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As filed with the Securities and Exchange Commission on December 17, 1997
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CHIRON CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 94-2754624
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
4560 HORTON STREET, EMERYVILLE, CA 94608
(Address of principal executive offices) (Zip Code)
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CHIRON CORPORATION SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(Full title of the Plan)
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WILLIAM G. GREEN, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
CHIRON CORPORATION
4560 HORTON STREET, EMERYVILLE, CA 94608
(Name and address of agent for service)
(510) 655-8730
(Telephone number, including area code, of agent for service)
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CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
TITLE OF MAXIMUM MAXIMUM
SECURITIES AMOUNT OFFERING AGGREGATE AMOUNT OF
TO BE TO BE PRICE OFFERING REGISTRATION
REGISTERED REGISTERED PER SHARE PRICE FEE
- ------------ ---------- --------- ----- ---
Deferred
Compensation
Obligations $4,600,000.00 100% $4,600,000.00 $1,357.00
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<PAGE>
PART II
Information Required in the Registration Statement
Item 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Chiron Corporation, (the "Registrant") hereby incorporates by reference
into this Registration Statement the following documents previously filed with
the Securities and Exchange Commission (the "SEC"):
a. The Registrant's Annual Report on Form 10-K for the fiscal year ended
December 29, 1996 filed with the SEC on March 31, 1997;
b. The Registrant's Quarterly Reports on Form 10-Q for the quarters ended
March 30, 1997, June 29, 1997 and September 28, 1997 filed with the
SEC on May 14, 1997, August 11, 1997 and November 12, 1997,
respectively;
c. The Registrant's Current Report on Form 8-K filed with the SEC on
October 23, 1997; and
d. The Registrant's Registration Statement (No. 0-12798) on Form 8-A
filed with the SEC on August 28, 1984 in which there is described the
terms, rights and provisions applicable to the Registrant's
outstanding Common Stock.
All reports and definitive proxy or information statements filed pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (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. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Registration Statement to the extent that a statement contained herein or
in any subsequently filed document which also is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
Item 4. DESCRIPTION OF SECURITIES
The securities consist of deferred compensation obligations of the
Registrant outstanding under the Registrant's Supplemental Executive Retirement
Plan (the "Plan"). The Plan is a non-qualified deferred compensation program
under the Internal Revenue Code which is designed to operate in conjunction with
the Registrant's 401(k) Plan (the "Qualified Plan"). The principal features of
the non-qualified Plan may be summarized as follows:
STRUCTURE. The Plan is comprised of three separate programs:
Supplemental Salary Deferral Program. Under this program each
selected participant will have the right, by prior irrevocable election, to
defer up to fifteen percent (15%) of his or her compensation for each
calendar year for which the election is in effect, LESS the maximum dollar
amount which may be contributed on the participant's behalf to the
Qualified Plan for that year in compliance with the applicable limitations
of Internal Revenue Code Sections 401(a)(17), 402(g)(1) and/or 415.
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Supplemental Matching Contribution Program. This program will
supplement the matching contribution allocated to the participant's account
each year under the Qualified Plan by providing such individual with the
additional level of matching contribution which would have otherwise been
allocated to his or her Qualified Plan account had that allocation not been
reduced by reason of the compensation limitation imposed under Internal
Revenue Code Sections 401(a)(17), 402(g) and/or 415.
Supplemental Retirement Contribution Program. This program will
supplement the retirement contribution allocated to the participant's
account each year under the Qualified Plan by providing such individual
with the additional level of retirement contribution which would have
otherwise been allocated to his or her account under the Qualified Plan had
that allocation not been reduced by reason of the compensation limitation
imposed under Internal Revenue Code Sections 401(a)(17) and/or 415.
ACCOUNTS. The Registrant will establish on its books and records a special
account for each individual for whom compensation is deferred under the
Supplemental Salary Deferral Program or to whom a supplemental benefit is
allocated under either the Supplemental Matching Contribution Program or the
Supplemental Retirement Contribution Program. However, the Registrant's
obligation to pay the balance credited to such account will at all times be an
unfunded and unsecured obligation. The Registrant will be under no obligation
to establish any trust, escrow arrangement or other fiduciary relationship for
the purpose of segregating funds for the payment of the account balances
maintained under the Plan. Although the Registrant has established a so-called
"rabbi trust" with The Northern Trust Company in order to accumulate a reserve
for satisfying its liabilities under the Supplemental Salary Deferral Program,
no participant will have any beneficial interest in those trust assets, and the
assets will be available for the satisfaction of creditor claims in the event of
the Registrant's insolvency or bankruptcy.
INVESTMENT RETURN. The balance credited to each participant's account
under the Plan will be credited with interest at the end of each calendar
quarter. The interest rate used will be based on the Moody's Corporate Bond
Yield Average. The participant will at all times be vested in his or her
account balance to the same extent he or she is vested in the corresponding
account balance maintained for such individual under the Qualified Plan.
DISTRIBUTION. The account balance will become payable either (i) in a
lump sum following the participant's termination of employment with the
Registrant or (ii) in a series of annual installments, provided the participant
has reached age fifty-five (55) and has been employed by the Registrant for a
period of at least ten (10) years. The account balance may be distributed prior
to the participant's termination of employment upon (i) the occurrence of an
immediate and heavy financial hardship for which the participant does not have
any other available resources or (ii) the forfeiture by the participant of
fifteen percent (15%) of his or her vested account balance. Accrued benefits
may not otherwise be assigned or alienated.
AMENDMENT/TERMINATION. The Plan may be amended or terminated at any time,
but no such plan amendment or termination will adversely affect the benefits
which the participants have accrued to date under the Plan; provided that the
Registrant may make a current distribution of each participant's account upon
plan termination.
There is no dollar limit on the total amount of compensation which may be
deferred by participants over the term of the Plan. As of December 1, 1997, the
total dollar amount of the Registrant's outstanding deferred compensation
obligations under the Plan was $0.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
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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 certain 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 General Corporation Law and
have been approved by the Registrant's stockholders. Accordingly, the
indemnification agreements with directors will (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 Exchange 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.
Item 8. EXHIBITS
Exhibit Number Exhibit
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4 Instruments Defining Rights of Security Holders: Chiron
Corporation Supplemental Executive Retirement Plan.
5 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of KPMG Peat Marwick LLP, Independent Auditors.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-5 of this
Registration Statement.
II-3
<PAGE>
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 (the "1933 Act"), (ii) to reflect
in the prospectus any facts or events arising after the effective date of this
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 this Registration Statement, and (iii) to include any
material information with respect to the plan of distribution not previously
disclosed in this Registration Statement or any material change to such
information in this 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 1934 Act that are incorporated by reference into the registration
statement; (2) that for the purpose of determining any liability under the 1933
Act 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; and (3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold upon the
termination of the Registrant's Supplemental Executive Retirement Plan.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is
incorporated by reference into this 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 1933 Act
may be permitted to directors, officers or controlling persons of the Registrant
pursuant to the indemnity provisions summarized in Item 6 above, or otherwise,
the Registrant has been informed that in the opinion of the SEC such
indemnification is against public 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, 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 this 15th
day of December, 1997.
CHIRON CORPORATION
By: /s/ Edward E. Penhoet, Ph.D
--------------------------------
Edward E. Penhoet, Ph.D
President and Chief Executive
Officer
II-4
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POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of Chiron Corporation, a
Delaware corporation, do hereby constitute and appoint Edward E. Penhoet, Ph.D.
and William J. Rutter, Ph.D., and each of them, the lawful attorneys and agents,
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 to 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 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.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ Edward E. Penhoet, Ph.D. President, Chief Executive Officer, December 15, 1997
- ------------------------------ Chief Financial Officer and Director
Edward E. Penhoet, Ph.D. (Principal Executive Officer, Principal
Financial and Accounting Officer)
/s/ William J. Rutter, Ph.D. Chairman of the Board December 15, 1997
- ------------------------------
William J. Rutter, Ph.D.
/s/ Lewis W. Coleman Director December 15, 1997
- ------------------------------
Lewis W. Coleman
/s/ Pierre E. Douaze Director December 15, 1997
- ------------------------------
Pierre E. Douaze
/s/ Donald A. Glaser, Ph.D. Director December 15, 1997
- ------------------------------
Donald A. Glaser, Ph.D.
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ Alex Krauer, Ph.D. Director December 15, 1997
- ------------------------------
Alex Krauer, Ph.D.
/s/ Vaughn D. Bryson Director December 15, 1997
- ------------------------------
Vaughn D. Bryson
/s/ Jack W. Schuler Director December 15, 1997
- ------------------------------
Jack W. Schuler
/s/ Pieter J. Strijkert, Ph.D. Director December 15, 1997
- ------------------------------
Pieter J. Strijkert, Ph.D.
/s/ Paul L. Herrling Director December 15, 1997
- ------------------------------
Paul L. Herrling
</TABLE>
II-6
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS
TO
FORM S-8
UNDER THE
SECURITIES ACT OF 1933
CHIRON CORPORATION
II-7
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
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4 Instruments Defining Rights of Security Holders: Chiron
Corporation Supplemental Executive Retirement Plan.
5 Opinion of Brobeck, Phleger & Harrison LLP.
23.1 Consent of KPMG Peat Marwick LLP, Independent Auditors.
23.2 Consent of Brobeck, Phleger & Harrison LLP is contained in
Exhibit 5.
24 Power of Attorney. Reference is made to page II-5 of this
Registration Statement.
<PAGE>
CHIRON CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
ARTICLE I
PURPOSE
This Plan is designed to restore to selected employees of Chiron
Corporation and its affiliates certain benefits that cannot be provided under
the Chiron 401(k) Plan. It shall be effective for compensation earned after
December 31, 1997.
This Plan is intended to be a plan that is unfunded and that is
maintained by Chiron Corporation primarily for the purpose of providing
deferred compensation for a select group of management or highly compensated
employees within the meaning of the Employee Retirement Income Security Act
of 1974 ("ERISA").
ARTICLE II
DEFINITIONS
In this Plan, the following terms have the meanings indicated below:
2.01 "ACCOUNT" means a bookkeeping entry used to record supplemental
deferrals and contributions made on a Participant's behalf under Article III
of the Plan and interest credited to these supplemental deferrals and
contributions under Article IV of the Plan. To the extent it considers
necessary or appropriate, the Committee or its delegate shall maintain a
separate subaccount for each type of supplemental deferral or contribution
under the Plan or shall otherwise provide a means for determining that
portion of an account attributable to each type.
2.02 "AFFILIATE" means an entity other than the Company whose employees
participate in the 401(k) Plan.
2.03 "BENEFICIARY" means the person or persons, natural or otherwise,
entitled to receive a Participant's vested Account if the Participant dies
before distribution of his or her entire vested Account. A Participant's
Beneficiary shall, at any time, be the person or persons then designated,
whether affirmatively or by default, as the Participant's beneficiary under
the 401(k) Plan. If the Participant no longer has a beneficiary under the
401(k) plan, the Participant may designate one or more primary Beneficiaries
and one or more secondary Beneficiaries for purposes of this Plan. Any such
designation will be made in writing pursuant to such procedures as the
Committee may establish and delivered to the Committee before the
Participant's death. The Participant may revoke or change this designation
at any time before his or her death by following such procedures as the
Committee may establish. If there is no effective Beneficiary designation on
file when such a Participant dies, the Participant's vested Account will be
distributed to the
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Participant's spouse if surviving at the Participant's death, or if there is
no such spouse, the Participant's estate.
2.04 "CHIRON 401(K) PLAN" means the Chiron Corporation 401(k) Plan, as
amended from time to time.
2.05 "CODE" means the Internal Revenue Code of 1986, as amended.
2.06 "COMMITTEE" means the committee established pursuant to Article XIV
of the Chiron 401(k) Plan, as constituted from time to time. The Committee
has full discretionary authority to administer and interpret the Plan, to
determine eligibility for Plan benefits, to select employees for Plan
participation, and to correct errors. The Committee may delegate its duties
and responsibilities and, unless the Committee expressly provides to the
contrary, any such delegation will carry with it the Committee's full
discretionary authority to accomplish the delegation. Decisions of the
Committee and its delegate will be final and binding on all persons.
2.07 "COMPANY" means Chiron Corporation.
2.08 "COMPENSATION" means compensation as established pursuant to Article
II of the Chiron 401(k) Plan, as constituted from time to time.
2.09 "ELIGIBLE EMPLOYEE" means an officer of the Company or of an
Affiliate at the level of Vice President (i.e., any position with a title
that includes the term Vice President) or above who has been selected by the
Committee for Plan participation. An individual will automatically cease to
be an Eligible Employee on the earliest of (i) the date the individual ceases
to be an officer of the Company or an Affiliate at the level of Vice
President or above, (ii) the date specified by the committee for such
cessation or (iii) the date the Plan is terminated.
2.10 "MATCHING CONTRIBUTION" means a matching contribution pursuant to
Section 5.02 of the Chiron 401(k) Plan.
2.11 "PARTICIPANT" means a current or former Eligible Employee who
retains an Account.
2.12 "PLAN" means this Chiron Corporation Supplemental Executive
Retirement Plan, as amended from time to time.
2.13 "PLAN YEAR" means the plan year defined in the Chiron 401(k) Plan.
2.14 "RETIREMENT CONTRIBUTION" means a retirement contribution pursuant
to Section 5.03 of the Chiron 401(k) Plan.
2.15 "SALARY DEFERRAL" means a salary deferral pursuant to Section 5.01
of the Chiron 401(k) Plan.
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2.16 "TERMINATION OF EMPLOYMENT" means termination of employment with the
Company and all Affiliates, other than by reason of death.
ARTICLE III
DEFERRALS AND CONTRIBUTIONS
3.01 SUPPLEMENTAL SALARY DEFERRALS.
(a) ELECTIONS. In order to be eligible for supplemental salary
deferrals for each Plan Year, an Eligible Employee must make an election to
make Salary Deferrals for such Plan Year. Such election generally must be
made before the calendar year in which the Compensation is earned, in
accordance with such procedures as the Committee shall specify. However, if
an individual first becomes an Eligible Employee during a Plan Year, an
Eligible Employee may elect, within 30 days after he or she is first notified
that he or she is eligible to participate in the Plan, to defer Compensation
for services performed during that Plan Year and after the election.
Elections will remain in effect for one Plan Year or, if the Committee so
permits, all subsequent Plan Years during which the individual remains an
Eligible Employee. Such election may be revoked, but any revocation cannot
be made effective before the first day of the first Plan year beginning after
the date the revocation is filed.
(b) LATE ELECTION. If an Eligible Employee does not make a timely
election for a Plan Year, no supplemental salary deferral will be made under
the Plan on behalf of that Eligible Employee with regard to that election for
that Plan Year.
(c) AMOUNT. The amount of an Eligible Employee's supplemental
salary deferral will be equal to the portion of the Salary Deferral otherwise
elected by such Eligible Employee which could not be contributed to the
Chiron 401(k) Plan due to the limitations of Code Sections 401(a)(17),
402(g)(1) and/or 415.
(d) CREDITING. Supplemental salary deferrals will be credited to
Eligible Employees' Accounts as of the date that the Salary Deferrals to
which the supplemental salary deferrals relate would otherwise have been
credited to the Chiron 401(k) Plan.
3.02 SUPPLEMENTAL MATCHING CONTRIBUTIONS.
(a) AMOUNT. The amount of an Eligible Employee's supplemental
matching contribution for a Plan Year will be equal to the amount by which
that Eligible Employee's Matching Contribution for that Plan Year was reduced
due to the reduction of such Eligible Employee's Salary Deferral or Matching
Contributions as a result of the Code Sections 401(a)(17), 402(g)(1) and/or
415; provided that supplemental matching contributions attributable to Salary
Deferral reductions under the Chiron 401(k) Plan shall not be made unless
supplemental salary deferrals equal to such reductions are made hereunder.
3
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(b) CREDITING. Supplemental Matching Contributions will be
credited to Eligible Employees' Accounts as of the date that the Matching
Contributions to which the Supplemental Matching Contributions relate would
otherwise have been credited to the Chiron 401(k) Plan.
3.03 SUPPLEMENTAL RETIREMENT CONTRIBUTIONS.
(a) AMOUNT. The amount of an Eligible Employee's supplemental
retirement contribution for a Plan Year will be equal to the amount by which
that Eligible Employee's Retirement Contribution for that Plan Year was
reduced as a result of Code Sections 401(a)(17) and/or 415.
(b) CREDITING. Supplemental retirement contributions will be
credited to Eligible Employees' Accounts as of the date that the Retirement
Contributions to which such Supplemental Retirement Contributions relate
would otherwise have been credited to the Chiron 401(k) Plan.
ARTICLE IV
EARNINGS
Interest will be credited to each Account at the end of each calendar
quarter, in accordance with procedures approved by the Committee. The
interest rate used will be based on the Moody's Corporate Bond Yield Average.
The Corporate Bond Yield Average is equal to the average of the Moody's
Corporate AAA, AA, A and BAA Bond Yield Averages, determined as of the first
business day of that quarter. The first quarter for which interest will be
credited is the calendar quarter beginning January 1, 1998.
ARTICLE V
VESTING
Participants will be 100% vested in that portion of their Accounts
attributable to supplemental salary deferrals and supplemental matching
contributions and will vest in that portion of their Accounts attributable to
supplemental retirement contributions in the same manner that they vest in
Retirement Contributions.
ARTICLE VI
DISTRIBUTIONS
6.01 TERMINATION OF EMPLOYMENT. Eligible Employees must elect the
manner in which their vested Accounts will be paid out upon Termination of
Employment by following the procedures described below and by satisfying such
additional requirements as the Committee may determine.
4
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(a) ELECTIONS. When an Eligible Employee first confirms his or her
initial participation in the Plan the Eligible Employee must elect, in
writing, which of the distribution options described below will govern
payment of the Eligible Employee's vested Account upon the Eligible
Employee's Termination of Employment. A Participant may change a
distribution election with respect to his or her vested Account by submitting
the change to the Committee, in writing, at least two calendar years before
the Participant has a Termination of Employment. However, such a subsequent
election will be valid only if Termination of Employment occurs more than two
years after the date of such subsequent election.
(b) GENERAL. Following Termination of Employment, the vested
portion of a Participant's Account will be distributed, based on the
Participant's election under (a) above, in a single lump sum within the 30
day period beginning 30 days after (and ending 60 days after) the date of
(or, if elected by the Participant, the January 15 of the calendar year
immediately following) the Participant's Termination of Employment.
(c) RETIREMENT. If the Participant has reached age fifty-five (55)
and has been employed by the Company for a period of at least ten (10) years
at the time of Termination of Employment, payment may, if elected by such
participant in lieu of the time and form of distribution set forth in (b)
above, begin within the 30 day period beginning 30 days after (and ending 60
days after) a date elected by the Participant following Termination of
Employment, but not later than the Participant's 65th birthday, and may be
made in a single lump sum or in annual installments, not in excess of 10.
The amount of each installment will be the remaining balance of the
Participant's vested Account divided by the number of installments remaining
(including the installment to be made).
(d) DEFAULT. If, upon a Participant's Termination of Employment,
the Committee does not have a proper distribution election on file for that
Participant, the vested portion of that Participant's Account will be
distributed to the Participant in one lump sum within the 30 day period
beginning 30 days after (and ending 60 days after) the Participant's
Termination of Employment.
6.02 DEATH. If a Participant dies with a vested amount in his or her
Account, whether or not the Participant was receiving payouts from that
Account at the time of his or her death, the Participant's Beneficiary will
receive the entire vested amount in the Participant's Account within the 30
day period beginning 30 days after (and ending 60 days after) the Committee
learns of the Participant's death and has verified the Beneficiary's right to
payment.
6.03 ACCELERATED DISTRIBUTIONS. Pursuant to the following restrictions,
a Participant may accelerate the time and form of distribution:
(a) HARDSHIP WITHDRAWAL. If a Participant has an immediate and
heavy financial need (as defined by Section 8.06 of the Chiron 401(k) Plan)
and has no other resources reasonably available to meet this need (as defined
by Section 8.06 of the Chiron 401(k) Plan),
5
<PAGE>
the Participant may request a hardship withdrawal. The total hardship
withdrawal must be approved by the Committee, and shall be limited to the
amount necessary to meet the financial need and to satisfy the Participant's
tax liability with respect to such withdrawal, and in no event may such
amount exceed that portion of the Participant's Account attributable to
supplemental salary deferrals and supplemental matching contributions.
(b) FORFEITURE. Absent a demonstration of immediate and heavy
financial need described above in paragraph (a), a Participant may elect to
receive 85% of his or her entire vested Account in an early distribution at
any time upon 30 days written request, in which case the remaining fifteen
percent (15%) of the Participant's entire vested Account shall be permanently
forfeited.
6.04 WITHHOLDING. The Company will deduct from Plan payouts, or from
other compensation payable to a Participant or Beneficiary, amounts required
by law to be withheld for taxes with respect to benefits under this Plan.
The Company reserves the right to reduce any supplemental deferral or
contribution that would otherwise be made under this Plan on behalf of a
Participant to satisfy the Participant's tax withholding liabilities.
ARTICLE VII
PRIOR CCD PLAN
This Plan shall supersede and replace the Ciba Corning Diagnostics Corp.
Supplemental Executive Retirement Plan (the "CCD SERP") effective January 1,
1998, other than with respect to Supplemental Pension Plan Benefits
thereunder. As a result, no further Supplemental Investment Plan Credits
shall be made under the CCD SERP with respect to compensation earned after
December 31, 1997 and all Supplemental Investment Plan Credits (including
earnings thereon as of December 31, 1997) attributable to compensation earned
by a Participant before January 1, 1998 shall be credited to such
Participant's Account under this Plan effective January 1, 1998 and shall be
subject thereafter to this Plan's provisions, including but not limited to
this Plan's provisions relating to earnings (for periods after December 31,
1997) and distribution. However, that portion of an Account attributable to
Supplemental Investment Plan Credits under the CCD SERP (including earnings
thereon) shall vest in the same manner that the underlying qualified plan
contributions (i.e. that they supplemented) vest under the 401(k) Plan. If
such an individual would not otherwise be a Participant in this Plan
effective January 1, 1998, he or she must elect no later than December 31,
1997, in accordance with such procedures as the Committee shall specify, the
manner in which his or her vested Account will be paid out in accordance with
Article V of this Plan.
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ARTICLE VIII
MISCELLANEOUS
8.01 LIMITATION OF RIGHTS. Participation in this Plan does not give any
individual the right to be retained in the service of the Company or of any
related entity.
8.02 SATISFACTION OF CLAIMS. Payments to a Participant, the
Participant's legal representative, or Beneficiary in accordance with the
terms of this Plan will, to the extent thereof, be in full satisfaction of
all claims that person may have hereunder against the Committee, the Company,
and all Affiliates, any of which may require, as a condition to payment, that
the recipient execute a receipt and release in a form determined by the
Committee, the Company, or an Affiliate.
8.03 INDEMNIFICATION. The Company and the Affiliates will indemnify and
hold harmless the Directors, the members of the Committee, and employees of
the Company and the Affiliates who may be deemed fiduciaries of the Plan,
from and against any and all liabilities, claims, costs and expenses,
including attorneys' fees, arising out of an alleged breach in the
performance of their fiduciary duties under the Plan, other than such
liabilities, claims, costs and expenses as may result from the gross
negligence or willful misconduct of such persons. The Company and the
Affiliates shall have the right, but not the obligation, to conduct the
defense of such persons in any proceeding to which this Section applies.
8.04 ASSIGNMENT. To the fullest extent permitted by law, benefits under
the Plan and rights thereto are not subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or
garnishment by creditors of a Participant or a Beneficiary.
8.05 INABILITY TO LOCATE RECIPIENT. If a benefit under the Plan remains
unpaid for two years from the date it becomes payable, solely by reason of
the inability of the Committee to locate the Participant or Beneficiary
entitled to the payment, the benefit shall be treated as forfeited. Any
amount forfeited in this manner shall be restored without interest upon
presentation of an authenticated written claim by the person entitled to the
benefit.
8.06 AMENDMENT AND TERMINATION. The Company's Board of Directors may,
at any time, amend or terminate the Plan. In addition, the Committee may
amend the Plan (other than this Section 8.06), provided that no such
amendment may cause any substantial increase in cost to the Company or to any
Affiliate. Any amendment must be made in writing; no oral amendment will be
effective. No amendment may, without the consent of an affected Participant
(or, if the Participant is deceased, the Participant's Beneficiary),
adversely affect the Participant's or the Beneficiary's rights and
obligations under the Plan with respect to amounts already credited to a
Participant's Account. Notwithstanding the foregoing, if the Plan is
terminated, the Company's Board of Directors may determine that all Accounts
will be paid out as soon as practicable thereafter in single sum payments.
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8.07 APPLICABLE LAW. To the extent not governed by Federal law, the
Plan is governed by the laws of the State of California. If any provision of
the Plan is held to be invalid or unenforceable, the remaining provisions of
the Plan will continue to be fully effective.
8.08 NO FUNDING. The Plan constitutes a mere promise by the Company and
the Affiliates to make payments in the future in accordance with the terms of
the Plan. Participants and Beneficiaries have the status of general
unsecured creditors of the Company and the Affiliates. Except to the extent
provided below in Section 8.09, Plan benefits will be paid from the general
assets of the Company and the Affiliates and nothing in the Plan will be
construed to give any Participant or any other person rights to any specific
assets of the Company or the Affiliates. In all events, it is the intention
of the Company, all Affiliates and all Participants that the Plan be treated
as unfunded for tax purposes and for purposes of Title I of ERISA.
8.09 SALARY DEFERRAL TRUST. Plan benefits attributable to the
supplemental salary deferrals of Participants shall be paid from the assets
of a grantor trust (the "Trust") established by the Company to assist it in
meeting its obligations and, to the extent that such assets are not
sufficient, by the Company. The Trust shall conform to the terms of the
Internal Revenue Service Model Trust as described in Internal Revenue Service
Procedure 92-64.
IN WITNESS WHEREOF, Chiron Corporation has caused this Plan to be
executed by its duly authorized representative on the date indicated below.
/s/ EDWARD E. PENHOET 11/14/97
- --------------------------------- ----------------
SIGNATURE DATE
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EXHIBIT 5
OPINION AND CONSENT OF BROBECK, PHLEGER & HARRISON LLP
December 15, 1997
Chiron Corporation
4560 Horton Street
Emeryville, CA 94608
Re: Chiron Corporation (the "Company")
S-8 Registration Statement for
Deferred Compensation Obligations
Ladies and Gentlemen:
We refer to your registration on Form S-8 (the "Registration Statement")
under the Securities Act of 1933, as amended, of the deferred compensation
obligations of the Company under the Company's Supplemental Executive
Retirement Plan (the "Plan"). We advise you that, in our opinion, when issued
in accordance with the provisions of the Plan, such obligations will be valid
and binding obligations of the Company, enforceable in accordance with their
terms, except as enforcement thereof may be limited by bankruptcy, insolvency
or other laws of general applicability relating to or affecting enforcement
of creditors' rights or by general principals of equity.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
BROBECK, PHLEGER & HARRISON LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF KPMG PEAT MARWICK LLP, INDEPENDENT AUDITORS
The Board of Directors
Chiron Corporation:
We consent to the use of our reports incorporated herein by reference.
San Francisco, California
December 15, 1997
