AMENDMENT WITH RESPECT TO EMPLOYEE STOCK OPTION
ARRANGEMENTS, dated January 3, 1995, among CIBA-GEIGY
LIMITED, a Swiss corporation ("Ciba"), CIBA-GEIGY
CORPORATION, a New York corporation ("CCorp"), CIBA BIOTECH
PARTNERSHIP, INC., a Delaware corporation ("Holdings"), and
CHIRON CORPORATION, a Delaware corporation (the "Company").
WHEREAS Ciba, CCorp, Holdings and the Company have entered into the
Investment Agreement dated as of November 20, 1994 (the "Investment
Agreement") (capitalized terms used but not defined herein shall have the
meanings assigned to them in the Investment Agreement);
WHEREAS the Investment Agreement provides in Section 5.14 thereof for the
implementation of arrangements regarding Employee Stock Options;
WHEREAS the parties wish to make certain changes to the arrangements
provided in Section 5.14 as set forth below;
NOW, THEREFORE, in consideration of the transactions contemplated by the
Investment Agreement and for other good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, the parties hereto
hereby agree as follows:
SECTION 1. The parties hereto agree that, notwithstanding anything to
the contrary contained in Section 5.14 of the Investment Agreement:
(a) All payments to be made to holders of Stock Options pursuant to
Section 5.14 shall be made by Ciba direct to the person entitled thereto, and
not by the Company. The parties shall work out methods and procedures for
effecting such payments, and the Company will provide, at its own expense,
such information and administrative support services as shall be required
therefor, including information regarding required withholdings. Such payments
shall be made, and the related arrangements shall be effected, at no added
expense to Ciba. Information detailing each amount so paid and each amount
withheld with respect thereto and the nature thereof shall be prepared by the
Company for the benefit of both parties. The parties shall cooperate with
respect to the application of and arrangements related to such withheld
amounts.
(b) The definition of "Options Tranche" set forth in the last sentence of
Section 5.14(a) shall be amended to read in full as follows: "An 'Options
Tranche' shall mean that portion of a series of options
with the same expiration date and exercise price that vest on the same date."
(c) The parties intend, and the last proviso of Section 5.14(b)
shall be interpreted to mean, that only such portion of a Type-A Non-Vested
Options with respect to which the Type-A Non-Vested Option Payment Right was
exercised shall be cancelled.
(d) Pursuant to Section 5.14(d) the Company has determined that
shareholder approval is desirable with respect to any right to a payment under
Section 5.14 that may be made to any director or officer as defined in Rule
16a-1 of the Exchange Act ("Section 16(b) Persons"). Accordingly, the
parties have agreed that the right of any Section 16(b) Person to payment
under Section 5.14 shall be embodied in an amendment to the Company's Stock
Option plans, which amendment shall be submitted to the stockholders of the
Company for approval at the next regularly scheduled meeting. Any right to
such payment is expressly conditioned upon such approval being obtained, and
no such payment shall be made prior thereto. Upon obtaining such approval,
such payment shall be made by Ciba to each Section 16(b) Person in an amount
equal to the aggregate Option Participation Payment such person would have
been entitled to under Section 5.14 had such payment been made on the Closing
Date, increased at a rate of 6% per annum calculated from the Closing Date to
the date such payment shall actually be made by Ciba; provided that such
increased payments shall be required only for amounts payable under Sections
5.14(a) and (b) for Vested Option Payment Rights and Type A Non-Vested
Option Payment Rights, as the case may be, exercised on or prior to the fifth
business day after such approval is obtained and for all amounts payable
under Section 5.14(c).
(e) The parties agree that Ciba shall have the right to review at
all reasonable times the books, records and other information of the Company
relating to the derivation and recipients of amounts paid by Ciba pursuant to
Section 5.14, as amended, to verify that such amounts paid were correctly
paid and calculated.
(f) The parties agree that Ciba shall have the right at any time to
review the books, records and any other information of the Company relating
to the derivation and recipients of amounts paid by Ciba pursuant hereto to
verify that such amounts paid were correctly paid and calculated.
2.
(g) The Company agrees to indemnify and hold harmless Ciba and its
subsidiaries and affiliates and any of their present, former and future
directors, officers, employees, trustees, representatives, attorneys and
advisers from, against and in respect of any damages, claims, losses, charges,
actions, suits, proceedings, deficiencies, taxes, interest, penalties and
reasonable costs and expenses (including attorneys' fees) ("Liabilities")
imposed on, sustained, incurred or suffered by or asserted against any of
them, directly or indirectly, relating to, arising out of or in connection
with, Ciba's payments to holders of Stock Options in accordance herewith,
excluding any Liabilities that would have been imposed on Ciba relating to,
arising out of or in connection with Section 5.14 as the same shall have been
in effect on the date of the execution of the Investment Agreement and without
giving effect to this Amendment, in any case including, but not limited to,
the reimbursement by the Company of any amounts paid by Ciba that were not
properly payable in accordance with Section 5.14 of the Investment Agreement
and the terms hereof.
(h) The parties hereby acknowledge and agree that the Section
references in the proviso to Section 5.14(e) are to "Section 5.14(a)" and
"Section 5.14(b)", respectively.
SECTION 2. This Amendment constitutes the entire agreement and
understanding of the parties with respect to the subject matter hereof and
supersedes any and all prior agreements and understandings, oral or written,
relating to the subject matter hereof. Capitalized terms used herein and not
otherwise defined herein shall have the meaning assigned to such terms in the
Investment Agreement. This Supplemental Agreement shall be construed in
accordance with and governed by the law of the State of Delaware. This
Supplemental Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which, when taken together, shall
constitute but one instrument. Except as expressly set forth herein, this
Supplemental Agreement shall not by implication or otherwise limit, impair,
constitute a waiver of, or otherwise affect the rights and remedies of the
parties under the Investment Agreement or any of the Ancillary Agreements.
3.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment with Respect Stock Option Arrangements to be duly executed by
their respective authorized officers as of the date first above
written.
CIBA-GEIGY LIMITED,
by /s/ Dr. Herbert Gut
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Name: Dr. Herbert Gut
Title: Senior Division Counsel
by /s/ Peter Sidler
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Name: Peter Sidler
Title: Senior Tax and
Corporate Counsel
CIBA-GEIGY CORPORATION,
by
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Name:
Title:
CIBA BIOTECH PARTNERSHIP, INC.
by
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Name:
Title:
CHIRON CORPORATION
by
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Name:
Title:
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment with Respect Stock Option Arrangements to be duly executed by
their respective authorized officers as of the date first above
written.
CIBA-GEIGY LIMITED,
by
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Name:
Title:
by
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Name:
Title:
CIBA-GEIGY CORPORATION,
by /s/ John J. McGraw
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Name:
Title:
CIBA BIOTECH PARTNERSHIP, INC.
by /s/ John J. McGraw
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Name:
Title:
CHIRON CORPORATION
by
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Name:
Title:
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment with Respect Stock Option Arrangements to be duly executed by
their respective authorized officers as of the date first above
written.
CIBA-GEIGY LIMITED,
by
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Name:
Title:
by
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Name:
Title:
CIBA-GEIGY CORPORATION,
by
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Name:
Title:
CIBA BIOTECH PARTNERSHIP, INC.
by
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Name:
Title:
CHIRON CORPORATION
by /s/ William J. Rutter
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Name:
Title: