NOVARTIS FINANCE S.A. : Novartis Board of Directors and Dr. Daniel Vasella agree to cancel the non-compete agreement and all

  NOVARTIS FINANCE S.A. : Novartis Board of Directors and Dr. Daniel Vasella
   agree to cancel the non-compete agreement and all related compensation;
              Decision taken to address concerns of stakeholders

NOVARTIS FINANCE S.A. / Novartis Board of Directors and Dr. Daniel Vasella
agree to cancel the non-compete agreement and all related compensation;
Decision taken to address concerns of stakeholders . Processed and transmitted
by Thomson Reuters ONE. The issuer is solely responsible for the content of
this announcement.

Basel, 19 February 2013 - Novartis announced that the Novartis Board of
Directors and Dr. Daniel Vasella have agreed to cancel his non-compete
agreement with Novartis and all related conditional compensation. The
agreement was to take effect after Dr. Vasella steps down as Chairman of the
Board at the Novartis Annual General Meeting on February 22, 2013.

Intended to protect the company, the non-compete required that Dr. Vasella
refrain from making his knowledge and know-how available to competitors who
may take advantage of his experience with the company. Dr. Vasella knows the
company's business intimately, having built the leading R&D organization and
personally recruited most of the top executives. In return, the non-compete
provided for an annual payout of up to CHF 12 million for six years, for a
maximum total payout to Dr. Vasella of CHF 72 million, assuming all conditions
were met. Dr. Vasella previously expressed his intention to make available the
net amount received under the non-compete for philanthropic activities.

"The Board and Dr. Vasella agreed to cancel the non-compete agreement and to
forgo all compensation linked to his non-compete," said current Vice Chairman
Prof. Dr. Ulrich Lehner, who will serve as Chairman ad interim until the
designated Chairman is elected and assumes office on August 1, 2013. "We
continue to believe in the value of a non-compete, however, we believe the
decision to cancel the agreement and all related compensation addresses the
concerns of shareholders and other stakeholders. The board understands the
importance of full transparency and will strengthen its efforts in this
regard."

In light of recent events and especially in view of safeguarding the company's
interests, Dr. Vasella said, "I have understood that many people in
Switzerland find the amount of the compensation linked to the non-compete
agreement unreasonably high, despite the fact I had announced my intention to
make the net amount available for philanthropic activities. That is why I have
recommended to the Board that I forgo all payments linked to the non-compete
agreement."

Disclaimer
The foregoing release contains forward-looking statements that can be
identified by terminology such as "intention," "will," or similar expressions,
or by express or implied discussions regarding the potential future impact on
Novartis of the matters described in this release. You should not place undue
reliance on these statements. Such forward-looking statements reflect the
current views of management regarding future events, and involve known and
unknown risks, uncertainties and other factors that may cause actual results
to be materially different from any future results, performance or
achievements expressed or implied by such statements. There can be no
guarantee as to the ultimate outcome of the matters described in this release.
In particular, management's expectations regarding these matters could be
affected by, among other things, the public reaction to these matters; the
potential impact of these matters on executive compensation at Novartis;
competition in general; the impact that the foregoing factors could have on
the values attributed to the Novartis Group's assets and liabilities as
recorded in the Group's consolidated balance sheet, and other risks and
factors referred to in Novartis AG's current Form 20-F on file with the US
Securities and Exchange Commission. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, believed, estimated
or expected. Novartis is providing the information in this press release as of
this date and does not undertake any obligation to update any forward-looking
statements contained in this press release as a result of new information,
future events or otherwise.

About Novartis
Novartis provides innovative  healthcare solutions that  address the  evolving 
needs of patients and societies. Headquartered in Basel, Switzerland, Novartis
offers a diversified portfolio to best meet these needs: innovative medicines,
eye  care,  cost-saving  generic  pharmaceuticals,  preventive  vaccines   and 
diagnostic tools, over-the-counter and animal health products. Novartis is the
only global company with leading positions in these areas. In 2012, the  Group 
achieved net  sales  of USD  56.7  billion,  while R&D  throughout  the  Group 
amounted  to  approximately  USD  9.3  billion  (USD  9.1  billion   excluding 
impairment  and  amortization  charges).   Novartis  Group  companies   employ 
approximately 128,000 full-time-equivalent associates and operate in more than
140  countries  around   the  world.  For   more  information,  please   visit 
http://www.novartis.com.

Novartis   is    on    Twitter.   Sign    up    to   follow    @Novartis    at 
http://twitter.com/novartis.

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WKN: 904278;ISIN: XS0432810116;