Exhibit 10.510
PERSONAL AND CONFIDENTIAL
, 200
«First_Name» «Last_Name»
«JOB_TITLE»
Chiron Corporation
«ADDRESS», M/S «MS»
«CITY_STATE_ZIP»
Re: Deferred Share Units Grant
Dear: «First_Name»
As you are aware, Novartis AG is in
the process of acquiring Chiron Corporation ( the
“Company”) pursuant to a merger agreement dated October
30, 2005 (the “Novartis Acquisition”). I am pleased to
inform you that you have been granted a deferred share units award
(the “Award”) with respect to
«Shrs_Grntd» («Shrs_Grntd_Wrds») of Company
common stock (“Common Stock”) payable in shares of
Common Stock or in cash as described below. The Award was granted
on
,
200 (the “Grant Date”) pursuant to
the Chiron Corporation 2004 Stock Compensation Plan (the
“Plan”) in accordance with the restrictions, terms, and
conditions hereinafter set forth and is in all respects limited and
conditioned by the provisions of the Plan.
1.
The Award will vest in four (4)
equal, successive annual installments upon completion of each year
of employment with the Company over the four (4)-year period
measured from the Grant Date, subject to accelerated vesting as set
forth below. Each date on which the Award vests is referred
to as a “Vesting Date”.
2.
The Award will entitle you to
receive, upon each Vesting Date (provided your Award has not been
terminated or canceled before such date in accordance with the
provisions below), a payment in shares of Common Stock or cash
depending on whether the Vesting Date occurs prior to, or on or
after the consummation of the Novartis Acquisition (the
“Novartis Closing”). To the extent the Vesting Date
occurs prior to the Novartis Closing, you will receive the number
of shares of Common Stock with respect to which your Award vests on
such date. Upon the Novartis Closing, your Award will be assumed by
Novartis and will automatically convert into a right to receive a
cash payment on each Vesting Date (to the extent the Award has not
been terminated or canceled before such date). The amount of the
cash
payment for each share under the Award that
vests on such date will be equal to the consideration paid in the
Novartis Acquisition for each share of Common Stock. Accordingly,
to the extent the Vesting Date occurs on or after the Novartis
Closing, you will receive a cash payment equal to the product of
(i) the consideration paid in the Novartis Acquisition for each
share of Common Stock and (ii) the number of shares with respect to
which the Award vests on such date. In no event will you be
entitled to receive any shares of Common Stock or any other
securities under this Award on or after the Novartis
Closing.
3.
If you voluntarily terminate
employment with the Company for any reason or if the Company
terminates your employment before a Vesting Date, subject to
paragraphs 8 and 9 below, your Award will be canceled automatically
and no shares of Common Stock or cash will be issued
thereunder.
4.
The issuance of shares of Common
Stock or cash under the Award is subject to satisfaction of all tax
withholding obligations with respect to such shares or cash and you
agree to make appropriate arrangements with the Company to satisfy
all such obligations. Unless you elect in writing to satisfy such
obligations by payment in cash before issuance of any shares under
your vested Award, the number of shares of Common Stock which you
would otherwise be entitled to receive on any Vesting Date will be
reduced by that number of whole shares which, as of that date, has
an aggregate Fair Market Value (as defined in the Plan) equal to
the total amount of tax withholding obligations applicable to the
shares issuable on that date. To the extent that the payment on any
Vesting Date is payable in cash, the amount of your payment will be
reduced by the total amount of tax withholding obligations
applicable to such payment.
5.
Your Award hereunder may not be
sold, assigned, transferred, alienated, subject to garnishment or
otherwise encumbered in any manner other than by transfer, to the
extent provided below, by will or the laws of descent and
distribution. In the event of your death prior to the issuance of
shares of Common Stock or cash under your Award, any shares or cash
issuable thereunder by reason of your death will pass pursuant to
your will or by the laws of descent and distribution.
6.
The issuance of shares of Common
Stock hereunder shall be subject to compliance by the Company and
you or your beneficiary with all applicable requirements of law
relating thereto and with all regulations of any stock exchange on
which the Common Stock may be listed at the time of such
issuance.
7.
Except as otherwise provided with
respect to a Novartis Acquisition in paragraph 2, if the Company or
its stockholders enter into an agreement to dispose of all or
substantially all of the assets of the Company, enter into an
agreement to merge or consolidate with another entity, or enter
into a plan of reorganization or liquidation, while your Award is
unvested, then the Award will become vested and paid in full,
immediately before the consummation of such transaction. However,
no such acceleration of the vesting or payment
2
date will occur if the agreement requires as a
prerequisite to the consummation of any such transaction that each
such outstanding Award will be either assumed by the successor
corporation or parent thereof or be replaced with a comparable
award in the successor corporation or parent thereof.
8.
If there is a Qualifying Termination
of your employment following the Novartis Closing, then the Award,
to the extent unvested at the time of such Qualifying Termination,
will vest and will be paid out in full in cash.
9.
If there is a Change in Control of
the Company (other than the Novartis Acquisition) pursuant to which
the Award continues and within twenty-four (24) calendar months
thereafter there is a Qualifying Termination of your employment,
then the Award to the extent unvested at the time of such
Qualifying Termination, will vest and will be paid out in
full.
10.
For this letter agreement, the
following definitions apply:
a.
“Change in Control” of
the Company shall be deemed to have occurred as of the first day
that any one or more of the following conditions is satisfied and
regulatory approval has
