<PAGE>
As filed with the Securities and Exchange Commission on December 20, 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 1991 STOCK OPTION PLAN
(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>
- ----------------------------------------------------------------------------------------------------------------------------------
Title of Securities Proposed Maximum Proposed Maximum Amount of
to be Registered Amount to be Registered Offering Price Per Share Aggregate Offering Price Registration Fee
----------------- ----------------------- ------------------------ ------------------------ -----------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par 1,235,996 (1) $98.25 (2) $121,436,607 (2) $41,875
value (1991 Stock Option
Plan)
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This Registration Statement shall also cover any additional shares of
Common Stock which become issuable under the Chiron 1991 Stock Option Plan,
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 December
18, 1995, as reported by the NASDAQ National Market System.
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 Nos. 33-35182, 33-20181, 2-90595, 33-44477 and
33-65024 pursuant to Rule 429 under the Securities Act of 1933.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
The contents of the Registration Statement on Form S-8 (File No. 33-44477),
filed by Chiron Corporation (the "Registrant") with the Securities and Exchange
Commission on December 12, 1991, is hereby incorporated by reference herein.
ITEM 8. EXHIBITS.
EXHIBIT NUMBER EXHIBIT
- -------------- --------
4.01 Rights Agreement, dated as of August 25, 1994, between the
Company and Continental Stock Transfer & Trust Company,
which includes the Certificate of Designations for the
Series A Junior Participating Preferred Stock as Exhibit A,
the form of Right Certificate as Exhibit B and the Summary
of Rights to Purchase Preferred Shares as Exhibit C,
incorporated by reference to Exhibit 4.04 of the
Registrant's current report on Form 8-K dated August 25,
1994.
4.02 Amendment No. 1 to Rights Agreement dated as of November 20,
1994, between Chiron Corporation and Continental Stock
Transfer & Trust Company, incorporated by reference to
Exhibit 4.05 of the Registrant's current report on Form 8-K,
dated November 20, 1994.
5 Opinion of William G. Green.
23.1 Consent of KPMG Peat Marwick LLP, Independent Auditors,
relating to the 1994 consolidated financial statements of
Chiron Corporation and subsidiaries.
23.2 Consent of Ernst & Young LLP, Independent Auditors, relating
to the 1993 and 1992 consolidated financial statements of
Chiron Corporation.
23.3 Consent of Ernst & Young LLP, Independent Auditors, relating
to the consolidated financial statements of Ciba Corning
Diagnostics Corp.
23.4 Consent of KPMG Peat Marwick LLP, Independent Auditors,
relating to the financial statements of The Biocine Company.
23.5 Consent of Reconta Ernst & Young, Independent Auditors,
relating to the consolidated financial statements of JV Vax
B.V.
23.6 Consent of Ernst & Young LLP, Independent Auditors,
relating to the financial statements of Viagene, Inc.
23.7 Consent of William G. Green is contained in Exhibit 5.
24 Power of Attorney. Reference is made to pages II-2 and II-3
of this Registration Statement.
99.1 Chiron 1991 Stock Option Plan.
II-1
<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 19th day of
December, 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-2
<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 Executive December 19, 1995
- ------------------------------- Officer and Director (Principal
(Edward E. Penhoet, Ph.D.) Executive Officer)
/s/ William J. Rutter, Ph.D. Chairman of the Board December 19, 1995
- -------------------------------
(William J. Rutter, Ph.D.)
/s/ Dennis L. Winger Senior Vice President, Finance December 19, 1995
- ------------------------------- and Administration, Chief
(Dennis L. Winger) Financial Officer (Principal
Financial and Accounting Officer)
/s/ Gilbert F. Amelio, Ph.D. Director December 19, 1995
- -------------------------------
(Gilbert F. Amelio, Ph.D.)
/s/ Lewis W. Coleman Director
- -------------------------------
(Lewis W. Coleman)
/s/ Pierre E. Douaze Director December 19, 1995
- -------------------------------
(Pierre E. Douaze)
/s/ Donald A. Glaser, Ph.D. Director December 19, 1995
- -------------------------------
(Donald A. Glaser, Ph.D.)
/s/ Alex Krauer, Ph.D. Director December 19, 1995
- -------------------------------
(Alex Krauer, Ph.D.)
/s/ Francois L'Eplattenier, Ph.D Director December 19, 1995
- -------------------------------
(Francois L'Eplattenier, Ph.D.)
/s/ Henri Schramek, Ph.D. Director December 19, 1995
- -------------------------------
(Henri Schramek, Ph.D.)
/s/ Jack W. Schuler Director December 19, 1995
- -------------------------------
(Jack W. Schuler)
/s/ Pieter J. Strijkert, Ph.D. Director December 19, 1995
- -------------------------------
(Pieter J. Strijkert, Ph.D.)
</TABLE>
II-3
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
FORM S-8
UNDER
SECURITIES ACT OF 1933
CHIRON CORPORATION
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER EXHIBIT
- -------------- -------
4.01 Rights Agreement, dated as of August 25, 1994, between the
Company and Continental Stock Transfer & Trust Company,
which includes the Certificate of Designations for the
Series A Junior Participating Preferred Stock as Exhibit A,
the form of Right Certificate as Exhibit B and the Summary
of Rights to Purchase Preferred Shares as Exhibit C,
incorporated by reference to Exhibit 4.04 of the
Registrant's current report on Form 8-K dated August 25,
1994.
4.02 Amendment No. 1 to Rights Agreement dated as of November 20,
1994, between Chiron Corporation and Continental Stock
Transfer & Trust Company, incorporated by reference to
Exhibit 4.05 of the Registrant's current report on Form 8-K,
dated November 20, 1994.
5 Opinion of William G. Green.
23.1 Consent of KPMG Peat Marwick LLP, Independent Auditors,
relating to the 1994 consolidated financial statements of
Chiron Corporation and subsidiaries.
23.2 Consent of Ernst & Young LLP, Independent Auditors, relating
to the 1993 and 1992 consolidated financial statements of
Chiron Corporation.
23.3 Consent of Ernst & Young LLP, Independent Auditors, relating
to the consolidated financial statements of Ciba Corning
Diagnostics Corp.
23.4 Consent of KPMG Peat Marwick LLP, Independent Auditors,
relating to the financial statements of The Biocine Company.
23.5 Consent of Reconta Ernst & Young, Independent Auditors,
relating to the consolidated financial statements of JV Vax
B.V.
23.6 Consent of Ernst & Young LLP, Independent Auditors,
relating to the financial statements of Viagene, Inc.
23.7 Consent of William G. Green is contained in Exhibit 5.
24 Power of Attorney. Reference is made to pages II-2 and II-3
of this Registration Statement.
99.1 Chiron 1991 Stock Option Plan.
<PAGE>
[CHIRON LETTERHEAD]
EXHIBIT 5
December 15, 1995
Chiron Corporation
4560 Horton Street
Emeryville, CA 94608
Re: Chiron Corporation
Registration Statement for Offering of
Shares of Common Stock
Ladies and Gentlemen:
In connection with your registration of 1,235,996 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 Chiron 1991 Stock Option Plan, 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 incorporation by reference in the Registration Statement
(Form S-8) of Chiron Corporation pertaining to the Chiron 1991 Stock Option
Plan 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.
KPMG PEAT MARWICK LLP
San Francisco, California
December 15, 1995
<PAGE>
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) of Chiron Corporation pertaining to the Chiron 1991 Stock Option
Plan 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, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
San Francisco, California
December 15, 1995
<PAGE>
EXHIBIT 23.3
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) of Chiron Corporation pertaining to the Chiron 1991 Stock Option
Plan of our report dated January 27, 1995, with respect to the consolidated
financial statements of Ciba Corning Diagnostics Corp. included in the Current
Report Form 8-K/A of Chiron Corporation dated January 4, 1995, as amended on
March 17, 1995, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Boston, Massachusetts
December 15, 1995
<PAGE>
EXHIBIT 23.4
CONSENT OF KPMG PEAT MARWICK LLP, INDEPENDENT AUDITORS
We consent to incorporation by reference in the Registration Statement (Form
S-8) of Chiron Corporation pertaining to the Chiron 1991 Stock Option Plan of
our report dated February 17, 1995, relating to the balance sheets of The
Biocine Company as of December 31, 1994 and 1993 and the related statements of
operations, partners' capital (deficit) and cash flows for each of the years in
the three year period ended December 31, 1994.
KPMG PEAT MARWICK LLP
San Francisco, California
December 15, 1995
<PAGE>
EXHIBIT 23.5
CONSENT OF RECONTA ERNST & YOUNG, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) of Chiron Corporation pertaining to the Chiron 1991 Stock Option
Plan of our report dated February 28, 1995, with respect to the consolidated
financial statements of JV Vax B.V. and subsidiaries included in the Current
Report Form 8-K/A of Chiron Corporation dated January 4, 1995, as amended on
March 17, 1995, filed with the Securities and Exchange Commission.
RECONTA ERNST & YOUNG
Milan, Italy
December 15, 1995
<PAGE>
EXHIBIT 23.6
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) of Chiron Corporation pertaining to the Chiron 1991 Stock Option
Plan of our report dated February 8, 1995, except for Note 7, as to which the
date is April 26, 1995, with respect to the financial statements of Viagene,
Inc. included in the Current Report Form 8-K/A of Chiron Corporation dated
September 29, 1995, as amended on November 13, 1995, filed with the Securities
and Exchange Commission.
ERNST & YOUNG LLP
San Diego, California
December 15, 1995
<PAGE>
CHIRON 1991 STOCK OPTION PLAN
[AS AMENDED AUGUST 14, 1993, APRIL 11, 1994 AND FEBRUARY 24, 1995]
I. PURPOSES
This Chiron 1991 Stock Option Plan ("Plan") is intended to enable Chiron
Corporation ("Corporation") to attract and retain the following individuals by
offering them incentives and rewards, in the form of options, restricted shares,
share rights, and share units ("awards") which will encourage them to acquire a
proprietary interest in the Corporation and to continue in the service of the
Corporation or its subsidiaries: (a) employees (including officers and
directors) of the Corporation and its subsidiaries, (b) non-employee members of
the Board of Directors of the Corporation ("Board"), and (c) consultants and
independent contractors who perform valuable services for the Corporation and
its subsidiaries.
In addition, the Plan is intended to permit the Corporation to satisfy its
obligations in connection with options it will assume pursuant to the terms of
the Agreement and Plan of Merger dated as of July 21, 1991 by and among the
Corporation, Chiron Acquisition Subsidiary, Inc., and Cetus Corporation
("Agreement"). Upon consummation of the transactions described in the Agreement
("Merger"), the Plan will supersede Cetus Corporation's Amended and Restated
Common Stock Option Plan and Cetus Corporation's Non-Employee Directors' Stock
Option Plan ("Cetus Prior Plans"). Upon stockholder approval, this Plan will
also supersede the following Chiron prior plans: the Protos Corporation 1988
Stock Option Plan (upon the merger of Protos into Chiron), the Chiron
Ophthalmics, Inc. 1986 Stock Option Plan (upon the merger of Chiron Ophthalmics
into a wholly owned subsidiary of Chiron), the Corporation's 1982 Stock Option
Plan and the Corporation's 1984 Non-Qualified Stock Option Plan (collectively,
"Chiron Prior Plans").
II. ADMINISTRATION
The Plan will be administered by a committee or committees appointed by the
Board and consisting of one or more members of the Board. The Board may delegate
the responsibility for administration of the Plan with respect to designated
classes of award holders to different committees, subject to such limitations as
the Board deems appropriate. With respect to any matter, the term "Committee,"
when used in this Plan, will refer to the committee that has been delegated
authority with respect to such matter. Members of a committee will serve for
such term as the Board may determine, and will be subject to removal by the
Board at any time.
(a) 16(B). The composition of any committee responsible for administration
of the Plan with respect to award holders who are subject to the trading
restrictions of Section 16(b) of the Securities Exchange Act of 1934 ("1934
Act") with respect to securities of the Corporation will comply with the
applicable requirements of Rule 16b-3 of the Securities and Exchange Commission.
(b) AUTHORITY. Any committee appointed by the Board will have full
authority to administer the Plan within the scope of its delegated
responsibilities, including authority to interpret and construe any relevant
provision of the Plan, to adopt such rules and regulations as it may deem
necessary, and to determine the terms and conditions of awards made under the
Plan (which need not be identical). Decisions of a committee made within the
discretion delegated to it by the Board will be final and binding on all persons
who have an interest in the Plan.
III. ELIGIBILITY FOR AWARDS
(a) DISCRETIONARY AWARDS. From time to time the Committee may, in its
discretion, select individuals from among the following categories to receive
awards under the Plan:
(1) EMPLOYEES. The Committee may select employees of the Corporation
or its subsidiaries (including officers, whether or not they are also
members of the Board).
A-1
<PAGE>
(2) CONSULTANTS AND INDEPENDENT CONTRACTORS. The Committee may select
consultants and independent contractors whose services tend to contribute
materially to the success of the Corporation or its subsidiaries or whose
services may reasonably be anticipated to so contribute.
(b) AUTOMATIC GRANTS. Members of the Board who are not employees of the
Corporation or its subsidiaries will receive options in accordance with, and
only in accordance with, the Plan's automatic grant provisions.
(c) SUBSTITUTE OPTIONS. Upon consummation of the Merger, outstanding
options under the Cetus Prior Plans (including related Limited Stock
Appreciation Rights) will be converted, in the manner and at the exchange ratio
specified in the Agreement, into substitute options under this Plan to acquire
Common Stock (as defined below). Upon stockholder approval and, with regard to
the Protos prior plan options and the Chiron Ophthalmics prior plan options,
consummation of the relevant mergers, outstanding options under the Chiron Prior
Plans will be converted into options under this Plan. These options will
preserve the exercise price of the outstanding options as adjusted, in the case
of options under the Protos Corporation 1988 Stock Option Plan and the Chiron
Ophthalmics, Inc. 1986 Stock Option Plan, to reflect the substitution of Common
Stock. These options will also preserve the other terms and conditions of the
outstanding options; provided, however, that on the Effective Date of this Plan,
outstanding automatic option grants under the Corporation's 1982 Stock Option
Plan will be conformed, other than to extend the term, to the Automatic Option
Grants under this Plan. Collectively, these options will be known as "Substitute
Options."
IV. STOCK SUBJECT TO THE PLAN
(a) CLASS. The stock subject to awards under the Plan is (i) the
Corporation's authorized but unissued or reacquired Common Stock ("Common
Stock"), or (ii) shares of one or more series of the Corporation's authorized
but unissued or reacquired Restricted Common Stock, in the aggregate, "Company
Stock." In connection with the grant of awards under the Plan, the Corporation
may repurchase shares in the open market or otherwise.
(b) AGGREGATE AMOUNT
(1) SHARES. Subject to adjustment under Sections IV(c) and IV(b)(3),
the aggregate maximum number of shares of Company Stock that may be subject
to awards under the Plan is 4,500,000 plus the number of shares of Company
Stock remaining for issuance on the Effective Date of this Plan under the
Corporation's 1982 Stock Option Plan and the Corporation's 1984
Non-Qualified Stock Option Plan. Notwithstanding the foregoing, as of
January 1 of each fiscal year after 1991, the aggregate number of shares of
Company Stock that may be subject to awards under the Plan will be increased
by 1.50% of the number of Chiron Common Equivalent Shares outstanding as of
December 31 of the preceding fiscal year. The maximum number of shares of
Company Stock with respect to which options may be granted to any employee
during the term of the Plan is 1,000,000 shares. Subject to adjustment under
Sections IV(c) and IV(b)(3), not more than 4,500,000 shares of Company Stock
plus the number of shares of Company Stock remaining for issuance on the
Effective Date of this Plan under the Corporation's 1982 Stock Option Plan
and the Corporation's 1984 Non-Qualified Stock Option Plan may be subject to
Incentive Options (as defined below) granted under the Plan after the
Effective Date. "Chiron Common Equivalent Shares" are the total number of
outstanding shares of Common Stock plus the total number of shares of Common
Stock issuable upon conversion or exercise of outstanding warrants, options
and convertible securities. In no event will more than 500,000 shares of
Restricted Common Stock, whether in a single series or in multiple series,
be subject to award under the Plan.
(2) RESTRICTED COMMON STOCK. Shares of Restricted Common Stock may be
issued under the Plan in one or more separate series. The rights,
preferences and privileges, together with the restrictions and limitations
and the number of shares, of each series of Restricted Common Stock issuable
under the Plan will be set forth in the Corporation's Certificate of
Determination of Preferences of Common Stock ("Certificate") as in effect
from time to time during the term of the Plan. Shares of each series of
Restricted Common Stock will be convertible or exchangeable into shares of
Common Stock in accordance with the terms and provisions of the Certificate
applicable to that series.
A-2
<PAGE>
(3) REUSE OF SHARES. If any outstanding option under the Chiron Prior
Plans, the Cetus Prior Plans or this Plan (including the Substitute Options)
expires or is terminated or cancelled for any reason (including pursuant to
Section X of the Plan but other than pursuant to surrender of the option for
a cash payment in accordance with Section XIII of the Plan) before being
exercised for the full number of shares to which it applies, then the shares
allocable to the unexercised portion of such option will not be charged
against the limitations of Section IV(b)(1) and will become available for
subsequent grants under the Plan. To the extent that a share right or share
unit expires or is terminated, or is canceled or forfeited for any reason
without being paid in cash or shares of Company Stock, any remaining shares
allocable to the unpaid portion of such share right or share unit shall not
be charged against the limitations of Section IV(b)(1) and will become
available again for subsequent grants under the Plan. Shares subject to any
option or portion of an option surrendered in accordance with the "Surrender
of Options for Cash or Stock" provisions of this Plan, shares for which a
cash payment is made in lieu thereof under a restricted share, share unit or
share right, and shares forfeited to or repurchased by the Corporation
pursuant to its forfeiture and repurchase rights under this Plan will not be
available for subsequent awards under the Plan.
(c) ADJUSTMENTS. In the event any change is made to the Company Stock
subject to the Plan (whether by reason of merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, combination of shares, exchange
of shares, or other change in corporate or capital structure of the Corporation)
then, unless such change results in the termination of all awards, the Committee
will make appropriate adjustments to the kind and maximum number of shares
subject to the Plan, the kind and maximum number of shares for which options are
to be granted to non-employee directors, and the kind and number of shares and,
where applicable, price per share of stock subject to outstanding awards.
V. TERMS AND CONDITIONS OF OPTIONS
Stock options granted under the Plan may, in the Committee's discretion, be
either incentive stock options ("Incentive Options") qualifying under Section
422 of the Internal Revenue Code of 1986, as amended ("Internal Revenue Code"),
or nonstatutory options. Individuals who are not employees of the Corporation or
its subsidiaries may only be granted nonstatutory options. Options will be
evidenced by instruments in such form as the Committee may from time to time
approve. These instruments will conform to the following terms and conditions
and, in the discretion of the Committee, may contain such other terms,
conditions and restrictions as are not inconsistent with the following:
(a) OPTION PRICE. The option price per share will be fixed by the
Committee, but in no event will the option price per share be less than
eighty-five percent (85%) of the Fair Market Value of the option shares on the
date of the option grant; provided, however, that in no event will the option
price per share of an Incentive Option be less than one-hundred percent (100%)
of the Fair Market Value of the option shares on the date of the option grant.
Notwithstanding the foregoing, Substitute Options will have an option price per
share determined pursuant to Section III(c) of this Plan and interim Automatic
Option Grants will have an option price per share determined pursuant to Section
VII(a)(3) of the Plan.
(b) NUMBER OF SHARES, TERM AND EXERCISE
(1) TERM AND NUMBER. Each option granted under the Plan will be
exercisable on such date or dates, during such period, and for such number
of shares of Company Stock as the Committee determines and sets forth in the
instrument evidencing the option. No option granted under the Plan will have
an expiration date that is more than 10 years after the date of the option
grant.
(2) EXERCISE. After any option granted under the Plan becomes
exercisable, it may be exercised by notice to the Corporation at any time
prior to the termination of such option. Except as authorized by the
Committee in accordance with Section VIII, the option price for the number
of shares for which the option is exercised will become due and payable upon
exercise.
A-3
<PAGE>
(3) PAYMENT. The option price will be payable in full in cash
(including cash equivalents); provided, however, that the Committee may,
either at the time the option is granted or at the time it is exercised and
subject to such limitations as it may determine, authorize payment of all or
a portion of the option price in one or a combination of the following
alternative forms:
(i) a promissory note authorized pursuant to Section VIII;
(ii) full payment in shares of Common Stock valued as of the exercise
date and held for the requisite period to avoid a charge to the
Corporation's earnings; or
(iii) by delivery of a properly executed exercise notice together with
irrevocable instructions to a broker to promptly deliver to the
Corporation the amount of sale or loan proceeds to pay the option price.
(c) TERMINATION OF SERVICES. The Committee will determine and set forth in
each option whether the option will continue to be exercisable, and the terms
and conditions of such exercise, on and after the date that an optionee ceases
to be employed by, or to provide services to, the Corporation or its
subsidiaries. The date of termination of an optionee's employment or services
will be determined by the Committee, which determination will be final.
(d) INCENTIVE OPTIONS. Options granted under the Plan that are intended to
be Incentive Options will be subject to the following additional terms and
conditions:
(1) DOLLAR LIMITATION. To the extent that the aggregate Fair Market
Value (determined as of the respective date or dates of grant) of shares
with respect to which options that are granted after 1986 and that would
otherwise be Incentive Options are exercisable for the first time by any
individual during any calendar year under the Plan (or any other plan of the
Corporation, a parent or subsidiary corporation or predecessor thereof)
exceeds the sum of $100,000 (or such greater amount as may be permitted
under the Internal Revenue Code), whether by reason of acceleration or
otherwise, such options will not be treated as Incentive Options. In making
such a determination, options will be taken into account in the order in
which they were granted. The aggregate fair market value (as of the
respective date or dates of grant) of shares of the Company (or parent or
subsidiary corporation) for which Incentive Options could be granted to any
one individual in a single calendar year before 1987 could not exceed
$100,000 at the time of grant, plus unused carryovers from the immediately
preceding three calendar years.
(2) 10% STOCKHOLDER. If any employee to whom an Incentive Option is to
be granted pursuant to the provisions of the Plan is, on the date of grant,
the owner of stock (determined with application of the ownership attribution
rules of Section 424(d) of the Internal Revenue Code) possessing more than
ten percent (10%) of the total combined voting power of all classes of stock
of his or her employer corporation or of its parent or subsidiary
corporation ("10% Stockholder"), then the following special provisions will
apply to the option granted to such individual:
(i) The option price per share of the stock subject to such Incentive
Option will not be less than one hundred ten percent (110%) of the Fair
Market Value of the option shares on the date of grant; and
(ii) The option will not have a term in excess of five (5) years from
the date of grant.
(3) SEQUENTIAL EXERCISE. No Incentive Option granted before January 1,
1987 may be exercised while there remains outstanding any other Incentive
Option to purchase shares of the Company (or its parent or subsidiary
corporation) which was granted at an earlier date to the optionee.
(4) PARENT AND SUBSIDIARY. For purposes of this Section V(d) "parent
corporation" and "subsidiary corporation" will have the meaning attributed
to those terms, as they are used in Section 422(b) of the Internal Revenue
Code.
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(e) WITHHOLDING
(1) OBLIGATION. The Corporation's obligation to deliver stock
certificates upon the exercise of an option will be subject to the option
holder's satisfaction of all applicable federal, state and local income and
employment tax withholding requirements.
(2) PAYMENT. In the event that an option holder is required to pay to
the Corporation an amount with respect to income and employment tax
withholding obligations in connection with exercise of an option, the
Committee may, in its discretion and subject to such limitations and rules
as it may adopt, permit the option holder to satisfy the obligation, in
whole or in part, by delivering shares of Common Stock already held by the
option holder or by making an irrevocable election that a portion of the
total value of the shares subject to the option be paid in the form of cash
in lieu of the issuance of Company Stock, and that such cash payment be
applied to the satisfaction of the withholding obligations.
VI. RESTRICTED SHARES, SHARE RIGHTS AND SHARE UNITS
(a) NATURE OF AWARDS
(1) RESTRICTED SHARES. A restricted share granted under the Plan shall
consist of shares of Company Stock, the retention and transfer of which is
subject to such terms, conditions and restrictions (whether based on
performance standards or periods of service or otherwise and including
repurchase and/or forfeiture rights in favor of the Corporation) as the
Committee shall determine. The terms, conditions and restrictions to which
restricted shares are subject shall be evidenced by instruments in such form
as the Committee may from time to time approve and may vary from grant to
grant. The Committee shall have the absolute discretion to determine whether
any consideration (other than the services of the potential award holder) is
to be received by the Corporation or its subsidiaries as a condition
precedent to the issuance of restricted shares.
(2) SHARE RIGHTS. A share right granted under the Plan shall consist
of the right, subject to such terms, conditions and restrictions (whether
based on performance standards or periods of service or otherwise), to
receive a share of Company Stock (together with cash dividend equivalents if
so determined by the Committee) as the Committee shall determine and shall
be evidenced by instruments in such form as the Committee may from time to
time approve. The Committee shall have the absolute discretion to determine
whether any consideration (other than the services of the potential award
holder) is to be received by the Corporation or its subsidiaries as a
condition precedent to the issuance of shares pursuant to share rights. The
terms, conditions and restrictions to which share rights are subject may
vary from grant to grant.
(3) SHARE UNITS. A share unit granted under the Plan shall consist of
the right to receive an amount in cash equal to the fair market value of one
share of Company Stock on the date of valuation of the unit (together with
cash dividend equivalents if so determined by the Committee) less such
amount, if any, as the Committee shall specify. The date of valuation and
payment of cash under a share unit and the conditions, if any, to which such
payment will be subject (whether based on performance standards or periods
of service or otherwise) shall be determined by the Committee. The terms,
conditions and restrictions to which share units are subject may vary from
grant to grant.
(b) WITHHOLDING. The Committee may require, or permit an award holder to
elect, that a portion of the total value of the shares of Common Stock subject
to restricted shares or share rights held by one or more award holders be paid
in the form of cash in lieu of the issuance of Company Stock and that such cash
payment be applied to the satisfaction of the federal, state and local income
and employment tax withholding obligations that arise at the time the restricted
shares and share rights become free of all restrictions under the Plan.
(c) CASH PAYMENTS. The Committee may provide award holders with an
election to receive a percentage of the total value of the Company Stock subject
to restricted shares or share rights in the form of a cash payment, subject to
such terms, conditions and restrictions as the Committee shall specify.
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(d) ELECTIVE AND TANDEM AWARDS. The Committee may award restricted shares,
share rights and share units independently of other compensation or in lieu of
compensation that would otherwise be paid in cash or stock options, whether at
the election of the potential award holder or otherwise. The number of
restricted shares, share rights or share units to be awarded in lieu of any cash
compensation amount or number of stock options shall be determined by the
Committee in its sole discretion and need not be equal to such foregone
compensation in fair market value. In addition, restricted shares, share rights
and share units may be awarded in tandem with stock options, so that a portion
of such award becomes payable or becomes free of restrictions only if and to the
extent that the tandem options are not exercised or are forfeited, subject to
such terms and conditions as the Committee may specify.
(e) MODIFICATION OF AWARDS. The Committee may, in its sole discretion,
modify or waive any or all of the terms, conditions or restrictions applicable
to any outstanding restricted share, share right or share unit; provided,
however, that no such modification or waiver shall, without the consent of the
holder of an outstanding award, adversely affect the holder's rights thereunder.
VII. AUTOMATIC OPTION GRANTS TO DIRECTORS
(a) GRANTS. Non-employee members of the Board will automatically be
granted nonstatutory options ("Automatic Option Grants") to purchase the number
of shares of Common Stock set forth below (subject to adjustment under Section
IV(c) hereof) on the dates and terms set forth below:
(1) CONTINUING DIRECTORS. On the last business day of the second
quarter of each fiscal year of the Corporation after the Effective Date of
this Plan ("Automatic Grant Date"), each continuing non-employee member of
the Board will receive an Automatic Option Grant to purchase 3,000 shares of
Common Stock.
(2) NEW DIRECTORS. Each person who is newly elected or appointed as a
non-employee member of the Board after the Effective Date of this Plan
(other than on an Automatic Grant Date) will receive, on the date of such
election or appointment, an Automatic Option Grant to purchase a pro rata
number of shares of Common Stock. The pro rata number will be determined by
multiplying 250 by the number of whole calendar months between the date of
the non-employee director's election or appointment and the next Automatic
Grant Date.
(3) INTERIM GRANTS. Non-employee members of the Board who were newly
elected or appointed between July 1, 1990 and the Effective Date of this
Plan received grants under this Section VII(a) on the Effective Date of this
Plan for a pro rata number of shares calculated as though the grant were
made on the date that the non-employee member of the Board was newly elected
or appointed ("Interim Grants"). The terms and conditions of these Interim
Grants will be determined under Section VII(b) below, as though the date
that the non-employee member was elected or appointed was the grant date and
as though the date that the non-employee member of the Board received an
automatic grant (if any) under the Corporation's 1982 Stock Option Plan was
an Automatic Grant Date under this Plan.
(4) ADVISORY COUNSELLORS. Advisory Counsellors of Cetus will not
qualify for Automatic Option Grants.
(b) TERMS AND CONDITIONS. The terms and conditions applicable to each
Automatic Option Grant will be as follows:
(1) PRICE. The option price per share will be equal to one hundred
percent (100%) of the Fair Market Value of one share of Common Stock on the
date of grant;
(2) TERM. The options will have terms of (10) years, measured from the
date of grant, and will be exercisable at any time during their term for all
or any part of the covered shares; provided, however, that no options may be
exercised prior to approval of the Plan by the Corporation's stockholders.
(3) REPURCHASE. The shares purchased under the options will be subject
to repurchase by the Corporation at the original exercise price in the event
an optionee ceases to provide services to the Corporation or its
subsidiaries as a director, an employee, a consultant or an independent
contractor.
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The Corporation's repurchase rights will lapse, and the optionee's interest
in the purchased shares will vest, in a series of equal annual installments
over the five-year period measured from the date of grant; provided the
optionee continues to provide such services. In addition, the Corporation's
repurchase right will lapse in its entirety, and full vesting will occur,
should one or more of the following events occur while the optionee is
providing such services: (A) the optionee's death, or (B) the optionee's
permanent disability.
(4) PAYMENT. Upon exercise of the option, the option price for the
purchased shares will become payable immediately in cash or in shares of
Common Stock that the optionee has held for at least six (6) months. Payment
may also be made by delivery of a properly executed exercise notice together
with irrevocable instructions to a broker to promptly deliver to the
Corporation the amount of sale or loan proceeds to pay the option price.
(5) CESSATION. In the event the optionee ceases to provide services to
the Corporation or its subsidiaries as a director, an employee, a consultant
or an independent contractor, the option may be exercised, within the term
of the option, for a period of three (3) months after the date of such
cessation (twelve (12) months in the case of cessation by reason of
disability or death). In the case of death, the option may be exercised
within such period by the estate or heirs of the optionee.
VIII. LOANS AND INSTALLMENT PAYMENTS
In order to assist an award holder (including an employee who is an officer
or director of the Corporation) in the acquisition of shares of Company Stock
pursuant to an award granted under the Plan (other than pursuant to the
Automatic Option Grant provisions of this Plan), the Committee may authorize, at
either the time of the grant of an award or the time of the acquisition of
Company Stock pursuant to the award (i) the extension of a loan to the award
holder by the Corporation, (ii) the payment by the award holder of the purchase
price, if any, of the Company Stock in installments, or (iii) the guarantee by
the Corporation of a loan obtained by the award holder from a third party. The
terms of any loans, guarantees or installment payments, including the interest
rate and terms of repayment, will be subject to the discretion of the Committee.
Loans, installment payments and guarantees may be granted without security, the
maximum credit available being the purchase price, if any, of the Company Stock
acquired plus the maximum federal and state income and employment tax liability
that may be incurred in connection with the acquisition.
IX. ASSIGNABILITY
No award granted under the Plan is assignable or transferable by the award
holder other than by Will or by the laws of descent and distribution, and during
the lifetime of the award holder, only the award holder may exercise options or
exercise the rights provided under awards granted under the Plan.
X. CANCELLATION AND NEW GRANT OF OPTIONS
The Committee will have the authority to effect, at any time and from time
to time, with the consent of the affected option holders, the cancellation of
any or all outstanding options under the Plan, a Cetus Prior Plan or a Chiron
Prior Plan (other than options granted under automatic option grant provisions
of these plans) and to grant in substitution therefor new options under the Plan
covering the same or different numbers of shares, but having an option price per
share not less than eighty-five percent (85%) of the Fair Market Value on the
new grant date or, in the case of an Incentive Option, one hundred percent
(100%) of the Fair Market Value on the new grant date (or, in the case of an
Incentive Option granted to a 10% Stockholder, one hundred ten percent (110%) of
such Fair Market Value). If one or more of the cancelled options is an Incentive
Option granted before 1987 under a Cetus Prior Plan or a Chiron Prior Plan, then
such option will, solely for purposes of the "sequential exercise" rule
applicable to outstanding Incentive Options granted before 1987, be considered
to be outstanding until the expiration date initially specified for the option
term of such option.
XI. ACCELERATION AND TERMINATION OF AWARDS
(a) ACCELERATION. In the event of 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, reorganization, or liquidation, each award will be
automatically accelerated so that (1) options become fully exercisable with
respect to the total
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number of shares purchasable under the options, provided, however, that the
exercise of accelerated Incentive Options granted prior to 1987 will remain
subject to any limitations imposed by the Internal Revenue Code's sequential
exercise rule, (2) restrictions on restricted shares will be eliminated, and the
shares will immediately vest, and (3) share rights and share units will
immediately vest and become payable. The Committee may also provide for the
automatic termination of repurchase rights upon the occurrence of such an event.
(b) NO ACCELERATION. No acceleration of awards will occur if the terms of
the agreement require as a prerequisite to the consummation of any such sale,
merger, reorganization or liquidation that each such award will be either
assumed by the successor corporation or parent thereof or be replaced with a
comparable award subject to shares of the successor corporation or parent
thereof. The determination of such comparability will be made by the Committee,
and its determination will be final, binding and conclusive. Upon consummation
of the sale, merger, reorganization or liquidation contemplated by the
agreement, all awards, whether or not accelerated, will terminate unless assumed
pursuant to a written agreement by the successor corporation or parent thereof.
(c) CORPORATE STRUCTURE. The grant of awards under this Plan will in no
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.
XII. VALUATION
With regard to all Substitute Options, Fair Market Value will be determined
in accordance with the relevant option plan documents on the date that the
outstanding options were granted. With regard to awards granted under this Plan,
for all valuation purposes under the Plan, the Fair Market Value of a share of
Common Stock or Restricted Common Stock (as the case may be) on any relevant
date will be determined in accordance with the following provisions:
(a) If the Common Stock or Restricted Common Stock is not at the time listed
or admitted to trading on any stock exchange, but is traded in the
over-the-counter market, the Fair Market Value will be the average between the
reported high price and the reported low price of one share of Common Stock or
Restricted Common Stock (as the case may be) on the date in question in the
over-the-counter market, as such prices are reported by the National Association
of Securities Dealers through its NASDAQ system or any successor system.
(b) If the Common Stock or Restricted Common Stock is at the time listed or
admitted to trading on any stock exchange, then the Fair Market Value will be
the average between the reported high price and the reported low price of one
share of Common Stock or Restricted Common Stock (as the case may be) on the
date in question on the stock exchange that is the primary market for the stock,
as such prices are officially quoted on such exchange.
(c) If the Common Stock or Restricted Common Stock (as the case may be) is
at the time neither listed nor admitted to trading on any stock exchange nor
traded in the over-the-counter market, or if the Committee determines that
neither subparagraph (a) nor subparagraph (b) above reflects Fair Market Value
of the stock and the award was not granted pursuant to the Plan's Automatic
Option Grant provisions, then the Fair Market Value will be determined by the
Committee after taking into account such factors as the Committee deems
appropriate, or in the case of Automatic Option Grants, by an independent third
party valuation.
XIII. SURRENDER OF OPTIONS FOR CASH OR STOCK
(a) STOCK APPRECIATION RIGHTS. If, and only if the Committee, in its
discretion, elects to implement an option surrender program under the Plan, one
or more option holders may, upon such terms and conditions as the Committee may
establish at the time of the option grant or at any time thereafter, be granted
the right to surrender all or part of an unexercised option in exchange for a
distribution equal in amount to the difference between (i) the Fair Market Value
(at date of surrender) of the shares for which the surrendered option or portion
thereof is at the time exercisable and (ii) the aggregate option price payable
for such shares. The distribution to which an option holder becomes entitled
under this Section may be made in
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shares of Common Stock or Restricted Common Stock, valued at Fair Market Value
at the date of surrender, in cash, or partly in shares and partly in cash, as
the Committee, in its sole discretion, deems appropriate. The option surrender
provisions of this Section will not apply to options granted pursuant to the
Automatic Option Grant provisions of this Plan.
(b) LIMITED STOCK APPRECIATION RIGHTS. If outstanding options of Cetus for
which Substitute Options are issued pursuant to Section III(c) have Limited
Stock Appreciation Rights ("LSARs") attached thereto, then each such LSAR shall
be honored by the Corporation in accordance with its terms and remain
exercisable for a period of 60 days following the date that stockholders of
Cetus approve the Merger; provided, however, that if the LSAR was originally
granted within 6 months of the date that Cetus stockholders approve the Merger,
then the LSAR will be exercisable for a period of 60 days following expiration
of such 6-month period. Upon expiration of the applicable 60 day period, each
such LSAR not previously exercised shall expire. Upon exercise of an LSAR, the
related option will be cancelled, and Chiron will pay to the LSAR holder an
amount in cash for each share with respect to which the LSAR is exercised
determined in accordance with the terms of the Cetus Prior Plans.
XIV. REPURCHASE RIGHTS
The Committee may, in its discretion, establish as a term of one or more
awards granted under the Plan that the Corporation (or its assigns) will have
the right, exercisable upon the award holder's termination of employment with,
or cessation of services for, the Corporation and its subsidiaries, to
repurchase at the original price paid, if any, for such shares of (1) Company
Stock acquired by the award holder pursuant to the granted award, or (2) Common
Stock into which acquired Restricted Common Stock may have been converted or for
which Restricted Common Stock may have been exchanged. Any such repurchase right
will be exercisable by the Corporation (or its assigns) upon such terms and
conditions (including provisions for the expiration of such right in one or more
installments) as the Committee may specify in the instrument evidencing such
right. The Committee will also have full power and authority to provide for the
automatic termination of the Corporation's repurchase rights, in whole or in
part, thereby accelerating the vesting of any or all of the purchased shares
(other than purchased shares obtained pursuant to the Automatic Option Grant
provisions of this Plan) upon the occurrence of any change in control specified
in Article XI.
XV. RIGHT OF FIRST REFUSAL
The Committee may, in its discretion, establish as a term of one or more
awards granted under the Plan that the Corporation has a right of first refusal
with respect to the proposed disposition by the award holder (or any successor
in interest by reason of purchase, gift or other mode of transfer) of any shares
of (1) Company Stock acquired by the award holder pursuant to the granted award,
or (2) Common Stock into which purchased Restricted Common Stock may have been
converted or for which acquired Restricted Common Stock may have been exchanged.
Any such right of first refusal will be exercisable by the Corporation or its
assigns in accordance with the terms and conditions specified in the instrument
evidencing such right.
XVI. EFFECTIVE DATE AND TERM OF PLAN
(a) EFFECTIVE DATE. The Plan is effective on the date that it is approved
by the Corporation's stockholders.
(b) TERM. Incentive Options may be granted under the Plan only within ten
years of the Effective Date of the Plan. Subject to this limitation, the
Committee may grant awards under the Plan at any time after the Effective Date
of the Plan and before the Plan is terminated by the Board.
XVII. AMENDMENT OR DISCONTINUANCE
(a) BOARD. The Board may amend, suspend or discontinue the Plan in whole
or in part at any time; provided, however, that (a) except to the extent
necessary to qualify as Incentive Options any or all options granted under the
Plan that are intended to so qualify, such action may not, without the consent
of the award holder, adversely affect rights and obligations with respect to
awards outstanding under the Plan; (b) the provisions of the Plan concerning the
eligibility of non-employee members of the Board for awards and the amount,
price and timing of Automatic Option Grants under this Plan may not be amended
more than once
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every six months, other than to comport with changes in the Internal Revenue
Code or rules thereunder; and (c) the Board may not, without the approval of the
Corporation's stockholders (1) materially increase the number of shares of
Company Stock subject to awards under the Plan (unless necessary to effect the
adjustments required under Section IV(c)), (2) materially modify the eligibility
requirements for awards under the Plan, or (3) make any other change with
respect to which the Board determines that stockholder approval is required by
applicable law or regulatory standards.
(b) COMMITTEE. The Committee will have full power and authority to modify
or waive any or all of the terms, conditions or restrictions applicable to any
outstanding award (other than Automatic Option Grants), to the extent not
inconsistent with the Plan.
(c) SUBSTITUTE OPTIONS. Substitute Options will be subject to amendment in
accordance with the terms of this Plan.
XVIII. NO OBLIGATION
Nothing contained in the Plan (or in any award granted under this Plan, a
Chiron Prior Plan or a Cetus Prior Plan) shall confer upon any employee,
consultant, or independent contractor any right to continue in the employ of, or
to provide services to, the Corporation or any affiliate or constitute a
contract or agreement of employment or for the provision of services, or
interfere in any way with the right of the Corporation or an affiliate to reduce
such employee's, consultant's or independent contractor's compensation from the
rate in existence at the time of the granting of an award or to terminate such
employee's, consultant's or independent contractor's employment or services at
any time, with or without cause; but nothing contained in the Plan or in any
award granted under this Plan shall affect any contractual rights of an employee
pursuant to a written employment agreement.
XIX. USE OF PROCEEDS
The cash proceeds received by the Corporation pursuant to awards granted
under the Plan will be used for general corporate purposes.
XX. COMPLIANCE
(a) FEDERAL AND STATE LAWS. No option may be exercised, and the
Corporation will not be obligated to issue stock under any award unless, in the
opinion of counsel for the Corporation, such exercise and issuance is in
compliance with all applicable federal and state securities laws. As a condition
to the grant of any award, or to the issuance of stock under any award, the
Committee may require that the award holder agree to comply with such provisions
of federal and state securities laws as may be applicable to such grant, or to
the sale of stock acquired pursuant to the Plan, and that the award holder
deliver to the Corporation a written agreement, in form and substance
satisfactory to the Corporation and its counsel, implementing such agreement.
(b) INFORMATION. The Corporation will furnish to each award holder
participating in the Plan (other than a key employee or a director) a copy of
the Corporation's Annual Report to Stockholders for the most recent fiscal year,
and additional copies will be furnished, without charge, to such award holders
upon request to the Secretary of the Corporation.
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APPENDIX A
SPECIAL PROVISIONS RELATED TO 1995 CIBA-GEIGY TRANSACTION
Those persons holding options to acquire shares of Common Stock under the
Corporation's 1991 Stock Option Plan on November 20, 1994 are granted the
following rights ("Rights") with respect to each such option:
(i) the right to receive upon the closing of the tender offer contemplated
under the Investment Agreement entered into on such date among the Corporation
and Ciba-Geigy Limited, Ciba-Geigy Corporation and Ciba Biotech Partnership,
Inc. (the "Closing") a cash payment equal to (A) 37.33% of the number of shares
of Common Stock with respect to which each such option would first become
exercisable in calendar year 1995 multiplied by (B) the difference between $117
per share and the exercise price per share of such option with respect to such
shares and
(ii) with respect to the remaining shares of Common Stock subject to each
such option, the right, exercisable at any time after the later of the Closing
or the date that such an option first becomes exercisable with respect to such
shares, to surrender that portion of such option relating to 37.33% of such
shares in return for a cash payment equal (A) to the difference between $117 per
share and the exercise price per share of such option multiplied by (B) the
number of shares with respect to which such option is so surrendered. However,
the grant and exercise of any such right with respect to any officer or director
subject to Section 16 of the Securities Exchange Act of 1934 shall be subject to
stockholder approval of the grant of such rights at the Corporation's 1995
stockholder meeting. The grant of such rights, which are made with respect to
1,858,776 optioned shares shall be in addition to, and shall not count against,
the aggregate and annual limits on the number of shares with respect to which
other awards under the Plan may be made to all individuals and/or a single
individual.
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