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EXHIBIT 99.2
GENENTECH, INC.
1991 Employee Stock Plan
(As amended effective April 13, 1999)
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 (i) shares of Callable Putable Common
Stock of the Company, or (ii) shares of Common Stock of the Company, to the
extent shares of Callable Putable Common Stock are converted to Common Stock in
accordance with the Company's Certificate of Incorporation (the shares referred
to in clauses (i) and (ii) above being hereinafter referred to collectively as
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
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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 five million three hundred thousand (5,300,000) 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
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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.
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