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EXHIBIT 99-A(4)
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GENENTECH, INC.
1984 INCENTIVE STOCK OPTION PLAN, AS AMENDED AND RESTATED
(EFFECTIVE OCTOBER 25, 1995)
1. PURPOSE
(a) The purpose of the Plan is to provide a means by which selected key
employees of GENENTECH, INC. (the "Company") and its affiliates, as defined in
subparagraph 1(b), may be given an opportunity to purchase stock of the Company.
(b) The word "affiliate" as used in the Plan means any parent corporation
or subsidiary corporation of the Company, as those terms are defined in Sections
424(e) and (f), respectively, of the Internal Revenue Code of 1986, as amended
(the "Code").
(c) The Company, by means of the Plan, seeks to retain the services of
persons now holding key positions, to secure and retain the services of persons
capable of filling such positions, and to provide incentives for such persons to
exert maximum efforts for the success of the Company.
(d) The Company intends that the options issued under the Plan be incentive
stock options as that term is used in Section 422 of the Code.
2. ADMINISTRATION
(a) The Plan shall be administered by the Board of Directors (the "Board")
of the Company unless and until the Board relegates administration to a
committee, as provided in subparagraph 2(c). Whether or not the Board has
delegated administration, the Board shall have the final power to determine all
questions of policy and expediency that may arise in the administration of the
Plan.
(b) The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:
(1) To determine from time to time which of the persons eligible under
the Plan shall be granted options; when and how the option shall be
granted; the provisions of each option granted (which need not be
identical), including the time or times during the term of each option
within which all or portions of such option may be exercised; and the
number of shares for which an option shall be granted to each person.
(2) To construe and interpret the Plan and options granted under it,
and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any option agreement,
in a manner and to the extent it shall deem necessary or expedient to make
the Plan fully effective.
(3) To amend the Plan as provided in paragraph 10.
(4) Generally, to exercise such powers and to perform such acts as the
Board deems necessary or expedient to promote the best interests of the
Company.
(c) The Board may delegate administration of the Plan to a committee
composed of not fewer than three (3) members of the Board. If such is then
required in order for transactions under the Plan to qualify for exemption under
Rule 16b-3 promulgated under the Securities and Exchange Act of 1934, as amended
("Rule 16b-3"), all of the members of such committee shall be disinterested
persons, as defined by the provisions of subparagraph 2(d). If administration is
delegated to a committee, the committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board,
subject, however, to such resolutions, not inconsistent with the provisions of
the Plan, as may be adopted from time to time by the Board. The Board may
abolish the committee at any time and revest in the Board the administration of
the Plan.
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(d) The term "disinterested person", as used in this Plan, shall mean an
administrator of the Plan, whether a member of the Board or of any committee to
which responsibility for administration of the Plan has been delegated pursuant
to subparagraph 2(c), who is not at the time he or she exercises discretion in
administering the plan eligible and has not at any time within one year prior
thereto been eligible for selection as a person to whom stock may be allocated
or to whom stock options or stock appreciation rights may be granted pursuant to
the Plan or any other plan of the Company or any of its affiliates entitling the
participants therein to acquire stock, stock options or stock appreciation
rights of the Company or any of its affiliates. Any such person shall otherwise
comply with the requirements of Rule 16b-3, as from time to time in effect.
3. SHARES SUBJECT TO THE PLAN
(a) Subject to the provisions of paragraph 9 relating to adjustments upon
changes in stock, the stock that may be sold pursuant to options granted under
this Plan shall not exceed in the aggregate Fifteen Million Ninety Four Thousand
Three Hundred and Ninety Seven (15,094,397) shares of the Company's common
stock; provided, however, that such aggregate number of shares shall be reduced
to reflect the number of shares of the Company's common stock which has been
sold under, or may be sold pursuant to outstanding options granted under, the
Company's 1984 Non-Qualified Stock Option Plan (the "Non-Qualified Plan") to the
same extent as if such sales had been made or options had been granted pursuant
to this Plan. As used in this Plan, the "Company's common stock" includes all
series of common stock authorized by the Company's charter documents, including
the Common Stock and Earnings Convertible Restricted Stock now authorized and
any other series that may in the future be authorized. If any option granted
under this Plan or the Non-Qualified Plan shall for any reason expire or
otherwise terminate without having been exercised in full, the stock not
purchased under such option shall again become available for this Plan and the
Non-Qualified Plan.
(b) For options granted after December 31, 1986, an option may be granted
to an eligible person under the Plan only if the aggregate fair market value
(determined at the time the option is granted) of the stock with respect to
which incentive stock options are exercisable for the first time by such
optionee during any calendar year under all such plans of the Company and its
affiliates does not exceed one hundred thousand dollars ($100,000). Should it be
determined that any option granted under the Plan exceeds such maximum, such
option shall be considered a nonstatutory stock option to the extent, but only
to the extent, of such excess.
(c) Subject to the limitations contained elsewhere herein and to the
provisions of paragraph 9 relating to adjustments upon changes in stock, the
aggregate number of shares of stock that may be subject to options granted to
all persons who are directors of the Company at the time such Options are
granted shall not exceed four hundred thousand (400,000) shares of the Company's
common stock, and no single director of the Company may be granted options to
purchase more than two hundred thousand (200,000) shares of the Company's common
stock.
4. ELIGIBILITY
(a) Options may be granted only to key employees (including officers) of
the Company or its affiliates. A director of the Company shall not be eligible
to be granted an option under the Plan unless such director is also a key
employee (including an officer) of the Company or an affiliate of the Company.
(b) A director shall in no event be eligible to be granted an option under
the Plan unless and until such director is expressly declared eligible to
participate in the Plan by action of the Board or the committee, and only if, at
any time discretion is exercised by the Board in the selection of a director as
a person to whom options may be granted, or in the determination of the number
of shares which may be covered by options granted to a director, a majority of
the Board and a majority of the directors acting in such matter are
disinterested persons, as defined in subparagraph 2(d), if such is then required
by Rule 16b-3. The Board shall otherwise comply with the requirements of Rule
16b-3, as from time to time in effect.
(c) No person shall be eligible for the grant of an option under the Plan
if, at the time of grant, such person owns (or is deemed to own pursuant to
Section 424(d) of the Code) stock assessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or of any of
its
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affiliates unless the options price is at least one hundred ten percent (110%)
of the fair market value of such stock at the date of grant and the term of the
option does not exceed five (5) years from the date of grant.
5. OPTION PROVISIONS
Each option shall be in such form and shall contain such terms and
conditions as the Board or the committee shall deem appropriate. The provisions
of separate options need not be identical, but each option shall include
(through incorporation of provisions hereof by reference in the option or
otherwise) the substance of each of the following provisions:
(a) The term of any option shall not be greater than ten (10) years
from the date it was granted.
(b) The exercise price of each option shall be not less than one
hundred percent (100%) of the fair market value of the stock subject to the
option on the date the option is granted.
(c) The purchase price of stock acquired pursuant to an option shall
be paid, as specified in the option, either (i) in cash at the time the
option is exercised, or (ii) at the discretion of the Board or the
committee, (A) by delivery to the Company of other shares of the Company's
common stock, (B) according to a deferred payment or other arrangement
(which may include, without limiting the generality of the foregoing, the
use of other common stock of the Company) with the person to whom the
option is granted or to whom the option is transferred pursuant to
subparagraph 5(d), or (C) in any other form of legal consideration that may
be acceptable to the Board or the committee in their discretion, either at
the time of grant or exercise of the option.
In the case of any deferred payment arrangement specified at the time
of grant, an interest rate shall be stated which is not less than the rate
then specified which will prevent any imputation of higher interest under
Section 483 of the Code.
(d) An option shall not be transferable except by will or by the laws
of descent and distribution, and shall be exercisable during the lifetime
of the person to whom the option is granted only by such person.
(e) The total number of shares of stock subject to an option may, but
need not, be allotted in periodic installments (which may, but need not, be
equal). From time to time during each of such installment periods, the
option may be exercised with respect to some or all of the shares allotted
to that period, and/or with respect to some or all of the shares allotted
to any prior period as to which the option was not fully exercised. During
the remainder of the term of the option (if its term extends beyond the end
of the installment periods), the option may be exercised from time to time
with respect to any shares then remaining subject to the option. The
provisions of this subparagraph 5(e) are subject to any option provisions
governing the minimum number of shares as to which an option may be
exercised.
(f) [RESERVED]
(g) The Company may require any optionee, or any person to whom an
option is transferred under subparagraph 5(d), as a condition of exercising
any such option to make such representations, warranties and agreements as
the Company may deem appropriate to assure that issuance of the Company's
common stock upon exercise of such option is in compliance with then
applicable federal and state securities laws.
(h) An option shall terminate three (3) months after termination of
the optionee's employment with the Company or an affiliate, unless (i) the
termination of employment of the optionee is due to such person's permanent
and total disability, within the meaning of Section 422(c)(6) of the Code,
in which case the option may, but need not, provide that it may be
exercised at any time within one (1) year following such termination of
employment; or (ii) the optionee dies while in the employ of the Company or
an affiliate, or within not more than three (3) months after termination of
such employment, in which case the option may, but need not, provide that
it may be exercised at any time within eighteen (18) months following the
death of the optionee by the person or persons to whom the optionee's
rights under such option pass by will or by the laws of descent and
distribution; or (iii) the option by its terms specifies either (a) that it
shall terminate sooner than three (3) months after termination of the
optionee's
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employment, or (b) that it may be exercised more than three (3) months
after termination of the optionee's employment with the Company or an
affiliate. This subparagraph 5(h) shall not be construed to extend the term
of any option or to permit anyone to exercise the option after expiration
of its term, nor shall it be construed to increase the number of shares as
to which any option is exercisable from the amount exercisable on the date
of termination of the optionee's employment.
(i) The option may, but need not, include a provision whereby the
optionee may elect any time during the term of his or her employment with
the Company or any affiliate to exercise the option as to any part or all
of the shares subject to the option prior to the stated vesting data of the
option or of any installment or installments specified in the option. Any
shares so purchased from any unvested installment or option may be subject
to a repurchase right in favor of the Company or to any other restriction
the Board or the committee determines to be appropriate.
(j) Options may be granted to directors of the Company only during the
first month of each calendar quarter. Any option held by a director of the
Company may only be exercised during any period of ten business days
beginning on the third business day after a quarterly or annual summary
statement of the Company's revenues and earnings appears on a wire service
or in a newspaper of general circulation, or is otherwise made generally
available to the public.
6. COVENANTS OF THE COMPANY
(a) During the terms of the options granted under the Plan, the Company
shall keep available at all times the number of shares of stock required to
satisfy such options.
(b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the options granted under the
Plan; provided, however, that this undertaking shall not require the Company to
register under the Securities Act of 1933, as amended, either the Plan, any
option granted under the Plan or any stock issued or issuable pursuant to any
such option. If the Company is unable to obtain from any such regulatory
commission or agency the authority which counsel for the Company deems necessary
for the lawful issuance and sale of stock under the Plan, the Company shall be
relieved from any liability for failure to issue and sell stock upon exercise of
such options unless and until such authority is obtained.
7. USE OF PROCEEDS FROM STOCK
Proceeds from the sale of stock pursuant to options granted under the Plan
shall constitute general funds of the Company.
8. MISCELLANEOUS
(a) The Board or the committee shall have the power to accelerate the time
during which an option may be exercised or the time during which the option or
any part thereof will vest pursuant to subparagraph 5(e), notwithstanding the
provisions in the option stating the time during which it may be exercised or
the time during which it will vest.
(b) Neither an optionee nor any person to whom an option is transferred
under subparagraph 5(d) shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares subject to such option unless
and until such person has satisfied all requirements for exercise of the option
pursuant to its terms.
9. ADJUSTMENTS UPON CHANGES IN STOCK
(a) If any change is made in the stock subject to the Plan, or subject to
any option granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or otherwise), the Board shall make
appropriate adjustments in the maximum number of shares subject to the Plan and
the number of shares and price per share of stock subject to outstanding
options.
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(b) In the event of a Change of Control (as defined in subparagraph 9(c)),
then as to options which are not then exercisable, the time during which such
options may be exercised shall be accelerated to the 60-day period from and
after a Change of Control, unless, in the opinion of the Board, it is clearly in
the best interests of the optionholders and the shareholders taken together that
the Company or a surviving corporation (if the Change of Control results in the
Company not surviving) assume any outstanding options or substitute similar
options for those outstanding under the Plan, in which case the Board may take
appropriate action to effect an assumption or substitution.
(c) "Change of Control" shall mean any of the following events:
(1) the acquisition by any person (including a group, within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended), other than the Company or any of its subsidiaries, of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Securities Exchange Act of 1934, as amended) of 50% or more of the
combined voting power of the Company's then outstanding voting securities;
or
(2) approval by stockholders of the Company of a merger,
consolidation, liquidation or dissolution of the Company or of the sale of
all or substantially all of the Company's assets.
(d) Notwithstanding any provision to the contrary set forth herein, the
consummation of the merger contemplated by the Agreement and Plan of Merger
dated as of May 23, 1995, among the Company, Roche Holdings, Inc. and HLR (U.S.)
II, Inc. shall not be deemed to be a Change of Control under the Plan.
(e) From and after October 25, 1995, all references herein to "shares",
"stock", or "the Company's common stock" shall be deemed to be references to
shares of Callable Putable Common Stock, par value $0.02 per share, of the
Company ("Special Common Stock"), except for the references to the shares of
Common Stock of the Company contained in subparagraph 9(g).
(f) Notwithstanding any provision to the contrary set forth herein, in the
event that the Special Common Stock is redeemed in accordance with Article
THIRD, Section (c)(ii) of the Company's Certificate of Incorporation, any
options granted under the Plan that are exercisable for Special Common Stock and
that are outstanding on the date of redemption (whether or not such options are
exercisable on such date) shall become exercisable for consideration of the same
type and amount as the holders thereof would have received had they exercised
such options prior to such date of redemption.
(g) Notwithstanding any provision to the contrary set forth herein, in the
event that the shares of Special Common Stock are converted into shares of
Common Stock, par value $0.02 per share, of the Company ("Common Stock")
pursuant to Article THIRD, Section (c)(vi) of the Company's Certificate of
Incorporation, each option granted under the Plan which is outstanding on the
Conversion Date as such term is defined in Article THIRD, Section (c)(vi) of the
Company's Certificate of Incorporation) shall automatically be canceled, and the
holder thereof shall receive, in exchange therefor, a substitute option to
purchase, at a per share exercise price equal to the per share exercise price of
such canceled option, the number of shares of Common Stock equal to the number
of shares of Special Common Stock subject to such canceled option. Such
substitute option shall be subject to the same terms and conditions as the
option for which it is exchanged, including with respect to vesting (such that
such substitute option vests at the same time as the option for which it is
exchanged would have vested) and the conditions relating to the exercise of the
option. From and after the Conversion Date, all references herein to "shares",
"stock", or the "Company's Common Stock" which in accordance with subparagraph
9(e) are deemed to be references to shares of Special Common Stock, shall be
deemed to be references to shares of Common Stock.
10. AMENDMENT OF THE PLAN
(a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in paragraph 9 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved
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by a majority of the outstanding shares of the Company entitled to vote within
twelve (12) months before or after the adoption of the amendment, where the
amendment will:
(i) Increase the number of shares reserved for options under the Plan;
(ii) Materially modify the requirements as to eligibility for
participation in the Plan; or
(iii) Materially increase the benefits accruing to participants under
the Plan.
It to expressly contemplated that the Board may amend the Plan in any
respect the Board deems necessary or advisable to provide optionees with the
maximum benefits provided or to be provided under the provisions of the Code and
the regulations promulgated thereunder relating to employee incentive stock
options and/or to bring the Plan and/or options granted under it into compliance
therewith.
(b) Rights and obligations under any option granted before amendment of the
Plan shall not be altered or impaired by any amendment of the Plan, except with
the consent of the person to whom the option was granted.
11. TERMINATION OR SUSPENSION OF THE PLAN
(a) The Board may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate within ten (10) years from the date the
Plan is adopted by the Board or approved by the stockholders of the Company,
whichever is earlier. No options may be granted under the Plan while the Plan is
suspended or after it is terminated.
(b) Rights and obligations under any option granted while the Plan is in
effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent of the person to whom the option was granted.
12. EFFECTIVE DATE OF PLAN
The Plan shall become effective as determined by the Board, but no options
granted under the Plan shall be exercised unless and until the Plan has been
approved by the holders of a majority of the outstanding shares of the Company
entitled to vote, and, if required, an appropriate permit has been issued by the
Commissioner of Corporations of the State of California.
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