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EXHIBIT 99-B(4)
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GENENTECH, INC.
1984 NON-QUALIFIED 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 and directors (if declared eligible under paragraph 4) of and
consultants to 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 not be
incentive stock options as that term is used in Section 422 of the Code.
(e) For purposes of the Plan, the following definitions shall apply:
CLOSING SELLING PRICE: The Closing Selling Price per share of Common
Stock on any relevant date under the Plan shall be the closing selling
price per share of Common Stock, if such Common Stock is reported on a
national securities exchange or reported on the NASDAQ National Market
System (or any successor system), for the trading day immediately preceding
the date in question, as such price is published in the Wall Street Journal
(or if such publication is not available, a comparable publication selected
by the Committee).
EMPLOYEE: An individual shall be considered to be an Employee for so
long as such individual remains in the employ of the Company or one or more
of its parent or subsidiary corporations.
SERVICE: An individual shall be deemed to be in the Service of the
Company for so long as such individual (i) renders service on a periodic
basis to the Company or one or more of its parent or subsidiary
corporations as an Employee or Consultant or (ii) is a member of the
Company's Board of Directors (the "Board").
2. ADMINISTRATION
(a) The Plan shall be administered by the Compensation Committee (the
"Committee"). The Committee shall be comprised of not less than three (3) Board
members, none of whom shall be eligible to participate in this Plan or any other
stock option, stock appreciation, stock bonus or other stock plan of the Company
or its parent or subsidiary corporations (except to the extent such member
becomes entitled to the special option grant to be made pursuant to automatic
grant provisions of Section VII of Article Two or to option grants made pursuant
to the automatic grant provisions of Article Three of the 1990 Stock Option/
Stock Incentive Plan). The Board may from time to time appoint members to the
Committee in substitution for (or in addition to) members previously appointed,
and the Board shall have the authority to fill any and all vacancies on a
Committee, however caused.
(b) Discretionary option grants to Board members who are Employees shall be
either (i) made by the Committee whose membership shall, at the time of any such
grant, be limited to three or more disinterested persons within the meaning of
paragraph (d)(3) of Rule 16b-3 of the Securities and Exchange Commission (or any
successor rule), as such term is interpreted from time to time or (ii) subject
to the following terms and conditions:
(i) The exercise price per share shall not be less than one hundred
percent (100%) of the Closing Selling Price per share of Common Stock on
the date of the option grant.
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(ii) The Committee shall have complete discretion in determining the
number of shares of Common Stock for which options may be granted to such
Employee-members of the Board; provided, however, that no such
Employee-member of the Board may acquire more than is permitted under
paragraph 3(d).
(iii) Any stock option granted to such an Employee-member of the Board
shall not become exercisable in whole or in part during the one-year period
following the grant date, except in the event of the optionee's death or
disability or in the event of either a stockholder-approved Corporate
Transaction or a Change of Control. Following the expiration of the
applicable waiting period, the option shall become exercisable at such time
or times as the Committee shall specify in the instrument evidencing the
grant.
(iv) Unless the members of the Committee qualify as disinterested
individuals under Rule 16b-3 prior to December 31, 1999, no further stock
option grants shall be made to any Employee-member of the Board from and
after such date.
(c) The Committee, whether or not comprised of disinterested persons, shall
at all times have the authority to make discretionary option grants under the
Plan to eligible Employees who are not members of the Board.
(d) Subject to the express provisions of the Plan, the Committee shall have
plenary authority:
(i) 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 such person.
(ii) To construe and interpret the Plan and options granted under it,
and to establish, amend and revoke rules and regulations for its
administration. The Committee, in the exercise of this power, may correct
any defeat, 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.
(iii) Generally, to exercise such powers and to perform such acts as
the Committee deems necessary or expedient to promote the best interests of
the Company.
(e) Determinations of the Committee on all matters relating to the Plan and
any discretionary option grants or stock issuances made hereunder shall be
final, binding and conclusive on all persons having any interest in the Plan or
any options granted or shares issued under the Plan.
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 have been
sold under, or may be sold pursuant to outstanding options granted under, the
Company's 1984 Incentive Stock Option Plan (the "ISO 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 ISO 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 ISO Plan.
(b) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.
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(c) There is no maximum limit on the aggregate fair market value
(determined as of the times the respective options are granted) of the stock for
which any eligible person may be granted options under the Plan in any calendar
year.
(d) 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 one million two hundred thousand (1,200,000) shares of
the Company's common stock, and no single director of the Company who is not an
employee of the Company or an affiliate thereof may be granted options to
purchase more than forty thousand (40,000) shares of the Company's common stock;
and no one director of the Company who is an employee of the Company or an
affiliate thereof may be granted options to purchase more than six hundred
thousand (600,000) shares of the Company's common stock.
4. ELIGIBILITY
(a) Options may be granted only to key employees (including officers) or
directors of or consultants to the company or its affiliates.
(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 Committee.
(c) Notwithstanding the above or any provision to the contrary set forth
herein, no options shall be granted to any non-Employee director under this Plan
after April 30, 1992.
5. OPTION PROVISIONS
Each option shall be in such form and shall contain such terms and
conditions as 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 twenty (20) years
from the date it was granted.
(b) The exercise price of each option shall be not less than
eighty-five percent (85%) 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 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(f), or (C) in any
other form of legal consideration that may be acceptable to 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) 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(d) are subject to any option provisions
governing the minimum number of shares as to which an option may be
exercised.
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(e) The Company may require any optionee, or any person to whom an
option is transferred under subparagraph 5(f), 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.
(f) (1) Should an Optionee cease to continue in Service for any reason
(other than termination due to death or permanent disability) while the
holder of one or more outstanding options under this Plan, then such
options shall not be exercisable at any time after the earlier of (i) the
specified expiration date of the option term or (ii) the expiration of
three (3) months after the Optionee's cessation of Service. Each such
option shall, during the applicable period following cessation of Service,
be exercisable only to the extent of the number of shares (if any) in which
the Optionee is vested on the date of such cessation of Service; provided,
however, that the Committee shall have the discretion to specify, either at
the time the option is granted or at the time that the Optionee ceases
Service, that vesting of such option may be accelerated and that the
applicable period set forth in subclause (ii) may be increased, as provided
in paragraph 8(a).
(2) Except for options granted to Section 16(b) Insiders, an option
may be exercisable by the Optionee or, in the event the Optionee is
permanently disabled (as such term is defined in Section 22(e)(3) of the
Code), by his or her spouse or designee. An option granted to a Section
16(b) Insider shall, during the lifetime of such Optionee, be exercisable
only by that Optionee. Options shall not be assignable or transferrable by
the Optionee otherwise than by will or by the laws of descent and
distribution.
(3) Should an Optionee cease to continue in Service due to death or
permanent disability while the holder of one or more outstanding options
under this Plan, then such options shall not be exercisable at any time
after the earlier of (i) the specified expiration date of the option term
or (ii) the expiration of three (3) months after the Optionee's cessation
of Service. Each such option shall, during the applicable period following
cessation of Service, be exercisable only to the extent of the number of
shares (if any) in which the Optionee in vested on the date of such
cessation of Service; provided, however, that the Committee shall have the
discretion to specify, either at the time the option is granted or at the
time that the Optionee ceases Service, that the vesting of such option may
be accelerated or extended from the date of cessation of Service and that
the period of exercisability can be increased up to the expiration date of
the option term.
(4) Any option granted to an Optionee under this Plan and outstanding
in whole or in part on the date of the Optionee's death may be subsequently
exercised by the Personal representative of the Optionee's estate or by the
person or persons to whom the option is transferred pursuant to the
Optionee's will or in accordance with the laws of descent and distribution
in the case of the Optionee's death, and any option granted to an Optionee
under this Plan which is outstanding in whole or in part on the date of the
Optionee's cessation of Service due to permanent disability may be
exercised by the Optionee's spouse or designee. Any such exercise must be
in accordance with clause (3).
(g) The option may, but need not, include a provision whereby the
optionee may elect at 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 date 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 Committee determines to be appropriate.
(h) 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.
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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 Committee shall have the power to accelerate or increase the time
during which an option any be exercised or the time during which the option or
any part thereof will vest pursuant to subparagraph 5(d), 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(f) 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 Committee 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.
(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 Committee, it in
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
result as in the Company not surviving) assume any outstanding options or
substitute similar options for those outstanding under the Plan, in which case
the Committee 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.
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(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 Redeemable 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 Redeemable 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 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.
(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 shareholders 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.
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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 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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