remuneration up to a maximum of CHF 220 000 per year, reduced with a coordinating offset of 30% of salary up to a maximum of CHF 24 120. The maximum retirement pension is 60% of the insured remuneration after 40 years of contribution. The table shows the annual pension benefit by base salary and years of service. In 2005, Novartis contributed on average CHF 18 650 to the Pension Fund for each of the six Swiss-based Executive Committee members.

The Swiss Management Pension Fund is basically a definedcontribution plan and provides retirement benefits and risk insurance for death and disability for components of remuneration not covered by the Swiss Pension Fund. Swiss law provides certain minimum requirements, e.g. return on employee contributions; however, these requirements do not substantially affect the “defined-contribution-character” of the pension plan. Employees exceeding the maximum insurable remuneration of the Swiss Pension Fund are eligible for the Swiss Management Pension Fund. The benefits under the Swiss Management Pension Fund are granted in addition to those of the Swiss Pension Fund. The Swiss Management Pension Fund is funded through contributions by Novartis and the employee.

The Pension Plan for certain US-based employees of Novartis Corporation (Pension Plan) is a funded, tax-qualified, non contributory defined-benefit pension plan that covers certain employees of Novartis Corporation and its US affiliates, including Dr. Fishman. The Pension Plan provides for different pension formulas, depending on which Novartis company is the employer of a particular employee. The pension formula in which Dr. Fishman

participates under the Pension Plan is a pension equity (PEP) formula. Benefits under the PEP formula are based upon an employee’s highest average earnings for a five-calendar-year period during the last ten calendar years of service with Novartis and the employee’s accumulated PEP credits (expressed as a percentage of final average earnings, and ranging from 2% to 13% for each year of service based on the employee’s attained age in a particular year), and are payable after retirement in the form of an annuity or a lump sum. The amount of annual earnings covered by the Pension Plan is generally equal to the employee’s base salary and annual bonus. The amount of annual earnings that may be considered in calculating benefits under the Pension Plan is limited by law. For 2005, the annual limitation was USD 210 000. Novartis Corporation and its US affiliates also maintain various unfunded supplemental pension plans, each of which provides its respective employees with an amount substantially equal to the difference between the amount that would have been payable under the Pension Plan in the absence of legislation limiting pension benefits and the annual earnings that may be considered in calculating pension benefits under tax-qualified pension plans, and the amount actually payable under the Pension Plan.

Employees of Business Units located in the US, including Dr. Fishman, generally are eligible to participate in tax-qualified definedcontribution plans through which they may contribute a portion of their annual compensation (subject to the annual limitation described above) and receive a Company match that is generally USD 1 for each USD 1 contributed by the employee, up to 6% of the employee’s annual compensation. In addition, employees of certain Business Units are eligible to receive a retirement contribution equal to 3% of their annual compensation (subject to the