SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the year ended: December 31, 1995
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________.
Commission file number: 1-9813
GENENTECH, INC. TAX REDUCTION INVESTMENT PLAN
(Full title of the Plan)
GENENTECH, INC.
(Name of issuer of the securities held pursuant to the Plan)
460 Point San Bruno Boulevard
South San Francisco, California 94080
(address of principal executive office)
<TABLE>
Genentech, Inc. Tax Reduction Investment Plan
Index to Financial Statements
<CAPTION>
Item Page No.
__________________________________________________________ _________
<S> <C>
Statement Of Net Assets Available For Benefits With Fund
Information at December 31, 1995 and 1994 3-4
Statement Of Changes in Net Assets Available
For Benefits With Fund Information for Years Ended
December 31, 1995 and 1994 5-8
Notes to Financial Statements 9-14
Report of Ernst & Young LLP, Independent Auditors 15
Signatures 16
</TABLE>
Page 2
<TABLE>
Genentech, Inc. Tax Reduction Investment Plan
Statement Of Net Assets Available For Benefits With Fund Information
December 31, 1995
<CAPTION>
FIDELITY
FIDELITY GROWTH FIDELITY FIDELITY
GENENTECH MAGELLAN COMPANY GROWTH & INTERMEDIATE
STOCK FUND FUND FUND INCOME FUND BOND FUND
___________ ___________ ___________ ___________ ___________
ASSETS:
<S> <C> <C> <C> <C> <C>
Investments, at
fair value $ 9,153,498 $30,153,976 $11,291,205 $18,106,286 $ 2,428,446
Contribution
receivable from
Genentech, Inc. 459,360 1,493,479 719,731 994,786 159,680
___________ ___________ ___________ ___________ ___________
Net assets
available for
benefits $ 9,612,858 $31,647,455 $12,010,936 $19,101,072 $ 2,588,126
=========== =========== =========== =========== ===========
FIDELITY FIDELITY FIDELITY
FIDELITY FIDELITY ASSET ASSET ASSET
OVERSEAS BALANCED MANAGER MANAGER: MANAGER:
FUND FUND FUND GROWTH FUND INCOME FUND
___________ ___________ __________ ___________ ___________
ASSETS:
Investments, at
fair value $ 3,238,236 $13,340,101 $ 719,994 $ 576,120 $ 193,856
Contribution
receivable from
Genentech, Inc. 272,473 646,863 63,926 66,657 20,398
___________ ___________ __________ ___________ ___________
Net assets
available for
benefits $ 3,510,709 $13,986,964 $ 783,920 $ 642,777 $ 214,254
=========== =========== ========== =========== ===========
FIDELITY
RETIREMENT FIDELITY
MONEY U.S. EQUITY PARTICIPANT
MARKET FUND INDEX FUND LOANS TOTAL
___________ ___________ ___________ ____________
ASSETS:
Investments, at
fair value $ 9,077,890 $ 2,653,009 $ 2,439,890 $103,372,507
Contribution
receivable from
Genentech, Inc. 526,864 166,368 - 5,590,585
___________ ___________ ___________ ____________
Net assets
available for
benefits $ 9,604,754 $ 2,819,377 $ 2,439,890 $108,963,092
=========== =========== =========== ============
<FN>
See accompanying notes.
</TABLE>
Page 3
<TABLE>
Genentech, Inc. Tax Reduction Investment Plan
Statement Of Net Assets Available For Benefits With Fund Information
December 31, 1994
<CAPTION>
FIDELITY
FIDELITY GROWTH FIDELITY FIDELITY
GENENTECH MAGELLAN COMPANY GROWTH & INTERMEDIATE
STOCK FUND FUND FUND INCOME FUND BOND FUND
___________ ___________ ___________ __________ ____________
ASSETS:
<S> <C> <C> <C> <C> <C>
Investments, at
fair value $ 9,090,200 $18,511,180 $ 4,725,960 $ 9,837,949 $ 1,567,685
Contribution
receivable from
Genentech, Inc. 560,300 1,211,006 433,460 782,252 130,119
___________ ___________ ___________ ___________ ___________
Net assets
available for
benefits $ 9,650,500 $19,722,186 $ 5,159,420 $10,620,201 $ 1,697,804
=========== =========== =========== =========== ===========
FIDELITY FIDELITY FIDELITY
FIDELITY FIDELITY ASSET ASSET ASSET
OVERSEAS BALANCED MANAGER MANAGER: MANAGER:
FUND FUND FUND GROWTH FUND INCOME FUND
___________ ___________ __________ ___________ ___________
ASSETS:
Investments, at
fair value $ 3,079,304 $12,769,920 $ 379,027 $ 479,134 $ 100,471
Contribution
receivable from
Genentech, Inc. 302,190 760,508 31,127 47,757 10,507
___________ ___________ __________ ___________ ___________
Net assets
available for
benefits $ 3,381,494 $13,530,428 $ 410,154 $ 526,891 $ 110,978
=========== =========== ========== =========== ===========
FIDELITY
RETIREMENT FIDELITY
MONEY U.S. EQUITY PARTICIPANT
MARKET FUND INDEX FUND LOANS TOTAL
___________ ___________ ___________ ___________
ASSETS:
Investments, at
fair value $7,476,596 $ 766,488 $ 2,108,168 $70,892,082
Contribution
receivable from
Genentech, Inc. 695,091 72,703 - 5,037,020
___________ ___________ ___________ ___________
Net assets
available for
benefits $8,171,687 $ 839,191 $ 2,108,168 $75,929,102
=========== =========== =========== ===========
<FN>
See accompanying notes.
</TABLE>
Page 4
<TABLE>
Genentech, Inc. Tax Reduction Investment Plan
Statement Of Changes In Net Assets Available For Benefits With Fund Information
Year Ended December 31, 1995
<CAPTION>
FIDELITY
FIDELITY GROWTH FIDELITY FIDELITY
GENENTECH MAGELLAN COMPANY GROWTH & INTERMEDIATE
STOCK FUND FUND FUND INCOME FUND BOND FUND
___________ ___________ ___________ ___________ ___________
<S> <C> <C> <C> <C> <C>
Investment income:
Interest and
dividends $ - $ 1,715,515 $ 502,859 $ 850,049 $ 132,127
Realized/unrealized
gain 1,344,329 5,870,835 1,972,702 3,470,977 118,389
___________ ___________ ___________ ___________ ___________
Total investment
income 1,344,329 7,586,350 2,475,561 4,321,026 250,516
Contributions:
Basic 1,143,846 2,910,678 1,273,734 1,946,677 310,787
Rollover 261,754 333,612 216,167 229,046 34,878
Match 459,360 1,493,959 720,374 995,699 159,680
___________ ___________ ___________ ___________ ___________
Total contributions 1,864,960 4,738,249 2,210,275 3,171,422 505,345
Distributions (423,696) (1,801,816) (541,503) (619,711) (56,264)
Administrative fees - (483) (312) (837) (388)
Transfers between funds (2,823,235) 1,402,969 2,707,495 1,608,971 191,113
___________ ___________ ___________ ___________ ___________
Net change
during the year (37,642) 11,925,269 6,851,516 8,480,871 890,322
Net assets available
for benefits:
Beginning of year 9,650,500 19,722,186 5,159,420 10,620,201 1,697,804
___________ ___________ ___________ ___________ ___________
End of year $ 9,612,858 $31,647,455 $12,010,936 $19,101,072 $ 2,588,126
=========== =========== =========== =========== ===========
FIDELITY FIDELITY FIDELITY
FIDELITY FIDELITY ASSET ASSET ASSET
OVERSEAS BALANCED MANAGER MANAGER: MANAGER:
FUND FUND FUND GROWTH FUND INCOME FUND
___________ ___________ ___________ ___________ ___________
Investment income:
Interest and dividends $ 75,747 $ 591,831 $ 18,933 $ 8,503 $ 7,705
Realized/unrealized
gain 227,256 1,308,728 82,033 95,392 15,324
___________ ___________ ___________ ___________ ___________
Total investment
income 303,003 1,900,559 100,966 103,895 23,029
Contributions:
Basic 701,074 1,497,445 137,436 172,501 41,767
Rollover 46,623 72,763 53,228 51,973 16,076
Match 272,473 647,176 63,926 66,657 20,398
___________ ___________ ___________ ___________ ___________
Total contributions 1,020,170 2,217,384 254,590 291,131 78,241
Distributions (198,043) (789,539) (15,891) (1,712) (1,239)
Administrative fees - (1,938) - (25) -
Transfers between funds (995,915) (2,869,930) 34,101 (277,403) 3,245
___________ ___________ ___________ ___________ ___________
Net change during the year 129,215 456,536 373,766 115,886 103,276
Net assets available
for benefits:
Beginning of year 3,381,494 13,530,428 410,154 526,891 110,978
___________ ___________ ___________ ___________ ___________
End of year $ 3,510,709 $13,986,964 $ 783,920 $ 642,777 $ 214,254
=========== =========== =========== =========== ===========
</TABLE>
Page 5
<TABLE>
Genentech, Inc. Tax Reduction Investment Plan
Statement Of Changes In Net Assets Available For Benefits With Fund Information
Year Ended December 31, 1995
<CAPTION>
FIDELITY
RETIREMENT FIDELITY
MONEY U.S. EQUITY PARTICIPANT
MARKET FUND INDEX FUND LOANS TOTAL
___________ ___________ ___________ ____________
<S> <C> <C> <C> <C>
Investment income:
Interest and dividends $ 499,820 $ 52,206 $ 202,900 $ 4,658,195
Realized/unrealized
gain - 442,105 - 14,948,070
___________ ___________ ___________ ____________
Total investment
income 499,820 494,311 202,900 19,606,265
Contributions:
Basic 1,167,442 289,759 - 11,593,146
Rollover 32,259 78,812 - 1,427,191
Match 536,574 166,368 - 5,602,644
___________ ___________ ___________ ____________
Total contributions 1,736,275 534,939 - 18,622,981
Distributions (643,106) (37,321) (57,769) (5,187,610)
Administrative fees (3,450) (213) - (7,646)
Transfers between funds (156,472) 988,470 186,591 -
___________ ___________ ___________ ____________
Net change during the year 1,433,067 1,980,186 331,722 33,033,990
Net assets available
for benefits:
Beginning of year 8,171,687 839,191 2,108,168 75,929,102
___________ ___________ ___________ ____________
End of year $ 9,604,754 $ 2,819,377 $ 2,439,890 $108,963,092
=========== =========== =========== ============
<FN>
See accompanying notes.
</TABLE>
Page 6
<TABLE>
Genentech, Inc. Tax Reduction Investment Plan
Statement Of Changes In Net Assets Available For Benefits With Fund Information
Year Ended December 31, 1994
<CAPTION>
FIDELITY
FIDELITY GROWTH FIDELITY FIDELITY
GENENTECH MAGELLAN COMPANY GROWTH & INTERMEDIATE
STOCK FUND FUND FUND INCOME FUND BOND FUND
___________ ___________ ___________ ___________ ___________
<S> <C> <C> <C> <C> <C>
Investment income:
Interest and
dividends $ - $ 714,604 $ 184,569 $ 685,781 $ 114,297
Realized/unrealized
loss (866,955) (1,093,888) (291,449) (510,850) (149,764)
___________ ___________ ___________ ___________ ___________
Total investment
income (loss) (866,955) (379,284) (106,880) 174,931 (35,467)
Contributions:
Basic 1,071,061 2,667,629 970,509 1,573,614 290,105
Rollover 210,014 329,653 152,702 133,718 61,131
Match 560,300 1,211,006 433,460 782,252 130,119
___________ ___________ ___________ ___________ ___________
Total contributions 1,841,375 4,208,288 1,556,671 2,489,584 481,355
Distributions (296,105) (1,122,164) (214,079) (462,304) (63,090)
Administrative fees - (263) (138) (488) (213)
Transfers between funds 575,378 (123,045) 20,576 81,786 (320,668)
___________ ___________ ___________ ___________ ___________
Net change
during the year 1,253,693 2,583,532 1,256,150 2,283,509 61,917
Net assets available
for benefits:
Beginning of year 8,396,807 17,138,654 3,903,270 8,336,692 1,635,887
___________ ___________ ___________ ___________ ___________
End of year $9,650,500 $19,722,186 $5,159,420 $10,620,201 $1,697,804
=========== =========== =========== =========== ===========
FIDELITY FIDELITY FIDELITY
FIDELITY FIDELITY ASSET ASSET ASSET
OVERSEAS BALANCED MANAGER MANAGER: MANAGER:
FUND FUND FUND GROWTH FUND INCOME FUND
___________ ____________ ___________ ___________ ___________
Investment income:
Interest and dividends $ 51,194 $ 415,428 $ 6,639 $ 11,389 $ 2,387
Realized/unrealized
loss (89,011) (1,161,346) (17,164) (27,207) (3,234)
___________ ____________ ___________ ___________ __________
Total investment
income (loss) (37,817) (745,918) (10,525) (15,818) (847)
Contributions:
Basic 558,867 1,710,194 35,174 46,145 7,013
Rollover 115,244 129,549 17,876 26,360 15,792
Match 302,190 760,508 31,127 47,757 10,507
___________ ____________ ___________ ___________ __________
Total contributions 976,301 2,600,251 84,177 120,262 33,312
Distributions (95,208) (426,289) (11) (222) -
Administrative fees - (1,075) - - -
Transfers between funds 1,089,094 (1,695,378) 336,513 422,669 78,513
___________ ____________ ___________ ___________ __________
Net change during the year 1,932,370 (268,409) 410,154 526,891 110,978
Net assets available
for benefits:
Beginning of year 1,449,124 13,798,837 - - -
___________ ____________ ___________ ___________ __________
End of year $3,381,494 $13,530,428 $ 410,154 $ 526,891 $ 110,978
=========== ============ =========== =========== ==========
</TABLE>
Page 7
<TABLE>
Genentech, Inc. Tax Reduction Investment Plan
Statement Of Changes In Net Assets Available For Benefits With Fund Information
Year Ended December 31, 1994
<CAPTION>
FIDELITY
RETIREMENT FIDELITY
MONEY U.S. EQUITY PARTICIPANT
MARKET FUND INDEX FUND LOANS TOTAL
___________ ___________ ___________ ___________
<S> <C> <C> <C> <C>
Investment income:
Interest and dividends $ 284,770 $ 22,532 $ 164,622 $2,658,212
Realized/unrealized
loss - (19,448) - (4,230,316)
___________ ___________ ___________ ___________
Total investment
income (loss) 284,770 3,084 164,622 (1,572,104)
Contributions:
Basic 1,064,080 169,751 - 10,164,142
Rollover 105,180 59,664 - 1,356,883
Match 695,091 72,703 - 5,037,020
___________ ___________ ___________ ___________
Total contributions 1,864,351 302,118 - 16,558,045
Distributions (265,257) (15,510) (37,377) (2,997,616)
Administrative fees (2,369) (125) - (4,671)
Transfers between funds (424,179) (89,826) 48,567 -
___________ ___________ ___________ ___________
Net change during the year 1,457,316 199,741 175,812 11,983,654
Net assets available
for benefits:
Beginning of year 6,714,371 639,450 1,932,356 63,945,448
___________ ___________ ___________ ___________
End of year $ 8,171,687 $ 839,191 $ 2,108,168 $75,929,102
=========== =========== =========== ===========
<FN>
See accompanying notes.
</TABLE>
Page 8
Genentech, Inc. Tax Reduction Investment Plan
Notes to Financial Statements
(1) Description of the Plan:
The following description of the Genentech, Inc. Tax Reduction Investment
Plan ("Plan") provides only general information. Participants should refer to
the Plan document for a more complete description of the Plan's provisions.
See footnote (6) for a summary of Plan amendments subsequent to December 31,
1995.
The Plan was established, effective January 1, 1985, by Genentech, Inc.
("Company") for the benefit of eligible employees of the Company in order to
provide them with a means of supplementing their retirement income on a tax-
favored basis, an incentive to continue and increase their efforts to
contribute to the success of the Company, and an opportunity to acquire an
equity interest in the Company. The Plan accomplishes this through a savings
program which is based on systematic salary reductions. The employee's salary
is reduced by the amount elected to be saved on a pre-tax basis. The
"deferred" part of the employee's salary is then invested in the Plan. An
individual employee's account is credited with earnings or losses on a pro
rata basis as the actual investment funds report their earnings performance.
Individuals eligible to participate under the Plan must be employees of the
Company or employees of an affiliate of the Company that adopts the Plan with
the approval of the Board of Directors. However, the following employees or
classes of employees are not eligible to participate: (i) any employee who is
classified as temporary by the Company, unless such employee has completed at
least 1,000 hours of service in a 12-month period; (ii) any part-time employee
normally scheduled to work less than 20 hours per week, unless such employee
has completed at least 1,000 hours of service in a 12-month period; (iii) any
employee who is a member of a collective bargaining unit and who is covered by
a collective bargaining agreement where retirement benefits were the subject
of good faith bargaining; (iv) any individual employed by any corporation or
other business entity that is merged or liquidated into the Company, unless
the Company designates such employees as eligible employees; (v) any employee
paid from a non-U.S. payroll; or (vi) any leased employee as defined under the
Internal Revenue Code of 1986, as amended ("Code").
The Board of Directors of the Company has the right under the Plan to alter,
amend or terminate the Plan, or any part thereof, in such a manner as it may
determine. If the Plan is terminated, the interests of all Plan members
remain fully (100%) vested and nonforfeitable. The balances credited to their
accounts shall remain with the plan trustee until they become distributable in
accordance with the Plan.
The Company matches a portion of employee contributions, up to a maximum of
4% of a participant's eligible compensation ("Match"). The Match is effective
December 31st of each year ("Effective Date") and contributions under the
Match are fully vested at that time. The Match is funded in the first quarter
of the subsequent year. In the first quarter of 1996 and 1995, the Company
contributed approximately $5.6 million and $5.0 million, respectively, to the
Plan in accordance with the terms of the Match.
The plan trustee is Fidelity Management Trust Company ("Plan Trustee"). All
amounts contributed to the Plan are deposited in a trust account with the Plan
Trustee. The Plan Trustee's fees and expenses are paid by the Company and are
not charged to the Plan. Accounts of terminated employees are charged an
annual fee of $50.00 by the Company. The Plan Trustee has blanket bond
insurance covering the full market value of the securities and investments of
which it has custody.
Page 9
Genentech, Inc. Tax Reduction Investment Plan
Notes to Financial Statements
In 1995 and 1994, each participant in the Plan could elect to defer up to
the lower of $9,240 or 15% of his or her eligible compensation, except that
highly compensated employees were limited to the lower of $9,240 or 9% of
eligible compensation in both years in accordance with the Code. For the plan
years 1995 and 1994, each participant directs the investment of his or her
contributions in any of the following twelve investment funds of the Plan (or
any combination thereof):
Genentech Stock Fund
This fund invests primarily in the callable putable common stock of the
Company, which is purchased at full market price. The callable putable common
stock of the Company does not currently pay dividends; therefore the return on
this fund is dependent solely on the performance of the stock.
Fidelity Magellan Fund
The Fidelity Magellan Fund is a mutual fund managed by Fidelity Management
and Research Company ("FMR"). The fund invests primarily in the stocks of
domestic and foreign growth companies.
Fidelity Growth Company Fund
The Fidelity Growth Company Fund is a mutual fund managed by FMR. It
invests primarily in common stock and securities convertible into common stock
of companies which it believes have above-average growth characteristics.
Fidelity Growth & Income Fund
The Fidelity Growth & Income Fund is a mutual fund managed by FMR, which
invests primarily in securities of companies that offer growth of earnings
potential while paying current dividends.
Fidelity Intermediate Bond Fund
The Fidelity Intermediate Bond Fund is a mutual fund managed by FMR. The
fund invests in high and upper-medium grade corporate debt obligations with
intermediate maturities, as well as obligations of the U.S. government and its
agencies and U.S. banks.
Fidelity Overseas Fund
The Fidelity Overseas Fund is a mutual fund managed by FMR. The fund
invests in foreign securities including common stock, securities convertible
to common stock and debt instruments of foreign businesses and governments.
Fidelity Balanced Fund
The Fidelity Balanced Fund is a mutual fund managed by FMR that invests in
high-quality bonds and high-yielding stocks. It is a growth and income fund
that seeks a high level of income while preserving capital.
Fidelity Asset Manager Fund
The Fidelity Asset Manager Fund is a mutual fund managed by FMR. The Asset
Manager Fund allocates its assets among domestic and foreign equities, bonds
and short-term instruments, attempting to achieve a high total return with
reduced risk over the long-term.
Page 10
Genentech, Inc. Tax Reduction Investment Plan
Notes to Financial Statements
Fidelity Asset Manager: Growth Fund
The Fidelity Asset Manager: Growth mutual fund, managed by FMR, invests in
domestic and foreign stocks, bonds and short-term instruments, and seeks to
maximize its total long-term return.
Fidelity Asset Manager: Income Fund
The Fidelity Asset Manager: Income Fund is a mutual fund managed by FMR
which invests in income-producing domestic and foreign stocks, bonds and
short-term instruments, with the goal of achieving a high level of current
income.
Fidelity Retirement Money Market Fund
The Fidelity Retirement Money Market Fund is a mutual fund managed by FMR.
It invests in high-quality United States dollar-denominated money market
instruments of U.S. and foreign issuers, including short-term corporate
obligations, U.S. government obligations and certificates of deposit.
Fidelity U.S. Equity Index Fund
The Fidelity U.S. Equity Index Fund, a mutual fund managed by FMR, invests
mostly in the common stocks of the 500 companies that make up the Standard &
Poor's 500 Index.
Participant Loans
Loans are made only to Plan participants, at fixed interest rates 2% above
the then current bank prime interest rate, subject to certain restrictions,
principally related to a participant's account balance, permissible loan
amount, and repayment through payroll withholding. Loans are repaid through
monthly payroll deductions over three or five years.
Conditions of Withdrawal
Distributions under the Plan will be made upon a participant's death,
disability, retirement or other termination of employment with the Company,
attainment of age 70-1/2, or authorized exercise of his or her withdrawal
rights under the Plan (subject in all cases to regulation under the Code
requiring the participant's consent to distribution unless he or she has
attained age 62 or the balance credited to his or her account under the Plan
does not exceed $3,500). Distributions are made upon receipt by the Plan
administrator of the participant's or beneficiary's election directing the
method of distribution.
Prior to termination of employment with the Company, the Plan administrator
may grant a participant's request for a withdrawal if either (i) the Plan
administrator makes a determination that such withdrawal is necessary in light
of the immediate and heavy financial needs of the participant and is in
accordance with the requirements of the Code and regulations promulgated
thereunder; or (ii) the participant is over age 59-1/2 at the time of
withdrawal.
(2) Summary of Significant Accounting Policies:
Investment Valuation
Investments are stated at market value at year end. Market values are
determined as follows: The Genentech Stock Fund, Fidelity Magellan Fund,
Fidelity Growth Company Fund, Fidelity Growth & Income Fund, Fidelity
Intermediate Bond Fund, Fidelity Overseas Fund, Fidelity Balanced Fund,
Fidelity Asset Manager Fund, Fidelity Asset Manager: Growth Fund, Fidelity
Asset Manager: Income Fund, and Fidelity U.S. Equity Index Fund securities are
Page 11
Genentech, Inc. Tax Reduction Investment Plan
Notes to Financial Statements
valued at the last reported sales price on the last business day of the year,
which represent the net asset values of shares held by the Plan at year end;
the Fidelity Retirement Money Market Fund portfolio instruments are valued on
the basis of historical cost which approximates fair value; and the
Participant Loans are valued on the basis of cost, which approximates fair
value.
Contributions
Basic contributions are accrued and vested when deducted from employee pay;
the Match is accrued and vested on the Effective Date; and qualified rollover
contributions are vested when received by the Plan Trustee. Contributions are
invested pursuant to participants' directions to the Plan Trustee after
receipt of contributions by the Plan Trustee. Participants may change the
amount of contributions (as a percentage reduction of pre-tax eligible
compensation) on a quarterly basis. Transfers between funds and changes in
investment allocations can be made up to ten times per year on a daily basis
effective upon request by the participant to Plan Trustee, except that
transfers in and out of the Genentech Stock Fund are effected on a monthly
cycle.
Distributions
Distributions are recorded when paid.
Other
All security transactions are recorded on the trade date. Gains and losses
on the disposals of investments are determined based on the average cost of
all securities. Dividend income is recorded on the effective date of a
declared dividend. Income from other investments is recorded as earned on an
accrual basis. Administrative costs of the Plan incurred by the Company are
paid by the Company and are not charged to the Plan, with the exception of a
$50.00 annual fee which is charged to the accounts of terminated employees who
remain Plan participants.
(3) Income Tax Status:
The Internal Revenue Service ruled on April 29, 1988 that the December 21,
1984 Plan, as amended, qualified in form under Section 401(a) of the Code and
the underlying trust is, therefore, exempt from federal income taxes under
Section 501(a) of the Code. The Plan is required to operate in conformity
with the Code to maintain its qualification. The Plan was subsequently
audited and accepted by the Internal Revenue Service with no change through
December 31, 1990.
In December, 1990, an amended and restated Plan, effective as of January 1,
1991, was adopted by the Board of Directors of the Company. Effective as of
June 30, 1991 and October 7, 1993, the first and second amendments,
respectively, to the amended and restated Plan were adopted. In January 1994,
the second restatement of the Plan was adopted effective January 1, 1994. On
September 25, 1995, the Internal Revenue Service issued a favorable
determination letter, ruling that the current restated Plan and related trust
meet the requirements of Section 401(a) of the Internal Revenue Code, as
amended, and, as such, are exempt from federal income tax.
The Company is not aware of any events which would cause the Plan to become
disqualified in operation.
(4) Related Party Transactions:
Certain of the investment funds are managed by FMR, an affiliate of the Plan
Trustee. Because of this relationship, transactions involving these funds
qualify as party-in-interest transactions.
Page 12
<TABLE>
Genentech, Inc. Tax Reduction Investment Plan
Notes to Financial Statements
<CAPTION>
(5) Assets held for investment at December 31, 1995 were as follows:
Number of
Name of Issuer Shares or Fair
and Title of Principal Amount Cost Value
__________________________________________ ___________ ____________ ___________
<S> <C> <C> <C>
GENENTECH STOCK FUND
Genentech, Inc. -
Callable Putable Common Stock......... 172,708 $ 6,577,632 $ 9,153,498
FIDELITY MAGELLAN FUND
Fidelity Magellan Fund.................. 350,709 25,097,253 30,153,976
FIDELITY GROWTH COMPANY FUND
Fidelity Growth Company Fund ........... 311,138 9,642,678 11,291,205
FIDELITY GROWTH & INCOME FUND
Fidelity Growth & Income Fund .......... 669,364 14,823,959 18,106,286
FIDELITY INTERMEDIATE BOND FUND
Fidelity Intermediate Bond Fund......... 233,280 2,409,803 2,428,446
FIDELITY OVERSEAS FUND
Fidelity Overseas Fund ................. 111,394 3,029,842 3,238,236
FIDELITY BALANCED FUND
Fidelity Balanced Fund ................. 986,694 12,505,533 13,340,101
FIDELITY ASSET MANAGER FUND
Fidelity Asset Manager Fund ............ 45,425 658,356 719,994
FIDELITY ASSET MANAGER: GROWTH FUND
Fidelity Asset Manager: Growth Fund .... 37,978 518,314 576,120
FIDELITY ASSET MANAGER: INCOME FUND
Fidelity Asset Manager: Income Fund ... 16,712 184,620 193,856
FIDELITY RETIREMENT MONEY MARKET FUND
Retirement Money Market Fund............ 9,077,890 9,077,890 9,077,890
FIDELITY U.S. EQUITY INDEX FUND
Fidelity U.S. Equity Index Fund ........ 117,546 2,217,233 2,653,009
PARTICIPANT LOANS
Loans receivable from participants ..... $2,439,890 2,439,890 2,439,890
___________ ____________
TOTAL INVESTMENTS ........................ $89,183,003 $103,372,507
=========== ============
</TABLE>
Page 13
(6) Subsequent Event:
On May 8, 1996, the Plan was restated. The most significant amendments to the
Plan are summarized here. Many of the administrative functions related to the
Plan, including loan processing, changing deferral percentages, stopping or
starting salary deferrals, and processing distributions are now performed by
the Trustee rather than the Company. The term of a loan from a participant's
account may now extend up to 15 years if the loan proceeds are used to purchase
a principal residence. There is no longer a limit on the number of times
employees may change their salary deferral percentage. The Genentech Stock
Fund now invests a small percentage of the fund (approximately 2%, although the
percentage may vary over time) in a short-term money market investment fund to
provide liquidity for the timely settlement of trades. Participants may now
transfer in or out of the Genentech Stock Fund as frequently, and on the same
basis, as they can transfer in and out of the other funds of the Plan.
Page 14
Report of Ernst & Young LLP, Independent Auditors
To the Participants and Plan Administration Committee of the
Genentech, Inc. Tax Reduction Investment Plan
We have audited the accompanying statements of net assets available for
benefits of the Genentech, Inc. Tax Reduction Investment Plan as of December
31, 1995 and 1994, and the related statements of changes in net assets
available for benefits for the years then ended. These financial statements
are the responsibility of the Plan's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Genentech,
Inc. Tax Reduction Investment Plan at December 31, 1995 and 1994, and the
changes in its net assets available for benefits for the years then ended in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental
schedules of assets held for investment purposes as of December 31, 1995 and
of reportable transactions for the year then ended are presented for purposes
of complying with the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974, and are not a required part of the basic financial statements. The Fund
Information in the statement of net assets available for benefits and the
statement of changes in net assets available for benefits is presented for
purposes of additional analysis rather than to present the net assets
available for benefits and changes in net assets available for benefits of
each fund. The supplemental schedules and Fund Information have been
subjected to the auditing procedures applied in our audit of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
ERNST & YOUNG LLP
San Jose, California
June 5, 1996
Page 15
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Plan administrator has duly caused this annual report to be signed by the
undersigned hereunto duly authorized.
Genentech, Inc. Tax Reduction Investment Plan
by Genentech, Inc., Plan Administrator
By: /S/MARTY GLICK Date: June 27, 1996
___________________________________
Marty Glick
Vice President and Treasurer
and Plan Administration Committee
Member for Genentech, Inc.
Tax Reduction Investment Plan
By: /S/LOUIS J. LAVIGNE, JR. Date: June 27, 1996
___________________________________
Louis J. Lavigne, Jr.
Senior Vice President and
Chief Financial Officer
and Plan Administration Committee
Member for Genentech, Inc.
Tax Reduction Investment Plan
Page 16
<TABLE>
Index of Supplemental Schedules Filed with Form 11-K
For the Year Ended December 31, 1995
<CAPTION>
Sequential
Schedule Description Page Numbers
________ ___________________________________ ____________
<S> <C> <C>
I Assets Held for Investment Purposes 18
II Schedule of Reportable Transactions 19
</TABLE>
Page 17
<TABLE>
SCHEDULE I
Genentech, Inc. Tax Reduction Investment Plan
Item 27a
Schedule of Assets Held For Investment Purposes
December 31, 1995
<CAPTION>
Description Current
Identity of Issue of Investment Cost Value
________________________________________ _________________ ____________ ___________
<S> <C> <C> <C>
* GENENTECH STOCK FUND
Genentech, Inc. - Common stock -
Callable Putable Common Stock ....... 172,708 shares $ 6,577,632 $ 9,153,498
* FIDELITY MAGELLAN FUND
Mutual fund -
Fidelity Magellan Fund ............... 350,709 shares 25,097,253 30,153,976
* FIDELITY GROWTH COMPANY FUND
Mutual fund -
Fidelity Growth Company Fund ......... 311,138 shares 9,642,678 11,291,205
* FIDELITY GROWTH & INCOME FUND
Mutual fund -
Fidelity Growth & Income Portfolio ... 669,364 shares 14,823,959 18,106,286
* FIDELITY INTERMEDIATE BOND FUND
Mutual fund -
Fidelity Intermediate Bond Fund ...... 233,280 shares 2,409,803 2,428,446
* FIDELITY OVERSEAS FUND
Mutual fund -
Fidelity Overseas Fund ............... 111,394 shares 3,029,842 3,238,236
* FIDELITY BALANCED FUND
Mutual fund -
Fidelity Balanced Fund ............... 986,694 shares 12,505,533 13,340,101
* FIDELITY ASSET MANAGER FUND
Mutual fund -
Fidelity Asset Manager Fund .......... 45,425 shares 658,356 719,994
* FIDELITY ASSET MANAGER: GROWTH FUND
Mutual fund -
Fidelity Asset Manager: Growth Fund .. 37,978 shares 518,314 576,120
* FIDELITY ASSET MANAGER: INCOME FUND
Mutual fund -
Fidelity Asset Manager: Income Fund .. 16,712 shares 184,620 193,856
* FIDELITY RETIREMENT MONEY MARKET FUND
Mutual fund -
Retirement Money Market Fund ......... 9,077,890 shares 9,077,890 9,077,890
* FIDELITY U.S. EQUITY INDEX FUND
Mutual fund -
Fidelity U.S. Equity Index Portfolio . 117,546 shares 2,217,233 2,653,009
* PARTICIPANT LOANS
Loans receivable from participants ... (1) 2,439,890 2,439,890
___________ ____________
TOTAL INVESTMENTS ...................... $89,183,003 $103,372,507
=========== ============
<FN>
(1) Maturing at various dates through 2000 at interest rates ranging from 7.25% to 12.0%.
* Party-in-interest.
</TABLE>
Page 18
<TABLE>
SCHEDULE II
Genentech, Inc. Tax Reduction Investment Plan
Item 27d
Schedule of Reportable Transactions
For the Year ended December 31, 1995
<CAPTION>
Purchases Sales
_________________________ _________________________________________________
Number of Dollar Number of Purchase Selling Realized
Description Transactions Value Transactions Price Price Gain/Loss
of Asset
____________________________ __________ ____________ __________ __________ _________
<S> <C> <C> <C> <C> <C> <C>
Genentech Stock 95 $2,783,639 55 $3,291,872 $4,059,871 $767,999
Fidelity
Magellan Fund 194 9,993,394 132 3,484,039 4,221,432 737,393
Fidelity Growth
Company Fund 184 5,688,058 102 942,371 1,095,515 153,144
Fidelity Growth
& Income Fund 187 6,902,144 116 1,879,111 2,104,784 225,673
Fidelity
Balanced Fund 167 3,349,575 133 3,974,829 4,088,122 113,293
Fidelity Retirement
Money Market Fund 163 4,992,588 142 3,391,294 3,391,294 -
<FN>
Reportable transactions include any series of transactions that in the aggregate exceed five
percent of the fair market value of Plan assets at the beginning of the year. The transactions
can occur on a daily basis. These transactions represent Category (iii) reportable
transactions in accordance with Department of Labor regulations. There were no other
reportable transactions during 1995.
</TABLE>
Page 19
<TABLE>
Genentech, Inc. Tax Reduction Investment Plan
Index of Exhibits Filed with Form 11-K
For the Year Ended December 31, 1995
<CAPTION>
Sequential
Exhibit Number Description Page Numbers
________________ ______________________________________________ ____________
<S> <C> <C>
23 Consent of Ernst & Young LLP, Independent Auditors,
filed with this document 21
</TABLE>
Page 20
EXHIBIT 23
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in the Registration
Statement on Form S-8 pertaining to the Genentech, Inc. Tax
Reduction Investment Plan of our report dated June 5, 1996, with
respect to the financial statements and supplemental schedules of
the Genentech, Inc. Tax Reduction Investment Plan included in this
Annual Report (Form 11-K) for the year ended December 31, 1995.
ERNST & YOUNG LLP
San Jose, California
June 27, 1996
