<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OF THE OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE SERIES A JUNIOR PREFERRED STOCK)
OF
PATHOGENESIS CORPORATION
AT
$38.50 NET PER SHARE
BY
PICARD ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
CHIRON CORPORATION
------------------------------------------------------------
THE OFFER AND WITHDRAWAL OF RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON MONDAY, SEPTEMBER 18, 2000, UNLESS THE OFFER IS EXTENDED.
--------------------------------------------------------------------------------
August 21, 2000
To Participants in the 401(k) Profit Sharing Plan of PathoGenesis:
Enclosed for your consideration are the Offer to Purchase dated August 21,
2000 (the "Offer to Purchase") and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer") in connection with the offer by Picard Acquisition Corp., a Delaware
corporation ("Merger Sub") and a wholly owned subsidiary of Chiron Corporation,
a Delaware corporation ("Parent"), to purchase all outstanding shares of common
stock, par value $0.001 per share (the "Common Stock"), of PathoGenesis
Corporation, a Delaware corporation (the "Company"), together with the
associated rights to purchase Series A Junior Preferred Stock (the "Rights")
issued pursuant to the Rights Agreement, dated as of June 26, 1997, as amended
(the "Rights Agreement"), between the Company and Harris Trust and Savings Bank
(the Common Stock and the Rights together being referred to herein as the
"Shares"), at a purchase price of $38.50 per Share, net to the seller in cash,
without interest (the "Offer Price"), upon the terms and subject to the
conditions set forth in the Offer to Purchase. The Offer is being made pursuant
to an Agreement and Plan of Merger dated as of August 13, 2000 among Parent,
Merger Sub and the Company ("Merger Agreement").
WILMINGTON TRUST COMPANY IS THE HOLDER OF RECORD OF SHARES HELD FOR YOUR
ACCOUNT AS A PARTICIPANT IN THE PATHOGENESIS CORPORATION 401(K) PROFIT SHARING
PLAN (THE "PLAN") AND IS THE TRUSTEE OF THE PLAN (THE "TRUSTEE") ON BEHALF OF
THE COMPANY. THE TRUST AGREEMENT PROVIDES THAT THE TRUSTEE SHALL INVEST AND
REINVEST ASSETS IN INDIVIDUALLY DIRECTED ACCOUNTS, INCLUDING THE DETERMINATION
TO TENDER SHARES HELD IN A PARTICIPANT'S ACCOUNT, PURSUANT TO THE DIRECTIONS OF
THE PARTICIPANT, AS COMMUNICATED BY THE ADMINISTRATOR OF THE PLAN OR ITS
DELEGATE. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD
AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU
FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD IN
YOUR PLAN ACCOUNT.
We, as delegate for the Company, the Plan administrator, request
instructions as to whether you wish to have us tender on your behalf any or all
of the Shares held in your Plan account, upon the terms and subject to the
conditions set forth in the Offer.
Please note the following:
<PAGE>
1. The tender price is $38.50 per Share, net to you in cash, without
interest thereon, upon the terms and subject to the conditions set forth in
the Offer.
2. The Offer is being made for all outstanding Shares.
3. THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED THAT THE OFFER
AND THE MERGER ARE ADVISABLE AND IN THE BEST INTEREST OF THE COMPANY'S
STOCKHOLDERS, AND UNANIMOUSLY RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS
ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
4. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON MONDAY, SEPTEMBER 18, 2000, UNLESS THE OFFER IS EXTENDED.
5. The Offer is conditioned upon, among other things, (i) there being
validly tendered and not withdrawn prior to the expiration of the offer that
number of shares of Share which, when added together with all other Shares
owned by Chiron Corporation and its subsidiaries, would represent at least a
majority of the outstanding Shares (determined on a fully diluted basis for
all outstanding stock options and other rights (other than the Rights, if
such rights are not at that time exercisable) to acquire Shares outstanding
on the date of purchase), (ii) any requisite waiting period under the
Harts-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
applicable to the purchase of shares pursuant to the Offer or the merger
described herein having been terminated or having expired, and (iii) the
applicable waiting periods under certain foreign antitrust and competition
laws having been terminated or having expired, except for such waiting
periods the failure of which to terminate or expire is not reasonably likely
to have a Parent Material Adverse Effect or a Company Material Adverse
Effect (as such terms are defined in the Offer to Purchase) or to provide a
reasonably basis to conclude that Parent, Merger Sub or the Company or any
of its directors, officers, agents advisors or other representatives would
be subject to the risk of criminal liability.
6. Any stock taxes applicable to the sale of the Shares to Merger Sub
pursuant to the Offer will be paid by Purchaser, except as otherwise
provided in Instruction 6 of the Letter of Transmittal.
If you wish to have us tender any or all of the Shares held in your Plan
account, please so instruct us by completing, executing and returning to us the
instruction form enclosed with this letter and the Substitute Form W-9 by 12:00
midnight, New York City time, on September 18, 2000, unless the Offer is
extended. An envelope in which to return your instructions to us is enclosed. If
you authorize tender of such Shares, all such Shares will be rendered unless
otherwise specified in your instructions. YOUR AUTHORIZATION SHOULD BE FORWARDED
TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE
EXPIRATION OF THE OFFER.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) the holders of Shares residing in any jurisdiction in which the
making of the Offer or the acceptance thereof would not be in compliance with
the securities, blue sky or other laws of such jurisdiction. However, the
Purchaser may, in its discretion, take such action as it may deem necessary to
make the Offer in any jurisdiction and extend the Offer to holders of Shares in
such jurisdiction.
In any jurisdiction where the securities, blue sky or other laws require the
Offer to be made by a licensed broker or dealer, the Offer is being made on
behalf of the Purchaser by Donaldson, Lufkin & Jenrette Securities Corporation,
the Dealer Manager for the Offer, or one or more registered brokers or dealers
that are licensed under the laws of such jurisdiction.
Very truly yours,
2
<PAGE>
Administrative Management Group
Delegate of Plan Administrator
Telephone: (847) 577-6000
3
<PAGE>
Instructions with Respect to the Offer to Purchase
for Cash All Outstanding Shares of Common Stock
(Including the Associated Preferred Stock Purchase Rights)
of
PathoGenesis Corporation
by
Picard Acquisition Corp.
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase dated August 21, 2000 (the "Offer to Purchase") and the related
Letter of Transmittal (which, together with any amendments or supplements
thereto, collectively constitute the "Offer") in connection with the offer by
Picard Acquisition Corp., a Delaware corporation ("Merger Sub") and a wholly
owned subsidiary of Chiron Corporation, a Delaware corporation ("Parent"), to
purchase all outstanding shares of common stock, par value $0.001 per share (the
"Common Stock"), of PathoGenesis Corporation, a Delaware corporation (the
"Company"), together with the associated rights to purchase Series A Junior
Preferred Stock (the "Rights") issued pursuant to the Rights Agreement, dated as
of June 26, 1997, as amended (the "Rights Agreement"), between the Company and
Harris Trust and Savings Bank (the Common Stock and the Rights together being
referred to herein as the "Shares"), at a purchase price of $38.50 per Share,
net to the seller in cash, without interest (the "Offer Price"), upon the terms
and subject to the conditions set forth in the Offer to Purchase. The Offer is
being made in connection with the Agreement and Plan of Merger dated as of
August 13, 2000 among Parent, Merger Sub and the Company (the "Merger
Agreement"). The undersigned understand(s) that the Offer applies to Shares
allocated to the account of the undersigned in the PathoGenesis Corporation
401(k) Profit Sharing Plan (the "Plan").
This will instruct you, in your capacity as delegate of the Plan
Administrator, to tender to the Purchaser the number of Shares, indicated below
(or, if no number is indicated below, all Shares) that are held by you for the
Plan account of the undersigned, upon the terms and subject to the conditions
set forth in the Offer.
Number of Shares to be Tendered:
------------------- Shares*
Date:
------------------------
* Unless otherwise indicated, it will be assumed that all Shares in your Plan
account are to be tendered.
--------------------------------------------------------------------------------
SIGN HERE
Signature(s) _______________________________________________________________
____________________________________________________________________________
Please type or print name(s) _______________________________________________
____________________________________________________________________________
Please type or print address _______________________________________________
Area Code and Telephone Number______________________________________________
Taxpayer Identification or Social Security Number___________________________
--------------------------------------------------------------------------------
4
<PAGE>
PAYOR'S NAME: HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<C> <S> <C>
-----------------------------------------------------------------------------------------------------------------
SUBSTITUTE Part I: PLEASE PROVIDE YOUR Social Security Number or
FORM W-9 TIN IN THE BOX AT RIGHT AND Employer Identification
Department of the Treasury CERTIFY BY SIGNING AND Number
Internal Revenue Service DATING BELOW
------------------------
----------------------------------------------------------------------
PART 2--Certifications--Under penalties of perjury, I certify that:
Payer's Request for Taxpayer (1) The number shown on this form is my current Taxpayer
Identification Number ("TIN") Identification Number (or I am writing for a number to be issued to
me and have checked the box in Part 3) and
(2) I am not subject to backup withholding because: (a) I am exempt
from backup withholding, or (b) I have not been notified by the
Internal Revenue Service (the "IRS") that I am subject to backup
withholding as a result of a failure to report all interest or
dividends, or (c) the IRS has notified me that I am no longer subject
to backup withholding.
Certification Instructions--You must cross out item (2) above if you
have been notified by the IRS that you are currently subject to
backup withholding because of underreporting interest or dividends on
your tax return. However, if after being notified by the IRS that you
were subject to backup withholding you received another notification
from the IRS that you are no longer subject to backup withholding, do
not cross out such item (2).
----------------------------------------------------------
SIGNATURE ------------ Part 3
Date -------------- Awaiting TIN / /
-----------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9.
--------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) I have mailed or delivered
an application to receive a taxpayer identification number to the
appropriate Internal Revenue Service Center or Social Security
Administration Office or (2) I intend to mail or deliver an application in
the near future. I understand that if I do not provide a taxpayer
identification number by the time of payment, 31% of all reportable payments
made to me will be withheld, but that such amounts will be refunded to me if
I then provide a Taxpayer Identification Number within sixty (60) days.
Signature
-------------------------------------------------------- Date:
--------------------
--------------------------------------------------------------------------------
5
