X0202 4 2005-12-08 0 0000706539 CHIRON CORP CHIRON COR 0001031007 NOVARTIS CORP 608 FIFTH AVENUE NEW YORK NY 10020 0 0 1 0 0001114448 NOVARTIS AG LICHTSTRASSE 35 BASEL SWITZERLAND CH 4002 0 0 1 0 Common Stock, par value $0.01 per share 2005-12-08 4 C 0 6896552 43.50 A 80746860 I See footnotes On October 30, 2005, Chiron Corporation (the "Company") gave Novartis AG and Novartis Corporation, an indirect wholly-owned subsidiary of Novartis AG, notice of the exercise of its right, pursuant to the Subscription Agreement, dated as of November 20, 1994, among the Company, Novartis AG and certain of its affiliates, to require Novartis Biotech Partnership, Inc., an indirect wholly-owned subsidiary of Novartis AG and an indirect subsidiary of Novartis Corporation ("Novartis Biotech"), to purchase an aggregate of $300,000,000 worth of shares of Common Stock at $43.50 per share directly from the Company. Pursuant to that notice, on December 8, 2005, Novartis Biotech completed the purchase of 6,896,552 shares of Common Stock from Chiron for $43.50 per share, resulting in an aggregate purchase price of $300,000,012. Following the transaction, Novartis Biotech is the record holder of 80,739,404 shares of Common Stock. Novartis Corporation is the record holder of 7,456 shares of Common Stock and is the indirect beneficial owner of the shares of Common Stock owned of record by Novartis Biotech. Novartis Pharma AG, an indirect wholly-owned subsidiary of Novartis AG, is the record holder of 5,469,770 shares of Common Stock. Novartis AG is the indirect beneficial owner of all shares owned through Novartis Biotech, Novartis Corporation and Novartis Pharma AG, resulting in indirect beneficial ownership of 86,216,630 shares of Common Stock. Pursuant to the Market Price Option Agreement, dated as of November 20, 1994, among the Company, Novartis AG, Novartis Corporation and Novartis Biotech, Novartis Biotech or its designee, which must be Novartis AG or a subsidiary thereof, has the right to purchase from the Company under certain circumstances such number of shares of Common Stock as are necessary for the Reporting Persons to maintain collectively up to a 55% ownership interest in the Company, which as of October 31, 2005, constituted the right to purchase an additional 47,318,084 shares, based on 195,472,305 shares of Common Stock outstanding at October 31, 2005, as reported in the Company's Preliminary Proxy Statement filed with the Securities and Exchange Commission on November 25, 2005. The purchase price of any shares purchased pursuant to the Market Price Option Agreement will be the fair market value of the shares, determined as of the business day three business days prior to the closing of the purchase, where fair market value is generally the average of the closing sale prices on the Nasdaq National Market of shares of Common Stock during the 10-day period immediately preceding the date of determination of fair market value. Novartis AG and Novartis Corporation are indirect beneficial owners of any shares purchased by Novartis Biotech pursuant to the Market Price Option Agreement. Novartis Corporation, Jeff Benjamin, Vice President and General Counsel 2005-12-12