<PAGE>
As filed with the Securities and Exchange Commission on March 30, 1995
Registration No. 33-_____
________________________________________________________________________________
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________
CHIRON CORPORATION
(EXACT NAME OF ISSUER AS SPECIFIED IN ITS CHARTER)
Delaware 94-2754624
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4560 Horton St., Emeryville, California 94608
(510) 655-8730
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
__________________
CHIRON CORPORATION 1988 EMPLOYEE STOCK PURCHASE PLAN
[As Amended February 18, 1994]
(Full title of the plan)
__________________
EDWARD E. PENHOET, PH.D.
President and Chief Executive Officer
CHIRON CORPORATION
4560 Horton Street, Emeryville, California 94608
(510) 655-8730
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Amount of
Title of Securities Amount to Offering Price Maximum Aggregate Registration
to be Registered be Registered Per Share Offering Price Fee
------------------- ------------- ---------------- ----------------- ------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par value
(1988 Employee Stock Purchase
Plan, as Amended) 1,000,000 (1) $57.25(2) $57,250,000(2) $19,741.52
<FN>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the Chiron Corporation Employee
Stock Purchase Plan, as amended, by reason of any stock dividend, stock
split, recapitalization or other similar transaction effected without the
receipt of consideration which results in an increase in the number of the
Registrant's outstanding shares of Common Stock.
(2) Calculated solely for the purposes of this offering under Rule 457(h) of
the Securities Act of 1933 on the basis of the average of the high and low
selling prices per share of Common Stock of Chiron Corporation on March 27,
1995, as reported by the NASDAQ National Market System.
</TABLE>
This Registration Statement shall become effective immediately upon filing with
the Securities and Exchange Commission, and sales of the registered securities
will begin as soon as reasonably practicable after such effective date.
__________________
Also relates to Registration File No. 33-23899 pursuant to Rule 429 under the
Securities Act of 1933.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Chiron Corporation (the "Registrant") files this Registration Statement
with the Securities and Exchange Commission (the "Commission") on Form S-8 to
register 1,000,000 shares authorized for issuance under the Registrant's 1988
Employee Stock Purchase Plan, as amended.
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The Registrant hereby incorporates by reference into this Registration
Statement the following documents previously filed with the Commission:
(a) The Registrant's Annual Report on Form 10-K for the year ended
December 31, 1994 filed pursuant to Section 13(a) of the Securities Exchange Act
of 1934 (the "1934 Act");
(b) The Registrant's Current Reports on Form 8-K and 8-K/A dated
January 4, 1995;
(c) The Registrant's Current Report on Form 8-K dated March 6, 1995;
(d) The Registrant's Current Report on Form 8-K dated March 10, 1995 and
(e) The description of Registrant's Common Stock contained in its
Registration Statement on Form 8-A filed with the Commission on August 28, 1984.
All reports and definitive proxy or information statements filed pursuant
to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
William G. Green, who has provided an opinion to the Registrant on the
validity of the securities being registered which is Exhibit 5 to this
registration statement, is Senior Vice President, General Counsel and Secretary
of the Registrant.
II-1
<PAGE>
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware and the
Bylaws of the Registrant contain provisions covering indemnification of
corporate directors, officers and employees under certain conditions and subject
to certain limitations.
In addition, the Registrant has entered into supplemental indemnification
agreements with its directors which broaden the scope of indemnity beyond that
expressly provided by the Bylaws or the Delaware General Corporation Law. These
supplemental contracts are permissible under the Delaware General Corporation
Law and have been approved by the Registrant's stockholders. Accordingly, the
indemnification agreements with directors (i) confirm the present indemnity
provided to them by the Registrant's Bylaws and give them assurance that this
indemnity will continue to be provided despite future changes in the Bylaws, and
(ii) provide that, in addition, the directors shall be indemnified to the
fullest possible extent permitted by law against all expenses (including
attorneys' fees), judgments, fines and settlement amounts, incurred or paid by
them in any action or proceeding, including any action by or in the right of the
Registrant, on account of their service as a director or officer of the
Registrant, or as a director or officer of any subsidiary of the Registrant, or
as a director, officer or similar official of any other company or enterprise
when they are serving in such capacities at the request of the Registrant. The
indemnification agreements further provide that expenses incurred by a director
in such cases shall be paid in advance, subject to the director's obligation to
reimburse the Registrant in the event it ultimately determines that the director
is not entitled to be indemnified for such expenses under any of the provisions
of the indemnification agreement. However, no indemnity will be provided to any
director under the agreements as described in clause (ii) of the third sentence
of this paragraph on account of conduct which is finally adjudged to be
knowingly fraudulent, deliberately dishonest or to constitute willful
misconduct. In addition, no indemnification will be provided if a final court
adjudication shall determine that such indemnification is not lawful, or in
respect to any suit in which judgment is rendered against a director for an
accounting of profits made from a purchase or sale of securities of the
Registrant in violation of Section 16(b) of the 1934 Act, as amended, or of any
similar statutory provision, or on account of any remuneration paid to a
director which is finally adjudged to have been paid in violation of law. The
indemnification agreements also contain provisions designed to protect the
Registrant from unreasonable settlements or redundant legal expenditures.
The Registrant maintains liability insurance for each of its directors and
officers which provides for coverage for certain liabilities for which
indemnification by the Registrant may not be permissible under applicable law
and public policy, including liabilities under the Securities Act of 1933, as
amended.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
II-2
<PAGE>
ITEM 8. EXHIBITS.
Exhibit Number Exhibit
-------------- -------
5 Opinion of William G. Green.
23.1 Consent of Independent Auditors - KPMG Peat Marwick LLP
23.2 Consent of Independent Auditors - Ernst & Young LLP
23.3 Consent of William G. Green is contained in Exhibit 5.
24 Power of Attorney. Reference is made to pages II-5 and II-6
of this Registration Statement.
99.1 Chiron Corporation 1988 Employee Stock Purchase Plan,
as amended February 18, 1994.
ITEM 9. UNDERTAKINGS.
A. The undersigned Registrant hereby undertakes: (1) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this registration statement (i) to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, (ii) to reflect in the prospectus any
facts or events arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set forth in
the registration statement, and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement PROVIDED, however, that clauses (1)(i) and (1)(ii) shall not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference into the registration statement; and (2) that for the
purpose of determining any liability under the Securities Act of 1933 each such
post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference into the
Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been informed that in the opinion of the Securities and
Exchange Commission such indemnification is against public
II-3
<PAGE>
policy as expressed in the 1933 Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the 1933 Act
and will be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Emeryville, State of California, on the 29th day of
March, 1995.
CHIRON CORPORATION
By /s/ Edward E. Penhoet
----------------------------------------
Edward E. Penhoet
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned officers and
directors of Chiron Corporation, a Delaware corporation, do hereby constitute
and appoint Edward E. Penhoet and William J. Rutter, and each of them, the
lawful attorneys and agents or attorney and agent with full power and authority
to do any and all acts and things and to execute any and all instruments which
said attorneys and agents, and any one of them, determine may be necessary or
advisable or required to enable said corporation to comply with the Securities
Act of 1933, as amended, and any rules or regulations or requirements of the
Securities and Exchange Commission in connection with this Registration
Statement. Without limiting the generality of the foregoing power and
authority, the powers granted include the power and authority to sign the names
of the undersigned officers and directors in the capacities indicated below this
Registration Statement, to any and all amendments, both pre-effective and post-
effective, and supplements to this Registration Statement, and to any and all
instruments or documents filed as part of or in conjunction with this
Registration Statement or amendments or supplements thereof, and each of the
undersigned hereby ratifies and confirms all that said attorneys and agents, or
any one of them shall do or cause to be done by virtue hereof. This Power of
Attorney may be signed in several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
II-5
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----------
<S> <C> <C>
/s/ Edward E. Penhoet, Ph.D. President, Chief March 29, 1995
-------------------------------- Executive Officer and
(Edward E. Penhoet, Ph.D.) Director (Principal
Executive Officer)
/s/ William J. Rutter, Ph.D. Chairman of the Board March 29, 1995
--------------------------------
(William J. Rutter, Ph.D.)
/s/ Dennis L. Winger Senior Vice President, March 29, 1995
-------------------------------- Finance and Administration, Chief
(Dennis L. Winger) Financial Officer (Principal
Financial and Accounting Officer)
/s/ Gilbert F. Amelio, Ph.D. Director March 29, 1995
--------------------------------
(Gilbert F. Amelio, Ph.D.)
/s/ Lewis W. Coleman Director March 29, 1995
--------------------------------
(Lewis W. Coleman)
/s/ Pierre E. Douaze Director March 29, 1995
--------------------------------
(Pierre E. Douaze)
/s/ Donald A. Glaser, Ph.D. Director March 29, 1995
--------------------------------
(Donald A. Glaser, Ph.D.)
/s/ Alex Krauer Director March 29, 1995
--------------------------------
(Alex Krauer, Ph.D.)
/s/ Francois L'Eplattenier Director March 29, 1995
--------------------------------
(Francois L'Eplattenier, Ph.D.)
/s/ Henri Schramek, Ph.D. Director March 29, 1995
--------------------------------
(Henri Schramek, Ph.D.)
/s/ Jack W. Schuler Director March 29, 1995
--------------------------------
(Jack W. Schuler)
/s/ Pieter J. Strijkert, Ph.D. Director March 29, 1995
--------------------------------
(Pieter J. Strijkert, Ph.D.)
</TABLE>
II-6
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
CHIRON CORPORATION
II-7
<PAGE>
EXHIBIT INDEX
Exhibit Number Exhibit
-------------- -------
5 Opinion of William G. Green.
23.1 Consent of Independent Auditors - KPMG Peat Marwick LLP
23.2 Consent of Independent Auditors - Ernst & Young LLP
23.3 Consent of William G. Green is contained in Exhibit 5.
24 Power of Attorney. Reference is made to pages II-5 and II-6
of this Registration Statement.
99.1 Chiron Corporation 1988 Employee Stock Purchase Plan, as
amended February 18, 1994.
<PAGE>
EXHIBIT 5
March 29, 1995
Chiron Corporation
4560 Horton Street
Emeryville, CA 94608
Re: Chiron Corporation
Registration Statement for Offering of
1,000,000 Shares of Common Stock
Ladies and Gentlemen:
In connection with your registration of 1,000,000 shares of the Common Stock of
Chiron Corporation (the "Company") on Form S-8 under the Securities Act of 1933,
as amended, I advise you that, in my opinion, when such shares have been issued
and sold pursuant to the provisions of the Company's 1988 Employee Stock
Purchase Plan, as amended, and in accordance with the Registration Statement,
such shares will be duly authorized, validly issued, fully paid and non-
assessable shares of the Company's Common Stock.
I hereby consent to filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ WILLIAM G. GREEN
William G. Green
Senior Vice President and
General Counsel
WGG/cdb
<PAGE>
EXHIBIT 23.1
CONSENT OF KPMG PEAT MARWICK LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 and related prospectus pertaining to the 1988 Employee Stock Purchase
Plan of Chiron Corporation of our report dated February 17, 1995, relating to
the consolidated balance sheet of Chiron Corporation and subsidiaries as of
December 31, 1994, and the related consolidated statements of operations,
stockholders' equity, and cash flows for the year then ended and the related
schedule, which report appears in the December 31, 1994 annual report on
Form 10-K of Chiron Corporation.
KPMG Peat Marwick LLP
San Francisco, California
March 27, 1995
<PAGE>
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement on
Form S-8 and related prospectus pertaining to the 1988 Employee Stock Purchase
Plan of Chiron Corporation of our report dated February 25, 1994, with respect
to the 1993 and 1992 consolidated financial statements and schedule of Chiron
Corporation included in the Annual Report (Form 10-K) of Chiron Corporation for
the year ended December 31, 1994.
ERNST & YOUNG LLP
San Francisco, California
March 27, 1995
<PAGE>
EXHIBIT 99.1
Chiron Corporation 1988 Employee Stock Purchase Plan
[As amended February 18, 1994]
<PAGE>
EXHIBIT 99.1
CHIRON CORPORATION
1988 EMPLOYEE STOCK PURCHASE PLAN
[AS AMENDED FEBRUARY 18, 1994]
I. PURPOSE
The Chiron Corporation 1988 Employee Stock Purchase Plan (the "Plan") is
intended to provide eligible employees of Chiron Corporation (the "Corporation")
and one or more of its Corporate Affiliates with the opportunity to acquire a
proprietary interest in the Corporation through participation in a plan designed
to qualify as an Employee Stock Purchase Plan under Section 423 of the Internal
Revenue Code (the "Code").
II. DEFINITIONS
For purposes of administration of the Plan, the following terms shall have
the meanings indicated:
BASE SALARY means (i) the regular basic earnings paid to a Participant by
one or more Participating Corporations plus (ii) all contributions made by the
Participating Corporations on the Participant's behalf pursuant to the qualified
salary deferral arrangement under Code Section 401(k) in effect under the
Corporation's Section 401(k) Savings Plan and (iii) any amount which the
Participant would have received in cash but for an election under a cafeteria
plan (within the meaning of Code Section 125). There shall be excluded from the
calculation of Base Salary (I) all overtime payments, bonuses, commissions,
profit sharing distributions and other incentive-type payments and (II) all
contributions (other than Code Section 125 or 401(k) contributions) made by the
Corporation or its corporate affiliates for the Participant's benefit under any
employee benefit or welfare plan now or hereafter established. Notwithstanding
the foregoing, commissions and bonuses that constitute an integral, recurring
part of a Participant's compensation, as determined by the Plan Administrator,
will be treated as Base Salary for purposes of this Plan.
BOARD means the Board of Directors of the Corporation.
CORPORATION means Chiron Corporation, a Delaware corporation, and any
corporate successor to all or substantially all of the assets or voting stock of
Chiron Corporation which shall by appropriate action adopt the Plan.
CORPORATE AFFILIATE means any Corporation which is either the parent
corporation or a subsidiary corporation of the Corporation (as determined in
accordance with Section 425 of the Code), including any parent or subsidiary
corporation which becomes such after the Effective Date.
EFFECTIVE DATE means April 1, 1988; PROVIDED, however, that any Corporate
Affiliate which becomes a Participating Corporation in the Plan after April 1,
1988 shall designate a subsequent Effective Date with respect to its
employee-Participants.
<PAGE>
EMPLOYEE means any person who is regularly engaged, for a period of more
than 20 hours per week and more than 5 months per calendar year, in the
provision of personal services to the Corporation or any other Participating
Corporation for earnings considered wages under Section 3121(a) of the Code.
PARTICIPANT means any Employee of a Participating Corporation who (i) has
satisfied the service requirement set forth in Article V and (ii) is actively
participating in the Plan.
PARTICIPATING CORPORATION means the Corporation and such Corporate
Affiliate or Affiliates as may be designated from time to time by the Board. The
Participating Corporations in the Plan, as of April 1, 1988, are listed in
attached Schedule A.
STOCK means shares of the common stock of the Corporation.
III. ADMINISTRATION
The Plan shall be administered by the Board or by a committee (the
"Committee") comprised of at least three members appointed from time to time by
the Board. The composition of the Committee shall comply with the applicable
requirements of Rule 16b-3 of the Securities and Exchange Commission. The
Administrator (whether the Board or the Committee) shall have full authority to
administer the Plan, including authority to interpret and construe any provision
of the Plan and to adopt such rules and regulations for administering the Plan
as it may deem necessary in order to comply with the requirements of Section 423
of the Code. Decisions of the Administrator shall be final and binding on all
parties who have an interest in the Plan.
IV. PURCHASE PERIODS
(a) Stock shall be offered for purchase under the Plan through a series of
purchase periods until such time as (i) the maximum number of shares of Stock
available for issuance under the Plan shall have been purchased or (ii) the Plan
shall have been sooner terminated in accordance with Article IX.
(b) Under no circumstances shall any purchase rights granted under the
Plan be exercised, nor shall any shares of Stock be issued hereunder, until such
time as (i) the Plan shall have been approved by the Corporation's stockholders
and (ii) the Corporation shall have complied with all applicable requirements of
the Securities Act of 1933 (as amended), all applicable listing requirements of
any securities exchange on which the Stock is listed and all other applicable
requirements established by law or regulation.
(c) The Plan shall be implemented in a series of purchase periods, each to
be of such duration (not to exceed twenty- seven (27) months per purchase
period) as determined by the Administrator prior to the commencement date of the
purchase period.
(d) The Participant shall be granted a separate purchase right for each
purchase period in which he/she participates. The purchase right shall be
granted on the first day of the purchase period and shall be automatically
exercised at the end of the period, and may also be exercised at regular
intervals during the purchase period (such as quarterly), as determined by the
Administrator at the beginning of the purchase period.
<PAGE>
(e) The Administrator shall have discretion to limit the number of shares
available for each purchase period and the number of shares that may be
purchased by an individual employee during each purchase period. If the
Administrator does not set a limit on the number of shares that may be purchased
by an individual employee during a particular purchase period, the limit shall
be 6,000 shares per individual for the purchase period.
V. ELIGIBILITY AND PARTICIPATION
(a) Every Employee of a Participating Corporation shall be eligible to
participate in the Plan on the first day of the calendar quarter next following
the Employee's first day of employment.
(b) In order to participate in the Plan for a particular purchase period,
the Employee must complete the enrollment forms prescribed by the Administrator
(including a purchase agreement and a payroll deduction authorization) and file
such forms with the Administrator (or its designate) 15 days prior to the
commencement of any calendar quarter within the purchase period unless the
Administrator determines at the beginning of the purchase period that enrollment
will be permitted at other intervals.
(c) The payroll deduction authorized by a Participant for purposes of
acquiring Stock under the Plan may be a percentage of the Base Salary paid to
the Participant during the period the purchase right remains outstanding,
between 3% and 15% (inclusive) of Base Salary, per purchase right. The deduction
amount so authorized shall continue in effect for the entire period the purchase
right remains outstanding, unless the Participant shall, within the ten (10) day
period ending immediately prior to the commencement of any calendar quarter for
which the purchase right will remain in effect, designate a new amount (not to
exceed the 15% maximum) by filing the appropriate form with the Administrator
(or its designate). The new amount shall become effective as of the first day of
the calendar quarter following the filing of such form. Payroll deductions,
however, will automatically cease upon the termination of the Participant's
purchase right in accordance with Section VII(d) or (e) below.
VI. STOCK SUBJECT TO PLAN
(a) The Stock purchasable by Participants under the Plan, shall, solely in
the Board's discretion, be made available from either authorized but unissued
Stock or from reacquired Stock, including shares of Stock purchased on the open
market. The total number of shares which may be issued under the Plan shall not
exceed 1,750,000 shares (subject to adjustment under subparagraph (b) below).
(b) In the event any change is made to the Stock purchasable under the
Plan by reason of (I) any merger, consolidation or reorganization or (II) any
stock dividend, stock split, combination of shares or other change affecting the
outstanding Common Stock of the Corporation as a class without receipt of
consideration, then unless such change occurs in connection with a Section
VII(i) transaction, appropriate adjustments shall be made by the Administrator
to (i) the class and maximum number of shares issuable over the term of the
Plan, (ii) the class and maximum number of shares purchasable per Participant
under any one purchase right, and (iii) the class and number of shares and the
price per share of the Stock subject to each purchase right at the time
outstanding under the Plan.
<PAGE>
VII. PURCHASE RIGHTS
An Employee who participates in the Plan for a particular purchase period
shall have the right to purchase Stock, at such times as designated by the
Administrator at the beginning of the purchase period, upon the terms and
conditions set forth below and shall execute a purchase agreement embodying such
terms and conditions and such other provisions (not inconsistent with the Plan)
as the Administrator may deem advisable.
(a) PURCHASE PRICE. The purchase price per share shall be determined by the
Administrator at the beginning of each purchase period as either a dollar amount
or a formula consisting of a fixed percentage of the fair market value of the
Stock on the date the purchase right is exercised, or a combination of both, but
in no event may the price as so determined result in an amount that is less than
the lesser of (i) 85% of the fair market value of a share of Stock on the date
on which the purchase right is granted or (ii) 85% of the fair market value of a
share of Stock on each date the purchase right is exercised. For purposes of
determining such fair market value (and for all other valuation purposes under
the Plan), the fair market value of a share of Stock on any date shall be the
highest selling price of such share on such date, as officially quoted on the
principal exchange on which the Stock is at the time traded or, if not traded on
any exchange, the mean of the reported high and low prices of the Stock on such
date, as reported on the NASDAQ system. If there are no sales of Stock on such
day, then the closing selling price (or, to the extent applicable, the mean of
the high and low prices) for the Stock on the next preceding day for which there
do exist such quotations shall be determinative of fair market value.
If the Stock is neither listed nor admitted to trading on any stock
exchange nor traded in the over-the-counter market (or, if the Administrator
determines that the value as determined above does not reflect fair market
value), then the fair market value shall be determined by the Administrator
after taking into account such factors as the Administrator shall deem
appropriate.
(b) NUMBER OF PURCHASABLE SHARES. The number of shares purchasable by a
Participant upon the exercise of each outstanding purchase right shall be the
number of whole shares obtained by dividing the amount collected from the
Participant through payroll deductions by the purchase price in effect for the
purchase period in which the purchase right is exercised. Under no circumstances
shall purchase rights be granted under the Plan to any Employee if such Employee
would, immediately after the grant, own (within the meaning of Section 425(d) of
the Internal Revenue Code), or hold outstanding options or other rights to
purchase, stock possessing 5% or more of the total combined voting power or
value of all classes of stock of the Corporation or any of its Corporate
Affiliates.
(c) PAYMENT. Payment for Stock purchased under the Plan shall be effected by
means of the Participant's authorized payroll deductions. Such deductions shall
begin on the first payday coincident with or immediately following the
commencement date of the relevant calendar quarter within the purchase period
for which Participant has enrolled and shall terminate with the payday ending
with or immediately prior to the last day of the purchase period. The amounts so
collected shall be credited to the Participant's individual account under the
Plan, but no interest shall be paid on the balance from time to time outstanding
in the account. The amounts collected from a Participant may be commingled with
the general assets of the Corporation and may be used for general corporate
purposes.
(d) TERMINATION OF PURCHASE RIGHTS.
(i) A Participant may, not later than ten (10) days prior to the last day
of any calendar
<PAGE>
quarter, terminate one or more of his/her outstanding purchase rights under the
Plan by filing the prescribed notification form with the Administrator (or its
designate). The Corporation will then refund the payroll deductions which the
Participant made in that calendar quarter with respect to the terminated
purchase rights.
(ii) If a Participant wishes to resume participation in the Plan following
a termination pursuant to (i) above, the Participant must re-enroll in the Plan
(by making a timely filing of a new purchase agreement and payroll deduction
authorization). The Administrator shall determine at the beginning of each
purchase period the time period that must expire, if any, before a Participant
may re-enroll in the Plan after a termination of participation.
(e) TERMINATION OF EMPLOYMENT. If a Participant ceases to remain an Employee
while one or more of his/her purchase rights remain outstanding, then such
purchase rights shall immediately terminate and all sums previously collected
from the Participant during the purchase period in which such termination occurs
shall be promptly refunded to the Participant. However, should the Participant
die or become permanently disabled while in Employee status, then the
Participant or the person or persons to whom the rights of the deceased
Participant under the Plan are transferred by will or by the laws of descent and
distribution shall have the election, exercisable up until the last ten
(10) days prior to the end of the purchase period in which the Participant dies
or becomes permanently disabled, to (i) withdraw all the funds in the
Participant's payroll account at the time of his/her cessation of Employee
status or (ii) have such funds held for the purchase of shares at the end of
such purchase period. If no such election is made, then such funds shall
automatically be held for the purchase of shares at the end of such purchase
period. In no event, however, shall any further payroll deductions be added to
the Participant's account following his/her cessation of Employee status. For
purposes of the Plan: (a) a Participant shall be considered to be an Employee
for so long as such Participant remains in the employ of the Corporation or any
other Participating Corporation under the Plan and (b) a Participant shall be
deemed to be permanently disabled if he/she is unable, by reason of any
medically determinable physical or mental impairment expected to result in death
or to be of continuous duration of at least twelve (12) months, to engage in any
substantial gainful employment. If the Administrator determines that purchase
rights shall be exercised at intervals during the purchase period, for purposes
of this subparagraph (e) the term "purchase period" shall mean the periods
ending on each such exercise date.
(f) PRORATION OF PURCHASE RIGHTS. Should the total number of shares of Stock
which are to be purchased pursuant to outstanding purchase rights on any
particular date exceed the number of shares then available for issuance under
the Plan, the Administrator shall make a pro-rata allocation of the available
shares on a uniform and nondiscriminatory basis, and any amounts credited to the
accounts of Participants shall, to the extent not applied to the purchase of
Stock, be refunded to the Participants.
(g) RIGHTS AS STOCKHOLDER. A Participant shall have no rights as a
stockholder with respect to shares covered by the purchase rights granted to the
Participant under the Plan until the shares are actually purchased on the
Participant's behalf. No adjustments shall be made for dividends, distributions
or other rights for which the record date is prior to the date of such purchase.
A Participant shall be entitled to receive, as soon as practicable after
the date of each purchase, stock certificates for the number of shares purchased
on the Participant's behalf. Such certificates may, upon the Participant's
request, be issued in the names of the Participant and his/her spouse as
community property or as joint tenants with right of survivorship.
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(h) ASSIGNABILITY. No purchase rights granted under the Plan shall be
assignable or transferable by a Participant other than by will or by the laws of
descent and distribution, and during the Participant's lifetime the purchase
rights shall be exercisable only by the Participant.
(i) MERGER OR LIQUIDATION OF CORPORATION. In the event the Corporation or its
stockholders enter into an agreement to dispose of all or substantially all of
the assets or outstanding capital stock of the Corporation by means of a sale,
merger or reorganization in which the Corporation will not be the surviving
corporation (other than a reorganization effected primarily to change the State
in which the Corporation is incorporated) or in the event the Corporation is
liquidated, then all outstanding purchase rights under the Plan shall
automatically be exercised immediately prior to the consummation of such sale,
merger, reorganization or liquidation by applying all sums previously collected
from Participants during the purchase period of such transaction to the purchase
of whole shares of Stock, subject, however, to the applicable limitations of
Section VII(b) and VII(f).
VIII. ACCRUAL LIMITATIONS
(a) No Participant shall be entitled to accrue rights to acquire Stock
pursuant to any purchase right outstanding under this Plan if and to the extent
such accrual, when aggregated with (I) Stock rights accrued under other purchase
rights outstanding under this Plan and (II) similar rights accrued under other
employee stock purchase plans (within the meaning of Section 423 of the Code) of
the Corporation or its Corporate Affiliates, would otherwise permit such
Participant to purchase more than $25,000 worth of stock of the Corporation or
any Corporate Affiliate (determined on the basis of the fair market value of
such stock on the date or dates such rights are granted to the Participant) for
each calendar year such rights are at any time outstanding.
(b) If by reason of the Section VIII(a) limitations, one or more purchase
rights of a Participant do not accrue for a particular purchase period, then the
payroll deductions which the Participant made during that purchase period with
respect to such purchase rights shall be promptly refunded.
IX. AMENDMENT AND TERMINATION
(a) The Board may from time to time alter, amend, suspend or discontinue
the Plan provided that upon termination of the Plan, all outstanding purchase
rights shall be immediately exercised; and provided, further, that no such
action of the Board may, without the approval of the stockholders of the
Corporation, increase the number of shares issuable under the Plan or the
maximum number of shares which any one Participant may purchase under the Plan
during a single purchase period (provided, however, the Administrator shall have
the authority to effect adjustments pursuant to Section VI(b) and VII(b) without
stockholder approval), alter the purchase price formula so as to reduce the
purchase price specified in the Plan, otherwise materially increase the benefits
accruing to Participants under the Plan or materially modify the requirements
for eligibility to participate in the Plan. The Administrator may amend or
modify outstanding purchase rights, provided however, that no such action shall
adversely affect purchase rights at the time outstanding under the Plan unless
the holder consents thereto.
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X. GENERAL PROVISIONS
(a) The Plan shall become effective on the designated Effective Date,
provided that no purchase rights granted under the Plan shall be exercised, and
no shares of Stock shall be issued hereunder, until (i) the Plan shall have been
approved by the stockholders and (ii) the Corporation shall have complied with
all applicable requirements of the Securities Act of 1933 (as amended), all
applicable listing requirements of any securities exchange on which the Stock is
listed and all other applicable requirements established by law or regulation.
In the event such stockholder approval is not obtained or such Corporation
compliance is not effected, within twelve (12) months after the date on which
the Plan is adopted by the Board, the Plan shall terminate and have no further
force or effect and all sums collected from Participants during the initial
purchase period hereunder shall be refunded.
(b) The Plan shall terminate upon the EARLIER of (i) March 31, 1998 or
(ii) the date on which all shares available for issuance under the Plan shall
have been sold pursuant to purchase rights exercised under the Plan.
(c) All costs and expenses incurred in the administration of the Plan
shall be paid by the Corporation.
(d) Neither the action of the Corporation in establishing the Plan, nor
any action taken under the Plan by the Board or the Committee, nor any provision
of the Plan itself shall be construed so as to grant any person the right to
remain in the employ of the Corporation or any of its Corporate Affiliates for
any period of specific duration, and such person's employment may be terminated
at any time, with or without cause.
(e) The provisions of the Plan shall be governed by the laws of the State
of California.
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SCHEDULE A
CHIRON CORPORATION
