<PAGE>
Exhibit 99(a)(12)
[CHIRON LOGO] [PATHOGENESIS LOGO]
MEMORANDUM
TO: PathoGenesis Employee Stock Optionees
FROM: Chiron and PathoGenesis Human Resources Departments
DATE: September 7, 2000
RE: Election Form
--------------------------------------------------------------------------------
Attached is the Election Form that you should complete and return to
PathoGenesis Human Resources, Attn: Pam Timberman, either in person, by mail
or by fax to (206) 270-3343 by 1:00 p.m. Pacific Daylight Time, Monday
September 18, 2000. You may change your election by completing and delivering
a new Election Form up until the consummation of the merger in which
PathoGenesis becomes a wholly owned subsidiary of Chiron, but that could be
as soon as the morning of September 19, 2000. This document contains
important information regarding your PathoGenesis stock options and the
decision you need to make regarding treatment of these options. You are being
asked to indicate on the Election Form which of the two alternatives you
decide to elect:
1) The Cash Out Right , or
2) The Conversion Alternative
Although we have communicated that the default treatment (if you do nothing)
of your options will be the Cash Out Right as defined in the Merger
Agreement, we believe the decision as to the disposition of your PathoGenesis
options is an important one. We would prefer therefore that you communicate
specifically your decision by completing the Election Form. However, if you
do nothing, your options will be treated as if you had elected the Cash Out
Right.
You will be receiving a cover memo and spreadsheet under separate cover this
week that are designed to help you understand the economic impact of the
alternatives and to determine what the best alternative is for you. PathoGenesis
Human Resources provided you a summary statement of your current stock options
last week and this information is also contained within the spreadsheet (the
spreadsheet does not reflect any option exercises you may have done on or about
Friday August 25, 2000 or thereafter). We urge you to take some time to evaluate
various scenarios and also discuss the alternatives with your tax or financial
advisor. We want to ensure that whatever your election, you have had the
opportunity to evaluate the alternatives based on your personal financial
situation.
Please contact Pam Timberman, Iain Duncan or Kent DeLucenay in PathoGenesis
Human Resources if you have any questions.
<PAGE>
[CHIRON LOGO] [PATHOGENESIS LOGO]
MEMORANDUM
TO: PathoGenesis non-Employee Stock Optionees
FROM: Chiron and PathoGenesis Human Resources Departments
DATE: September 7, 2000
RE: Election Form
--------------------------------------------------------------------------------
Attached is the Election Form that you should complete and return to
PathoGenesis Human Resources, Attn: Pam Timberman, either in person, by mail
or by fax to (206) 270-3343 by 1:00 p.m. Pacific Daylight Time, Monday
September 18, 2000. You may change your election by completing and delivering
a new Election Form up until the consummation of the merger in which
PathoGenesis becomes a wholly owned subsidiary of Chiron, but that could be
as soon as the morning of September 19, 2000. This document contains
important information regarding your PathoGenesis stock options and the
decision you need to make regarding treatment of these options. You are being
asked to indicate on the Election Form which of the two alternatives you
decide to elect:
1) The Cash Out Right , or
2) The Conversion Alternative
We believe the decision as to the disposition of your PathoGenesis options is
an important one. We would prefer therefore that you communicate specifically
your decision by completing the Election Form. However, if you do nothing,
your options will be treated as if you had elected the Cash Out Right.
Attached is an Options Summary detailing your stock option holdings as of
September 6, 2000.
Please note that if your status as a non-employee optionee should change
after the merger (i.e. you no longer are a member of the Board of Directors
or Scientific Advisory Board, your consulting agreement ends or other action
occurs that causes your relationship with PathoGenesis or Chiron to end) you
should keep in mind if you elect the Conversion Alternative that some options
you receive may not vest and would expire unvested.
Please contact Pam Timberman, Iain Duncan or Kent DeLucenay in PathoGenesis
Human Resources if you have any questions.
<PAGE>
[CHIRON LOGO] [PATHOGENESIS LOGO]
MEMORANDUM
TO: PathoGenesis Employee Stock Optionees Whose Employment
Has Terminated
FROM: Chiron and PathoGenesis Human Resources Departments
DATE: September 7, 2000
RE: Election Form
--------------------------------------------------------------------------------
Attached is the Election Form that you should complete and return to
PathoGenesis Human Resources, Attn: Pam Timberman, either in person, by mail
or by fax to (206) 270-3343 by 1:00 p.m. Pacific Daylight Time, Monday
September 18, 2000. You may change your election by completing and delivering
a new Election Form up until the consummation of the merger in which
PathoGenesis becomes a wholly owned subsidiary of Chiron, but that could be
as soon as the morning of September 19, 2000. This document contains
important information regarding your PathoGenesis stock options and the
decision you need to make regarding treatment of these options. You are being
asked to indicate on the Election Form which of the two alternatives you
decide to elect:
1) The Cash Out Right , or
2) The Conversion Alternative
We believe the decision as to the disposition of your PathoGenesis options is
an important one. We would prefer therefore that you communicate specifically
your decision by completing the Election Form. However, if you do nothing,
your options will be treated as if you had elected the Cash Out Right. You
were provided a copy of your Options Summary that specifies the last date on
which you are able to exercise your vested options at your exit interview or
in the benefits package delivered to you or after your termination.
As a terminated employee with only ninety (90) days post termination to exercise
vested options:
1. Your unvested options at the time of your termination expired on your
termination date.
2. If you elect the Conversion Alternative, this will not extend the
date by which you must exercise your vested options.
3. If you elect the Conversion Alternative and do not exercise your
conversion options by the end of the 90-day period post termination,
they will be cancelled.
Please contact Pam Timberman, Iain Duncan or Kent DeLucenay in PathoGenesis
Human Resources if you have any questions.
<PAGE>
ELECTION FORM
Dear _____________________:
The agreement by which PathoGenesis is to be acquired by Chiron
Corporation (the "Merger Agreement") provides you with an election as to how
your outstanding options to acquire PathoGenesis common stock will be handled in
the acquisition. Under the Merger Agreement, you may choose either the Cash Out
Right or the Conversion Alternative. Each alternative is described briefly
below, and is described more completely in the document entitled Employee
Questions and Answers Regarding PathoGenesis Employee Stock Options, which has
already been distributed. Please complete this election form and deliver it to
Pam Timberman, PathoGenesis Corporation, 201 Elliott Avenue West, Seattle, WA
98119 on or before Monday, September 18, 2000 at 1:00 p.m. Pacific Daylight
Time. You may change your election by completing and delivering a new election
form up until the consummation of the merger in which PathoGenesis becomes a
wholly owned subsidiary of Chiron (the "Merger"), but that could be as soon as
the morning of September 19, 2000.
ELECTION
Subject to the terms and conditions of the Merger Agreement as
described in the Q&A and the instructions below and effective upon the
consummation of the Merger, I hereby elect as follows by checking the
appropriate box:
CASH OUT RIGHT
/ / I ELECT THE CASH OUT RIGHT. I hereby elect to have all my option(s)
outstanding as of the Effective Time, as defined in the Merger
Agreement, cancelled in return for a cash payment. At that time,
each option that I hold will terminate and cease to be outstanding.
In exchange, I will receive a cash amount, less applicable
withholding taxes, for each outstanding option equal to the
excess, if any, of $38.50 over the exercise price for such option
multiplied by the number of shares of PathoGenesis stock subject to
that option.
or
CONVERSION ALTERNATIVE
/ / I ELECT THE CONVERSION ALTERNATIVE. I hereby elect to have all my
option(s) outstanding as of the Effective Time converted into an
option(s) to purchase Chiron common stock. By making this election, I
waive (1) any right to acceleration of vesting of my option(s) by
reason of Chiron's acquisition of PathoGenesis common stock, the Merger
or any other transaction contemplated by the Merger Agreement and (2)
any right to a cash payment in exchange for my option(s) as described
under the heading Cash Out Right. The converted option(s) will have the
same life and vesting schedule as my PathoGenesis option(s) but they
will all be non-statutory options and the exercise price and number of
shares will be adjusted to reflect the merger and the terms of the
Merger Agreement. Thus, my conversion options will be unvested to the
same extent that my PathoGenesis
1
<PAGE>
option(s) was (were) unvested and they will continue to vest based on
employment after the Merger. However, if my employment is terminated
without cause by Chiron in the 12 months following the date that
PathoGenesis becomes a wholly owned subsidiary of Chiron (the "Merger
Date") (or if I voluntarily terminate employment within 13 months
following that Merger Date for "good reason" as defined in any
employment agreement or severance agreement to which I am a party),
all of my converted options will become immediately vested and
exercisable and I will receive a cash payment for each converted
option. The cash payment will be calculated as follows:
Cash Payment = (1) Number of Chiron shares under my converted option
(excluding any shares acquired and/or disposed of upon exercise or
cashless exercise prior to such time of termination) x (2) the amount,
if any, by which the average of the closing price per share of Chiron
Common Stock on the NASDAQ National Market for the 5 consecutive
trading days immediately before the Merger Date exceeds the adjusted
exercise price per share.
Whether or not vesting of my converted options accelerates upon a
subsequent merger or change in control will be determined under the
same terms as the acceleration provisions generally applicable under
the Chiron 1991 Stock Option Plan. Under those provisions, the
conversion options would accelerate upon a merger or change in control
of Chiron unless the options are either assumed or replaced with a
comparable award subject to shares of the successor corporation or its
parent.
Finally, if I elect the Conversion Alternative, I will be granted a new
Chiron option to purchase a number of Chiron shares equal to 30% of the
number of unvested shares subject to my converted option(s) on the
Merger Date. The exercise price per share of the new Chiron option will
be equal to the fair market value, as determined pursuant to the Chiron
1991 Stock Option Plan, of one share of Chiron common stock on the
grant date. The vesting and remaining provisions of my new Chiron
option will be determined in accordance with the terms of the Chiron
1991 Stock Option Plan. I will not be entitled to this new Chiron
Option if I do not elect the Conversion Alternative.
Dated: _________, 2000. ------------------------------
Signature
------------------------------
Name
Address:
------------------------------
------------------------------
2
<PAGE>
Subject to the terms and conditions hereof, upon execution and delivery
of this election form by you, this election form will constitute the agreement
between you and Chiron Corporation with respect to the subject matter herein.
Chiron Corporation
By: /s/ William G. Green
---------------------------
Name: William G. Green
Title: Senior Vice President
and General Counsel
3
<PAGE>
INSTRUCTIONS
1. GENERAL. This Election Form should be properly filled in, dated and signed
and should be delivered to the address set forth on the first page of this
Election Form. If sent by mail, then it is suggested the Election Form be sent
registered mail, return receipt requested or overnight express or mail. You may
also send the form by facsimile to the attention of Pam Timberman at (206)
270-3343 but you must also send the signed original of your form by mail.
2. TIME IN WHICH TO ELECT. The Election Form should be received no later
than Monday, September 18, 2000 at 1:00 p.m. Pacific Daylight Time. You may
change your election by completing and delivering a new election form up
until the consummation of the merger in which PathoGenesis becomes a wholly
owned subsidiary of Chiron, but that could be as soon as the morning of
September 19, 2000.
3. SIGNATURES. The signature (or signatures) on the Election Form should
correspond exactly with the name as written on your option agreement(s).
4. QUESTIONS. All questions should be directed to Pam Timberman at
(206) 674-6663 or Iain Duncan at (206) 664-6044.
