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Exhibit 10.502

 
 

CHIRON CORPORATION
  NOTICE OF GRANT OF STOCK OPTION    
  

	«First_Name»	 	»Last_Name»	 	Chiron Corporation
	«Extra_Field_4»	 	 	 	4560 Horton Street
	 	 	 	 	Emeryville, CA 94608
	Option Number:	 	«Number»	 	ID: 94-275624
	Plan:	 	«Plan»	 	 
	ID:	 	«SSN»	 	 

        You
have been granted a(n) «Long            Type» to buy «Shares            Granted» shares of Chiron
Corporation stock at
«Option            Price»per share, effective as of «Option            Date» (the "Option Grant Date").

        Your
shares become exercisable as follows: 

«Shares_Period_1»
shares vest on «Vest_Date_Period_1» 

«Shares_Period_2»
shares will vest monthly thereafter with full vest on «Vest_Date_Period_2» 

        This
Option will expire ten years from the Option Grant Date above. 

        This
Option shall become exercisable in accordance with the above-described schedule. The Option may become exercisable prior to completion of the above-described schedule pursuant to
the terms of Paragraph C of the 2001-1 Form Stock Option Agreement (the "Agreement") attached hereto as Exhibit A, relating to certain terminations of employment following
certain corporate transactions. However, the Option shall not become exercisable for any additional Option Shares after Optionee's cessation of employment, except to that limited extent permitted
under the terms of Paragraph B of the Agreement, relating to termination by reason of death or Retirement. In no event may this Option be exercised for any fractional shares. 

        Optionee
understands and agrees that the Option is granted subject to and in accordance with the terms of the Chiron Corporation 1991 Stock Option Plan as amended (the "Plan"). Optionee
further agrees to be bound by the terms of the Plan and the terms of the Option as set forth in the Agreement. If you misplaced your copy of the Prospectus or otherwise wish a new copy, you should go
to the Human Resources Stock page on Chiron's intranet site to view the prospectus or contact the Corporate Secretary at the Corporation's principal offices at 4560 Horton Street, Emeryville, CA
94608, Attention Stock Plan Administration. 

        No Employment Contract.    Nothing in this Notice or in the Agreement or in the Plan shall confer upon Optionee any right to
continue in the employ of the Corporation or any affiliate or constitute any contract or agreement of employment or interfere in any way with the right of the Corporation or an affiliate to reduce
such Optionee's compensation or to terminate Optionee's employment at any time, with or without cause; but nothing contained in this Notice shall affect any contractual rights of Optionee pursuant to
a written employment agreement. 

        Withholding.    The Option holder agrees, as a condition to the exercise of this Option, to make appropriate arrangements with
the Committee, the Corporation, or any subsidiary that employs the Option holder for the satisfaction of any federal, state or local income and employment tax withholding requirements applicable to
the exercise of this Option or the sale of shares acquired under this Option. 

        Definitions.    All capitalized terms in this Notice shall have the meaning assigned to them in this Notice or in the Agreement.

	DATED:                    , 2002	 	CHIRON CORPORATION
	

 	
 	

By:	
 	

	

 	
 	

Title:	
 	
Chairman and Chief Executive Officer

ATTACHMENT

Exhibit A: 2001 -1 Form Stock Option Agreement  

 
 
 

EXHIBIT A
  CHIRON CORPORATION
  2001-1 FORM STOCK OPTION AGREEMENT    
  

A.    Manner Of Exercising Option.  

        1.    To
the extent exercisable under the Grant Notice and this Agreement, this Option may be exercised before the Expiration Date set forth in the Grant Notice (or earlier
termination of this Option) by
delivering written notice in such form and to such person as the Corporation specifies. The exercise date will be the date that this notice is delivered ("Exercise Date"). The Option holder must
furnish such documentation as the Corporation may request to verify that such person has the right to exercise this Option. The holder of this Option will not have any stockholder rights with respect
to the Option Shares until such person has exercised the Option, paid the Exercise Price and become a holder of record of the purchased shares. 

        2.    Upon
exercise, the Optionee must pay the full Exercise Price to the Corporation in one or more of the following forms: cash, shares of Common Stock of the Corporation
held by the Option holder for the requisite period to avoid a charge to the Corporation's earnings and valued as of the Exercise Date, or delivery in a manner approved by the Corporation of
irrevocable instructions to a broker to promptly deliver to the Corporation the amount of sale or loan proceeds to pay the Exercise Price. In order to assist in the acquisition of shares of Common
Stock pursuant to this Agreement, the Committee may (but is not required to) authorize the extension of a loan to Optionee from the Corporation, the payment by Optionee of the Exercise Price in
installments, or a guarantee by the Corporation of a loan obtained by Optionee from a third party. 

        3.    For
purposes of this Option, Fair Market Value of a share of Common Stock on any date will be determined under the terms of the Plan, which, as long as the Common Stock
is traded on the NASDAQ system and the Committee administering the Plan does not determine otherwise, will be the average of the high and low price of one share of Common Stock during NASDAQ's regular
trading session, as determined by the Committee using such publicly available sources as it may specify. 

B.    Termination.    If the Optionee's employment terminates before the Expiration Date, this Option will expire early and cease to
be exercisable in accordance with the following provisions. For purposes of these provisions, the term "employment" includes service as an employee, an independent contractor or a consultant for the
Corporation or a parent or subsidiary entity. 

        1.    If
Optionee terminates employment other than by reason of Retirement, death, a disability that qualifies for benefits under the Corporation's long-term
disability program, or Cause (each as defined below) during the option term, this Option will terminate on the earlier of the Expiration Date or 3 months after the date of termination of
employment. For purposes of this paragraph B, an employee who goes on an approved disability leave will be deemed to have terminated employment on the earlier of the end of such leave (if
Optionee has not returned to employment with the Corporation on or before the end of such leave) or one year after the beginning of the leave. 

        2.    If
Optionee terminates employment by Retirement during the option term, this Option will terminate on the earlier of the Expiration Date or 36 months after such
termination of employment. Retirement means termination of employment by an employee (by reason other than death or Cause) after all of the following has occurred (i) the Optionee has completed
5 or more years of continuous employment, (ii) the Optionee has attained age 55 and (iii) the sum of the Optionee's age in full years and full years of employment equals at least 65. 

        3.    If
Optionee takes an approved disability leave during the option term and qualifies for benefits under the Corporation's long-term disability insurance
program (but not for Retirement), the Option will terminate on the earlier of the Expiration Date or 36 months after the start of the leave. 

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        4.    If
Optionee is on an approved leave of absence without pay, each Vesting Date (i.e., each date on which Optionee would otherwise become eligible to exercise this Option
for the initial or additional number of shares if he or she is then still employed by the Corporation) shall be deferred by the number of days of such unpaid leave (in excess of 31 in the case of a
personal leave), provided that in the case of a leave during which Optionee has a statutory or contractual right to reemployment for some period, vesting shall be deferred by the number of days by
which such leave extends beyond the date of lapse of such right. 

        5.    If
Optionee dies while this Option is outstanding, the person or entity who succeeds to this Option will have the following period to exercise this Option: (i) if
Optionee is employed by the Corporation at the time of death, the 36 month period following the date of death, (ii) if Optionee terminated employment before death by reason other than
Retirement, Cause or disability that qualifies for benefits under the Corporation's long-term disability program, the 12 month period following the date of death or (iii) if
Optionee terminated employment before death by reason of Retirement or disability that qualifies for benefits under the Corporation's long term disability program, 36 months after the date of
such Retirement or, in the case of a qualifying disability, the start of the disability leave. However, in no event can this Option be exercised after the Expiration Date. 

        6.    After
Optionee's termination of employment, this Option cannot be exercised for more than that number of Option Shares (if any) for which it is exercisable on the date of
such termination, provided that (i) this shall be subject to paragraph C below and (ii) if termination occurs by reason of death or Retirement (including termination by reason of
disability after becoming eligible for Retirement), then during the 36 month period of limited exercisability following such termination of employment the Option will continue to vest and
become (and remain) exercisable as if the Optionee continued as an employee during such period. Upon the expiration of any applicable limited period of exercise or (if earlier) upon the Expiration
Date, this Option will terminate and cease to be outstanding. 

        7.    Notwithstanding
any provision of this Agreement to the contrary, if Optionee's employment is terminated for Cause or if, during any limited period of exercisability
following termination of employment by reason of Retirement or disability that qualifies for benefits under the Corporation's long-term disability program, Optionee engages in any activity
which would justify termination for Cause, as defined in paragraph C below, then this Option will terminate and cease to be outstanding on the date of such termination of employment or, if such
activity occurs after termination of employment, the date the Optionee engages in such activity. If any provision of this paragraph contravenes or is invalid under the applicable laws of any state,
this entire paragraph will not be invalidated, but will be construed and enforced insofar as the laws of that state are concerned as not containing the particular provision or provisions that is
invalid in that state. 

C.    Change In Control.  

        1.    Failure to Assume. If the Corporation or its stockholders enter into an agreement to dispose of all or substantially all
of the assets of the Corporation, enter into an agreement to merge or consolidate with another entity or enter into a plan of reorganization or liquidation, then this Option, to the extent not
previously exercised or terminated, may be exercised, immediately before the consummation of such transaction with respect to all the shares of Common Stock purchasable under this Option, unless this
Option will be either continued or assumed by the successor entity or its parent or replaced with a comparable option to purchase equity interests of the successor entity or parent thereof. The
Committee will determine such comparability, and its determination will be final, binding and conclusive. Upon consummation of such a transaction, this Option, whether or not accelerated, will
terminate and cease to be exercisable, unless continued or assumed by the successor entity or parent thereof. 

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        2.    Certain Terminations Following a Change in Control. If there is a Change in Control of the Corporation pursuant to which
the exercisability of the Option does not accelerate in full pursuant to 1. above and within twenty-four (24) calendar months thereafter there is a Qualifying Termination of
Optionee's employment, then this Option will become immediately exercisable for all of the Option Shares then subject to this Option. For this purpose, the following definitions apply: 

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

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

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

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

Notwithstanding
anything else contained herein to the contrary, in no event shall a Change in Control be deemed to have occurred by reason of a purchase, or series of purchases of Corporation stock by
Novartis or its successor such that the acquiring entity remains subject to the terms of that certain Governance Agreement dated as of January 5, 1995, as amended through December 9,
2000, provided the acquiring entity's Corporation stock holdings, direct or indirect, in the aggregate, represent less than seventy-nine and nine-tenths of a percent (79.9%) of
the combined voting power of all outstanding Corporation securities. In addition, in no event shall a Change in Control be deemed to have occurred, with respect to the Optionee, if the Optionee is
part of a purchasing group that consummates the Change-in-Control transaction. The Optionee shall be deemed "part of a purchasing group" for purposes of the preceding sentence
if the Optionee is an equity participant in the purchasing company or group (except for: (i) passive ownership of less than three percent (3%) of the stock or other equity of the purchasing
company; or (ii) ownership of equity participation in the purchasing company or group which is otherwise not significant, as determined prior to the Change in Control by a majority of the
nonemployee continuing Directors). 

	b.
	"Qualifying
Termination" means an involuntary termination of the Optionee's employment by the Corporation for reasons other than Cause, death or disability.

	c.
	"Cause"
means:

	i.
	The
Optionee's willful failure to substantially perform his/her duties with the Corporation (other than any such failure resulting from disability); 

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

	iii.
	The
Optionee's having been convicted of a felony. 

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

        3.    Right to Effect Transactions. This Agreement does not in any way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets. 

D.    Adjustment In Option Shares.    If there is a stock split, stock dividend, recapitalization, combination of shares, exchange
of shares or other change affecting the outstanding Common Stock as a class without the Corporation's receipt of consideration, appropriate adjustments will be made to (i) the total number
and/or class of securities subject to this Option and (ii) the exercise price in order to reflect such change and thereby preclude a dilution or enlargement of benefits hereunder. 

E.    Limited Transferability.    This Option cannot be transferred or assigned other than by will or by the laws of descent and
distribution and, during Optionee's lifetime, can only be exercised by Optionee, unless and to the extent that this Option is originally designated a Non-Statutory Option, in which case,
subject to such limitations as the Corporation may establish from time to time for administrative and regulatory compliance reasons (including continued eligibility of Registration Form
S-8), this Option may be assigned by Optionee by gift or pursuant to a domestic relations order to one or more of Optionee's family members or an entity owned, benefiting or controlled by
the Optionee or one or more of Optionee's family members. Notwithstanding the foregoing, the Optionee may also designate a beneficiary to whom this Option will automatically be transferred if still
outstanding upon the Optionee's death. The terms of this Option are binding upon the executors, administrators, successors and assigns of the Optionee. 

F.    Compliance With Plan, Laws And Regulations.    The exercise of this Option and the issuance of the Option shares upon such
exercise is subject to the terms of the plan and compliance by the Corporation and Optionee with all applicable laws and with all applicable regulations of any stock exchange on which the common stock
is listed for trading at the relevant time. If the Corporation cannot obtain approval from any regulatory body having authority deemed by the Corporation to be necessary to the lawful issuance of
common stock pursuant to this Option, the Corporation will not have any liability with respect to the failure to issue the common stock as to which such approval is not obtained. 

G.    Additional Terms Applicable To An Incentive Option.    If this Option is designated an Incentive Option in the Grant Notice,
the following terms and conditions will also apply to the grant: 

        1.    This
Option will not qualify for favorable tax treatment as an Incentive Option to the extent that it is exercised: (A) more than 3 months after the date
Optionee ceases to be an employee for any reason other than death or permanent and total disability or (B) more than 12 months after the date Optionee ceases to be an employee by reason
of permanent and total disability. For this purpose (i) permanent and total disability means the inability to engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months and (ii) an
employee on a leave of absence will be deemed to have terminated employment on the 91st day after the employee no longer has a contractual or statutory right to reemployment. 

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        2.    To
the extent that the aggregate Fair Market Value of the stock for which options intended to be Incentive Options first become exercisable during any calendar year
(under this Plan or any other plan of the Corporation or any parent or subsidiary and whether by reason of initial installment exercisability or acceleration of exercisability upon a Change in
Control) would exceed $100,000 in the aggregate, the options shall not qualify as Incentive Options, but shall be exercisable as Non-Statutory Options. The foregoing limit will be applied
by taking into account options in the order in which they were granted. 

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ADDENDUM
  TO
  STOCK OPTION AGREEMENT    
  

        The following provisions are hereby incorporated into, and are hereby made a part of, that certain Stock Option Agreement (the "Option Agreement") by and between
Chiron Corporation (the "Corporation") and                        ("Optionee") evidencing the stock option (the "Option") granted
this day to Optionee under the terms of the Corporation's 1991 Stock Option
Plan, and such provisions are effective immediately. All capitalized terms in this Addendum, to the extent not otherwise defined herein, shall have the meanings assigned to them in the Option
Agreement. 

 
 

INVOLUNTARY TERMINATION FOLLOWING
  A CHANGE IN CONTROL    
  

        For purposes of Section C. of the Option Agreement, relating to involuntary termination of Service following a Change in Control, the following additional
provisions shall apply: 

        1.    For
purposes of determining whether the Corporation's termination of Optionee's employment is for Cause, Optionee's willful failure to substantially perform his/her
duties with the Corporation shall not constitute Cause unless both (i) such failure does not occur by reason of disability or after the Optionee has notified the Corporation in writing of his
or her termination for Good Reason (as defined below), but in the latter case, only if the Corporation has not requested a Transition Employment Period (as defined below) for Optionee and
(ii) a written demand for substantial performance is delivered to the Optionee that specifically identifies the manner in which the Corporation believes that the Optionee has willfully failed
to substantially perform his/her duties and the Optionee has failed to resume substantial performance of his/her duties on a continuous basis within thirty (30) calendar days of receiving such
demand; 

        2.    The
Corporation will be deemed to have involuntarily terminated Optionee's employment and a Qualified Termination shall be deemed to have occurred if Optionee voluntarily
terminates employment for Good Reason pursuant to a written notice of termination delivered to the Corporation by the Optionee; provided that, if upon receiving such notice of termination, the
Corporation requests that the Optionee remain an employee for a period ending no later than six (6) months following the date of the Change in Control (the "Transition Employment Period") with
compensation and benefits equal to or greater than the Optionee's compensation and benefits immediately before the Qualifying Termination (or, if more favorable to the Optionee, immediately before the
Change in Control), the Optionee will not be deemed to have a Qualifying Termination unless he or she remains employed throughout the Transition Period or Executive's employment earlier terminates due
to death, disability or involuntary termination by the Corporation for reason other than Cause. 

        3.    For
purposes of this Addendum, "Good Reason" shall mean the occurrence, without the Optionee's express written consent, of any one or more of the following: 

        a.    The
assignment of the Optionee to duties materially inconsistent with the Optionee's authorities, duties, responsibilities as an employee of the Corporation, or a
material reduction in the nature or status of the Optionee's authorities, duties, or responsibilities than those in effect immediately preceding the Change in Control; 

        b.    The
Corporation's requiring the Optionee to be based at a location which is at least fifty (50) miles further from the Optionee's current primary residence than is
such residence from the Corporation's current headquarters, except for required travel on the Corporation's business to an extent substantially consistent with the Optionee's business obligations as
of the Effective Date; 

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        c.    A
material reduction in the Optionee's Base Salary or bonus opportunity as in effect on the Effective Date or as the same shall be increased from time to time; 

        d.    A
material reduction in the Optionee's level of participation in any of the Corporation's short- and/or long-term incentive compensation plans, or employee
benefit or retirement plans, policies, practices, or arrangements in which the Optionee participates immediately preceding the Change in Control; provided, however, that reductions in the levels of
participation in any such plans shall not be deemed to be "Good Reason" if the Optionee's reduced level of participation in each such program remains substantially consistent with the average level of
participation of other employees who have positions commensurate with the Optionee's position. Long-term incentive plans shall mean the Chiron Executive Long-Term Incentive
Plan, the 1991 Stock Option Plan, and any other similar plans instituted by the Corporation. 

However,
the occurrence of an event set forth in (a) through (d) above shall not constitute Good Reason if the Corporation has cured such event within fifteen (15) days of receipt
of written notice from the Optionee that such event has occurred and constitutes Good Reason. 

IN WITNESS WHEREOF, Chiron Corporation has caused this Addendum to be executed by its duly authorized officer as of the Effective Date specified below. 

	 	 	Very truly yours,
	

 	
 	
CHIRON CORPORATION
	

 	
 	

By:	
 	

	

 	
 	

Title:	
 	

	EFFECTIVE DATE:	
	 

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CHIRON CORPORATION NOTICE OF GRANT OF STOCK OPTION

EXHIBIT A CHIRON CORPORATION 2001-1 FORM STOCK OPTION AGREEMENT

ADDENDUM TO STOCK OPTION AGREEMENT

INVOLUNTARY TERMINATION FOLLOWING A CHANGE IN CONTROLExhibit 10.504  

PERSONAL AND CONFIDENTIAL  

                        ,
2002 

«First_Name»
«Last_Name»

«JOB_TITLE»

Chiron Corporation

«ADDRESS», M/S «MS»

«CITY_STATE_ZIP»

        Re:    Restricted
Share Right Grant 

Dear:
«First_Name» 

        Pursuant
to the Chiron Corporation 1991 Stock Option Plan (the "Plan"), Chiron Corporation (the "Company") hereby grants you «Shrs            Grntd»
(«Shrs            Grntd            Wrds») restricted share rights ("share rights") with respect to its Common Stock
("Common Stock"). These share rights are granted to
you in accordance with the restrictions, terms, and conditions hereinafter set forth and are in all respects limited and conditioned by the provisions of the Plan. 

        1.    Each
share right entitles you to receive one share of Common Stock on the Payment Date applicable to such share right if you remain employed with the Company through that
date. The Payment Date for forty percent (40%) of your share rights will be August 31, 2003; the Payment Date for the remaining sixty percent (60%) of your share rights will be
August 31, 2005. A certificate representing
the share of stock payable under a share right will be issued without restriction on the Payment Date provided that your share rights have not been terminated or canceled before such date in
accordance with the following provisions. 

        2.    If
you voluntarily terminate employment with the Company for any reason other than death or permanent disability or if the Company terminates your employment for Cause
before the Payment Date of a share right, subject to paragraph 8 below, each share right you hold will be canceled automatically and no shares of Common Stock will be issued thereunder. 

        3.    If
you terminate employment by reason of death or permanent disability or if the Company terminates your employment for any reason other than for Cause before
August 31, 2005, all share rights then held by you will be canceled automatically except as follows: 

        (i)    if
your termination date is after August 31, 2002 and before August 31, 2003, you will be issued, as soon as practicable following such termination of
employment, that number of shares of Common Stock equal to the total number of your share rights with an August 31, 2003 Payment Date multiplied by a fraction, the numerator of which is the
number of whole months of your employment after August 31, 2001 and the denominator of which is twenty-four (24), or 

        (ii)  if
your termination date is after August 31, 2003, and before August 31, 2005, you will be issued, as soon as practicable following such termination of
employment, that number of shares of Common Stock equal to the total number of your share rights with an August 31, 2005 Payment Date multiplied by a fraction, the numerator of which is the
number of whole months of your employment after August 31, 2003 and the denominator of which is twenty-four (24). 

You
will be deemed to be permanently disabled if, by reason of any medically determinable physical or mental impairment expected to result in death or to be of continuous duration of not less than
12 months, you are unable to engage in any substantial gainful employment. 

        4.    The
issuance of shares under a share right is subject to all applicable tax withholding obligations. In order to satisfy such tax withholding obligations, the number of
shares of Common 

 

Stock which would otherwise be paid to you on any date will be reduced by that number of shares which, as of that date, has an aggregate Fair Market Value (as defined in the Plan) equal to the total
amount of tax withholding obligations applicable to the shares otherwise payable on that date. 

        5.    Your
share rights hereunder may not be sold, assigned, transferred, alienated, subject to garnishment or otherwise encumbered in any manner other than by transfer, to the
extent provided below, by Will or the laws of descent and distribution. In the event of your death prior to the issuance of shares of Common Stock under your share rights, any shares issuable
thereunder by reason of your death will pass pursuant to your Will or by the laws of descent and distribution. 

        6.    The
issuance of shares of Common Stock hereunder shall be subject to compliance by the Company and yourself or your beneficiary with all applicable requirements of law
relating thereto and with all regulations of any stock exchange on which the Common Stock may be listed at the time of such issuance. 

        7.    If
the Company or its stockholders enter into an agreement to dispose of all or substantially all of the assets of the Company, enter into an agreement to merge or
consolidate with another entity, or enter into a plan of reorganization or liquidation, while your restricted share rights are outstanding, then each outstanding share right will become vested and
paid in full, immediately before the consummation of such transaction. However, no acceleration of the vesting or payment date will occur if the agreement requires as a prerequisite to the
consummation of any such transaction that each such outstanding share right will be either assumed by the successor corporation or parent thereof or be replaced with a comparable share right in the
successor corporation or parent thereof. 

        8.    If
there is a Change in Control of the Company pursuant to which the share rights continue and within twenty-four (24) calendar months thereafter there
is a Qualifying Termination of your employment, then the share rights which remain outstanding at the time of such Qualifying Termination will vest and will be paid out in full. 

        9.    For
this letter agreement, the following definitions apply: 

        a.    "Change
in Control" of the Company shall be deemed to have occurred as of the first day that any one or more of the following conditions is satisfied and regulatory
approval has been granted if necessary: 

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

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

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

Notwithstanding
anything else contained herein to the contrary, in no event shall a Change in Control be deemed to have occurred by reason of a purchase, or series of purchases of Company stock by
Novartis or its successor such that the acquiring entity remains subject to the terms of that certain Governance Agreement dated as of January 5, 1995, as amended through December 9,
2000, provided the acquiring entity's Company stock holdings, direct or indirect, in the aggregate, represent less than seventy-nine and nine-tenths of a percent (79.9%) of the
combined voting power of all outstanding Company securities. In addition, in no event shall a Change in Control be deemed to have occurred, with respect to you, if you are part of a purchasing group
that consummates the Change-in-Control transaction. You shall be deemed "part of a purchasing group" for purposes of the preceding sentence if you are an equity participant in
the purchasing company or group (except for: (i) passive ownership of less than three percent (3%) of the stock or other equity of the purchasing company; or (ii) ownership of equity
participation in the purchasing company or group which is otherwise not significant, as determined prior to the Change in Control by a majority of the nonemployee continuing Directors). 

        b.    "Qualifying
Termination" means: (i) an involuntary termination of your employment by the Company for reasons other than death, permanent disability, as defined in
paragraph 3, above, or Cause, or (ii) a voluntary termination by you for Good Reason pursuant to a written notice of termination delivered to the Company; provided that, if upon
receiving such notice of termination, the Company requests that you remain an employee for a period ending no later than six (6) months following the date of the Change in Control (the
"Transition Employment Period") with compensation and benefits equal to or greater than your compensation and benefits immediately before the Qualifying Termination (or, if more favorable to you,
immediately before the Change in Control), you will not be deemed to have a Qualifying Termination unless you remain employed throughout the Transition Period or your employment earlier terminates due
to death, disability or involuntary termination by the Corporation for reason other than Cause. 

        c.    "Cause"
means: (i) your willful failure to substantially perform your duties with the Company (other than any such failure resulting from permanent disability or
occurring after you have notified the Company in writing of your termination for Good Reason, but, in the latter case, only if the Company has not requested a Transition Employment Period for you),
(ii) your material act of dishonesty, fraud or embezzlement against the Company, unauthorized disclosure of confidential information or trade secrets of any of the Company or an affiliate
(whether or not in violation of any confidentiality agreement) or other willful conduct that is demonstrably injurious to the Company, monetarily or otherwise; or (iii) your having been
convicted of a felony. No act, or failure to act, on your part will be deemed "willful" unless done, or omitted to be done, by you not in good faith and without reasonable belief that the action or
omission was in the best interests of the Company. 

        d.    "Good
Reason" shall mean, without your express written consent, the occurrence of any one or more of the following: 

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

        (ii)  The
Company's requiring you to be based at a location which is at least fifty (50) miles further from your current primary residence than is such residence from
the 

3

 

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

        (iii)  A
material reduction in your Base Salary or bonus opportunity as in effect on the Effective Date of the Change in Control or as the same shall be increased from time
to time; 

        (iv)  A
material reduction in your level of participation in any of the Company's short- and/or long-term incentive compensation plans, or employee benefit or
retirement plans, policies, practices, or arrangements in which you participate in immediately preceding the Change in Control; provided, however, that reductions in the levels of participation in any
such plans shall not be deemed to be "Good Reason" if your reduced level of participation in each such program remains substantially consistent with the average level of participation of other
employees who have positions commensurate with your position. Long-term incentive plans shall mean the Chiron Executive Long-Term Incentive Plan, the 1991 Stock Option Plan,
and any other similar plans instituted by the Company. 

However,
the occurrence of an event set forth in (i) through (iv) above shall not constitute Good Reason if the Company has cured such event within fifteen (15) days of receipt of
written notice from you that such event has occurred and constitutes Good Reason. 

        10.  Neither
you nor, in the event of your death, your beneficiary shall have any rights as a shareholder with respect to the shares of Common Stock issuable hereunder until
you shall have been issued a stock certificate for such shares. It is the intention of the parties that the Company's obligations under your share rights are unfunded for purposes of the Internal
Revenue Code and that the Employee Retirement Income Security Act of 1974 does not apply to your share rights. 

        11.  The
Compensation Committee, may, in its discretion, modify or waive any or all of the terms, conditions or restrictions hereof, provided, however, that no such
modification or waiver may, without your or, if applicable, your beneficiary's, consent, adversely affect the rights of you or your beneficiary hereunder. 

        12.  The
Compensation Committee has full authority to administer the Plan, including authority to interpret and construe any provision thereof and hereof and to adopt such
rules and regulations for administering the Plan as it may deem necessary. Decisions of the Compensation Committee are final and binding on all persons who have an interest in the Plan. 

        13.  This
grant shall not constitute a contract of employment. The Company (or any subsidiary employing you) may terminate or change the terms of your employment at any time
and for any reason and whether or not such termination or change causes a loss of rights under the Plan, except to the extent that the terms of any employment contract or, with respect to changes in
your compensation, any written compensation agreement between the Company and you may expressly provide otherwise. 

	 	 	Very truly yours,
	 	 	CHIRON CORPORATION
	 	 	 	 	 
	

 	
 	

By:	
 	

 Seán P. Lance

Chairman and

Chief Executive Officer

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