	 	Swiss
    Code of Obligations
	Cross-Divisional
    Unit(s)	 	Any
    or all cross-divisional organizational unit(s) supporting the Divisions 
	Company	 	Novartis
    AG
	Compensation
    Report	 	Compensation
    report of the Company
	Conflict
    of Interest	 	Any
    personal interest, or the interest of a closely related person or company, that a Director or Executive might have in a particular
    matter which does or might be regarded to conflict with the interests of the Company or the Group
	Director(s)	 	Any
    or all member(s) of the Board
	Division(s)	 	Any
    or all global operating divisions of the Group, including its business units, if any
	Executive(s)	 	Any
    or all Executive Committee member(s)
	Executive
    Committee	 	Executive
    committee of the Company
	External
    Auditor	 	The
    Group’s external auditor
	Family
    Member	 	An
    immediate family member of a Director, i.e., including a person’s spouse, parents, children, stepchildren, siblings,
    mother-, father-, brothers-, sisters-, sons- and daughters-in-law and anyone (other than domestic employees) who share such
    person’s home 
	General
    Meeting 	 	General
    meeting of shareholders of the Company
	GNCRC	 	Governance,
    Nomination and Corporate Responsibilities Committee of the Board
	Group	 	Novartis
    and its subsidiaries
	Independence
    Criteria	 	Independence
    criteria set forth in Appendix II 
	Internal
    Audit	 	The
    Group’s internal audit
	RC	 	Risk
    Committee of the Board
	Regulations	 	These
    Organizational Regulations of the Company, including Appendix I and Appendix II which form an integral part of these Regulations
	STC	 	Science
    & Technology Committee of the Board
	Vice-Chairman	 	Vice-Chairman
    of the BoardExhibit 4.9

 

Novartis AG

 

Long Term Incentive Plan

 

Adopted by the Board of
Directors on January 22, 2014 and amended thereafter 

 

Version effective in relation to awards made on or after January
1, 2021

 

     

    	 	 	 

    

 

Contents

 

	NOVARTIS
    AG LONG TERM INCENTIVE PLAN	4
	 	 
	1.    Purpose
    of the plan	4
	 	 
	2.    Granting
    of awards	4
	 	 
	3.    Dividends
    and dividend equivalents	6
	 	 
	4.    Vesting
    of awards	7
	 	 
	5.    Lapse
    or forfeiture of awards	9
	 	 
	6.    Cessation
    of Employment	9
	 	 
	7.    Corporate
    events	11
	 	 
	8.    Participant
    rights and obligations	12
	 	 
	9.    Clawback	13
	 	 
	10.  Tax,
    social security and other charges	13
	 	 
	11.  Transfer
    of awards	13
	 	 
	12.  Company
    documents	13
	 	 
	13.  Board’s
    powers	13
	 	 
	14.  Administration
    and regulations	14
	 	 
	15.  Awards
    not pensionable etc.	14
	 	 
	16.  Notices	14
	 	 
	17.  Data
    protection	14
	 	 
	18.  Amendment
    and termination of the plan	14
	 	 
	19.  Compliance
    with law and articles of incorporation	15
	 	 
	20.  Applicable
    law	16
	 	 
	21.  Definitions
    and interpretation	16
	 	 
	APPENDIX 1 NOVARTIS
    COMPETITOR COMPANIES	20
	 	 
	SCHEDULE 1 LONG TERM
    PERFORMANCE PLAN	21
	 	 
	1.   Application
    of the Schedule	21
	 	 
	2.   Performance
    period	21
	 	 
	3.   Performance
    conditions	21
	 	 
	4.   Amendments	21
	 	 
	SCHEDULE 2 BUSINESS
    UNIT PERFORMANCE PLAN	22
	 	 
	1.   Application
    of this Schedule	22
	 	 
	2.   Performance
    period	22
	 	 
	3.   Performance
    conditions	22
	 	 
	4.   Amendments	22

 

     

    	 	 	 

    

 

	SCHEDULE
    3 PARTICIPANTS WHO ARE OR BECOME MEMBERS OF THE ECN	23
	 	 
	1.   Application
    of this Schedule	23
	 	 
	2.   Definitions	23
	 	 
	3.   Performance
    conditions and ecn ltpp awards vesting	23
	 	 
	4.   Blocking
    Restrictions	23
	 	 
	5.   Cessation
    of Employment – introduction	23
	 	 
	6.   Cessation
    of Employment as a result of Retirement	23
	 	 
	7.   Corporate
    events	23
	 	 
	SCHEDULE 4 UNITED STATES	24
	 	 
	1.   Application
    of this Schedule	24
	 	 
	2.   Grant
    of Awards – Shares subject to the Plan	24
	 	 
	3.   Definitions	24
	 	 
	4.   Stock
    Appreciation Rights	24
	 	 
	5.   Consequences
    of Vesting – Restricted Stock Units	26
	 	 
	6.   Corporate
    Events	26
	 	 
	7.   Code
    Section 409A	26
	 	 
	8.   US
    Executive Financial Recoupment Program	27
	 	 
	SCHEDULE 5 SELECT PLAN
    2015	28
	 	 
	1.   Application
    of the Schedule	28
	 	 
	2.   Purpose	28
	 	 
	3.   Participants	28
	 	 
	4.   Vesting
    and other Conditions	28
	 	 
	5.   Definitions	28
	 	 
	6.   Cessation
    of Employment	28
	 	 
	7.   US
    Selling restrictions	30
	 	 
	8.   Appendices
    to the Select Plan	30
	 	 
	APPENDIX 1 NOVARTIS
    SELECT PLAN SWITZERLAND	31
	 	 
	1.   Select
    Switzerland	31
	 	 
	2.   Select
    Choices Switzerland	31
	 	 
	3.   Cessation
    of Employment	31

 

     

    	 	 	 

    

 

	SCHEDULE
    6 NOVARTIS RESTRICTED STOCK UNIT PLAN – FRENCH QUALIFIED RSU PLAN	32
	 	 
	1.   French
    Qualified RSU Plan	32
	 	 
	2.   Application	32
	 	 
	3.   Eligibility	32
	 	 
	4.   Award
    limit	32
	 	 
	5.   No
    Cash Settlement	32
	 	 
	6.   Vesting
    Period	32
	 	 
	7.   Definitive
    Transfer of Shares	32
	 	 
	8.   Sales
    Restrictions	32
	 	 
	9.   Closed
    Periods	32
	 	 
	10. Non-Transferability
    of RSUs	32
	 	 
	11. Death
    of a Participant	32
	 	 
	12. Disability
    of a Participant	32
	 	 
	13. Participant’s
    Account	32
	 	 
	14. Restriction
    on Grant to Corporate Officers	32
	 	 
	15. Adjustments
    due to Certain Corporate and Other Events	32
	 	 
	SCHEDULE 7 NOVARTIS
    LAUNCH LEADER PLAN	33
	 	 
	1.   Application
    of the Schedule	33
	 	 
	2.   Eligible
    Participants	33
	 	 
	3.   Award
    Size	33
	 	 
	4.   Vesting
    and other Conditions	33
	 	 
	5.   Dividends
    and dividend equivalents	34
	 	 
	6.   Cessation
    of Employment	34
	 	 
	7.   Definitions	35
	 	 
	8.   Amendments	35

 

     

    	 	 	4

    

 

NOVARTIS
AG LONG TERM INCENTIVE PLAN

 

1.           
Purpose of the plan

 

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

 

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

 

2.           
Granting of awards

 

2.1         
Selection of Participants

 

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

 

2.2         
Timing of Awards

 

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

 

2.3         
Decisions relating to Awards

 

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

 

		(a)	the
                                         type of Award to be granted;

 

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

 

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

 

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

 

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

 

		(f)	the
                                         Vesting Date or Vesting Dates;

 

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

 

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

 

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

 

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

 

     

    5

    

 

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

 

2.4         
Determining the number of Shares or ADIs subject to an Award

 

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

 

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

 

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

 

2.5         
Change of Performance Conditions

 

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

 

2.6         
Award documentation

 

Each Award
will be granted by resolution of the Board.

 

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

 

The Board
may determine in relation to any Award that the Participant shall be required to accept or acknowledge the grant of the Award
to him. If a Participant is so required, the Board will also determine the time within which the Participant must provide such
acceptance or acknowledgement and the consequences of not doing so.

 

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

 

2.7         
Schedules to the Plan

 

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

 

     

    6

    

 

	2.8	Policies etc.

 

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

 

	3.	Dividends
                                         and dividend equivalents

 

	3.1	Restricted Stock Units and SARs

 

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

 

	3.2	Restricted Stock

 

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

 

	3.3	Dividend Equivalents

 

If the Board determines that an Award carries
Dividend Equivalents:

 

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

 

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

 

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

 

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

 

     

    7

    

 

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

 

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

 

	4.	Vesting
                                         of awards

 

	4.1	General

 

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

 

The Board shall determine the number of
Shares (or amount of cash in respect of a SAR) comprising an Award that shall Vest on any particular day or days.

 

	4.2	Normal Vesting

 

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

 

	4.3	Consequences of Vesting – Restricted Stock Units

 

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

 

	4.4	Consequences of Vesting – Restricted Stock

 

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

 

	4.5	Consequences of Vesting – SARs

 

As soon as practicable and legally possible
after Vesting the Company or the Participant’s Employer shall pay to the Participant a sum equal to growth in the market
value (as determined by the Board) of the number of Vested notional Shares comprising each SAR.

 

	4.6	Dealing Restrictions

 

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

 

     

    8

    

 

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

 

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

 

	4.7	Fractional entitlements

 

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

 

	4.8	Delivery of Shares or ADIs to a deposit account

 

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

 

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

 

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

 

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

 

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

 

	4.9	Lock-In period

 

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

 

     

    9

    

 

	4.10	Cash, Share and ADI alternatives

 

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

 

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

 

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

 

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

 

	5.	Lapse
                                         or forfeiture of awards

 

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

 

		(a)	failure to meet the Performance Conditions to the extent such Performance Conditions are not met;
and

 

		(b)	the occurrence of any event described in the Rules resulting in forfeiture or lapse of Awards,
including under Rule 6 (cessation of employment) and Rule 7 (corporate events).

 

	6.	Cessation
                                         of Employment

 

	6.1	Introduction

 

This Rule 6 applies where a Participant
Ceases Employment.

 

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

 

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

 

	6.2	General

 

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

 

     

    10

    

 

	6.3	Cessation of Employment as a result of Retirement

 

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

 

	6.4	Cessation of Employment for other good reasons and following sale

 

If a Participant Ceases Employment because
of:

 

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

 

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

 

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

 

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

 

	6.5	Lapse or forfeiture of Awards on joining a Competitor

 

Where either Rule 6.3 or 6.4 applies such that Awards are retained
by the Participant following Cessation of Employment, in the event that the Participant, in the period commencing on such cessation
and ending immediately following the relevant Vesting Date becomes an employee or director (or otherwise provides services to)
a Competitor, other than as a direct result of an event within Rule 6.4(b) or Rule 6.4(c), then Awards held by that Participant
shall immediately lapse (or in the case of Restricted Stock shall be immediately forfeited). The intent of identifying these companies
as Competitors under this Plan is, and always has been, to be inclusive of all subsidiaries and affiliates of each such Competitor
company group conglomerate.

 

	6.6	Cessation of Employment as a result of death or Disability

 

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

 

     

    11

    

 

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

 

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

 

	6.7	Cessation of Employment – effect on blocking periods

 

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

 

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

 

	7.	Corporate
events

 

	7.1	Change of Control

 

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

 

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

 

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

 

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

 

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

 

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

 

	7.2	Exchange of Awards

 

If an Award is exchanged, then:

 

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

 

     

    12

    

 

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

 

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

 

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

 

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

 

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

 

	7.3	Demerger, variations of share capital and other corporate
events

 

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

 

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

 

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

 

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

 

	8.	Participant
                                         rights and obligations

 

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

 

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

 

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

 

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

 

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

 

     

    13

    

 

	9.	Clawback

 

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

 

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

 

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

 

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

 

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

 

	10.	Tax,
                                         social security and
                                         other charges

 

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

 

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

 

	11.	Transfer
                                         of awards

 

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

 

	12.	Company
                                         documents

 

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

 

	13.	Board’s
powers

 

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

 

     

    14

    

 

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

 

	14.	Administration
                                         and regulations

 

	14.1	The Plan shall be administered by the Board.

 

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

 

	15.	Awards
not pensionable etc.

 

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

 

	16.	Notices

 

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

 

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

 

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

 

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

 

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

 

	17.	Data
protection

 

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

 

	18.	Amendment
                                         and termination of the plan

 

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

 

     

    15

    

 

	19.	Compliance
with law and articles of incorporation

 

	19.1	Compliance with Law etc.

 

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

 

	19.2	Swiss law with respect to the compensation of certain
executives of listed companies

 

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

 

	19.3	US Code Section 409A

 

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

 

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

 

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

 

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

 

		(c)	Section 5.2 of Schedule 4 shall apply to Restricted Stock Units, and

 

     

    16

    

 

		(d)	the provisions of Sections 6 and 7 of Schedule 4 shall apply to all such Awards.

 

	19.4	Voluntary Participation

 

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

 

	20.	Applicable
law

 

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

 

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

 

	21.	Definitions
                                         and interpretation

 

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

 

	21.1	Definitions

 

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

 

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

 

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

 

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

 

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

 

     

    17

    

 

Change of Control means any of the
following:

 

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

 

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

 

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

 

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

 

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

 

Company means Novartis AG.

 

Competitor means any company or
other organisation that is, from time to time, part of the Company’s comparator peer group of peer companies in the global
healthcare industry, as listed in Appendix 1, or defined by the Board from time to time. The intent of identifying these companies
as Competitors under this Plan is, and always has been, to be inclusive of all subsidiaries and affiliates of each such Competitor
company group conglomerate.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

     

    18

    

 

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

 

Grant Period means the period of
42 calendar days commencing:

 

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

 

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

 

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

 

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

 

Group means the Company, all its
direct and indirect subsidiaries and any other entity determined by the Board to be a member of the group for the purposes of the
Plan.

 

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

 

		(a)	a Change of Control occurs; and

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

     

    19

    

 

Plan means the Novartis AG Long
Term Incentive Plan.

 

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

 

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

 

Retirement means the Cessation of Employment:

 

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

 

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

 

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

 

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

 

Schedule means a schedule to the
Rules.

 

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

 

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

 

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

 

VegüV means the Swiss ordinance
in executive compensation and is the German abbreviation for the ordinance against excessive compensation in listed companies (in
full “Verordnung gegen übermässige Vergütungen bei börsenkotierten Aktiengesellschaften” or compensation
of governing bodies in public companies such as members of the executive committee, the board of directors or the advisory boards).

 

Vesting means:

 

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

 

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

 

		(c)	in the case of SARs, a Participant being entitled to receive a cash sum based on the growth in
value of the notional Shares comprising the Award, and “Vest” shall be
construed accordingly.

 

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

 

	21.2	Interpretation

 

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

 

     

    20

    

 

APPENDIX 1

NOVARTIS COMPETITOR COMPANIES

 

[Omitted]

 

     

    21

    

 

SCHEDULE 1

LONG TERM PERFORMANCE
PLAN

 

		1.	Application of the Schedule

 

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

 

		2.	Performance period

 

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

 

		3.	Performance conditions

 

LTPP Awards are subject to Performance
Conditions relating to Net Sales Growth, Core Operating Income Growth, Innovation and Relative TSR. Each of the four Performance
Conditions applies to 25% of an LTPP Award.

 

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

 

Net Sales Growth Performance Condition

 

For the purposes of this Schedule 1:

 

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

 

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

 

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

 

     

    22

    

 

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

 

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

 

Core Operating Income Growth Performance
Condition

 

For the purposes of this Schedule 1:

 

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

 

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

 

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

 

Innovation Performance Condition

 

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

 

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

 

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

 

     

    23

    

 

Relative
Total Shareholder Return (TSR) Performance Condition

 

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

 

TSR is measured against a comparator peer
group of fourteen peer companies in the global healthcare industry, currently AbbVie, Amgen, AstraZeneca, Biogen, Bristol-Myers
Squibb, Eli Lilly & Company, Gilead, GlaxoSmithKline, Johnson & Johnson, Merck & Co., Novo Nordisk, Pfizer, Roche and
Sanofi. The Board, in its discretion, may alter the constituents of the comparator group in such circumstances as it considers
appropriate, including where a constituent company is no longer listed on a stock exchange.

 

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

 

	TSR rank compared to the comparator group	TSR Performance Factor
	1 to 2	170 to 200 per cent
	3 to 5	130 to 160 per cent
	6 to 8	80 to 120 per cent
	9 to 12	20 to 70 per cent
	13 to 15	0 per cent

 

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

 

		4.	Amendments

 

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

 

     

    24

    

 

SCHEDULE 2

BUSINESS UNIT PERFORMANCE PLAN

 

		1.	Application
of this Schedule

 

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

 

		2.	Performance
period

 

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

 

		3.	Performance
conditions

 

BUPP Awards are subject to Performance
Conditions, details of which shall be set out in the relevant Grant Notice and shall Vest in accordance with those Performance
Conditions.

 

		4.	Amendments

 

The Board may at any time change this Schedule and/or may amend
the Performance Conditions attaching to an BUPP Award. Subject to Rule 2.5 of the LTIP, changes may affect Awards already granted
provided always that, unless required by law, no such change may be made which is to the material disadvantage of a Participant
without that Participant’s prior written consent.

 

     

    25

    

 

SCHEDULE 3

PARTICIPANTS WHO ARE OR BECOME MEMBERS OF THE ECN

 

		1.	Application
of this Schedule

 

Unless specifically provided otherwise,
this Schedule shall apply to:

 

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

 

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

 

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

 

		2.	Definitions

 

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

 

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

 

“Retirement”
means the Cessation of Employment after:

 

		(a)	having attained age 58 or older, or

 

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

 

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

 

		3.	Performance
conditions and ecn ltpp awards vesting

 

The table of performance factors set out in paragraph 3 of Schedule
1 in relation to the Relative total Shareholder Return (TSR) Performance Condition shall not apply and shall be replaced by the
factors set out below PROVIDED ALWAYS that the below shall not apply to Awards under the LTPP which were granted prior to the date
on which the Participant became a member of the ECN:

 

	TSR rank compared to the comparator group	LTPP Performance Factor 
	1 to 2	170 to 200 per cent
	3 to 5	130 to 160 per cent
	6 to 8	80 to 120 per cent
	9 to 15	0 per cent

 

     

    26

    

 

For the avoidance of doubt, all of the
other Performance Conditions set out in paragraph 3 of Schedule 1 (i.e. the Net Sales Growth Performance Condition, the Core Operating
Income Growth Performance Condition and the Innovation Performance Condition) shall continue to apply, as specified in Schedule
1.

 

		4.	Blocking
Restrictions

 

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

 

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

 

		5.	Cessation
of Employment – introduction

 

The following in Rule 6.1 shall not apply:

 

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

 

		6.	Cessation
of Employment as a result of Retirement

 

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

 

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

 

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

 

		(b)	this provision of this Schedule 3 shall not apply to any member of the ECN who, as at 1 January
2018, satisfied the definition of Retirement, as set out above in this Schedule 3 (irrespective of whether or not such Retirement
has been approved by his employer). If this proviso (b) applies then Rule 6.3 (as set out in the main body of the Plan) shall apply.”

 

     

    27

    

 

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

 

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

 

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

 

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

 

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

 

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

 

		(e)	whether the Participant has affirmed his obligation not to disclose confidential information he
received during his employment with the Group and to refrain from using any such information for any purpose not in Group’s
business interests.”

 

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

 

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

 

7.           
Corporate events

 

The following in Rule 7.1 shall not apply:

 

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

 

     

    28

    

 

SCHEDULE 4

UNITED STATES

 

	1.	Application
                                         of this Schedule

 

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

 

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

 

	2.	Grant
of Awards – Shares subject to the Plan

 

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

 

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

 

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

 

	3.	Definitions

 

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

 

“Company”
in this Schedule means Novartis Corporation, a New York corporation.

 

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

 

	4.	Stock
Appreciation Rights

 

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

 

	(a)	SARs with Participant discretion to exercise

 

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

 

     

    29

    

 

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

 

		(iii)	Market value. For the purposes of SARs subject to this Schedule, “market value”
in paragraphs 4(a)(i) and 4(a)(ii) of this Schedule on a given date means:

 

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

 

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

 

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

 

		(iv)	Dividend Equivalents. If the Board designates Dividend Equivalents to apply to SARs pursuant
to Rule 3.3(a), such accumulated Dividend Equivalents shall be paid to the Participant immediately upon Vesting.

 

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

 

	(b)	SARs without Participant Discretion to exercise

 

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

 

     

    30

    

 

	5.	Consequences
                                         of Vesting – Restricted Stock Units

 

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

 

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

 

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

 

	6.	Corporate
Events

 

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

 

	7.	Code
                                         Section 409A

 

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

 

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

 

		(b)	the date of the Participant’s death following such
separation from service.

 

     

    31

    

 

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

 

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

 

		(b)	the Participant’s death.

 

	8.	US
                                         Executive Financial Recoupment Program

 

For US-based roles covered by the Incentive
Compensation Restriction and Executive Financial Recoupment Program (as set forth in Appendix E of the 2020 CIA, hereinafter “Executive
Financial Recoupment Program”) of the Corporate Integrity Agreement Between the Office of Inspector General of the Department
of Health and Human Services and Novartis Corporation (“2020 CIA”) (such roles hereinafter referenced as “Covered
Executives”), the Board temporarily delegates its authority and discretion to make Clawback determinations under section
9 of this Plan, with respect to incentives awarded under this Plan, to the Recoupment Committee established under the Executive
Financial Recoupment Program and to fulfill the obligations entrusted to the Recoupment Committee under such Program, for the term
of the 2020 CIA.

 

Covered Executives must agree to accept
the terms and conditions of the Executive Financial Recoupment Program as a condition of accepting awards under this Plan. The
terms and conditions of the Executive Financial Recoupment Program shall apply to all awards made under this Plan to Covered Executives
during the term of the 2020 CIA.

 

At the conclusion of the 2020 CIA, this
temporary delegation of authority and discretion shall cease and will revert to the Board. The 2020 CIA may be accessed online
at https://oig.hhs.gov/fraud/cia/agreements/Novartis_Corporation_06302020.pdf.

 

     

    32

    

 

SCHEDULE 5

SELECT PLAN 2015

 

	1.	Application of the Schedule

 

Where Awards are granted under the Select
Plan 2015 (“Select Plan”), then the Rules of the Novartis AG Long Term Incentive Plan (LTIP) shall apply subject
to the terms set out in this Schedule.

 

The Select Plan applies for Select Awards
made on or after 1 January 2015.

 

	2.	Purpose

 

The purpose of the Select Plan 2015 is
to provide selected Eligible Employees of the Company or any member of the Group with an opportunity to receive an Award in respect
of Restricted Stock and/or Restricted Stock Units, thus providing an increased incentive for such persons to contribute to the
future success and prosperity of the Company and the Group, enhancing the value of the Shares for the benefit of the shareholders
of the Company and increasing the ability of the Company and the Group to attract and retain individuals of exceptional skill.

 

	3.	Participants

 

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

 

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

 

	4.	Vesting and other Conditions

 

		(a)	Subject to the Board determining otherwise the vesting period of the Awards under the Select Plan
is 3 years.

 

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

 

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

 

	5.	Definitions

 

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

 

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

 

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

 

     

    33

    

 

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

 

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

 

“Vesting Date”
means in relation to an Award the Vesting Date specified in the relevant Grant Notice.

 

“Vesting Period”
shall mean the period between the Grant Date and Vesting Date of an Award.

 

	6.	Cessation of Employment

 

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

 

	6.3	Cessation of Employment as a result of Retirement

 

Rule 6.3 shall apply as follows:

 

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

 

	6.4	Cessation of Employment for other good reasons and
following sale

 

“If a Participant Ceases Employment because of:

 

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

 

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

 

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

 

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

 

     

    34

    

 

	6.5	Lapse or forfeiture of Awards on joining a Competitor

 

"Section 6.5 entitled Lapse or forfeiture
of Awards on joining a Competitor shall not apply to awards made under this Schedule 7.”

 

	6.6	Cessation of Employment as a result of death or Disability

 

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

 

	7.	US Selling restrictions

 

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

 

	8.	Appendices to the Select Plan

 

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

 

     

    35

    

 

APPENDIX 1

NOVARTIS SELECT PLAN SWITZERLAND

 

[Omitted]

 

     

    36

    

 

SCHEDULE 6

NOVARTIS RESTRICTED STOCK UNIT PLAN – FRENCH QUALIFIED RSU PLAN

 

[Omitted]

 

     

    37

    

 

SCHEDULE 7

NOVARTIS LAUNCH LEADER PLAN

 

	1.	Application of the Schedule

 

Where Awards are granted under the Novartis
Launch Leader Plan (the “NLLP”) then the rules of the Novartis AG Long Term Incentive Plan (LTIP) shall apply subject
to the terms set out in this Schedule 7. Awards under the NLLP may be granted in addition to the Awards under other long-term incentive
programs within this Plan or other Plans. Awards under the NLLP granted to US and Canadian Participants will be awarded under the
respective Schedule of the Novartis Corporation 2011 Stock Incentive Plan for North American Employees, as amended.

 

	2.	Eligible Participants

 

For Participants to be eligible to participate
in the NLLP they must be both

 

		1.	US and global launch leaders of products with anticipated peak sales in excess of 1 billion
                                                          USD in the financial year (as determined in the sole discretion of the company), and

 

		2.	Holder of Enterprise Value Roles (“EVR”) and Business Value Roles (“BVR”)

 

ECN members are excluded from participation
in the NLLP. Additionally, those Participants that are US or Canadian paid are not eligible under this schedule. US and Canadian
Participants are eligible for awards under the respective Schedule of the Novartis Corporation 2011 Stock Incentive Plan for North
American Employees, as amended.

 

	3.	Award Size

 

Eligible participants may receive Awards
up to the following size

 

		(i)	Business Value Role (“BVR”): up to 5,000 Restricted Stock Units

		(ii)	Holder of Enterprise Value Roles (“EVR”): up to 10,000 Restricted Stock Units

 

The Board may change the Award size at
any time.

 

	4.	Vesting and other Conditions

 

a) NLLP Awards are subject to the following
Vesting conditions:

 

		1.	The Participants need to receive at least 2.2 Ratings in the Novartis annual performance evaluations
over the performance period (i.e. 2-2, 3-2, 2-3 or 3-3) or if not available, Equivalent Performance Measurement(s) over the Vesting
Period as defined in the Grant Notice, and

		2.	The Participants may not move out of their EVR or BVR role they were in at the grant date before
the end of the Vesting Period.

 

b) If the Vesting condition no. 1 is not
met at the time of Vesting, the NLLP Award will not qualify for Vesting and will lapse.

 

c) If a Participant initiates a move to
a role that does not qualify for eligibility for NLLP Awards within the Group (including all subsidiaries and affiliates of Novartis
AG) at any time during the vesting period but prior to Vesting, condition no. 2 fails and the NLLP Award will lapse.

 

     

    38

    

 

d) The Novartis Compensation Committee
or the CEO can approve exceptions to these Vesting conditions.

 

e) To the extent the Vesting conditions
are met (as determined by the Board), the NLLP Award shall Vest on the Vesting Date subject to the rules of the Novartis AG Long
Term Incentive Plan, including subject to the provisions relating to cessation of employment. The Board can also define additional
Vesting conditions in the Grant Notice.

 

	5.	Dividends and dividend equivalents

 

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

 

	6.	Cessation of Employment

 

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

 

	6.3	Cessation of Employment as a result of Retirement

 

Rule 6.3 shall apply as follows:

 

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

 

	6.4	Cessation of Employment for other good reasons and
following sale

 

“If a Participant Ceases Employment because of:

 

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

 

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

 

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

 

     

    39

    

 

	6.5	Lapse or forfeiture of Awards on joining a Competitor

 

"Section 6.5 entitled Lapse or forfeiture
of Awards on joining a Competitor shall not apply to awards made under this Schedule 7.”

 

	6.6	Cessation of Employment as a result of death or Disability

 

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

 

	7.	Definitions

 

For the purpose of this Schedule, the following
additional definitions shall apply:

 

“Equivalent Performance Measurement”
If the Rating 2.2 is not available for any reason including any performance management system changes, only the available ratings
will be considered or an Equivalent Performance Measurement will be sought. For new Awards, the Equivalent Performance Measurement
will be defined in the Grant Notice.

 

“EVR”Enterprise
Value Roles are roles with enterprise-wide responsibilities and impact.

 

“BVR” Business Value
Roles are roles with division-wide or business-wide responsibilities and impact.

 

“Launch Leaders”have
responsibility and control over product launches with anticipated sales budgets of > 1 billion USD per financial year (as determined
in the sole discretion of the company).

 

“Rating 2.2” means the
performance rating on the Novartis 3x3 rating matrix used for the annual performance evaluation, which is required subsequently
over the performance period.

 

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

 

“Vesting Date” means
in relation to an Award the Vesting Date specified in the relevant Grant Notice.

 

“Vesting Period” shall
mean the period between the Grant Date and Vesting Date of an Award.

 

	8.	Amendments

 

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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00317-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00317-of-00352.parquet"}]]