GENENTECH, INC.
1991 Employee Stock Plan, as Amended
1. Purpose
The purpose of this 1991 Employee Stock Plan (the "Plan") is to
provide employees of Genentech, Inc. (the "Company"), and its U.S.
subsidiaries designated by the Company's Board of Directors, who wish to
become stockholders of the Company an opportunity to purchase Redeemable
Common Stock of the Company (the "Shares"). The Plan is intended to
qualify as an "employee stock purchase plan" within the meaning of Section
423 of the Internal Revenue Code of 1986, as amended (the "Code").
2. Eligible Employees
Subject to the provisions of Sections 7, 8 and 9 below, any individual
who is in the full-time employment of the Company on the day on which a
Grant Date (as defined in Section 3 below) occurs is eligible to
participate in an offering of Shares made by the Company hereunder. In
addition, the board of Directors may at any time designate one or more of
the Company's U.S. subsidiary corporations (as defined in Section 425(f) of
the Code) to be included in an offering of Shares under the Plan. Full-
time employment shall mean employment by the Company or its designated
U. S. subsidiary for:
(a) 20 hours or more per week; and
(b) more than five months in the calendar year.
3. Grant Dates
From time to time, the Board of Directors may fix a date (a "Grant
Date") or a series of dates (each of which is a "Grant Date") on which the
Company will grant rights to purchase Shares ("Rights") to employees
eligible to participate.
4. Prices
The purchase price per Share for Shares covered by a grant of Rights
hereunder shall be determined by the Board of Directors, but in no event
shall be less than the lesser of:
(a) eighty-five percent (85%) of the fair market value of a
Share on the Grant Date on which such Right was granted; or
(b) eighty-five percent (85%) of the fair market value of a
Share on the date such Right is exercised as to that Share.
5. Exercise of Rights and Method of Payment
(a) Rights granted under the Plan will be exercisable on
specific dates as determined by the Board of Directors.
(b) The method of payment for Shares purchased upon exercise of
Rights granted hereunder shall be through regular payroll
deductions or by lump sum cash payment, or both, as
determined by the Board of Directors. No interest shall be
paid upon payroll deductions or other payments in exercise
of Rights unless specifically provided for by the Board of
Directors.
6. Terms of Rights
Rights granted hereunder shall be exercisable during a twenty-seven
(27) month period or such shorter period as determined by the Board of
Directors. All Rights granted to an employee shall terminate upon
termination of full-time employment of the employee. Any payments received
by the Company from a participating employee with respect to a Right
granted hereunder and not utilized for the purchase of Shares upon exercise
of such Right shall be promptly returned to such employee by the Company
after termination of such Right, except that amounts that were not so
utilized because such amounts were insufficient to purchase a whole Share
may be applied toward the purchase of Shares pursuant to a Right
subsequently granted hereunder, if any.
7. Shares Subject to the Plan
No more than three million eight hundred thousand (3,800,000) Shares
may be sold pursuant to Rights granted under the Plan. Appropriate
adjustments in the above figure, in the number of Shares covered by
outstanding Rights granted hereunder, in the exercise price of the Rights
and in the maximum number of Shares which an employee may purchase
(pursuant to Section 9 below) shall be made to give effect to any mergers,
consolidations, reorganizations, recapitalizations, stock splits, stock
dividends or other relevant changes in the capitalization of the Company
occurring after the effective date of the Plan, provided that no fractional
Shares shall be subject to a Right and each Right shall be adjusted
downward to the nearest full Share. Any agreement of merger or
consolidation will include provisions for protection of the then existing
Rights of participating employees under the Plan. Either authorized and
unissued Shares or issued Shares heretofore or hereafter reacquired by the
Company may be made subject to Rights under the Plan. If for any reason
any Right under the Plan terminates in whole or in part, Shares subject to
such terminated Right may again be subject to a Right under the Plan.
8. Limitations on Grants
Anything to the contrary notwithstanding, pursuant to Section 423 of
the Code:
(a) No employee shall be granted a Right hereunder if such
employee, immediately after the Right is granted, owns stock
possessing five percent (5%) or more of the total combined
voting power or value of all classes of stock of the
Company, its parent corporation (as defined in Section
425(c) of the Code) or any subsidiary corporation, in each
case computed in accordance with Section 423(b)(3) of the
Code.
(b) No employee shall be granted a Right which permits his
Rights to purchase Shares under all employee stock purchase
plans of the Company and its subsidiaries to accrue at a
rate which exceeds twenty-five thousand dollars ($25,000)
(or such other maximum as may be prescribed from time to time
by the Code) of fair market value of such Shares (determined
at the time such Right is granted) for each calendar year in
which such Right is outstanding at any time, all in
accordance with the provisions of Section 423(b)(8) of the
Code.
9. Limits on Participation
(a) Participation shall be limited to eligible employees who enroll
under the Plan.
(b) No Right granted to any participating employee shall cover more
than twelve thousand (12,000) Shares.
(c) No more than One Hundred Eighty Thousand (180,000) Shares may be
purchased during any calendar quarter upon the exercise of
Rights granted under the Plan; provided, however, that for those
calendar quarters in which the Company pays regular annual
bonuses to eligible employees, the maximum aggregate numbers of
Shares which may be purchased upon the exercise of Rights shall
be Two Hundred Thousand (200,000) Shares. If the aggregate
purchases of Shares upon exercises of Rights granted under the
Plan would exceed the applicable maximum number for a particular
calendar quarter, the maximum permitted number of Shares shall
be allocated to the exercising participants in proportion to the
number of Shares they would otherwise purchase during such
calendar quarter.
10. Employee's Rights as Stockholder
No participating employee shall have any Rights as a stockholder in
the Shares covered by a Right granted hereunder until such Right has been
exercised, full payment has been made for the corresponding Shares and the
purchase has been entered in the records of the Transfer Agent for the
Shares.
11. Rights Not Transferable
Rights under the Plan are not assignable or transferable by a
participating employee.
12. Amendments or Discontinuance of the Plan
The Board of Directors of the Company shall have the right to amend,
modify or terminate the Plan at any time without notice; provided, however,
that the then existing Rights of all participating employees shall not be
adversely affected thereby, except that in the case of a participating
employee of a foreign branch of the Company or a designated U.S. subsidiary
corporation the Plan may be varied to conform with local laws, and
provided further that, subject to the provisions of Section 7 above, no
such amendment to the Plan shall, without the approval of the stockholders
of the Company:
(a) Increase the total number of Shares which may be offered
under the Plan;
(b) Amend the Plan in any manner which would render Rights
granted hereunder unqualified for special tax treatment
under Section 421 of the Code.
13. Effective Date and Approvals.
The Plan shall become effective as of January 1, 1991. The Company's
obligation to offer, sell or deliver its Shares under the Plan is subject
to the approval of the Company's stockholders and any governmental approval
required in connection with the authorized issuance or sale of such Shares
and is further subject to the determination by the Company that all
applicable securities laws have been complied with.
14. Administration of the Plan
The Board of Directors or any committee or person(s) to whom it
delegates its authority (the "Administrator") shall administer, interpret
and apply all provisions of the Plan. The Administrator may waive such
provisions of the Plan as it deems necessary to meet special circumstances
not anticipated or covered expressly by the Plan. Nothing contained in
this Section shall be deemed to authorize the Administrator to alter or
administer the provisions of the Plan in a manner inconsistent with the
provisions of Section 423 of the Code.