<PAGE> 1
As filed with the Securities and Exchange Commission on January 14, 2000
Registration No. 333-_________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
-------------
GENENTECH, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-2345624
(State of Incorporation) (I.R.S. Employer Identification No.)
-------------
1 DNA Way
South San Francisco, California 94080-4990
(Address of principal executive (Zip Code)
offices)
-------------
Genentech, Inc.
Tax Reduction Investment Plan
(Full titles of the plans)
Stephen G. Juelsgaard, Esq.
Senior Vice President, General Counsel and Secretary
Genentech, Inc.
1 DNA Way
South San Francisco, California 94080-4990
(Name and address of agent for service)
(650) 225-1000
(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===================================================================================================================
Proposed Maximum Proposed Maximum
Title of Securities Offering Aggregate Amount of
to be Registered Amount to be Registered Price per Share(1) Offering Price(1) Registration Fee
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common stock, par value 1,000,000 shares $125.125 $125,125,000 $34,784.75
$.02 per share (2)
===================================================================================================================
</TABLE>
(1) The Proposed Maximum Offering Price Per Share was estimated pursuant to
Rule 457(c) promulgated under the Securities Act of 1933, as amended, with
reference to the high and low prices January 10, 2000, reported on the New
York Stock Exchange of $129.00 and $121.25, respectively, the average of
which is $125.125. The Proposed Maximum Offering Price Per Share represents
this average.
(2) In addition, pursuant to Rule 416(c) of the Securities Act of 1933, as
amended, this registration statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plan
described herein.
<PAGE> 2
PART II: INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3: INCORPORATION OF DOCUMENTS BY REFERENCE
In this Registration Statement, "Genentech," "we," "us" and "our" refer
to Genentech, Inc. The Securities and Exchange Commission, or SEC, allows us to
"incorporate by reference" the information we file with it, which means we can
disclose important information by referring to those documents. The information
included in the following documents is incorporated by reference and is
considered to be a part of this Registration Statement. The most recent
information that we file with the SEC automatically updates and supersedes more
dated information. We have previously filed the following documents with the SEC
and incorporate them by reference into this Registration Statement:
(a) Our annual report on Form 10-K for the year ended December 31,
1998;
(b) Our quarterly reports on Form 10-Q for the quarters ended March 31,
1999, June 30, 1999 and September 30, 1999;
(c) Our current report on Form 8-K filed June 28, 1999;
(d) Our current report on Form 8-K filed July 28, 1999;
(e) The description under the heading "Description of Capital Stock"
relating to our common stock in the prospectus included in our Amendment No. 2
to the Registration Statement on Form S-3 (Registration No. 333-88651) filed
with the SEC on October 20, 1999, and the description under the heading
"Description of Capital Stock" relating to the common stock in the our final
prospectus filed with the SEC on October 21, 1999 pursuant to Rule 424(b) under
the Securities Act of 1933, as amended, which is commonly known as the
Securities Act, including any amendment or report filed for the purpose of
updating that description; and
(f) Our current report on Form 8-K filed November 3, 1999.
(g) Our current report on Form 8-K filed January 14, 2000.
We also incorporate by reference all documents subsequently filed by us
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, as amended, which is commonly known as the Exchange Act, until all of the
shares registered under this Registration Statement are sold.
We will provide without charge to each person to whom a prospectus is
delivered, including any beneficial owner, a copy of any or all of the
information that has been incorporated by reference in this Registration
Statement. If you would like to obtain this information from us, please direct
your request to the Investor Relations Department, either in writing or by
telephone, to Genentech, Inc., 1 DNA Way, South San Francisco, California 94080,
Attention Investor Relations (650) 225-1260.
ITEM 4: DESCRIPTION OF SECURITIES
We have incorporated by reference the description under the heading
"Description of Capital Stock" relating to our common stock in the prospectus
included in our Amendment No. 2 to the Registration Statement on Form S-3
(Registration No. 333-88651) filed with the SEC on October 20, 1999, and the
description under the heading "Description of Capital Stock" relating to the
common stock in the our final prospectus filed with the SEC on October 21, 1999
pursuant to Rule 424(b) under the Securities Act, including any amendment or
report filed for the purpose of updating that description.
ITEM 5: INTERESTS OF NAMED EXPERTS AND COUNSEL
Stephen G. Juelsgaard, Senior Vice President, General Counsel and
Secretary of Genentech, is an officer of Genentech and has enrolled in the
Genentech, Inc. Tax Reduction Plan, which is referred to as the "Plan."
<PAGE> 3
ITEM 6: INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our certificate of incorporation limits, to the fullest extent
permitted by Delaware corporate law, the personal liability of directors for
monetary damages for breach of their fiduciary duties.
Section 145 of the General Corporation Law of the State of Delaware
(the "DGCL") provides, in summary, that directors and officers of Delaware
corporations are entitled, under certain circumstances, to be indemnified
against all expenses and liabilities (including attorneys' fees) incurred by
them as a result of suits brought against them in their capacity as a director
or officer, if they acted in good faith and in a manner they reasonably believed
to be in or not opposed to the best interests of the corporation, and with
respect to any criminal action or proceeding, if they had no reasonable cause to
believe their conduct was unlawful; provided, that no indemnification may be
made against expenses in respect of any claim, issue or matter as to which they
shall have been adjudged to be liable to the corporation, unless and only to the
extent that the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, they are fairly and reasonably entitled to
indemnity for such expenses which the court shall deem proper. Any such
indemnification may be made by the corporation only as authorized in each
specific case upon a determination by the stockholders or disinterested
directors that indemnification is proper because the indemnitee has met the
applicable standard of conduct.
Our board of directors may provide similar indemnification to our
officers, employees and agents as it deems appropriate and as authorized by
Delaware law. We may purchase insurance on behalf of any director, officer,
employee or agent against any expense incurred by such person in his or her
capacity.
Our certificate of incorporation also provides that Roche and the
officers or directors of Roche Holdings, Inc., or Roche, which is our majority
stockholder, will not be presumed liable to us or our stockholders for breach of
any fiduciary duty or duty of loyalty, failure to act in the best interests of
Genentech, or receipt of any improper personal benefit, simply because Roche or
any director or officer of Roche, in good faith, takes any action, exercises any
right or gives or withholds any consent with respect to any agreement or
contract between Roche and Genentech.
In addition, Roche will not be liable to us or our stockholders for
breach of any fiduciary duty if Roche pursues or acquires a potential corporate
opportunity of ours or does not inform us of a potential corporate opportunity.
If a director, officer or employee of Genentech who is also a director, officer
or employee of Roche knows of a potential transaction or matter that may be a
corporate opportunity both for Genentech and Roche, the director, officer or
employee is entitled to offer the corporate opportunity to us or Roche as the
director, officer or employee deems appropriate under the circumstances in his
or her sole discretion, and no such director, officer or employee will be liable
to us or our stockholders for breach of any fiduciary duty or duty of loyalty or
failure to act in our best interests or the derivation of any improper personal
benefit by reason of the fact that such director, officer or employee offered
such corporate opportunity to Roche (rather than to us) or did not communicate
information regarding such corporate opportunity to us, or Roche pursues or
acquires such corporate opportunity for itself or directs such corporate
opportunity to another person or does not communicate the corporate opportunity
to us.
Neither Roche nor any officer or director thereof shall be liable to us
or our stockholders for breach of any fiduciary duty or duty of loyalty or
failure to act in (or not opposed to) our best interests or the derivation of
any improper personal benefit by reason of the fact that Roche or an officer of
director thereof in good faith takes any action or exercises any rights or gives
or withholds any consent in connection with any agreement or contract between
Roche and Genentech. No vote cast or other action taken by any person who is an
officer, director or other representative of Roche, which vote is cast or action
is taken by such person in his capacity as a director of Genentech, shall
constitute an action of or the exercise of a right by or a consent of Roche for
the purpose of any such agreement or contract.
ITEM 7: EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
<PAGE> 4
ITEM 8: EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
<S> <C>
5 Opinion of Stephen G. Juelsgaard, Esq.
15.1 Letter re: Unaudited Interim Financial Information.
23.1 Consent of Ernst & Young LLP, independent auditors.
23.2 Consent of Stephen G. Juelsgaard, Esq. is contained in Exhibit 5 to
this Registration Statement.
24 Power of Attorney is contained on the signature pages.
99.1 Genentech, Inc. Tax Reduction Investment Plan. (*)
99.2 Amendment No. 1 to the Genentech, Inc. Tax Reduction Investment
Plan.
99.3 Amendment No. 2 to the Genentech, Inc. Tax Reduction Investment
Plan.
99.4 Amendment No. 3 to the Genentech, Inc. Tax Reduction Investment
Plan.
99.5 Trust Agreement.
99.6 Amendment No. 1 to Trust Agreement.
99.7 Amendment No. 2 to Trust Agreement.
99.8 Amendment No. 3 to Trust Agreement.
99.9 Amendment No. 4 to Trust Agreement.
99.10 Amendment No. 5 to Trust Agreement.
99.11 Amendment No. 6 to Trust Agreement.
99.12 Amendment No. 7 to Trust Agreement.
</TABLE>
- ---------------
(*) Previously filed.
ITEM 9: UNDERTAKINGS
1. The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
<PAGE> 5
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the SEC
pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20% change in
the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
Provided, however, that paragraphs (a)(i) and (a)(ii) do not
apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the issuer pursuant to section 13 or
section 15(d) of the Exchange Act that are incorporated by
reference herein.
(b) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(c) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
2. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to section 15(d) of the Exchange
Act) that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
3. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered,
the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and will
be governed by the final adjudication of such issue.
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the undersigned registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of South San Francisco, State of
California, on January 14, 2000.
GENENTECH, INC.
By: /s/ STEPHEN G. JUELSGAARD
----------------------------------------------------
Name: Stephen G. Juelsgaard
Title: Senior Vice President, General Counsel and Secretary
<PAGE> 7
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Stephen G. Juelsgaard and Cynthia J.
Ladd, and each or any one of them, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Post-Effective Amendment No. 1 to
the Registration Statement, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitutes or substitute, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ ARTHUR D. LEVINSON Principal Executive Officer and Director January 14, 2000
- -------------------------------------------
Arthur D. Levinson
/s/ LOUIS J. LAVIGNE, JR. Principal Financial Officer January 14, 2000
- -------------------------------------------
Louis J. Lavigne, Jr.
/s/ JOHN M. WHITING Principal Accounting Officer January 14, 2000
- -------------------------------------------
John M. Whiting
/s/ HERBERT W. BOYER Director January 14, 2000
- -------------------------------------------
Herbert W. Boyer
/s/ FRANZ B. HUMER Director January 14, 2000
- -------------------------------------------
Franz B. Humer
/s/ JONATHAN K.C. KNOWLES Director January 14, 2000
- -------------------------------------------
Jonathan K.C. Knowles
/s/ CHARLES A. SANDERS Director January 14, 2000
- -------------------------------------------
Charles A. Sanders
/s/ MARK RICHMOND Director January 14, 2000
- -------------------------------------------
Mark Richmond
</TABLE>
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
<S> <C>
5 Opinion of Stephen G. Juelsgaard, Esq.
15.1 Letter re: Unaudited Interim Financial Information.
23.1 Consent of Ernst & Young LLP, independent auditors.
23.2 Consent of Stephen G. Juelsgaard, Esq. is contained in Exhibit 5 to
this Registration Statement.
24 Power of Attorney is contained on the signature pages.
99.1 Genentech, Inc. Tax Reduction Investment Plan. (*)
99.2 Amendment No. 1 to the Genentech, Inc. Tax Reduction Investment
Plan.
99.3 Amendment No. 2 to the Genentech, Inc. Tax Reduction Investment
Plan.
99.4 Amendment No. 3 to the Genentech, Inc. Tax Reduction Investment
Plan.
99.5 Trust Agreement.
99.6 Amendment No. 1 to Trust Agreement.
99.7 Amendment No. 2 to Trust Agreement.
99.8 Amendment No. 3 to Trust Agreement.
99.9 Amendment No. 4 to Trust Agreement.
99.10 Amendment No. 5 to Trust Agreement.
99.11 Amendment No. 6 to Trust Agreement.
99.12 Amendment No. 7 to Trust Agreement.
</TABLE>
- ---------------
(*) Previously filed.
<PAGE> 1
Exhibit 5
Genentech, Inc.
1 DNA Way
South San Francisco, California 94080
January 14, 1999
Ladies and Gentlemen:
I am Senior Vice President, General Counsel and Secretary of Genentech, Inc.
(the "Company"). In connection with this opinion, I have examined the following
documents:
- - the Company's Registration Statement on Form S-8 (the "Registration
Statement") to be filed with the Securities and Exchange Commission
covering the offering of 1,000,000 shares of the Company's Common
Stock, par value $.02 per share (the "Shares"), pursuant to the
Company's Tax Reduction Investment Plan (the "Plan") and the related
Prospectus;
- - the Company's Amended and Restated Certificate of Incorporation and
Bylaws; and
- - such other documents, records, certificates, memoranda and other
instruments as I deem necessary as a basis for this opinion.
I have assumed the genuineness and authenticity of all documents submitted to me
as originals, the conformity to originals of all documents submitted to me as
copies thereof, and the due execution and delivery of all documents where due
execution and delivery are a prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, I am of the opinion that
the Shares, when sold and issued in accordance with the Registration Statement
and the Plan and the related Prospectus, will be validly issued, fully paid, and
nonassessable (except as to shares issued pursuant to certain deferred payment
arrangements, which will be fully paid and nonassessable when such deferred
payments are made in full).
I am admitted to practice only in the State of California. The opinions set
forth herein are limited to matters of the General Corporation Law of the state
of Delaware and the federal securities laws of the United States.
I consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ STEPHEN G. JUELSGAARD
-----------------------------------
Stephen G. Juelsgaard
Senior Vice President,
General Counsel and Secretary
<PAGE> 1
EXHIBIT 15.1
January 12, 2000
The Board of Directors and Stockholders
Genentech, Inc.
We are aware of the incorporation by reference in the Registration Statement
(Form S-8) of Genentech, Inc. pertaining to the Tax Reduction Investment Plan of
Genentech, Inc. of our reports dated April 9, 1999, July 9, 1999 and October 7,
1999 relating to the unaudited condensed consolidated interim financial
statements of Genentech, Inc. that are included in its Forms 10-Q for the
quarters ended March 31, 1999, June 30, 1999 and September 30, 1999.
Pursuant to Rule 436(c) of the Securities Act of 1933 our report is not a part
of the registration statement prepared or certified by accountants within the
meaning of Section 7 or 11 of the Securities Act of 1933.
Very truly yours,
/s/ ERNST & YOUNG LLP
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the Tax Reduction Investment Plan of Genentech, Inc. of our
report dated January 20, 1999, with respect to the consolidated financial
statements and schedule of Genentech, Inc. included and incorporated by
reference in its Annual Report on Form 10-K for the year ended December 31,
1998, filed with the Securities and Exchange Commission.
San Jose, California
January 12, 2000
/s/ ERNST & YOUNG LLP
<PAGE> 1
EXHIBIT 99.2
AMENDMENT NO. 1 TO THE
GENENTECH, INC.
TAX REDUCTION INVESTMENT PLAN
(MAY 8, 1996 RESTATEMENT)
GENENTECH, INC. (the "Company"), having established the Genentech, Inc.
Tax Reduction Investment Plan (the "Plan") effective January 1, 1985, and
amended and restated the Plan effective (most recently) as of May 8, 1996,
hereby amends the Plan, as follows:
1. Section 1.12 is hereby amended in its entirety to read as
follows:
"1.12 "Eligible Employee" shall mean every Employee of an
Employer except:
(a) An Employee who is employed on a temporary basis
as defined by an Employer; provided, however, that any such
Employee who is credited with at least 1,000 Hours of Service
for a 12-month period beginning on his or her date of hire or
any anniversary thereof shall become an Eligible Employee as
of the Entry Date that next follows the last day of such
12-month period;
(b) A part-time Employee who is not normally
scheduled to work at least 20 hours per week; provided,
however, that any such Employee who is credited with at least
1,000 Hours of Service for a 12-month period beginning on his
or her date of hire or any anniversary thereof shall become an
Eligible Employee as of the Entry Date that next follows the
last day of such 12-month period;
(c) An 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, unless the agreement specifically provides
for coverage of such Employee under this Plan;
(d) An individual employed by any corporation or
other business entity that is merged or liquidated into, or
whose assets are acquired by, any Employer, unless any two (2)
of the officers identified in Section 11.2 designate (in
writing) the employees of that corporation or other business
entity as Eligible Employees under the Plan; provided,
however, that the exclusion of any individual under this
paragraph (c) does not make unavailable an exemption from
section 16(a) or (b) of the 1934 Act;
(e) An Employee whose Compensation is not paid from
any Employer's U.S. payroll; and
(f) An Employee who, as to any period of time, is
classified or treated by an Employer as an independent
contractor, a consultant, a Leased Employee, or an employee of
an employment agency or any entity other than an Employer,
even if such individual is subsequently determined to have
been a common-low employee of the Employer during such period.
For purposes of this Section 1.12, "date of hire" shall mean the date
on which an Employee first completes an Hour of Service."
<PAGE> 2
2. In order to clarify the intended meaning of the Plan provisions
limiting Plan eligibility to individuals classified by the Employers as
common-law employees, this amended Section 1.12 shall be effective as of January
1, 1985.
IN WITNESS WHEREOF, the Company, by the officers identified below, who
have been thereunto duly authorized by the Board of Directors of the Company,
has executed Amendment No. 1 on the date indicated below.
GENENTECH, INC.
By: /s/ MARTY GLICK
------------------------------------
Name: Marty Glick
Title: Vice President, Tax and Treasury
Date: May 21, 1997
By: /s/ JUDITH A. HEYBOER
------------------------------------
Name: Judith A. Heyboer
Title: Senior Vice President,
Human Relations
Date: May 21, 1997
<PAGE> 1
EXHIBIT 99.3
AMENDMENT NO. 2 TO THE
GENENTECH, INC.
TAX REDUCTION INVESTMENT PLAN
(MAY 8, 1996 RESTATEMENT)
GENENTECH, INC. (the "Company"), having established the Genentech, Inc.
Tax Reduction Investment Plan (the "Plan") effective January 1, 1985, amended
and restated the Plan effective (most recently) as of May 8, 1996, and amended
the restated Plan on May 21, 1997, hereby again amends the Plan, as follows:
1. Section 1.10 is amended in its entirety to read as follows:
1.10 "COMPENSATION" shall mean all salary, wages, annual cash
bonuses and sales commissions paid by any Employer with respect to
services performed during any period by an Employee, including Salary
Deferrals, but excluding contributions made by any Employer (other than
Salary Deferrals) under this Plan or any other employee benefit plan
(within the meaning of section 3(3) of ERISA); provided, however, that
the amount of an Employee's Compensation shall not be increased or
decreased by compensation reductions effected or Flex Credits awarded
under GenenFlex. No portion of the Compensation of any Member for a
Plan Year which exceeds $150,000 (as adjusted pursuant to sections
401(a)(17) and 415(d) of the Code) shall be taken into account under
the Plan for any Plan Year. In applying that $150,000 limit for a Plan
Year, Section 1.17(c) shall apply except that the term "Family Member"
shall only include a spouse or a lineal descendant who has not attained
age 19 before the close of the Plan Year.
2. Section 1 is amended by inserting the following immediately after
Section 1.16 thereof:
1.16A "FLEX CREDIT" shall have the meaning set forth in
GenenFlex.
1.16B "GENENFLEX" shall mean the cafeteria plan (within the
meaning of section 125 of the Code) pursuant to which Flex Credits are
awarded to any Employee of an Employer.
3. Section 1.22 is amended by deleting the phrase "Salary Deferrals"
and substituting the phrase "Salary Deferrals and excess Flex Credits" therefor.
4. Section 1.23(a) is amended in its entirety to read as follows:
(a) For each Plan Year a Member shall be classified as an
"Active Member" (1) if he or she has (A) enrolled in the Plan for any
portion of the Plan Year by authorizing the required Salary Deferrals
in accordance with Sections 2.3, 3.1 and 3.2, and/or (B) elected under
GenenFlex to have at least five dollars ($5.00) worth of excess Flex
Credits contributed to his or her GenenFlex Account; or (2) if his or
her active membership is resumed during the Plan Year after the end of
a suspension period in accordance with Section 2.4 or 2.5.
<PAGE> 2
5. Section 1.24 is amended in its entirety to read as follows:
1.24 "MEMBER'S ACCOUNT" OR "ACCOUNT" shall mean as to any
Member the separate account maintained in order to reflect his or her
interest in the Plan. Each Member's Account shall be comprised of up to
four separate subaccounts, as follows:
1.24.1 "GENENFLEX ACCOUNT" shall mean the subaccount
maintained to record any excess Flex Credits that the Member has
elected under GenenFlex to have credited to his or her Account pursuant
to Sections 3.1 and 3.2 and any adjustments relating thereto.
1.24.2 "LOAN ACCOUNT" shall mean the subaccount
maintained to record any loans made to the Member from his or her
Account pursuant to Section 5.3.3.
1.24.3 "MATCHING ACCOUNT" shall mean the subaccount
maintained to record Matching Contributions made on behalf of the
Member and any adjustments relating thereto.
1.24.4 "ROLLOVER ACCOUNT" shall mean the subaccount
maintained to record any transfers to the Plan made by or on behalf of
a Member pursuant to Section 10.5 and any adjustments relating thereto.
1.24.5 "SALARY DEFERRAL ACCOUNT" shall mean the
subaccount maintained to record the Salary Deferrals made on behalf of
the Member and any adjustments relating thereto.
6. Section 2.4 is amended by deleting the phrase "Salary Deferrals" (at
both points where that phrase appears) and substituting the phrase "Salary
Deferrals and excess Flex Credits" therefor.
7. Section 2.4.1 is amended by deleting the phrase "Salary Deferrals"
(at both points where that phrase appears) and substituting the phrase "Salary
Deferrals and excess Flex Credits" therefor.
8. Section 2.4.2 is amended by deleting the phrase "Salary Deferrals"
and substituting the phrase "Salary Deferrals and excess Flex Credits" therefor.
9. Section 2.5 is amended by deleting the phrase "Salary Deferrals" in
the last sentence and substituting the following therefor:
Salary Deferrals, nor shall such Member contribute any Flex Credits to
his or her GenenFlex Account during such mandatory suspension period.
The title of Section 3 is amended to read "SALARY DEFERRALS AND FLEX
CREDITS" and Section 3.1 is amended in its entirety to read as follows:
3.1 SALARY DEFERRALS AND FLEX CREDITS. Each Active Member may
elect to defer portions of his or her Compensation payments and to have
the amounts of such
<PAGE> 3
Salary Deferrals contributed by the Employers to the Trust Fund and
credited to his or her Salary Deferral Account under the Plan. An
Active Member may elect under this Plan to defer a portion of each
payment of Compensation that would otherwise be made to him or her,
after the election becomes and while it remains effective, equal to any
whole percentage from 1% to 15% (inclusive) of his or her Compensation.
In addition, an Active Member may elect under GenenFlex to have at
least five dollars ($5.00) worth of excess Flex Credits contributed to
his or her GenenFlex Account.
Section 3.1.1(a) is amended in its entirety to read as follows:
(a) May suspend or limit any Member's salary deferral
election, and/or election under GenenFlex to have any excess Flex
Credits contributed to his or her GenenFlex Account, at any time in
order to prevent the cumulative amount of the Salary Deferrals and Flex
Credits contributed on behalf of the Member for any calendar year from
exceeding the Section 401(k) Ceiling;
Section 3.1.1(c) is amended in its entirety to read as follows:
(c) May cause any other amount allocated to the Member's
Salary Deferral and/or GenenFlex Account(s) and designated by the
Member as an excess deferral, together with any income allocable
thereto for the calendar year to which the excess deferral relates, to
be distributed to the Member in accordance with section 402(g)(2)(A) of
the Code; provided, however, that any such designation shall be applied
last to any excess Flex Credits that any HCE Member (as defined in
Section 3.1.3) has elected under GenenFlex to have contributed to his
or her GenenFlex Account.
10. Section 3.1.2 is amended. in its entirety to read as follows:
3.1.2 LIMITATIONS ON HCE MEMBERS. For any Plan Year, the
Committee (in its discretion) may limit (a) the period for which,
and/or specify a lesser maximum percentage at which, Salary Deferrals
may be elected by HCE Members (as defined in Section 3.1.3), and/or (b)
the period for which or the value of the excess Flex Credits that may
be contributed to HCE Members' GenenFlex Accounts, in such manner as
may be necessary or appropriate in order to assure that the limitation
described in Section 3.1.4 will be satisfied.
11. Clause (1) of the first sentence of Section 3.1.5 is amended in its
entirety to read as follows:
(1) the total of all Salary Deferrals and excess Flex Credits made by
the Member and credited to his or her Salary Deferral and GenenFlex
Accounts for the Plan Year,
12. Section 3.1.6(a) is amended in its entirety to read as follows:
(a) The sum of (1) his or her Total Compensation (as defined
in Section 5.4.2(d)), (2) Salary Deferrals credited to his or her
Salary Deferral Account, (3) compensation reductions effected (but not
Flex Credits awarded) under GenenFlex, and (4) other amounts that are
contributed to an employee benefit plan by any Employer pursuant to a
salary reduction agreement and are not includible in gross income under
section 125, 401(k), 402(e)(3), 402(h), 403(b) or 414(h)(2) of the
Code; or
<PAGE> 4
13. Section 3.2 is amended in its entirety to read as follows:
3.2 SALARY DEFERRAL AND FLEX CREDIT ELECTIONS. Each Active
Member shall determine the percentage of his or her Compensation that
shall be deferred and contributed to the Trust Fund as his or her
Salary Deferrals, subject to the limitations of Section 3.1, at the
time he or she becomes an Active Member and thereafter may redetermine
such percentage from time to time as of any Entry Date. Each Active
Member who is also a participant in GenenFlex may also elect under
GenenFlex to have at least five dollars ($5.00) worth of excess Flex
Credits contributed to his or her GenenFlex Account. In either event,
(a) the Active Member shall execute and deliver (1) a salary deferral
election with respect to his or her Salary Deferrals, in such manner
and within such advance notice period as the Committee (in its
discretion) shall specify, and/or (2) an election under GenenFlex to
have any such excess Flex Credits contributed to his or her GenenFlex
Account, in accordance with the rules in effect under GenenFlex; (b) no
Salary Deferrals shall be made by any Active Member except in
accordance with his or her salary deferral election and the limitations
of Section 3.1; and (c) no Flex Credits shall be contributed to any
Active Member's GenenFlex Account except pursuant to his or her
election under GenenFlex to have excess Flex Credits so contributed, in
accordance with the rules in effect under GenenFlex.
14. The heading of Section 3.2.1 is amended in its entirety to read
"Amounts" and Section 3.2.1 is further amended by inserting the following new
sentence at the end thereof:
In addition, each Active Member may elect under GenenFlex to have
contributed to his or her GenenFlex Account all or any portion of those
Flex Credits which the Member has not used to purchase benefits under
GenenFlex, provided that such Member elects to contribute at least five
dollars ($5.00) worth of excess Flex Credits to his or her GenenFlex
Account.
15. Section 3.2.2 is amended by inserting the following new
sentence at the end thereof:
However, changes in an Active Member's election to have excess Flex
Credits contributed to his or her GenenFlex Account shall be permitted
only in accordance with the rules in effect under GenenFlex.
16. Section 3.2.3 is amended by (a) deleting the phrase
"Salary Deferrals" from the first sentence thereof and substituting the
phrase "Salary Deferrals and excess Flex Credits" therefor; and
(b) replacing the second sentence thereof with the following new sentence:
If the Committee determines that it is no longer necessary to reduce
the Salary Deferrals and/or excess Flex Credits contributed on behalf
of (current or former) HCE Members, the Committee (in its discretion)
may permit some or all HCE Members, on a uniform and nondiscriminatory
basis, to make (a) new salary deferral elections with respect to their
Salary Deferrals, and/or (b) new elections under GenenFlex to have
excess Flex Credits contributed to their GenenFlex Accounts (if and to
the extent permitted by the rules in effect GenenFlex), and shall
establish a policy as to the deferral percentages
<PAGE> 5
and/or limitations on the contribution of excess Flex Credits that
shall apply with respect to those HCE Members who do not make new
elections.
17. Sections 3.2.4(a)(1) and 3.2.4(a)(2) are amended in their entirety
to read as follows:
(1) The Salary Deferrals and Flex Credits contributed on
behalf of the HCE Member with the highest Deferral Rate shall be
reduced to the extent necessary to satisfy the ADP test or cause such
Rate to equal the Deferral Rate of the HCE Member with the next highest
Deferral Rate; provided, however, that any such reduction shall be
applied last to any excess Flex Credits that the HCE Member has elected
under GenenFlex to have contributed to his or her GenenFlex Account.
This process shall be repeated until the ADP test is satisfied.
(2) The amount of excess contributions for a HCE Member shall
be equal to his or her Salary Deferrals and Flex Credits (calculated
using the Member's original Deferral Rate), minus his or her Salary
Deferrals and Flex Credits calculated using the Member's Deferral Rate
as reduced under paragraph (a)(1) above.
18. Section 3.3 is amended by deleting the phrase "Salary Deferrals"
(at both points where that phrase appears) and substituting the phrase "Salary
Deferrals and excess Flex Credits" therefor.
19. Section 4.1 is amended by (a) deleting the phrase "Section 3.1)"
from the second sentence thereof and substituting the phrase ", but excluding
excess Flex Credits)" therefor and
(b) inserting the following new sentence at the end thereof:
In no event shall the amount of the Flex Credits contributed to any
Member's GenenFlex Account be taken into account in determining the
amount of Matching Contributions to made to the Trust Fund and/or
allocated to his or her Matching Account.
20. The title of Section 5.1 is amended in its entirely to read "Salary
Deferrals and Flex Credits" and Section 5.1 is further amended by adding the
following new sentence at the end thereof:
In addition, except as provided in Section 3.2.4, the excess Flex
Credits contributed on behalf of any Active Member for any period shall
be allocated to his or her GenenFlex Account on the business day that
is or next follows the date on which such Flex Credits are received by
the Trust Fund.
21. Clause (1) of Section 5.4.2(c) is amended in its entirety to read
as follows:
(1) the Member's Salary Deferrals and excess Flex Credits to be
credited to the Member's Salary Deferral and GenenFlex Accounts,
22. The first sentence of Section 5.4.5 is amended by deleting the
phrase "Salary Deferrals that may be made" and substituting the phrase "Salary
Deferrals and excess Flex Credits that may be made or contributed" therefor.
<PAGE> 6
23. Sections 5.4.5(b) and 5.4.5(e) are is amended in there entirety to
read as follows:
(b) In the circumstances described in clause (2) above, Salary
Deferrals and the value of excess GenenFlex Credits contributed shall
be distributed to the Member to the extent required to reduce the
excess annual addition to the Member's Account attributable to that
circumstance, provided that any such distribution shall be made last
from any excess Flex Credits that the Member has elected under
GenenFlex to have contributed to his or her GenenFlex Account.
. . .
(e) The Member's Salary Deferrals, excess Flex Credits and any
salary reduction contributions made at the Member's election pursuant
to section 401(k) of the Code under any Aggregated Plan shall be
reallocated to a suspense account and applied to reduce such Salary
Deferrals, excess Flex Credits or other salary reduction contributions
as otherwise are to be made thereafter at his or her election under
this or any Aggregated Plan; and
24. Section 6.1 is amended by deleting "and" from the end of Section
6.1(c), substituting "; and" for the period (".") at the end of Section 6.1(d),
and inserting immediately thereafter the following new Section 6.1(e):
(e) A GenenFlex Account, to which shall be credited all excess
Flex Credits paid to the Trust Fund at his or her election under
GenenFlex in accordance with Section 3.
25. The first sentence of Section 6.2 is amended by inserting the
phrase "contributions of excess Flex Credits," immediately after the phrase
"Matching Contributions,".
26. The last sentence of Section 8.1 is amended by deleting the phrase
"Salary Deferrals" and substituting the phrase "Salary Deferrals and
contributions of excess Flex Credits (if and to the extent permitted by the
rules in effect under GenenFlex)," therefor.
27. Section 8.2.3 is amended in its entirety to read as follows:
8.2.3 CONTRIBUTION LIMITATIONS. To the extent required by
regulations, no withdrawal shall be made under this Section 8.2 unless
the Member irrevocably agrees in writing to the following limitations
in his or her hardship withdrawal application:
(a) The Member shall agree to refrain, during the period
beginning on the withdrawal approval date and ending on the first
anniversary of that date, from (1) making contributions to,
compensation deferrals under or payments in connection with the
exercise of any rights granted under any other qualified plan or any
nonqualified stock option, stock purchase, deferred compensation or
similar plan (but not any health or welfare plan) maintained by any
Employer or Affiliate; and (2) electing under GenenFlex to have any
excess Flex Credits contributed to his or her GenenFlex Account.
<PAGE> 7
(b) Any election under GenenFlex to have excess Flex Credits
contributed to his or her GenenFlex Account shall be suspended until
the end of the withdrawal suspension period described in paragraph (a)
above.
(c) If the Member elects to become an Active Member again
following the suspension of his or her active membership pursuant to
Section 8.1, the total amount of the Member's Salary Deferrals and
excess Flex Credits for the calendar year that next follows the
withdrawal date shall not exceed an amount equal to (1) the Section
401(k) Ceiling (as defined in Section 3.1) for that calendar year,
minus (2) the Member's Salary Deferrals and excess Flex Credits for the
calendar year of the withdrawal under this Section 8.2.
28. Clause (1) of Section 8.2.4(c) is amended in its entirety to read
as follows:
(1) the sum of all Salary Deferrals and excess Flex Credits allocated
to the Member's Salary Deferral Account and/or GenenFlex Account on or
about the date of the withdrawal plus the amount of earnings credited
to his or her Salary Deferral Account as of December 31, 1988, over
29. Effective as of January 1, 1985 (in order to reflect in the Plan
the manner in which a Member's Account is administered once the Committee
receives notice of an impending QDRO), Section 8.5 is amended by inserting the
following new Section 8.5.4 at the end thereof:
8.5.4 HOLD PROCEDURES. Notwithstanding any contrary Plan
provision, at any time the Committee (in its discretion) may place a
hold upon all or a portion of a Member's Account for a reasonable
period of time (as determined by the Committee) if the Committee
receives notice that (a) a domestic relations order is being sought by
the Member, his or her spouse, former spouse, child or other dependent
and (b) the Member's Account is a source of payment under such order.
For purposes of this Section 8.5.4, a "hold" means that no withdrawals,
loans or distributions may be made from a Member's Account. The
Committee shall notify the Member if a hold is placed upon his or her
Account pursuant to this Section 8.5.4.
30. Paragraphs (a) and (g) of Section 9.4 are amended in their entirety
to read as follows:
(a) To interpret the provisions of the Plan (and the documents
governing GenenFlex, insofar as they relate to the relationships
between GenenFlex and this Plan) and to determine any question arising
under, or in connection with the administration or operation of, the
Plan;
. . .
(g) To determine the status and rights of Members and their
spouses, Beneficiaries or estates under this Plan and the ability of
Members to have Flex Credits contributed to their GenenFlex Accounts
under this Plan;
<PAGE> 8
31. The first sentence of Section 10.1 is amended by inserting the
phrase "contributions of excess Flex Credits," immediately after the phrase
"Matching Contributions,".
32. Section 10.3 is amended by (a) deleting from the first sentence the
phrase "Salary Deferrals" (at both points where that phrase appears) and
substituting the phrase "Salary Deferrals or excess Flex Credits" therefor and
(b) deleting from the second sentence the phrase "Salary Deferral" and
substituting the phrase "Salary Deferral, excess Flex Credit" therefor.
33. Section 11.1 is amended by (a) deleting from the second sentence
the phrase "Salary Deferrals and/or Matching Contributions" and substituting the
phrase "contributions of Salary Deferrals, excess Flex Credits and/or Matching
Contributions" therefor and (b) deleting from the third sentence the phrase
"Salary Deferral and Employer contributions" and substituting the phrase "Salary
Deferral, excess Flex Credit and Employer contributions" therefor.
34. Section 11.3 is amended by (a) deleting from the first sentence the
phrase "Salary Deferral and Matching Contributions" and substituting the phrase
"contributions of Salary Deferrals, excess Flex Credits and/or Matching
Contributions" therefor and (b) adding "and/or GenenFlex Account" after "Salary
Deferral Account" in the second sentence thereof.
35. Paragraph (a) of Section 12.2.1 is amended by deleting the phrase
"Salary Deferral and Matching Contributions" and substituting the phrase "Salary
Deferrals, excess Flex Credits and Matching Contributions" therefor.
36. Clause (b) of Section 12.2.2 is amended by (a) deleting the phrase
"Salary Deferrals" and substituting the phrase "Salary Deferrals and excess Flex
Credits" therefor and (b) adding "and/or GenenFlex Account" after "Salary
Deferral Account".
37. Except as indicated in paragraph 32 above, this Amendment No. 2
shall become effective as of January 1, 1998.
<PAGE> 9
IN WITNESS WHEREOF, the Company, by the officers identified below, who
are thereunto duly authorized under Section 11.2 of the Plan, has executed this
Amendment No. 2 on the date indicated below.
GENENTECH, INC.
By: /s/ JUDITH A. HEYBOER
------------------------------------
Name: Judith A. Heyboer
Title: Senior Vice President,
Human Resources
Date: December 15, 1997
By: /s/ LOUIS J. LAVIGNE, JR.
------------------------------------
Name: Louis J. Lavigne, Jr.
Title: Executive Vice President and
Chief Financial Officer
Date: December 31, 1997
<PAGE> 1
EXHIBIT 99.4
AMENDMENT NO. 3 TO THE
GENENTECH, INC.
TAX REDUCTION INVESTMENT PLAN
(MAY 8, 1996 RESTATEMENT)
GENENTECH, INC. (the "Company"), having established the Genentech, Inc.
Tax Reduction Investment Plan (the "Plan") effective January 1, 1985, amended
and restated the Plan effective (most recently) as of May 8, 1996, and amended
the restated Plan on two prior occasions, hereby again amends the Plan, as
follows:
38. Section 1.12(d) is amended to read as follows:
(d) An individual employed by any corporation or other
business entity that is merged or liquidated into, or whose assets are
acquired by any Employer, unless any two (2) of the officers identified
in Section 11.2 designate (in writing) the employees of that
corporation or other business entity as Eligible Employees under the
Plan;
39. The first sentence of Section 2.4 is amended to read as follows:
2.4 VOLUNTARY SUSPENSION. An Active Member may voluntarily
suspend his or her active membership in the Plan, thereby suspending
his or her Salary Deferrals and becoming an Inactive Member for future
payroll periods during the suspension period, by giving notice to such
person, in such manner and within such advance notice period as the
Committee (in its discretion) shall specify.
40. Section 2.4.2 is amended in its entirety to read as follows:
2.4.2 RESUMPTION OF ACTIVE MEMBERSHIP. A Member whose active
membership in the Plan has been suspended may voluntarily resume his or
her Salary Deferrals, effective with respect to Compensation paid for
the payroll period beginning on any Entry Date, by again electing to
become an Active Member in accordance with Section 2.3.
41. Section 4.1.1 is amended in its entirety to read as follows:
4.1.1 MATCHING AMOUNT. The rate at which the amount of
Employer Matching Contributions shall be made for any Plan Year (the
"Matching Amount") shall be determined as follows:
<TABLE>
<S> <C>
If the Salary Deferral
Contribution Rate for an Eligible Then the Matching Amount for the Member
Active Member is: shall be:
</TABLE>
<PAGE> 2
<TABLE>
<S> <C>
Less than or equal to 3% Equal to 100% of Salary Deferrals
Greater than 3% Equal to the first 3% of Salary Deferrals
plus one-half (1/2) of Salary Deferrals
greater than 3% and less than or equal
to 5%
</TABLE>
The "Salary Deferral Contribution Rate" for an Active Member
is determined on a Plan Year basis and is (Salary Deferrals) divided by
(Compensation), expressed as a percentage.
Subject to the limitations of Section 5.4 and as provided in
this Section 4.1.1, the Matching Amount may be changed for any Plan
Year to such extent (if any) as the Board of Directors (in its
discretion) may determine by resolution and without amending the Plan
pursuant to Section 11.2; provided, however, that no decrease in the
Matching Amount applicable to any Salary Deferral Contribution Rate
shall not take effect before the first payroll period that begins after
the decrease is announced to eligible Active Members.
42. Section 4.1.2 is amended in its entirety to read as follows:
4.1.2 MAXIMUM MATCHED RATE. For any Plan Year for which a
different rate is not determined in accordance with the following
sentence, the maximum Salary Deferral Contribution Rate that shall be
taken into account in determining the amount of the Matching
Contribution (if any) to be made on behalf of any eligible Active
Member pursuant to this Section 4.1 (the "Matching Ceiling") shall be
5% of Compensation. The amount of Matching Contributions (if any) to be
made on behalf of any eligible Active Member shall not exceed 4% of his
or her Compensation.
Subject to the limitations of Section 5.4, the Board of
Directors (in its discretion) may change for any Plan Year the maximum
Salary Deferral Contribution Rate stated in the preceding sentence;
provided, however, that no decrease in the Matching Ceiling shall take
effect before the first payroll period that begins after the decrease
is announced to eligible Active Members.
<PAGE> 3
43. Effective as of October 1, 1998, Section 7.3 is amended in its
entirety to read as follows:
7.3 CONSENT REQUIREMENT. For determinations made on or after
October 1, 1998, if the balance credited to a Member's Account exceeds
$5,000 (the "Threshold Amount") as of the Valuation Date that (a) next
precedes the date of the distribution or (b) next preceded the date of
any prior distribution or withdrawal from the Account (provided such
prior distribution or withdrawal occurred on or after October 1, 1998),
no portion of the Member's Account shall be distributed to the Member
until he or she attains age 62, unless the Member (or, if deceased, his
or her Beneficiary) has consented to an earlier distribution in such
manner and within such advance notice period as the Committee (in its
discretion) shall specify. The Threshold Amount (as defined in this
Section 7.3) shall be adjusted as provided under Sections 402(g)(5) and
415(d) of the Code.
44. Except as otherwise indicated above, this Amendment No. 3 shall
become effective as of January 1, 1999.
In Witness Whereof, the Company, by the officers identified below, who
are thereunto duly authorized under Section 11.2 of the Plan, has executed this
Amendment No. 3 on the date indicated below.
GENENTECH, INC.
By: /s/ JUDITH A. HEYBOER
------------------------------------
Name: Judith A. Heyboer
Title: Senior Vice President,
Human Resources
Date: December 23, 1998
By: /s/ LOUIS J. LAVIGNE, JR.
------------------------------------
Name: Louis J. Lavigne, Jr.
Title: Executive Vice President and
Chief Financial Officer
Date: December 31, 1998
<PAGE> 1
EXHIBIT 99.5
Trust Agreement
Between
Genentech, Inc.
And
Fidelity Management Trust Company
----------------------------------------------------------------
GENENTECH, INC. TAX REDUCTION INVESTMENT PLAN
TRUST
----------------------------------------------------------------
Dated as of July 1, 1991
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
<S> <C> <C>
1 Definitions 1
2 Trust 4
3 Exclusive Benefit and Reversion of 4
Sponsor Contributions
4 Member's Accounts
(a) Contributions to Accounts 5
(b) Limitations on Trustee 5
5 Disbursements
(a) Directions from Committee 6
(b) Limitations 6
(c) Payments 6
(d) Cash in the Trust 6
6 Investment of Trust
(a) Selection of Investment Options 6
(b) Available Investment Options 7
(c) Participant Direction 7
(d) Mutual Funds 7
(e) Sponsor Stock 8
(f) Notes 13
(g) Reliance of Trustee on Directions 14
(h) Trustee Powers 14
7 Record Keeping to Be Performed
(a) General
(b) Accounts 15
(c) Inspection and Audit 16
(d) Judicial Determination 16
(e) Plan Amendment and other Information 16
(f) Returns, Reports and Information 16
8 Compensation and Expenses 17
9 Directions and Indemnification
(a) Identity of Administrator and Committee 17
(b) Directions from Administrator 17
(c) Directions from Committee 17
(d) Co-Fiduciary Liability and Investment
of Trust Assets 18
(e) Indemnification 18
(f) Survival 18
</TABLE>
i
<PAGE> 3
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
SECTION PAGE
<S> <C> <C>
10 Resignation or Removal of Trustee
(a) Resignation 18
(b) Removal 18
11 Successor Trustee
(a) Appointment 18
(b) Acceptance 19
(c) Trustee Corporate Action 19
(d) Sponsor Corporate Action 19
12 Termination 19
13 Notices 19
14 Duration 20
15 Amendment or Modification 20
16 General
(a) Performance by Trustee, its Agents or Affiliates 20
(b) Entire Agreement 20
(c) Waiver 20
(d) Successors and Assigns 20
(e) Partial Invalidity 20
(f) Nonalienation of Trust 20
(g) section Headings 21
(h) Massachusetts Law Controls 21
(i) Trust not a Party to the Plan 21
(j) Counterparts 21
Schedules
A. Record Keeping Services 22
B. Fee Schedule 24
C. Investment Options 26
D. Sponsor's Authorization Letter 27
E. Named Fiduciary's Authorization Letter 28
F. Telephone Procedures 29
</TABLE>
-ii-
<PAGE> 4
TRUST AGREEMENT (the "Agreement"), dated as of the first day of July,
1991, between Genentech, Inc., a Delaware corporation, having an office at 460
Point San Bruno Boulevard, South San Francisco, CA 94080 (the "Sponsor"), and
FIDELITY MANAGEMENT TRUST COMPANY, a Massachusetts trust company, having an
office at 82 Devonshire Street, Boston, Massachusetts 02109 (the "Trustee").
WITNESSETH:
WHEREAS, the Sponsor is the sponsor of the Genentech, Inc. Tax
Reduction Investment Plan (the "Plan"); and
WHEREAS, the Sponsor wishes to establish a trust to hold and invest
plan assets under the Plan for the exclusive benefit of Members of the Plan and
their Beneficiaries; and
WHEREAS, the Committee is the named fiduciary of the Plan (within the
meaning of section 402(a) of ERISA); and
WHEREAS, the Trustee is willing to hold for safekeeping and invest the
aforesaid plan assets in trust among several investment options selected by the
Committee; and
WHEREAS, the Sponsor wishes to have the Trustee perform certain
administrative and ministerial record keeping functions under the Plan; and
WHEREAS, the Sponsor is the administrator of the Plan (within the
meaning of section 3(16)(A) of ERISA); and
WHEREAS, the Trustee is willing to perform administrative and record
keeping services for the Plan within a framework of plan provisions, guidelines
and interpretations conveyed in writing to the Trustee by the Administrator or
the Committee.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements set forth below, the Sponsor and the Trustee
agree as follows:
Section 1. Definitions.
"Administrator" shall have the definition set forth in the definition
of "Sponsor".
"Affiliate" shall mean a corporation, trade or business which is,
together with any Employer, a member of a controlled
1
<PAGE> 5
group of corporations or an affiliated service group or under common control
(within the meaning of section 414(b), (c), (m) or (o) of the Code), but only
for the period during which such other entity is so affiliated with any
Employer.
"Agreement" shall mean this Agreement, including the schedules
thereto, as amended from time to time in accordance therewith.
"Beneficiary" shall means any person(s) entitled to receive benefits
under the Plan.
"Board of Directors" shall mean the Board of Directors of the Sponsor,
as from time to time constituted.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
Reference to a specific section of the Code shall include such section, any
valid regulation promulgated thereunder, any comparable provision of any future
legislation amending, supplementing or superseding such section.
"Committee" shall mean the administrative committee appointed by the
Board of Directors and charged with the general administration of the Plan
pursuant to the Plan. For purposes of this Agreement, the Committee is a named
fiduciary of the Plan within the meaning of section 402(a)(1) of ERISA.
"Employer" shall mean the Sponsor and each Affiliate that adopts the
Plan in accordance with the Plan.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended. Reference to a specific section of ERISA include such section,
any valid regulation promulgated thereunder, any comparable provision of any
future legislation amending, supplementing or superseding such section.
"FBSI" shall have meaning set forth in Section 6(e)(iii)(B) of the
Agreement.
"FIRSCO" shall have the meaning set forth on Schedule "F".
"Matching Contributions" shall mean as to each Member the amounts
contributed under the Plan by the Employers, excluding Salary Deferrals, in
accordance with the Plan.
2
<PAGE> 6
"Member" shall mean an eligible employee (as defined under the Plan)
of any Employer who becomes and has not ceased to be a member of the Plan in
accordance with the Plan.
"Member's Account" or "Account" shall mean as to any Member the
separate account maintained in order to reflect his or her interest in the Plan.
The subaccounts within each Account are defined in Section 4(a) of the
Agreement.
"Mutual Fund" shall have the meaning set forth in Section 6(b) of the
Agreement.
"NFSC" shall have the meaning set forth in Section 6(e)(iii)(B) of the
Agreement.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended.
Reference to a specific section of the 1934 Act shall include such section, any
valid regulation promulgated thereunder, any comparable provision of any future
legislation amending, supplementing or superseding such section.
"Pass-Through Issue" shall have the meaning set forth in Section
6(e)(v)(A)(1) of the Agreement.
"Plan" shall mean the Genentech, Inc. Tax Reduction Investment Plan
(Restatement of January 1, 1991), as heretofore or hereafter amended from time
to time.
"Plan Year" shall have the meaning set forth in the Plan.
"Reporting Date" shall have the meaning set forth in Section 7(b) of
the Agreement.
"Salary Deferrals" shall mean as to each Member the amounts
contributed under the Plan by the Employers in accordance with the salary
deferral election made by such Member, all pursuant to the Plan.
"Sponsor" shall mean Genentech, Inc., a Delaware corporation,, and any
successor by merger, consolidation or otherwise that assumes the obligations of
the Sponsor under the Plan and this Agreement. For purposes of this Agreement,
the Sponsor is the administrator of the Plan within the meaning of sections 414
(g) and 3(16)(A) of the Code and ERISA, respectively (the "Administrator").
3
<PAGE> 7
"Sponsor Stock" shall mean equity securities issued by the Sponsor or
an Affiliate which are publicly traded and which are "qualifying employer
securities" within the meaning of Section 407 (d) (5) of BRISA, including but
not limited to the redeemable common stock of the Sponsor, par value $0.02,
while such redeemable common stock is outstanding, and thereafter the common
stock of the Sponsor as from to time constituted.
"Trust" shall mean the Genentech, Inc. Tax Reduction Investment Plan
Trust established and maintained under this Agreement entered into by and
between the Trustee and any Employer, as amended from time to time.
"Trustee" shall mean Fidelity Management Trust Company, a
Massachusetts trust company, and any additional, successor or substituted
trustee(s) from time to time acting as Trustee of the Trust in accordance with
this Agreement.
"Valuation Date" shall mean any business day on which the assets of a
Member's Account and/or the Trust are to be valued, as set forth in this
Agreement.
Any other term used in this Agreement which is defined in the Plan
shall have the identical meaning when used in this Agreement unless a different
meaning is clearly required in the context.
Section 2. Trust. The Sponsor hereby establishes the Trust with the Trustee. The
Trust shall consist of an initial contribution or contributions of money or
other property acceptable to the Trustee in its sole discretion, made by the
Sponsor and/or transferred from a previous trustee under the Plan and consisting
of all the Members' Salary Deferrals, Matching Contributions and rollover
amounts (all pursuant to the Plan), such additional sums of money and/or Sponsor
Stock as shall from time to time be delivered to the Trustee, all investments
made therewith and proceeds thereof, and all earnings and profits (less any
losses) thereon, less the payments, transfers and other distributions that are
made by the Trustee as provided herein, without distinction between principal
and income. The Trustee hereby accepts the Trust on the terms and conditions set
forth in this Agreement and acknowledges that it assumes the fiduciary duties
established by this Agreement. In accepting this Trust, the Trustee shall be
accountable for the assets received by it, subject to the terms and conditions
of this Agreement, and Trustee agrees to deal with the Trust at all times in
accordance with the provisions of this Agreement and
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the Plan. The Trust established herein is intended to comply with ERISA, to be a
"qualified trust" exempt from taxation under section 401 and 501 of the Code,
and to qualify under section 404(c) of ERISA.
Section 3. Exclusive Benefit and Reversion of Sponsor Contributions. Except as
provided under applicable law and as provided to the limited extent set forth in
the Plan, no part of the Trust may be used for, or diverted to, purposes other
than the exclusive benefit of the Members, or Beneficiaries prior to the
satisfaction of all accrued liabilities with respect to each of the foregoing.
Any obligation to contribute Salary Deferrals and/or Matching Contributions
under the Plan or this Agreement after initial qualification is hereby
conditioned upon the continued qualification of the Plan under section 401(a) of
the Code and the exempt status of the Trust under section 501(a) of the Code and
upon the deductibility of such Salary Deferrals and/or Matching Contributions
under section 404(a) of the Code. That portion of any Salary Deferral of
Matching Contribution which is contributed or made by reason of a good faith
mistake of fact, or by reason of a good faith mistake in determining the
deductibility of such portion, shall be returned to the Employers as promptly as
practicable, but not later than one (1) year after the contribution was made or
the deduction was disallowed (as the case may be). The amount returned pursuant
to the preceding sentence shall be an amount equal to the excess of the amount
actually contributed over the amount that would have been contributed if the
mistake had not been made; provided, however, that any gains attributable to the
returnable portion shall be retained in the Trust; and provided further,
however, that the returnable portion shall be reduced (i) by any losses
attributable thereto and (ii) to avoid a reduction in the balance of any
Member's Account below the balance that would have resulted if the mistake had
not been made.
Section 4. Members' Accounts.
(a) Contributions to Accounts. The Sponsor or Committee shall transmit
to the Trustee all contributions of Members as may be required or permitted
under the Plan. All such contributions shall be made in cash and shall be paid
to the Trustee for allocation, investment and reinvestment in accordance with
the terms of this Agreement and the Plan. At the direction of the Committee, the
Trustee shall establish and maintain for each individual Member an Account
consisting of up to four (4) subaccounts, as appropriate:
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<PAGE> 9
(i) a "Salary Deferral Account" to which the Trustee at the
direction of the Administrator or Committee shall contribute all Salary
Deferrals elected by the Member to be paid to the Trust and invested and
reinvested by the Trustee at the direction of the Member, in accordance with the
Plan and this Agreement;
(ii) a "Matching Account" to which the Trustee at the direction of
the Administrator or Committee shall contribute all Matching Contributions to be
paid to the Trust and invested and reinvested by the Trustee at the direction of
the Member, in accordance with the Plan and this Agreement;
(iii) a "Rollover Account" to which the Trustee at the direction
of the Administrator or Committee shall contribute all transfers of assets
qualifying as a rollover under section 402 (a) (5) or 408(d)(3)(A)(ii) of the
Code to be made to the Trust and invested and reinvested by the Trustee at the
direction of the Member, in accordance with the Plan and this Agreement; and
(iv) a "Loan Account" to which the Trustee at the direction of the
Administrator or Committee shall credit (A) any amounts loaned to the Member (or
Beneficiary of a deceased Member) from the Member's Account, after liquidation
of a portion of the Member's investments and reallocation of the proceeds to the
Loan Account, and (B) any interest and principal payments on loans made to any
Member (or Beneficiary of a deceased Member) as received by the Trustee from the
Committee. (which payments, after appropriate adjustment of the Loan Account,
shall be reallocated and invested and reinvested by the Trustee at the direction
of the Member), all in accordance with the Plan and this Agreement.
(b) Limitations on Trustee. The Trustee shall have no duty to determine
or inquire whether any contributions to the Trust are made in compliance with
the Plan; nor shall the Trustee have any duty or authority to compute any amount
to be paid to the Trust; nor shall the Trustee be responsible for the collection
or adequacy of any contributions to the Trust.
Section 5. Disbursements.
(a) Directions from Committee. The Trustee shall make disbursements,
payments and distributions out of the assets of the Trust in the amounts and in
the manner that the Administrator or Committee directs from time to time in
writing.
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The Trustee shall have no responsibility to ascertain any direction's compliance
with the terms of the Plan or of any applicable law or the direction's effect
for tax purposes or otherwise; nor shall the Trustee have any responsibility to
see to the application of any disbursement.
(b) Limitations. The Trustee shall not be required to make any
disbursement, payment or distribution in excess of the net realizable value of
the assets of the Trust at the time of the disbursement.
(c) Payments. Any disbursement, payment or distribution from such
portion of a Member's Account as is not invested in Sponsor Stock shall be made
in the form of a single lump sum payment of cash (or its equivalent) equal to
the balance credited to such portion of the Account as of the Valuation Date (as
defined hereinbelow for purposes of this Section). Any disbursement, payment or
distribution from such portion of a Member's Account as is invested in Sponsor
Stock shall be made in the form of a single lump sum payment in (i) whole shares
of the Sponsor Stock allocable to such portion of the Account as of the
Valuation Date, (ii) cash equal to the fair market value of such Sponsor Stock,
or (iii) a combination of both, as elected by the distributee; provided,
however, that if fewer than 100 shares of Sponsor Stock are allocable to the
Member's Account, the distribution shall be made in cash (or its equivalent) to
that extent. The Trustee shall make all disbursements, payments and
distributions in Sponsor Stock in accordance with the provisions of the Plan as
instructed by the Administrator or Committee. For purposes of this Section, the
Valuation Date shall be the date on which occur the transactions required to
effectuate the liquidation of the assets of the Account (whether later
distributed as cash or Sponsor Stock or both).
(d) Cash in the Trust. The Trustee shall keep such portion of the
assets of the Trust in cash (or cash equivalents) as the Administrator or
Committee shall specify in writing from time to time to meet contemplated
disbursements, payments and distributions from the Trust. The Trustee may invest
such cash, along with any other cash portions of the Trust assets, in accordance
with such investment policies and guidelines as may be communicated to the
Trustee from the Administrator or Committee from time to time.
Section 6. Investment of Trust.
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(a) Selection of Investment Options. The Trustee shall have no
responsibility for the selection of investment options under the Trust and shall
not render investment advice to any person in connection with the selection of
such options.
(b) Available Investment Options. The Committee shall direct the
Trustee as to what investment options Members may invest in, subject to the
following limitations. The Committee may determine to offer as investment
options only (i) securities issued by the investment companies advised by
Fidelity Management & Research Company ("Mutual Funds"), (ii) Sponsor Stock,
(iii) notes evidencing loans to Members (or Beneficiaries) in accordance with
the terms of the Plan, (iv) guaranteed investment contracts chosen by the
Trustee, and (v) collective investment funds maintained by the Trustee for
qualified plans; provided, however, the Trustee shall be considered a fiduciary
with investment discretion only with respect to Trust assets that are invested
in collective investment funds maintained by the Trustee for qualified plans.
The investment options initially selected by the Committee are identified on
Schedules "A" and "C" attached hereto. The Committee may change investment
options upon amendment of this Trust Agreement and the Schedules thereto, in
accordance with section 15 of this Agreement, to reflect such changes.
(c) Participant Direction. Each Member shall direct the Trustee in
which investment option(s) to invest the assets in the Member's Account. Such
directions may be made by Members by use of the telephone exchange system
maintained for such purposes by the Trustee or its agent, in accordance with the
written Telephone Exchange Guidelines attached hereto as Schedule "F". In the
event that the Trustee fails to receive a proper direction in accordance with
Schedule "F", the assets shall be invested in the securities of the Mutual Fund
set forth for such purpose on Schedule "C", until the Trustee receives a proper
direction. Any direction made by a Member in accordance with the Telephone
Exchange Guidelines shall be treated as a direction made in writing by the
Committee for purposes of Section 9(c).
(d) Mutual Funds. The Sponsor hereby acknowledges that it has received
from the Trustee a copy of the prospectus for each Mutual Fund selected by the
Committee as a Plan investment option. Trust investments in Mutual Funds shall
be subject to the following limitations:
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(i) Execution of Purchases, Sales and Exchanges. Executions of
purchases and sales of Mutual Funds (not including exchanges among investments,
which are directed by Members as set forth hereinbelow) shall be made on the
date on which the Trustee receives from the Sponsor in good order all
information and documentation necessary to accurately effect such purchases and
sales, together, in the case of purchases, with a wire transfer of funds
necessary to make such purchases. Exchanges of investments in Mutual Funds shall
be made at the direction of Members, in accordance with the Telephone Exchange
Guidelines attached hereto as Schedule "F".
(ii) Voting. At the time of mailing of notice of each annual or
special stockholders' meeting of any Mutual Fund, the Trustee shall send a copy
of the notice and all proxy solicitation materials to each Member (or, if
deceased, his or her Beneficiary) who has shares of the Mutual Fund allocated to
the Member's Account, together with a voting instruction form for return to the
Trustee or its designee. The Member shall have the right to instruct the Trustee
as to the manner in which the Trustee is to vote the shares credited to the
Member's Account. The Trustee shall vote the shares as instructed by the Member.
The Trustee shall not vote shares for which it has received no instructions from
the Member. With respect to all rights other than the right to vote, the Trustee
shall follow the instructions of the Member and if no such instructions are
received, the instructions of the Committee. The Trustee shall have no duty to
solicit instructions from Members. The voting instructions of the Members shall
be held in strictest confidence by the Trustee And shall not be divulged or
released to any person, including the Sponsor or any Affiliate or any officer,
director or employee, thereof, or any other person except for a record keeper,
auditor or other person providing services to the Trust if the person (a) is not
the Sponsor or an Affiliate and (b) agrees not to divulge the instructions to
any other person.
(e) Sponsor Stock. Investments of Trust assets in Sponsor Stock shall
be subject to the following limitations:
(i) Acquisition Limit. Pursuant to the Plan, the Trust may be
invested in Sponsor Stock to the extent necessary to comply with investment
directions of Members under section 6(c) of this Agreement.
(ii) Fiduciary Duty of Committee. The Committee shall continually
monitor the suitability under the fiduciary duty
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rules of section 404(a)(1) of ERISA (as modified by section 404(a)(2) of ERISA)
of acquiring and holding Sponsor Stock. The Trustee shall not be liable for any
loss, or by reason of any breach, which arises from the directions of the
Committee with respect to the acquisition and holding of Sponsor Stock, unless
the actions to be taken under those directions would be prohibited by the
foregoing fiduciary-duty rules or would be contrary to the terms of the Plan or
this Agreement.
(iii) Execution of Purchases and Exchanges.
(A) Executions of purchases and sales of Sponsor Stock (not
including exchanges among investments, which are directed by Members as set
forth hereinbelow) shall be made on the date on which the Trustee receives from
the Sponsor in good order all information and documentation necessary to
accurately effect such purchases and sales, together, in the case of purchases,
with a wire transfer of funds necessary to make such purchases. All purchases
and sales of Sponsor Stock shall be made on the open market. Exchanges of
investments in Sponsor Stock by Members shall be made in accordance with the
Telephone Exchange Guidelines attached hereto as Schedule "F". Such general
rules shall not apply in the following circumstances:
(1) if the Trustee is unable to determine the number of shares
required to be purchased or sold on such day; or
(2) if the Trustee is unable to purchase or sell the total
number of shares required to be purchased or sold on such day as a result of
market conditions; or
(3) if the Trustee is prohibited by the Securities and
Exchange Commission, the New York Stock Exchange, or any other regulatory body
from purchasing or selling any or all of the shares required to be purchased or
sold on such day. In the event of the occurrence of the circumstances described
in (1), (2), or (3) above, the Trustee shall purchase or sell such shares as
soon as possible thereafter and shall determine the price of such purchases or
sales to be the average purchase or sales price of all such shares purchased or
sold, respectively. The Trustee may follow directions from the Committee to
deviate from the above purchase and exchange procedures provided that such
direction is made in writing by the Committee.
(B) Use of an Affiliated Broker. The Sponsor hereby authorizes the
Trustee to use Fidelity Brokerage Services, Inc.
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("FBSI") to provide brokerage services in connection with any exchange of
Sponsor Stock in accordance with directions from Members. FBSI shall execute
such directions directly or through its affiliate, National Financial Services
Company ("NFSC"). The provision of brokerage services shall be subject to the
following:
(1) As consideration for such brokerage services, the Sponsor
agrees that FBSI shall be entitled to remuneration under this authorization
provision in the amount of five cents ($.05) commission on each share of Sponsor
Stock up to 10,000 shares in a singular transaction, four cents ($.04)
commission on each share of Sponsor Stock from 10,001 to 20,000 shares in a
singular transaction, and three and one-half cents ($.035) commission on each
share of Sponsor Stock in excess of 20,000 shares in a singular transaction. Any
change in such remuneration may be made only by a signed agreement between
Sponsor and Trustee.
(2) Following the procedures set forth in Department of Labor
Prohibited Transaction Class Exemption 86-128, the Trustee will provide the
Sponsor with the following documents: (1) a description of FBSI's brokerage
placement practices; (2) a copy of PTCE 86-128; and (3) a form by which the
Sponsor may terminate this authorization to use a broker affiliated with the
Trustee in accordance with subsection (iv) below. The Trustee annually will
provide the Sponsor with this termination form and an annual report which
summarizes all securities transaction-related charges incurred by the Plan and
the Plan's annualized turnover rate.
(3) Any successor organization of FBSI, through
reorganization, consolidation, merger or similar transactions, shall, upon
consummation of such transaction, become the successor broker in accordance with
the terms of this authorization provision.
(4) The Trustee and FBSI shall continue to rely on this
authorization provision until notified to the contrary as provided for herein.
The Sponsor reserves the right in its sole discretion to terminate this
authorization upon sixty (60) days prior written notice to FBSI (or its
successor) and to the Trustee, in accordance with Section 13 of this Agreement.
(iv) Securities Law Reports. The Committee shall be responsible
for filing all reports required under Federal or state securities laws with
respect to the Trust's ownership of
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Sponsor Stock, including, without limitation, any reports required under section
13 or 16 of the Securities Exchange Act of 1934, and shall immediately notify
the Trustee in writing of any requirement to stop purchases or sales of Sponsor
Stock pending the filing of any such report. The Trustee promptly shall provide
to the Committee such accurate and complete information on the Trust's ownership
of Sponsor Stock as the Committee may reasonably request in order to file such
reports and otherwise to comply with Federal or state securities laws.
(v) Voting and Tender Offers. Notwithstanding any other provision
of this Agreement, the provisions of this Section shall govern the voting and
tendering of Sponsor Stock. The Sponsor, after consultation with the Trustee,
shall provide and pay for all printing, mailing, tabulation and other costs
associated with the voting and tendering or exchanging of Sponsor Stock.
(A) Voting.
(1) With respect to Pass-Through Issues (as hereinafter
defined), all Sponsor Stock in the Trust shall be voted, tendered or exchanged
in accordance with the following provisions. For purposes of this Agreement, a
"Pass-Through Issue" with respect to Sponsor Stock is an issue that concerns:
(I) the voting of shares of Sponsor Stock with
respect to the approval or disapproval of any corporate merger or consolidation,
recapitalization, reclassification, liquidation, dissolution, sale of
substantially all assets of a trade or business or any transaction which the
Committee determines, in its discretion, to be similar to the foregoing;
(II) any tender or exchange offer for Sponsor Stock;
(III) any proposal by a shareholder pursuant to Rule
14a-8 under the 1934 Act;
(IV) any election contest governed by Rule 14a11
under the 1934 Act;
(V) any proposal with respect to which there is any
"solicitation in opposition" (within the meaning of Rule 14a-6 under the 1934
Act); or
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(VI) any such other event that the Committee
designates a Pass-Through Issue.
(2) For purposes of this Agreement, each Member (or if
deceased, his or her Beneficiary) shall be a named fiduciary (within the meaning
of, but not limited to, sections 402(a) and 403(a)(1) of ERISA) with respect to
Pass-Through Issues for all shares of Sponsor Stock as to which the Member has
the right of direction with respect to voting, tender, and any other rights
appurtenant to such Sponsor Stock. That named fiduciary status shall apply with
respect to Pass-Through Issues for all shares of Sponsor Stock allocable to the
Member's Account.
(3) In implementing the provisions of this Agreement
relating to voting of Sponsor Stock, each appropriate fiduciary shall take all
steps necessary or appropriate to ensure that each Member's (or, if deceased,
his or her Beneficiary's) instructions shall be kept in strictest confidence and
shall not be divulged or released to any person, except as provided in the next
sentence, including any officers, directors or employees of the Sponsor or any
Affiliate. To the extent necessary for the operation of these provisions,
however, the instructions may be provided to a record keeper, auditor or other
person providing services to the Trust if the person (a) is not the Sponsor or
an Affiliate and (b) agrees not to divulge the instructions to any other person.
(4) Notwithstanding any contrary provision of this
Agreement, whenever any proxies or consents are solicited from the holders of
Sponsor Stock with respect to Pass-Through Issues, the Trustee shall exercise
voting or other rights solely as directed in written instructions timely
received from Members (or, if deceased, their Beneficiaries) and in accordance
with this provision. Each Member (or, if deceased, his or her Beneficiary) shall
have the right, with respect to Pass-Through Issues, to instruct the Trustee in
writing as to the manner in which to vote those shares at any stockholders,
meeting of the issuer of Sponsor Stock, or the manner in which the Trustee shall
give or withhold consent with respect to the shares. The following procedures
shall apply:
(I) The Sponsor shall use its best efforts to timely
distribute or cause to be distributed to each Member (or, if deceased, his or
her Beneficiary) such information concerning Pass Through Issues as will be
distributed to stockholders of the issuer of Sponsor Stock in
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connection with any stockholders' meeting or any solicitation of voting or
consents, together with a request for confidential instructions to the Trustee
or its designee on how shares of Sponsor Stock shall be voted on each such
matter or how consents shall be given or withheld.
(II) The Trustee shall pool the results of
instructions received from all Members to whose Accounts fractional shares of
Sponsor Stock are allocable and shall vote or otherwise act accordingly with
respect to those shares on Pass-Through Issues.
(III) In the case of a deceased Member who has more
than one Beneficiary, the Trustee shall vote or otherwise act on Pass-Through
Issues in accordance with the instructions of the Member's Beneficiaries in
respect of the shares allocable to the deceased Member's Account in proportion
to the Beneficiaries' respective interests in the Member's Account in accordance
with rules established by the Committee.
(IV) If no instructions are received with respect to
shares of Sponsor Stock allocable to a Member's Account, those shares shall not
be voted nor shall any other actions be taken under this provision with respect
to the shares on Pass-Through Issues.
(B) Tender Offers.
(1) Notwithstanding any contrary provision of this
Agreement, whenever any tender or exchange offer is made for shares of Sponsor
Stock, the Trustee shall tender or exchange shares of Sponsor Stock (or refrain
from tendering or exchanging Sponsor Stock) solely as directed in written
instructions timely received from Members (or, if deceased, their Beneficiaries)
and in accordance with this provision.
(2) Each Member (or, if deceased, his or her
Beneficiary) shall have the right, with respect to shares of Sponsor Stock
allocable to his or her Account, to instruct the Trustee in writing as to the
manner in which to respond to a tender or exchange offer with respect to those
shares. The following procedures shall apply:
(I) The Sponsor shall use its best efforts to
timely distribute or cause to be distributed to each Member (or, if deceased,
his or her Beneficiary) such information as will be distributed to stockholders
of the issuer
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<PAGE> 18
of Sponsor Stock in connection with any tender or exchange offer, together with
a request for confidential instructions to the Trustee or its designee to
respond to the tender or exchange offer.
(II) If, and to the extent that the Trustee shall
not have timely received instructions from any Member (or, if deceased, his or
her Beneficiary) with a right to instruct under the Plan, such person shall be
deemed to have timely instructed the Trustee not to tender or exchange the
relevant shares of Sponsor Stock.
(III) The Trustee shall pool the results of
instructions received from all Members to whose Accounts fractional shares of
Sponsor Stock are allocable and shall respond to the tender or exchange offer
accordingly with respect to those shares.
(IV) In the case of a deceased Member who has more
than one Beneficiary, the Trustee shall respond to the tender or exchange offer
in accordance with the instructions of the Member's Beneficiaries in respect of
the shares allocable to the deceased Member's Account in proportion to the
Beneficiaries' respective interests in the Member's Account in accordance with
rules established by the Committee.
(V) Shares of Sponsor Stock allocated to a
Member's Account with respect to which no timely instructions are furnished
shall be treated as shares with respect to which instructions not to tender or
exchange have been timely furnished.
(VI) An instruction by a Member to the Trustee to
tender shares of Sponsor Stock credited to the Member's Account shall not be
considered a written election under the Plan by the Member to withdraw, or have
distributed, any or all of his or her withdrawable shares. The Trustee shall
credit to each Member's Account from which the tendered shares were taken the
proceeds received by the Trustee in exchange for the shares of Sponsor Stock
tendered from that Account. Pending receipt of directions from the Member, in
accordance with Schedule "F", as to which of the remaining investment options
the proceeds should be invested in, the Trustee shall invest the proceeds in the
Mutual Fund described in Schedule "C".
(VI) Shares Credited. For all purposes under this
Section (including, without limitation, investment and
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<PAGE> 19
reinvestment of assets in Members' Accounts and voting, tendering or exchanging
of Sponsor Stock). The number of Shares deemed allocated to a Member's Account
shall be determined as of the relevant Valuation Date (as defined hereinbelow
for purposes of this Section). Such Valuation Date shall be the date on which
occur the transactions effectuating such investment or reinvestment, or, in the
case of voting, tendering or exchanging, the date on which falls the record date
fixed for purposes of such voting, tendering or exchanging.
(vii) General. Except with respect to the right to vote with
respect to Pass-Through Issues and the right to tender or exchange, all rights
and powers appurtenant to all Sponsor Stock held in the Trust shall be exercised
only in accordance with written instructions of the Committee. However, if the
Committee shall fail to give, or shall notify the Trustee in writing of its
decision not to give, timely instructions to the Trustee, the Trustee shall
exercise such rights and powers in its sole discretion.
(f) Notes. The Committee shall act as the Trustee's agent for the
purpose of holding all Trust assets in Members' Loan Accounts, and as such shall
(i) hold physical custody of and keep safe the promissory notes and other loan
documents, (ii) collect and remit all principal and interest payments to the
Trustee, (iii) direct the Trustee as to the amount in any Member's Account that
must be reallocated to such Member's Loan Account in accordance with the Plan
and this Agreement, (iv) advise the Trustee of the Member's Account, amount and
distributee of the cash (or its equivalent) to be paid representing loans, and
(v) cancel and surrender the promissory notes and other loan documentation in
accordance with the Plan.
(g) Reliance of Trustee on Directions.
(i) The Trustee shall not be liable for any loss, or by reason of
any breach, which arises from any Member's exercise or nonexercise of rights
under this Section 6 over the assets in the Member's Account.
(ii) The Trustee shall not be liable for any loss, or by reason of
any breach, which arises from the Committee's exercise or non-exercise of rights
under this Section 6, unless the actions to be taken under the Committee's
directions were prohibited by the fiduciary duty rules of section 404(a) of
ERISA or were contrary to the terms of the Plan or this Agreement.
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(h) Trustee Powers. The Trustee shall have the following powers and
authority:
(i) Subject to paragraphs (b), (c), (d) and (e) of this Section 6,
to control, manage, invest and reinvest the assets of the Trust in accordance
with the terms of the Plan and this Agreement.
(ii) subject to paragraphs (b), (c), (d) and (e) of this Section 6,
to sell, exchange, convey, transfer, or otherwise dispose of any property held
in the Trust, by private contract or at public auction. No person dealing with
the Trustee shall be bound to see to the application of the purchase money or
other property delivered to the Trustee or to inquire into the validity,
expediency, or propriety of any such sale or other disposition.
(iii) Subject to paragraphs (b) and (c) of this Section 4, to
invest in guaranteed investment contracts and short term investments (including
interest-bearing accounts with the Trustee or money market mutual funds advised
by affiliates of the Trustee) and in collective investment funds maintained by
the Trustee for qualified plans, in which case the provisions of each collective
investment fund in which the Trust is invested shall be deemed adopted by the
Sponsor and the provisions thereof incorporated as a part of this Trust as long
as the fund remains qualified and exempt from taxation under Sections 401(a) and
501(a) of the Code.
(iv) To cause any securities or other property held as part of the
Trust to be registered in whole or in part in the Trustee's own name, in the
name of one or more of its nominees, or in the Trustee's account with the
Depository Trust Company of New York and to hold any investments in bearer form,
provided that the books and records of the Trustee shall at all times show that
all such investments are part of the Trust.
(v) To keep that portion of the Trust in cash or cash balances or
cash equivalents as the Committee may, from time to time, designate in writing
to meet contemplated payments from the Trust.
(vi) To make, execute, acknowledge, and deliver any and all
documents of transfer or conveyance with respect to assets of the Trust and to
carry out the powers herein granted.
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(vii) To commence, participate in or defend suits or legal or
administrative proceedings involving the Trustee in its capacity hereunder; to
represent the Trust in all suits and legal and administrative hearings; and to
pay all reasonable expenses arising from any such action from the Trust if not
paid by the Sponsor.
(viii) To appoint agents and employ legal, accounting, clerical,
and other assistance as may be required in carrying out the provisions of this
Agreement and to pay their reasonable expenses and compensation from the Trust
if not paid by the Sponsor.
(ix) To do all other acts although not specifically mentioned
herein, as the Trustee may deem necessary to carry out any of the foregoing
powers and the purposes of the Trust.
Section 7. Record Keeping to Be Performed.
(a) General. The Trustee at all times and on a timely basis shall
perform those record keeping functions described in Schedule "A" attached
hereto. These record keeping functions shall be performed within the framework
of the Committee's written directions regarding the Plan's provisions,
guidelines and interpretations. The Trustee shall preserve all records and
accounted established and maintained by the Trustee with respect to the Trust
for any time period required under any applicable law. Upon expiration of such
time period, the Trustee shall have the right to destroy all such records and
accounts, provided that the Trustee previously notifies the Administrator in
writing of its intention to destroy such records and accounts and promptly
transfers to the Administrator any and all such records and accounts requested
by the Administrator.
(b) Accounts. The Trustee at all times shall keep true and accurate
accounts of all investments, reinvestment, receipts, proceeds, disbursements,
payments and other transactions hereunder, and shall report the fair market
value of the assets held in the Trust as of each Valuation Date and, if
applicable, the date on which the Trustee resigns or is removed as provided in
section 10 or is terminated as provided in Section 12 (in either case, the
"Reporting Date"), in any case with such fair market value to be determined in
accordance with the Plan and with generally acceptable accounting principles.
Within thirty (30) days following each Reporting Date or within sixty (60) days
in the case of a Reporting Date caused by the resignation or removal of the
Trustee, or the termination of this Agreement,
18
<PAGE> 22
the Trustee shall file with the Administrator a certified written report setting
forth (a) all investments, reinvestment, receipts, proceeds, disbursements,
payments and other transactions effected by the Trustee between the Reporting
Date and the prior Reporting Date, (b) value of the Trust as of the Reporting
Date, and (c) all other information as may be required under applicable law.
Except as otherwise required under ERISA, upon the expiration of six (6) months
from the date of filing such report with the Administrator, the Trustee shall
have no liability or further accountability to anyone with respect to the
propriety of its acts or transactions shown in such report, except with respect
to such acts or transactions as to which the Administrator shall within such six
(6) month period file with the Trustee written objections thereto.
(c) Inspection and Audit. All records generated by the Trustee in
accordance with paragraphs (a) and (b) shall be open to inspection and audit by
the Administrator or any person or entity designated by the Administrator,
during the Trustee's regular business hours at any time during the time period
during which the Trustee is required to preserve such records under Section
7(a). Upon the resignation or removal of the Trustee or the termination of this
Agreement, the Trustee shall provide to the Administrator, at no expense to the
Sponsor, in the format regularly provided to the Administrator, a statement of
each Member's Account as of the resignation, removal, or termination of the
Trustee hereunder, and the Trustee shall provide to the Administrator (or the
Plan's new record keeper if directed to by the Administrator) such further
records as are available, at the Sponsor's expense.
(d) Judicial Determination. Nothing contained herein shall be construed
or interpreted as denying the Trustee or the Sponsor the right to have the
Trustee's accounts judicially determined.
(e) Plan Amendment and Other Information. The Trustee's provision of
the record keeping services set forth in this Section 7 shall be conditioned on
the Sponsor providing the Trustee on a timely basis with a copy of any amendment
to the Plan following such amendment's adoption in accordance with the Plan, all
information the Administrator deems necessary for the Trustee to perform the
record keeping services, and such other information as the Trustee may
reasonably request in writing. The Sponsor intends to submit the Plan, as
amended, to the Internal Revenue Service and to request from it a favorable
determination letter as to the Plan's qualified status under
19
<PAGE> 23
section 401(a) of the Code. Upon receipt, the Administrator will provide the
Trustee promptly with a copy of such favorable determination letter as well as
any subsequent favorable determination letters received by the Sponsor.
(f) Returns, Reports and Information. The Committee shall be
responsible for the preparation and filing of all returns, reports, and
information required of the Trust or Plan by law. In addition to the items set
forth on Schedule "A". The Trustee shall provide the Committee with such
information as the Committee may reasonably request to make these filings. The
Committee shall also be responsible for making any disclosures to Members
required by law including, without limitation, such disclosures as may be
required under federal or state truth-in-lending laws with regard to Member (or
Beneficiary) loans.
Section 8. Compensation and Expenses. Within thirty (30) days of receipt of the
Trustee's bill, which shall be computed and billed in accordance with Schedule
"B", the Sponsor shall send to the Trustee a payment in such amount. All taxes
and assessments of any kind whatsoever that may be levied or assessed under
existing or future laws upon or in respect of the Trust or the income thereof,
shall be a charge against and paid from the assets of the Trust in accordance
with the following procedure. With respect to taxes and assessments upon or in
respect to the Trust or the income thereof, the Trustee shall notify the
Administrator in writing of such taxes and assessments. Unless the Administrator
notifies the Trustee to the contrary within thirty (30) days of receipt of the
Trustee's notice hereunder, the Trustee shall pay such taxes and assessments
from the assets of the Trust. If the Administrator notifies the Trustee that, in
the opinion of the Administrator, such taxes and assessments are invalid or
should be contested, the Trustee shall take whatever action is specified in the
Administrator's notice regarding such taxes and assessments, including
contesting such taxes and assessments.
Section 9. Directions and Indemnification.
(a) Identity of Administrator and Committee. The Trustee shall be fully
protected in relying on the fact that the Committee and the Administrator under
the Plan are the individuals, persons or entities named as such above or such
other individuals, persons or entities as the Sponsor may notify the Trustee of
in writing.
20
<PAGE> 24
(b) Directions from Administrator. Except as otherwise provided for
herein, whenever the Administrator provides a direction to the Trustee, the
Trustee shall not be liable for any loss, or by reason of any breach, arising
from the direction if the direction is contained in a writing (or is oral and
immediately confirmed in a writing) signed by any individual whose name and
signature have been submitted (and not withdrawn) in writing to the Trustee by
the Administrator in the form attached hereto as Schedule "D", provided the
Trustee reasonably believes the signature of the individual to be genuine. The
Trustee shall have no responsibility to ascertain any direction's (i) accuracy,
(ii) compliance with the terms of the Plan or any applicable law, or (iii)
effect for tax purposes or otherwise.
(c) Directions from Committee. Except as otherwise provided herein,
whenever the Committee provides a direction to the Trustee, the Trustee shall
not be liable for any loss, or by reason of any breach, arising from the
direction (i) if the direction is contained in a writing (or is oral and
immediately confirmed in a writing) signed by any individual whose name and
signature have been submitted (and not withdrawn) in writing to the Trustee by
the Committee in the form attached hereto as Schedule "E" and (ii) if the
Trustee reasonably believes the signature of the individual to be genuine,
unless the actions to be taken under the direction would be prohibited by the
fiduciary duty rules of section 404(a) of ERISA or would be contrary to the
terms of the Plan or this Agreement.
(d) Co-Fiduciary Liability and Investment of Trust Assets. The Trustee
shall not be liable for any loss, or by reason of any breach, arising from any
act or omission of another fiduciary under the Plan except as provided in
section 405(a) of ERISA. The Trustee shall be considered a fiduciary with
investment discretion with respect to Trust assets that are invested in
collective investment funds maintained by the Trustee, and as such shall
discharge its investment duties hereunder with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent man acting in a
like capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims and by diversifying the
investments held hereunder consistent with investment policies, objectives and
guidelines so as to minimize the risk of large losses, unless under the Plan or
the circumstances it would be clearly not prudent to diversify.
21
<PAGE> 25
(e) Indemnification. The Sponsor shall indemnify the Trustee against,
and hold the Trustee harmless from, any and all loss, damage, penalty,
liability, cost, and expense, including without limitation, reasonable
attorneys' fees and disbursements, that may be incurred by, imposed upon, or
asserted against the Trustee by reason of any claim, regulatory proceeding, or
litigation arising from any act done or omitted to be done by any individual or
person with respect to the Plan or Trust, excepting only any and all loss, etc.,
arising from the Trustee's negligence or bad faith or breach of fiduciary duties
hereunder.
(f) Survival. The provisions of this Section 9 shall survive the
termination of this Agreement.
Section 10. Resignation or Removal of Trustee.
(a) Resignation. The Trustee may resign at any time upon sixty (60)
days' prior notice in writing to the Sponsor, unless a shorter period of notice
is agreed upon by the Sponsor.
(b) Removal. The Sponsor may remove the Trustee at any time upon sixty
(60) days' prior notice in writing to the Trustee, unless a shorter period of
notice is agreed upon by the Trustee.
Section 11. Successor Trustee.
(a) Appointment. If the office of Trustee becomes vacant for any
reason, the Sponsor may in writing appoint a successor trustee or trustees under
this Agreement as of the time of such vacancy. Any such successor trustee shall
accept such appointment by a written instrument delivered to the Trustee and the
Sponsor, and upon becoming such a successor trustee shall have all of the
rights, powers, privileges, obligations, duties, liabilities, and immunities
granted to the Trustee under this Agreement. The successor trustee and
predecessor trustee shall not be liable for the acts or omissions of the other
with respect to the Trust.
(b) Acceptance. When any such successor trustee accepts its appointment
under this Agreement, title to and possession of the Trust assets shall
immediately vest in the successor trustee without any further action on the part
of the predecessor trustee. The predecessor trustee shall execute all
instruments and do all acts that reasonably may be necessary or reasonably may
be requested in writing by the Sponsor or the successor
22
<PAGE> 26
trustee to vest title to all Trust assets in the successor trustee or to
deliver, assign, convey and transfer all assets then constituting the Trust to
the successor trustee.
(c) Trustee Corporate Action. Any successor of the Trustee or of a
successor trustee, through sale or transfer of the business or trust department
of the Trustee or successor trustee, or through reorganization, consolidation,
or merger, or any similar transaction, shall, upon consummation of the
transaction and assumption of the obligations of Trustee under the Trust and the
Plan, become the successor trustee under this Agreement.
(d) Sponsor Corporate Action. Any successor to the Sponsor, through
sale or transfer of the business or assets of the Sponsor, or through
reorganization, consolidation, or merger, or any similar transaction, shall,
upon consummation of the transaction and assumption of the obligations of the
Sponsor under the Trust and the Plan, become the successor Sponsor under this
Agreement.
Section 12. Termination. This Agreement may be terminated at any time by the
Sponsor upon sixty (60) days' prior notice in writing to the Trustee. On the
date of the termination of this Agreement, the Trustee shall forthwith transfer
and deliver to such individual or entity as the Sponsor shall designate, all
cash and assets then constituting the Trust. If, by the termination date, the
Sponsor has not notified the Trustee in writing as to whom the assets and cash
are to be transferred and delivered, the Trustee shall make such distributions
as are specified in the Plan after written notice to the Sponsor. If the Plan is
silent or inconsistent with applicable law, the Trustee reserves the right to
bring an appropriate action or proceeding for leave to deposit the assets and
cash in a court of competent jurisdiction. The Trustee shall be reimbursed by
the Sponsor for all costs and expenses of the action or proceeding including,
without limitation, reasonable attorneys' fees and disbursements.
Section 13. Notices. All notices under this Agreement, except as otherwise
provided herein, must be in writing and mailed to the party to which the notice
is being given by certified or registered mail, return receipt requested, to the
Sponsor c/o Senior Corporate Counsel, Genentech, Inc., 460 Point San Bruno
Blvd., South San Francisco, CA 94080, and to the Trustee c/o John M. Ximpel,
Fidelity Investments, 82 Devonshire Street,
23
<PAGE> 27
Boston, Massachusetts 02109, or to such other addresses as the parties have
notified each other of in the foregoing manner.
Section 14. Duration. This Trust shall continue in effect without limit as to
time, subject, however, to the provisions of this Agreement relating to
amendment, modification, and termination thereof.
Section 15. Amendment or Modification. The Sponsor shall have the right from
time to time and at any time by appropriate action to modify or amend the
Agreement in whole or in part upon seventy five (75) days, prior written notice
to the Trustee, provided that no modification or amendment that affects the
rights, duties or obligations of the Trustee may be made without the Trustee's
written consent thereto. To reflect increased operating costs the Trustee may
once each calendar year amend Schedule "B" with the Sponsor's prior written
consent upon seventy-five (75) days written notice to the Sponsor.
Section 16. General.
(a) Performance by Trustee, its Agent or Affiliates. The Sponsor
acknowledges and authorizes that the services to be provided under this
Agreement shall be provided by the Trustee, its agents or affiliates including
employ Fidelity Investments Institutional Operations company or its successor.
(b) Entire Agreement. This Agreement contains all of the terms agreed
upon between the parties with respect to the subject matter hereof.
(c) Waiver. No waiver by either party of any failure or refusal to
comply with an obligation hereunder shall be deemed a waiver of any other or
subsequent failure or refusal to so comply.
(d) Successors and Assigns. The stipulations in this Agreement shall
inure to the benefit of, and shall bind, the successors and assigns of the
respective parties.
(e) Partial Invalidity. If any term or provision of this Agreement or
the application thereof to any person or circumstances shall, to any extent, be
held invalid or unenforceable by a court of competent jurisdiction, the
remainder of this Agreement, or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected
24
<PAGE> 28
thereby, and each term and provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
(f) Nonalienation of Trust. Except as heretofore provided in this
Agreement or in the Plan, neither the Sponsor nor any Employer, Member, former
Member or his or her spouse, Beneficiary or estate to which the Trust applies
shall have any interest in or right to the assets of this Trust, and to the full
extent of all applicable law, the assets of this Trust shall not be subject to
any form of attachment, garnishment, sequestration or other actions of
collection afforded creditors of such Sponsor, Employers, Members, former
Members or their spouses, Beneficiaries or estates. The Trustee shall not
recognize any assignment or alienation of Benefits unless, and then only to the
extent that, written notices are received from the Administrator or the
Committee with respect thereto.
(g) Section Headings. The headings of the various sections and
subsections of this Agreement have been inserted only for the purposes of
convenience and are not part of this Agreement and shall not be deemed in any
manner to modify, explain, expand or restrict any of the provisions of this
Agreement.
(h) Massachusetts Law Controls. This Agreement is being made in the
Commonwealth of Massachusetts, and the Trust shall be administered as a
Massachusetts trust. The validity, construction, effect, and administration of
this Agreement shall be governed by and interpreted in accordance with the laws
of the Commonwealth of Massachusetts and all applicable federal laws and
regulations from time to time applicable thereof.
(i) Trustee Not a Party to the Plan. The Trustee is not a party to the
Plan. In the event of any conflict between the provisions of the Plan and the
provisions of this Agreement, the provisions of the Plan shall control, except
that the provisions of the Plan shall not alter, amend or expand the rights,
duties or obligations of the Trustee without the Trustee's written consent
thereto.
(j) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which shall
constitute one and the same instrument.
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<PAGE> 29
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
GENENTECH, INC.
Attest: /s/ JOHN P. McLAUGHLIN By: /s/ JOHN P. McLAUGHLIN
---------------------- ----------------------
Secretary Vice President
FIDELITY MANAGEMENT TRUST COMPANY
Attest: /s/ DOUGLAS O. KENT By: /s/ AUTHORIZED SIGNATORY
------------------- ------------------------
Assistant Clerk Senior Vice President
26
<PAGE> 30
SCHEDULE "A"
ADMINISTRATIVE SERVICES
Administration
* Establishment and maintenance of Members' Accounts and election
percentages.
* Maintenance of nine plan investment options:
- Sponsor Stock
- Fidelity Money Market Trust: Retirement Money Market Portfolio
- Fidelity Magellan fund
- Fidelity Intermediate Bond Fund
- Fidelity Balanced Fund
- Fidelity U.S. Equity Index Portfolio
- Fidelity Overseas Fund
- Fidelity Growth company Fund
- Fidelity Growth & Income Portfolio
* Maintenance of up to four subaccounts for each Member:
- Salary Deferral Account
- Matching Account
- Rollover Account
- Loan Account
* Processing of mutual fund trades.
The trader will provide only those record keeping services set forth on
this Schedule "A" and no others.
Processing
* Semi-monthly processing of contribution data from Sponsor.
* Daily processing of Members' exchanges and changes of future
allocations.
* Semi-monthly reconciliation and processing of withdrawals.
<PAGE> 31
Other
* Monthly trial balances and performance data within 30 days following
end of each month.
* Quarterly administrative reports and investment reviews within 30 days
following end of each Plan quarter.
* Quarterly Members' statements on performance and investment options
within 30 days following end of each Plan quarter.
* Written confirmation of telephonic exchanges and allocation changes
within 5 business days of request date.
* Year-end reporting to Sponsor.
* Annual plan financial summary to Sponsor.
* Market and fund updates.
* Financial reporting package to assist Sponsor in filing with IRS of the
Plan's Form 550
* Forwarding and filing with IRS of Form 1099-Rs for annual Member tax
reporting.
* Member (and Beneficiary) loan report.
* Toll-free 24-hour Member number for fund information.
* Performance of section 401(k) limitation testing upon request. In order
to obtain this service, Sponsor shall be required to provide the
information identified in the Fidelity Discrimination Testing Package
Guidelines.
* Employee communications describing available investment options and
educational pieces on investing, including multimedia informational
materials and group presentations.
GENENTECH, INC. FIDELITY MANAGEMENT TRUST COMPANY
By: /s/ JOHN P. McLAUGHLIN 6/26/91 By: /s/ AUTHORIZED SIGNATORY 6/26/91
--------------------------- ---------------------------------
(Name) Date Senior Vice President Date
<PAGE> 32
SCHEDULE "B"
FEE SCHEDULE
Annual Member Fee $15.00 per Member,* subject to a $15,000 per year minimum,
billed and payable quarterly.
Member Loan Fees Establishment fee of $10.00 per loan account;
additional annual fee of $15.00 per Loan Account.
Other Fees: separate charges (a) for optional ADP testing, (b) of $2,500
installation fee for remote access plus $1,000 annual maintenance fee plus
TYMNET hourly usage fee, and (c) for extraordinary expenses resulting from large
numbers of simultaneous manual transactions or from errors not caused by
Trustee. (There will be no additional fees or charges for reasonable levels of
materials and support personnel.)
* This fee will be imposed pro rata for each calendar quarter, or any
part thereof, that it remains necessary to keep a Member's Account as
part of the Plan's records, e.g., vested, deferred, forfeiture,
top-heavy and terminated participants who must remain on file through
calendar year-end for 1099-R reporting purposes.
Trustee Fees**
To the extent that Trust assets are invested in Mutual Funds, 0.02% per year
payable pro rata quarterly on the basis of such assets in the Trust as of the
Valuation Date (as defined in the Plan).
To the extent that Trust assets are invested in Sponsor Stock, 0.25% of such
assets in the Trust payable pro rata quarterly on the basis of such assets as of
the Valuation Date (as defined in the plan), up to a limit of $25 million in
assets invested in Sponsor Stock.
** Trustee fees for Mutual Funds and Sponsor Stock (in the aggregate) are
subject to a $10,000 per year minimum.
<PAGE> 33
The Trustee will charge only those fees set forth on this Schedule "B" and no
others.
GENENTECH, INC. FIDELITY MANAGEMENT TRUST COMPANY
By: /s/ JOHN P. McLAUGHLIN 6/26/91 By: /s/ AUTHORIZED SIGNATORY 6/26/91
--------------------------- ---------------------------------
(Name) Date Senior Vice President Date
<PAGE> 34
SCHEDULE "C"
INVESTMENT OPTIONS
In accordance with Section 6(b) of the Agreement, the Committee hereby
directs the Trustee that Members' Accounts may be invested in the following
investment options:
- Sponsor Stock
- Fidelity Money Market Trust: Retirement Money Market Portfolio
- Fidelity Magellan Fund
- Fidelity Intermediate Bond Fund
- Fidelity Balanced Fund
- Fidelity U.S. Equity Index Portfolio
- Fidelity Overseas Fund
- Fidelity Growth Company Fund
- Fidelity Growth & Income Portfolio
The mutual fund advised by Fidelity Management & Research Company referred to in
Section 6(c) of the Agreement shall be Fidelity Money Market Trust: Retirement
Money Market Portfolio.
GENENTECH, INC.
By: /s/ JOHN P. McLAUGHLIN 6/26/91
---------------------------
(Name) Date
<PAGE> 35
Mr. Peter Smail
Fidelity Investments Institutional
Operations Company
83 Devonshire Street
Boston, Massachusetts 02109
GENENTECH, INC. TAX REDUCTION INVESTMENT PLAN
Dear Mr. Smail:
This letter is sent to you in accordance with Section 9(b) of the Trust
Agreement, dated as of July 1, 1991, between Genentech, Inc. and Fidelity
Management Trust Company. We hereby designate Marty Glick as the individual who
may provide directions upon which Fidelity Management Trust Company shall be
fully protected in relying. The signature of the designated individual is set
forth below and certified to be such.
You may rely upon each designation and certification set forth in this
letter until we deliver to you written notice of the termination of authority of
a designated individual.
Very truly yours,
GENENTECH, INC.
By: /s/ MARTY GLICK
---------------------
By: /s/ MARTY GLICK
----------------------
Marty Glick, Treasurer
<PAGE> 36
Mr. Peter Smail
Fidelity Investments Institutional
Operations Company
83 Devonshire Street
Boston, Massachusetts 02109
GENENTECH, INC. TAX REDUCTION INVESTMENT PLAN
Dear Mr. Smail:
This letter is sent to you in accordance with Section 9(b) of the Trust
Agreement, dated as of July 1, 1991, between Genentech, Inc. and Fidelity
Management Trust Company. We hereby designate Marty Glick, Louis J. Lavigne, Jr.
and Larry Setren as the individuals who may provide directions upon which
Fidelity Management Trust Company shall be fully protected in relying. Only one
such individual need provide any direction. The signature of each designated
individual is set forth below and certified to be such.
You may rely upon each designation and certification set forth in this
letter until we deliver to you written notice of the termination of authority of
a designated individual.
Very truly yours,
ADMINISTRATIVE COMMITTEE
/s/ MARTY GLICK
-------------------------------------
Marty Glick
/s/ LOUIS J. LAVIGNE, JR.
-------------------------------------
Louis J. Lavigne, Jr.
/s/ LARRY SETREN
-------------------------------------
Larry Setren
<PAGE> 37
SCHEDULE "F"
TELEPHONE EXCHANGE PROCEDURES AND SERVICES
A. Exchanges:
The following toll-free telephone exchange procedures are currently employed by
Fidelity Investments Retirement Services Company ("FIRSCO").
Telephone exchange hours are 8:30 a.m. (EST) to 8:00 p.m. (EST) on each business
day. A "business day" is any day on which the New York Stock Exchange is open.
Mutual Funds
Exchanges Between Mutual Funds
Members may call on any business day to exchange between the mutual
funds. If the request is received before 4:00 p.m. (EST), it will
receive that day's trade date. Calls received after 4:00 p.m. (EST)
will be processed on a next day basis.
Sponsor Stock
I. Exchanges from Mutual Funds to Sponsor Stock
Sponsor Stock exchanges are processed on a monthly cycle. Members who
wish to exchange out of a mutual fund into Sponsor Stock may call
between the 1st and the 15th of the month. No calls will be accepted
after 4:00 p.m. (ET) on the 15th (or previous business day if the 15th
is not a business day).
Mutual fund shares are sold on the 16th of the month (or the previous
business day if the 16th is not a business day) and the Sponsor Stock
is purchased within two (2) business days after the date on which the
mutual fund shares are sold.
II. Exchanges from Sponsor Stock to Mutual Funds
Members who wish to exchange out of Sponsor Stock into mutual funds may
call between the 1st and the 15th of the month. No calls will be
accepted after 4:00 p.m. (ET) on the 15th (or previous business day if
the 15th is not a business day).
<PAGE> 38
The Sponsor Stock is sold on the 16th (or the previous business day if
the 16th is not a business day) and the subsequent purchase into mutual
funds will take place five (5) business days later. This allows for
settlement of the stock trade at the custodian and the corresponding
transfer to Fidelity. Orders for sales of Sponsor Stock must be share
specific.
B. Other Services:
The following other telephonic services are currently employed by FIRSCO from
8:30 a.m. (EST) to 8:00 p.m. (EST) on each business day:
Account Balance Information and Investment Data
Members may call on any business day to receive account balance
information and NAV data.
Changes in Future Contribution Allocations
Members may call on any business day to change the allocation of future
contributions, effective the next business day.
FIRSCO reserves the right to change these telephone exchange procedures and
services at its discretion (provided that FIRSCO will not eliminate such
procedures and/or services without the consent of Sponsor).
GENENTECH, INC.
By: /s/ JOHN P. McLAUGHLIN 6/26/91
- -----------------------------------
Date
<PAGE> 1
EXHIBIT 99.6
FIRST AMENDMENT TO TRUST AGREEMENT BETWEEN
FIDELITY MANAGEMENT TRUST COMPANY AND
GENENTECH, INC.
THIS FIRST AMENDMENT, dated as of the first day of May, 1994, by the
between Fidelity Management Trust Company (the "Trustee") and Genentech, Inc.
(the "Sponsor");
WITNESSETH:
WHEREAS, the Trustee and the Sponsor heretofore entered into a trust
agreement dated July 1, 1991, with regard to Genentech, Inc. Tax Reduction
Investment Plan (the "Plan"); and
WHEREAS, the Trustee and the Sponsor now desire to amend said master
trust agreement as provided for in Section 15 thereof;
NOW THEREFORE, in consideration of the above premises the Trustee and
the Sponsor hereby amend the trust agreement by:
(1) Amending and adding the following mutual funds to the
"investment options" portion of Schedules "A" and "C", as
follows:
Fidelity Asset Manager Fund
Fidelity Asset Manager: Growth
Fidelity Asset Manager: Income
IN WITNESS WHEREOF, the Trustee and the Sponsor have caused this First
Amendment to be executed by their duly authorized officers effective as of the
day and year first above written.
GENENTECH, INC. FIDELITY MANAGEMENT TRUST COMPANY
By: /s/ MARTY GLICK By: /s/ JOHN P. O'REILLY, JR. 4/4/94
- -------------------------- ---------------------------------
Date Date
<PAGE> 1
EXHIBIT 99.7
SECOND AMENDMENT TO TRUST AGREEMENT BETWEEN
FIDELITY MANAGEMENT TRUST COMPANY AND
GENENTECH, INC.
THIS SECOND AMENDMENT, dated as of the first day of December, 1995, by
and between Fidelity Management Trust Company (the "Trustee") and Genentech,
Inc. (the "Sponsor");
WITNESSETH:
WHEREAS, the Trustee and the Sponsor heretofore entered into a trust
agreement dated July 1, 1991, with regard to the Genentech, Inc. Tax Reduction
Investment Plan (the "Plan"); and
WHEREAS, the Trustee and the Sponsor now desire to amend said trust
agreement as provided for in Section 15 thereof;
NOW, THEREFORE, in consideration of the above premises the Trustee and
the Sponsor hereby amend the trust agreement by:
(1) Amending Section 1 of the Agreement as follows:
For all purposes under the Trust Agreement "Plan" shall mean
the Genentech, Inc. Tax Reduction Investment Plan (Restatement
of January 1, 1994) as heretofore or hereinafter amended from
time to time. As amended as set forth herein, the Trust
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the Trustee and the Sponsor have caused this Second
Amendment to be executed by their duly authorized officers effective as of the
day and year first above written.
GENENTECH, INC. FIDELITY MANAGEMENT TRUST COMPANY
By: /s/ MARTY GLICK 11/15/95 By: /s/ AUTHORIZED SIGNATORY 11/29/95
- ------------------------------ ----------------------------------
Date Vice President Date
1
<PAGE> 1
EXHIBIT 99.8
THIRD AMENDMENT TO TRUST AGREEMENT BETWEEN
FIDELITY MANAGEMENT TRUST COMPANY AND
GENENTECH, INC.
THIS THIRD AMENDMENT, dated as of the eighth day of May, 1996, by and
between Fidelity Management Trust Company (the "Trustee") and Genentech, Inc.
(the "Sponsor");
WITNESSETH:
WHEREAS, the Trustee and the Sponsor heretofore entered into a trust
agreement dated July 1, 1991, with regard to the Genentech, Inc. Tax Reduction
Investment Plan (the "Plan"), and subsequently amended said trust agreement as
of May 1, 1994 and as of December 1, 1995 (said trust agreement as amended being
referred to herein as the "Trust Agreement"); and
WHEREAS, the Trustee and the Sponsor now desire to amend said Trust
Agreement as provided for in Section 15 thereof;
NOW THEREFORE, in consideration of the above premises the Trustee and
the Sponsor hereby amend the Trust Agreement by;
(1) Amending Section 5 by insetting a new Section 5(b) and
renumbering all subsequent sections accordingly:
(b) Member Withdrawal or Distribution Requests. The
Sponsor hereby directs that, pursuant to the Plan, a Member
withdrawal or distribution request (in-service or full
withdrawal) may be made by the Member via telephone and the
Trustee shall process such request only after the identity of
the Member is verified by use of a personal identification
number ("PIN") and social security number. The Trustee shall
process such withdrawal in accordance with the written
guidelines in the Plan, a copy of which has been provided to
the Trustee, and in the Plan's summary plan description
("SPD"), a copy of which has been provided to the Trustee by
the Sponsor.
(2) Amending and restating Section 6(e), in its entirety, as
follows:
(e) Sponsor Stock. Trust investments in Sponsor Stock
shall be made via the Genentech Stock Fund (the "Stock Fund")
which shall consist of shares of Sponsor
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<PAGE> 2
Stock and short-term liquid investments, including Fidelity
Institutional Cash Portfolios: Money Market Portfolio: Class A
or such other Mutual Fund or commingled money market pool as
agreed to by the Sponsor and Trustee, necessary to satisfy the
Fund's cash needs for transfers and payments. A cash target
range shall be maintained in the Stock Fund. Such target range
may be changed as agreed to in writing by the Sponsor and the
Trustee. The Trustee is responsible for ensuring that the
actual cash held in the Stock Fund falls within the agreed
upon range over time. Each Member's proportional interest in
the Stock Fund shall be measured in units of participation,
rather than shares of Sponsor Stock. Such units shall
represent a proportionate interest in all of the assets of the
Stock Fund, which includes shares of Sponsor Stock, short-term
investments and at times, receivables for dividends and/or
Sponsor Stock sold and payables for Sponsor Stock purchased. A
Net Asset Value ("NAV") per unit will be determined daily for
each unit outstanding of the Stock Fund. The return earned by
the Stock Fund will represent a combination of the dividends
paid on the shares of Sponsor Stock held by the Stock Fund,
gains or losses realized on sales of Sponsor Stock,
appreciation or depreciation in the market price of those
shares owned, and interest on the short-term investments held
by the Stock Fund. Dividends received by the Stock Fund shall
be reinvested by the Trustee in additional shares of Sponsor
Stock. Investments in Sponsor Stock shall be subject to the
following limitations:
(i) Acquisition Limit. Pursuant to the Plan, the
Trust may be invested in Sponsor Stock to the extent necessary
to comply with investment directions under Section 6(c) of
this Agreement.
(ii) Fiduciary Duty of Committee. The Committee shall
continually monitor the suitability under the fiduciary duty
rules of section 404(a)(1) of ERISA (as modified by section
404(a)(2) of ERISA) of acquiring and holding Sponsor Stock.
The Trustee shall not be liable for any loss, or by reason of
any breach, which arises from the directions of the Committee
with respect to the acquisition and holding of Sponsor Stock,
unless the actions to be taken under those directions would be
prohibited by the foregoing
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<PAGE> 3
fiduciary duty rules or would be contrary to the terms of the
Plan or this Agreement.
(iii) Execution of Purchases and Sales.
(A) Purchases and sales of Sponsor Stock (other
than for exchanges) shall be made on the open market on the
date on which the Trustee receives from the Sponsor in good
order all information and documentation necessary to
accurately effect such purchases and sales (or, in the case of
purchases, the subsequent date on which the Trustee has
received a wire transfer of the funds necessary to make such
purchases). Exchanges of Sponsor Stock shall be made in
accordance with the Telephone Exchange Guidelines attached
hereto as Schedule "F". Such general rules shall not apply in
the following circumstances:
(1) If the Trustee is unable to determine
the number of shares required to be purchased or sold on such
day; or
(2) If the Trustee is unable to purchase or
sell the total number of shares required to be purchased or
sold on such day as a result of market conditions; or
(3) If the Trustee is prohibited by the
Securities and Exchange Commission, the New York Stock
Exchange, or any other regulatory body from purchasing or
selling any or all of the shares required to be purchased or
sold on such day.
In the event of the occurrence of the circumstances described
in (1), (2), or (3) above, the Trustee shall purchase or sell
such shares as soon as possible thereafter and shall determine
the price of such purchases or sales to be the average
purchase or sales price of all such shares purchased or sold,
respectively. The Trustee may follow directions from the
Committee to deviate from the above purchase and sale
procedures provided that such direction is made in writing by
the Committee.
(B) Purchases and Sales from or to Sponsor.
If directed by the Sponsor in writing prior to the trading
date, the Trustee may purchase or sell Sponsor
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<PAGE> 4
Stock from or to the Sponsor if the purchase or sale is for
adequate consideration (within the meaning of section 3(18) of
ERISA) and no commission is charged. If Sponsor contributions
or contributions made by the Sponsor on behalf of the Members
under the Plan are to be invested in Sponsor Stock, the
Sponsor may transfer Sponsor Stock in lieu of cash to the
Trust. In either case, the number of shares to be transferred
will be determined by dividing the total amount of Sponsor
Stock to be purchased or sold by the closing price of the
Sponsor Stock on any national securities exchange on the
trading date.
(C) Use of an Affiliated Broker. The Sponsor
hereby directs the Trustee to use Fidelity Brokerage Services,
Inc. ("FBSI") to provide brokerage services in connection with
any purchase or sale of Sponsor Stock in accordance with
directions from Members. FBSI shall execute such directions
directly or through its affiliate, National Financial Services
Company ("NFSC"). The provision of brokerage services shall be
subject to the following:
(1) As consideration for such brokerage
services, the Sponsor agrees that FBSI shall be entitled to
remuneration under this authorization provision in the amount
of three and one-half cents ($.035) commission on each share
of Sponsor Stock. Any change in such remuneration may be made
only by a signed agreement between Sponsor and Trustee.
(2) Following the procedures set forth in
Department of Labor Prohibited Transaction Class Exemption
86-128, the Trustee will provide the Sponsor with the
following documents: (1) a description of FBSI's brokerage
placement practices; (2) a copy of PTCE 86-128; and (3) a form
by which the Sponsor may terminate this authorization to use a
broker affiliated with the Trustee in accordance with
subsection (iv) below. The Trustee annually will provide the
Sponsor with this termination form, and an annual report which
summarizes all securities transaction-related charges incurred
by the Plan and the Plan's annualized turnover rate.
(3) Any successor organization of FBSI,
through reorganization, consolidation, merger or
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<PAGE> 5
similar transactions, shall, upon consumption of such
transaction, become the successor broker in accordance with
the terms of this authorization provision.
(4) The Trustee and FBSI shall continue to
rely on this authorization provision until notified to the
contrary as provided for herein. The Sponsor reserves the
right in its sole discretion to terminate this authorization
upon sixty (60) days prior written notice to FBSI (or its
successor) and the Trustee, in accordance with Section 13 of
this Agreement.
(iv) Securities Law Reports. The Committee
shall be responsible for filing all reports required under
Federal or state securities laws with respect to the Trust's
ownership of Sponsor Stock, including, without limitation, any
reports required under section 13 or 16 of the Securities
Exchange Act of 1934, and shall immediately notify the Trustee
in writing of any requirement to stop purchases or sales of
Sponsor Stock pending the filing of any report. The Trustee
promptly shall provide to the Committee such accurate and
complete information on the Trust's ownership of Sponsor Stock
as the Committee may reasonably request in order to file such
reports and otherwise to comply with Federal or state
securities laws.
(v) Voting and Tender Offers. Notwithstanding
any other provision of this Agreement, the provisions of this
Section shall govern the voting and tendering of Sponsor
Stock. The Sponsor, after consultation with the Trustee, shall
provide and pay for all printing, mailing, tabulation and
other costs associated with the voting and tendering of
Sponsor Stock.
(A) Voting.
(1) With respect to Pass-Through Issues
(as hereinafter defined), all Sponsor Stock in the Trust shall
be voted, tendered or exchanged in accordance with the
following provisions. For purposes of this Agreement, a
"Pass-Through Issue" with respect to Sponsor Stock is an issue
that concerns:
(i) the voting of shares of Sponsor
Stock with respect to the approval or
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<PAGE> 6
disapproval of any corporate merger or consolidation,
recapitalization, reclassification, liquidation, dissolution,
sale of substantially all assets of a trade or business or any
transaction which the Committee determines, in its discretion,
to be similar to the foregoing;
(ii) any tender or exchange offer
for Sponsor Stock or any transaction that the Committee
determines, in its discretion, to be similar to the foregoing;
(iii) any proposal by a shareholder
pursuant to Rule 14a-8 under the 1934 Act;
(iv) any election contest governed
by Rule 14a-11 under the 1934 Act;
(v) any proposal with respect to
which there is any "solicitation in opposition" (within the
meaning of Rule 14a-6 under the 1934 Act); or
(vi) any such other event that the
Committee designates a Pass-Through Issue.
(2) For purposes of this Agreement,
each Member (or if deceased, his or her Beneficiary) shall be
a named fiduciary (within the meaning of, but not limited to,
sections 402(a) and 403(a) (1) of ERISA) with respect to
Pass-Through Issues for all shares of Sponsor Stock as to
which the Member has the right of direction with respect to
voting, tender, and any other rights appurtenant to such
Sponsor Stock. That named fiduciary status shall apply with
respect to Pass-Through Issues for all shares of Sponsor Stock
allocable to the Member's Account.
(3) In implementing the provisions of
this Agreement relating to voting of Sponsor Stock, each
appropriate fiduciary shall take all steps necessary or
appropriate to ensure that each Member's (or, if deceased, his
or her Beneficiary's) instructions shall be kept in strictest
confidence and shall not be divulged or released to any
person, except as provided in the next sentence, including any
officers, directors or employees of the Sponsor or any
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<PAGE> 7
Affiliate. To the extent necessary for the operation of these
provisions, however, the instructions may be provided to a
record keeper, auditor or other person providing services to
the Trust if the person (a) is not the Sponsor or an Affiliate
and (b) agrees not to divulge the instructions to any other
person.
(4) Notwithstanding any contrary
provision of this Agreement, whenever any proxies or consents
are solicited from the holders of Sponsor Stock with respect
to Pass-Through Issues, the Trustee shall exercise voting or
other rights solely as directed in written instructions timely
received from Members (or, if deceased, their Beneficiaries)
and in accordance with this provision. Each Member (or, if
deceased, his or her Beneficiary) shall have the right, with
respect to Pass-Through Issues, to instruct the Trustee in
writing as to the manner in which to vote those shares at any
stockholders' meeting of the issuer of Sponsor Stock, or the
manner in which the Trustee shall give or withhold consent
with respect to the shares. The following procedures shall
apply:
(i) The Sponsor shall use its best
efforts to timely distribute or cause to be distributed to
each Member (or, if deceased, his or her Beneficiary) such
information concerning Pass-Through Issues as will be
distributed to stockholders of the issuer of Sponsor Stock in
connection with any stockholders' meeting or any solicitation
of voting or consents, together with a request for
confidential instructions to the Trustee or its designee on
how shares of Sponsor Stock shall be voted on each such matter
or how consents shall be given or withheld.
(ii) The Trustee shall pool the
results of instructions received from all Members to whose
Accounts fractional shares of Sponsor Stock are allocable and
shall vote or otherwise act accordingly with respect to those
shares on Pass-Through Issues.
(iii) In the case of a deceased
Member who has more than one Beneficiary, the Trustee shall
vote or otherwise act on Pass-Through Issues in accordance
with the instructions of the Member's Beneficiaries in respect
of the shares allocable to
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<PAGE> 8
the deceased Member's Account in proportion to the
Beneficiaries' respective interests in the Member's Account in
accordance with rules established by the Committee.
(iv) If no instructions are
received with respect to shares of Sponsor Stock allocable to
a Member's Account, those shares shall not be voted nor shall
any other actions be taken under this provision with respect
to the shares on Pass-Through Issues.
(B) Tender Offers.
(1) Notwithstanding any contrary
provision of this Agreement, whenever any tender or exchange
offer is made for shares of Sponsor Stock or any transaction
occurs that the Committee determines, in its discretion, to be
similar to the foregoing, the Trustee shall tender or exchange
shares of Sponsor Stock (or refrain from tendering or
exchanging Sponsor Stock) solely as directed in written
instructions timely received from Members (or, if deceased,
their Beneficiaries) and in accordance with this provision.
(2) Each Member (or, if deceased,
his or her Beneficiary) shall have the right, with respect to
shares of Sponsor Stock allocable to his or her Account, to
instruct the Trustee in writing as to the manner in which to
respond to a tender or exchange offer or similar transaction
with respect to those shares. The following procedures shall
apply:
(i) The Sponsor shall use its
best efforts to timely distribute or cause to be distributed
to each Member (or, if deceased, his or her Beneficiary) such
information as will be distributed to stockholders of the
issuer of Sponsor Stock in connection with any such tender or
exchange offer, together with a request for confidential
instructions to the Trustee or its designee to respond to the
tender or exchange offer.
(ii) If, and to the extent that
the Trustee shall not have timely received instructions from
any Member (or, if deceased, his or her Beneficiary) with a
right to instruct under the
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<PAGE> 9
Plan, such person shall be deemed to have timely instructed
the Trustee not to tender or exchange the relevant shares of
Sponsor Stock.
(iii) The Trustee shall pool
the results of instructions received from all Members to whose
Accounts fractional shares of Sponsor Stock are allocable and
shall respond to such tender or exchange offer accordingly
with respect to those shares.
(iv) In the case of a deceased
Member who has more than one Beneficiary, the Trustee shall
respond to such tender or exchange offer in accordance with
the instructions of the Member's Beneficiaries in respect of
the shares allocable to the deceased Member's Account in
proportion to the Beneficiaries' respective interests in the
Member's Account in accordance with rules established by the
Committee.
(v) Shares of Sponsor Stock
allocated to a Member's Account with respect to which no
timely instructions are furnished shall be treated as shares
with respect to which instructions not to tender or exchange
have been timely furnished.
(vi) An instruction by a Member
to the Trustee to tender shares of Sponsor Stock credited to
the Member's account shall not be considered a written
election under the Plan by the Member to withdraw, or have
distributed, any or all of his or her withdrawable shares. The
Trustee shall credit to each Member's account from which the
tendered shares were taken the proceeds received by the
Trustee in exchange for the shares of Sponsor Stock tendered
from that Account. Pending receipt of directions from the
Member, in accordance with Schedule "F", as to which of the
remaining investment options the proceeds shall be invested
in, the Trustee shall invest the proceeds in the Mutual Fund
described in Schedule "C".
(vi) Shares Credited. For all purposes of this
Section (including, without limitation, investment and
reinvestment of assets in Member's accounts and voting,
tendering or exchanging of Sponsor Stock), the
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<PAGE> 10
number of shares of Sponsor Stock deemed "credited",
"allocable" or "reflected" to a Member's account shall be
determined as of the relevant Valuation Date (as defined
hereinbelow for purposes of this Section). Such valuation date
shall be the date on which occur the transactions effectuating
such investment or reinvestment, or, in the case of voting,
tendering or exchanging, the date on which falls the record
date fixed for such purposes of such voting, tendering or
exchanging.
(vii) General. With respect to the right to vote with
respect to Pass-Through Issues, the right to tender or
exchange and the right to withdraw shares previously tendered,
in the case of Sponsor Stock credited to a Member's
proportional interest in the Stock Fund, the Trustee shall
follow the directions of the Member. The Trustee shall have no
duty to solicit directions from Members. With respect to all
rights other than the right to vote with respect to Pass-
Through Issues, the right to tender or exchange and the right
to withdraw shares previously tendered, and in the case of
Sponsor Stock (if any) not credited to Members' accounts, the
Trustee shall follow the written direction of the Committee.
However, if the Committee shall fail to give, or shall notify
the Trustee in writing of its decision not to give, timely
written instructions to the Trustee, the Trustee shall
exercise such rights and powers in its sole discretion.
(viii) Conversion. All provisions in this Section
6(e) shall also apply to any securities received as a result
of a conversion of Sponsor Stock.
(3) Amending and restating Section 6(f), in its entirety, to read as
follows:
(f) General Purposes Notes. The Administrator shall act as the
Trustee's agent for the Member's loan notes and as such shall (i)
collect and remit all principal and interest payments to the Trustee
and (ii) keep the proceeds of such loans separate from the other assets
of the Administrator and clearly identify such assets as Plan assets.
To originate a Member loan, the Member shall notify the Trustee of the
request by use of the Trustee's Telephone Exchange System. The Trustee
shall determine, based on the
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<PAGE> 11
current value of the Member's Account on the date of the request and
the guidelines in the Plan and SPD, provided by the Sponsor to the
Trustee, the amount available for the loan. The Member shall then
direct the Trustee regarding the amount to be borrowed and the term or
period for repayment. Based on the most recent interest rate supplied
by the Sponsor in accordance with the terms of the Plan, the Trustee
shall advise the Member of such interest rate, as well as the
installment payment amounts. The Trustee shall distribute the loan note
with the proceed check to the Member. The Trustee shall also distribute
truth-in-lending disclosure, borrowers memorandum and loan agreement
terms to the Member. To facilitate recordkeeping, the Trustee may
destroy the original of any promissory note made in connection with a
loan to a Member under the Plan, provided that the Trustee first
creates a duplicate by a photographic or optical scanning or other
process yielding a reasonable facsimile of the promissory note and the
Member's signature thereon, which duplicate may be reduced or enlarged
in size from the actual size of the original promissory note. The
provisions of this Section 6(f) shall not apply to any Member loans
with a term of fifteen (15) years, which shall be governed solely by
the provisions of Section 6(g) below.
(4) Amending Section 6 by inserting a new Section 6(g) and renumbering
existing sections accordingly:
(g) Home Loans. The Administrator shall act as the Trustee's
agent for the purpose of holding all trust investments in Member loan
notes and related documentation and as such shall (i) collect and
remit all principal and interest payments to the Trustee and (ii) keep
the proceeds of such loans separate from the other assets of the
Administrator and clearly identify such assets as Plan assets. To
originate a Member loan, the Member shall notify the Trustee of the
request by use of the Trustee's Telephone Exchange System. The Trustee
shall determine, based on the current value of the Member's Account on
the date of the request and the guidelines in the Plan and SPD,
provided by the Sponsor to the Trustee, the amount available for the
loan. The Member shall then direct the Trustee regarding the amount to
be borrowed and the term or period for repayment. Based on the most
recent interest rate supplied by the Sponsor in accordance with the
terms of the Plan, the Trustee shall advise the Member of such
interest rate, as well as the installment payment amounts. The Trustee
shall forward the employee certificate attached
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<PAGE> 12
hereto in Schedule "G" to the Member for execution and submission for
approval to the Administrator. The Administrator shall have the
responsibility for approving the loan and instructing the Trustee of
such approval via remote access. Subject to receipt of the foregoing
approval, the Trustee shall distribute the loan note with the proceed
check to the Member. The Trustee shall also distribute truth-in-lending
disclosure, borrowers memorandum and loan agreement terms to the
Member. To facilitate recordkeeping, the Trustee may destroy the
original of any promissory note made in connection with a loan to a
Member under the Plan, provided that the Trustee first creates a
duplicate by a photographic or optical scanning or other process
yielding a reasonable facsimile of the promissory note and the Member's
signature thereon, which duplicate may be reduced or enlarged in size
from the actual size of the original promissory note. In all cases, if
the Administrator is able to approve the request, such approval shall
be made within 30 days of the Member's initial request (the origination
date).
(5) Amending and restating the third bullet under the "Processing"
section of Schedule "A" to read as follows:
* Daily processing of in-service withdrawals via telephone due
to specific circumstances previously authorized by the
Sponsor; Members may initiate the hardship withdrawal process
via telephone as directed and approved by the Sponsor.
(6) Amending the "Processing" section of Schedule "A" to include the
following new bullet points:
* Enroll new Members via telephone; provide confirmation of
enrollment within five (5) business days of the request.
* Daily processing of changes of deferral percentages; prepare
and mail to the Member a confirmation of telephonic
instructions relative to deferral percentages within five (5)
business days of the Member's instructions.
(7) Amending Schedule "B" to reflect the addition of the following
fees:
Withdrawals by Phone: $15.00 per withdrawal.
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Enrollments by Phone: $5.00 per non-active employee
residing on Fidelity's
participant recordkeeping
system.
Genentech Loan Fees: $50.00 loan set-up fee per
loan account (this fee shall
be paid by the Member,
Fidelity will credit the fee
back to Genentech).
In addition, Schedule "B" is also amended by deleting the current
provision on "Member Loan Fees" and replacing it in its entirety with the
following:
Member Loan Fees: Establishment fee of $35.00
per loan account; annual fee
of $15.00 per loan account.
(8) Amending and restating Schedule "F" in its entirety as attached
hereto, and adding as a new Schedule "G" the Schedule "G" as attached
hereto.
IN WITNESS WHEREOF, the Trustee and the Sponsor have caused this Third
Amendment to the Trust Agreement to be executed by their duly authorized
officers effective as of the day and year first above written.
GENENTECH, INC. FIDELITY MANAGEMENT TRUST COMPANY
By: /s/ MARTY GLICK By: /s/ AUTHORIZED SIGNATORY 5/14/96
-------------------------- -------------------------------
Date Vice President Date
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<PAGE> 14
SCHEDULE "F"
TELEPHONE EXCHANGE PROCEDURES
The following telephone exchange procedures are currently employed by Fidelity
Institutional Retirement Services Company (FIRSCO).
Telephone exchange hours are 8:30 a.m. (ET) to 8:00 p.m. (ET) on each business
day. A "business day" is any day on which the New York Stock Exchange is open.
FIRSCO reserves the right to change these telephone exchange guidelines at its
discretion (provided that FIRSCO will not eliminate procedures or services
without the consent of the Sponsor).
MUTUAL FUND
EXCHANGES BETWEEN MUTUAL FUNDS
Members may call on any business day to exchange between the mutual
funds. If the request is received before 4:00 p.m. (ET), it will receive
that day's trade date. Calls received after 4:00 p.m. (ET) will be
processed on a next day basis.
SPONSOR STOCK FUND
I. EXCHANGES BETWEEN MUTUAL FUNDS AND SPONSOR STOCK FUND
Members may call on any business day to exchange between the mutual
funds and the Sponsor Stock Fund. If the request is received before
4:00 p.m. (ET), it will receive that day's trade date. Calls received
after 4:00 p.m. (ET) will be processed on a next day basis.
II. EXCHANGE RESTRICTION
It is the intention of the Trustee to maintain a sufficient liquidity
reserve in the Sponsor Stock Fund to meet exchange, redemption or
withdrawal requests. However, if there is insufficient liquidity in the
Sponsor Stock Fund to allow for same day exchanges, the Trustee will be
required to sell shares of Sponsor Stock to meet the exchange requests.
If this occurs, the subsequent exchange into other Plan investment
options will take place three
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<PAGE> 15
(3) business days later. This allows for settlement of the stock trade
at the custodian and the corresponding transfer to the Trustee.
OTHER SERVICES
I. ACCOUNT BALANCE INFORMATION AND INVESTMENT DATA
Members may call on any business day to receive account balance
information and NAV data.
II. CHANGES IN FUTURE CONTRIBUTION ALLOCATIONS
Members may call on any business day to change the allocation of future
contributions, effective the next business day.
GENENTECH, INC. FIDELITY MANAGEMENT TRUST COMPANY
By: /s/ MARTY GLICK By: /s/ SUSAN BERKEWITCZ 5/14/96
-------------------------- -------------------------------
Date Vice President Date
2
<PAGE> 16
SCHEDULE "G"
GENENTECH, INC.
TAX REDUCTION INVESTMENT PLAN
EMPLOYEE CERTIFICATION
(PLAN LOAN TO PURCHASE NEW PRINCIPAL RESIDENCE)
Employee Name ________________________
Current Residence Address ________________________
Home Telephone Number ________________________
New Principal Residence Address ________________________
I, the undersigned employee of Genentech and participant in the Plan named
above, hereby certify that:
(a) I am applying for a loan from my account under the Plan
with a term of more than five (5) years and not more than fifteen (15)
years;
(b) I will use the proceeds of the loan to purchase a dwelling
unit which (within a reasonable period of time after I receive the loan
proceeds) will be MY NEW PRINCIPAL RESIDENCE; and
(c) I have attached to this Certification a copy of the signed
contract of sale for my purchase of my NEW PRINCIPAL RESIDENCE.
__________________________________________ ________________________
Employee Signature Date
Received by Payroll_______________________ ________________________
Initials Date
1
<PAGE> 1
EXHIBIT 99.9
FOURTH AMENDMENT TO TRUST AGREEMENT BETWEEN
FIDELITY MANAGEMENT TRUST COMPANY AND
GENENTECH, INC.
THIS FOURTH AMENDMENT, effective as of the first day of April 1997, by
and between Fidelity Management Trust Company (the "Trustee" or "Fidelity") and
Genentech, Inc. (the "Sponsor");
WITNESSETH:
WHEREAS, the Trustee and the Sponsor heretofore entered into a trust
agreement dated July 1, 1991, with regard to the Genentech, Inc. Tax Reduction
Investment Plan (the "Plan") and subsequently amended said trust agreement as of
May 1, 1994, December 1, 1995, and as of May 8, 1996 (said trust agreement as
amended being referred to herein as the "Trust Agreement"); and
WHEREAS, the Trustee and the Sponsor now desire to amend said Trust
Agreement in accordance within Section 15 thereof;
NOW, THEREFORE, in consideration of the above premises the Trustee and
the Sponsor hereby amend the Trust Agreement by:
(1) Amending the "Other" section of Schedule "A" by adding the
following bullet point:
o De Minimis Distributions: After a participant terminates
employment with the Sponsor and is eligible for a distribution of
his or her Plan account balance, Fidelity will determine whether
the vested account balance:
(1) Currently exceeds $3,500; (2) exceeded $3,500 before any prior
distribution or in-service withdrawal date in the account
history at Fidelity; or (3) exceeds $3,500 at the end of the
warning period (which commences on the date of determination
of the account balance and ends 30 days thereafter).
If the participant's vested account balance does not meet any of
the above criteria, Fidelity will process a mandatory and immediate
cashout distribution under the Plan, subject only to the
1
<PAGE> 2
terms and conditions of the Plan including the requirement to offer
a rollover opportunity. The $3,500 threshold will be automatically
adjusted if raised by the Internal Revenue Code.
These services relating to de minimis distributions will be
provided quarterly by Fidelity.
(2) As amended as set forth herein, the Trust Agreement shall remain in
full force and effect.
IN WITNESS WHEREOF, the Trustee and the Sponsor have caused this Fourth
Amendment to be executed by their duly authorized officers effective as of the
day and year first above written.
GENENTECH, INC. FIDELITY MANAGEMENT TRUST COMPANY
By: /s/ MARTY GLICK By: /s/ SUSAN BERKEWITCZ 4/9/97
-------------------------- -------------------------------
Date Vice President Date
2
<PAGE> 1
EXHIBIT 99.10
FIFTH AMENDMENT TO TRUST AGREEMENT BETWEEN
FIDELITY MANAGEMENT TRUST COMPANY AND
GENENTECH, INC.
THIS FIFTH AMENDMENT, dated as of the ninth day of November, 1997, by
and between Fidelity Management Trust Company (the "Trustee") and Genentech,
Inc. (the "Sponsor");
WITNESSETH:
WHEREAS, the Trustee and the Sponsor heretofore entered into a Trust
Agreement dated July 1, 1991, with regard to the Genentech, Inc. Tax Reduction
Investment Plan (the "Plan") and subsequently amended said Trust Agreement as of
May 1, 1994, December 1, 1995, May 8, 1996 and April 1, 1997; and
WHEREAS, the Trustee and the Sponsor now desire to amend said Trust
Agreement as provided for in Section 15 thereof;
NOW, THEREFORE, in consideration of the above premises the Trustee and
the Sponsor hereby amend the Trust Agreement by:
(1) Effective January 1, 1998, amending Section 1 by inserting a new
definition of "Excess Flex Credits" immediately after the
definition of "ERISA" to read as follows:
"Excess Flex Credits" shall mean as to any Member who is a
participant in the Sponsor's cafeteria plan (within the meaning of
Section 125 of the Code)("GenenFlex") the amounts contributed
under the Plan by the Employers, pursuant to the Member's election
under GenenFlex to have any excess Flex Credits (as defined in
GenenFlex) contributed to his or her GenenFlex Account.
(2) Effective January 1, 1998, amending and restating the definition
of "Matching Contributions" in Section 1 to read as follows:
"Matching Contributions" shall mean as to each Member the
amounts contributed under the Plan by the Employers, excluding
Salary Deferrals, Excess Flex Credits and rollover contributions,
in accordance with the Plan.
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(3) Effective May 8, 1996, amending and restating the definition of
"Plan" in section 1 to read as follows:
"Plan" shall mean the Genentech, Inc. Tax Reduction Investment
Plan (May 8, 1996 Restatement), as heretofore or hereafter amended
from time to time.
(4) Effective January 1, 1998, amending the second sentence of Section
2 by inserting the phrase "Excess Flex Credits" immediately after
the phrase "Salary Deferrals".
(5) Effective January 1, 1998, amending and restating the second and
third sentences of Section 3 to read as follows:
"Any obligation to contribute Salary Deferrals, Excess Flex
Credits and/or Matching Contributions under the Plan or this
Agreement after initial qualification is hereby conditioned upon
the deductibility of such Salary Deferrals, Excess Flex Credits
and/or Matching Contributions under Section 404(a) of the code.
That portion of any Salary Deferral, Excess Flex Credit or
Matching Contribution which is contributed or made by reason of a
good faith mistake of fact, or by reason of a good faith mistake
in determining the deductibility of such portion, shall be
returned to the Employers as promptly as practicable, but not
later than (1) year after the contribution was made or the
deduction was disallowed (as the case may be).
(6) Effective January 1, 1993, amending Section 4(a)(iii) by deleting
the phrase "section 402(a)(5)" therefrom and substituting the
phrase "section 402(c)" therefor.
(7) Effective January 1, 1998, amending the last sentence of Section
4(a) by (a) deleting the phrase "four (4)" therefrom and
substituting the phrase "five (5)" therefor; and (b) inserting the
following new clause "(ii)" and renumbering all subsequent clauses
accordingly:
(ii) a "GenenFlex Account" to which the Trustee at the
direction of the Administrator or Committee shall contribute all
Excess Flex Credits elected by the Member to be paid to the Trust
and invested and
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reinvested by the Trustee at the direction of the Member, in
accordance with the Plan and this Agreement.
(8) Effective May 8, 1996, amending and restating Section 5(d)(as
redesignated by the Third Amendment to the Trust Agreement) to
read as follows:
(d) Payments. Any disbursement, payment or distribution from
such portion of a Member's Account as is not invested in the Stock
fund (as defined in Section 6(e)) shall be made in the form of a
single lump sum payment of cash (or its equivalent) equal to the
balance credited to such portion of the Account as of the relevant
Valuation date (as defined herein below for the purposes of this
Section). Any disbursement, payment or distribution from such
portion of a Member's Account as is invested in Stock Fund as of
the Valuation Date shall be made in the form of a single lump sum
payment (i) such whole number of shares of Sponsor Stock as is
equivalent in value to the full value of the units of the Stock
Fund then credited to such portion of the Account; (ii) cash (or
its equivalent) equal in value to the full value of the units of
the Stock Fund then credited to such portion of the Account; or
(iii) a combination of both, as elected by the distributee. If
shares of Sponsor Stock are to be distributed pursuant to the
preceding sentence, only full shares shall be distributed and cash
(or its equivalent), equal in value to the remaining value of
units shall be distributed in lieu of any fractional share. The
Trustee shall make all disbursements, payments and distributions
in Sponsor Stock in accordance with the provisions of the Plan as
instructed by the Administrator or Committee. For purposes of this
Section, the Valuation Date shall be the date on which occur the
transactions required to effectuate the liquidation of the assets
of the Account (whether later distributed as cash or Sponsor Stock
or both).
(9) Effective January 1, 1998, amending and restating the third bullet
under the "Administration" section of Schedule "A" to read as
follows:
* Maintenance of the following subaccounts for each Member:
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- Salary Deferral Account
- GenenFlex Account
- Matching Account
- Rollover Account
- Loan Account
(10) Effective October 1, 1997, amending Schedule "A" by adding, at no
extra charge, the following new services for Member of the Plan:
Fidelity's NetBenefits online account access services.
(11) Effective October 1, 1997, amending Schedule "B" by replacing the
existing Schedule "B" with the new Schedule "B", which is attached
hereto and incorporated into the Trust Agreement by this
reference.
IN WITNESS WHEREOF, the Trustee and the Sponsor have caused this Fifth
Amendment to be executed by their duly authorized officers effective as of the
day and year first above-written.
GENENTECH, INC. FIDELITY MANAGEMENT TRUST COMPANY
By: /s/ LOUIS J. LAVIGNE, JR. 11/6/97 By: /s/ AUTHORIZED SIGNATORY 12/1/97
---------------------------------- --------------------------------
Date Vice President Date
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SCHEDULE "B"
FEE SCHEDULE
(EFFECTIVE OCTOBER 1, 1997)
Annual Participant Fee: $0 per participant*, billed and payable quarterly;
provided, however, that any fee increase shall be
effected only in accordance with Section 15 of the
Trust Agreement.
Enrollments by Phone: $5.00 per non-active employee residing on Fidelity's
participant recordkeeping system.
Member Loan Fee: Establishment fee of $35.00 per loan account; annual
fee of $15.00 per loan account.
Sponsor Loan Fee: $50.00 loan set-up fee per loan account (this fee
shall be paid by the Member, Fidelity will credit the
fee back to the Sponsor).
Withdrawals by Phone: $15.00 per withdrawal.
- - Other Fees: separate charges for optional non discrimination testing,
extraordinary expenses resulting from large numbers of simultaneous manual
transactions or from errors not caused by Fidelity, or for reports not
contemplated in this Agreement. The Administrator may withdraw reasonable
administrative fees from the Trust by written direction to the Trustee.
- - This Fee, if any, will be imposed pro rata for each calendar quarter, or any
part thereof, that it remains necessary to keep a participant's account(s) as
part of the Plan's records, e.g., vested, deferred, forfeiture, top-heavy and
terminated participants who must remain on file through calendar year-end for
1099-R reporting purposes.
TRUSTEE FEE
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- - To the extent that assets are invested in Sponsor Stock, 0.10% of such
assets in the Trust payable pro rata quarterly on the basis of such assets
as of the calendar quarter's last valuation date, but no less than $10,000
nor more than $35,000 per year.
Note: These fees have been negotiated and accepted based on the following Plan
characteristics: current plan assets of $161 million, current participation of
3,065 participants, current stock assets of $9.1 million, total Fidelity Managed
Mutual Fund assets of $141.7 million and projected net cash flows of $13.9
million per year. Any fee increases hereunder shall be effected only in
accordance with Section 15 of the Trust Agreement. Fees will be subject to
revision if these Plan characteristics change significantly by either falling
below or exceeding current or projected levels. Fees also have been based on the
use of up to 12 investment options, and such fees will be subject to revision if
additional investment options are added.
GENENTECH, INC. FIDELITY MANAGEMENT TRUST COMPANY
By: /s/ LOUIS J. LAVIGNE, JR. 11/6/97 By: /s/ AUTHORIZED SIGNATORY 12/1/97
----------------------------- --------------------------------
Date Vice President Date
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<PAGE> 1
EXHIBIT 99.11
SIXTH AMENDMENT TO TRUST AGREEMENT BETWEEN
FIDELITY MANAGEMENT TRUST COMPANY AND
GENENTECH, INC.
THIS SIXTH AMENDMENT, effective as of the first day of October, 1998,
except as otherwise noted below, by and between Fidelity Management Trust
Company (the "Trustee") and Genentech, Inc. (the "Sponsor");
WITNESSETH:
WHEREAS, the Trustee and the Sponsor heretofore entered into a Trust
Agreement dated July 1, 1991, and amended May 1, 1994, December 1, 1995, May 8,
1996, April 1, 1997, November 9, 1997 (as amended, the "Trust Agreement"), with
regard to the Genentech, Inc. Tax Reduction Investment Plan (the "Plan"); and
WHEREAS, the Sponsor has notified the Trustee that the Sponsor desires
to add certain Non-Fidelity Mutual Funds (as defined below), effective starting
October 1, 1998 as new investment options to participants of the Plan; and
WHEREAS, the Sponsor has notified the Trustee that effective starting
on the close of business on December 31, 1998, the Sponsor wishes to freeze
certain investment options currently offered to participants of the Plan; and
WHEREAS, in connection with implementing modification, the Sponsor has
notified the Trustee that effective starting on the close of business on
December 31, 1998, the Trustee is to disregard any participant instructions to
direct any further contribution, exchange or other investment into (but not any
exchange out of) any of the Frozen Funds (as defined below), and in lieu thereof
shall direct such contribution, exchange or investment into one of the new
investment options, as provided in greater detail herein below; and
WHEREAS, in connection therewith, the Trustee and the Sponsor now
desire to amend said Trust Agreement as provided for in Section 15 thereof;
NOW THEREFORE, in consideration of the above premises, the Trust and
the Sponsor hereby amend the Trust Agreement, effective as of October 1, 1998
(unless otherwise noted), by:
(1) Amending Section 1 by restating the definition of "Mutual Fund" as
follows:
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"Mutual Fund" shall refer, collectively, to both Fidelity Mutual
Funds and Non-Fidelity Mutual Funds, as those terms are defined in
this Section.
(2) Amending Section 1 by inserting a new definition of "Fidelity
Mutual Fund" immediately after the definition of "FBSI" to read as
follows:
"Fidelity Mutual Fund" shall mean securities issued by the
investment companies advised by Fidelity Management & Research
Company.
(3) Amending Section 1 by inserting a new definition of "Non-Fidelity
Mutual Fund" immediately after the definition of "1934 Act" to
read as follows:
"Non-Fidelity Mutual fund" shall mean securities issued by
investment companies not advised by Fidelity Management & Research
Company.
(4) Amending Section 1 by amending the definition of "Plan" as
follows:
"Plan" shall mean the Genentech, Inc. Tax Reduction Investment
Plan (Restatement of May 8, 1996), as heretofore or hereafter
amended from time to time.
(5) Amending Section 1 by amending the definition of "Sponsor Stock"
as follows:
"Sponsor Stock" shall mean equity securities issued by the Sponsor
or an Affiliate which are publicly traded and which are
"qualifying employer securities" within the meaning of Section
407(d)(5) of ERISA, including, but not limited to the redeemable
common stock of the Sponsor, par value $.02 while such redeemable
stock is outstanding, and the callable putable common stock of the
Sponsor, par value $.02 while such callable putable common stock
is outstanding, and thereafter the common stock of the Sponsor as
from time to time constituted.
(6) Amending Section 6(b), Available Investment Options, by restating
item (i) as follows:
(i) Mutual Funds
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(7) Amending Section 6(d), Mutual Funds, by adding a new item (iii) as
follows:
(iii) Non-Fidelity Mutual Funds. In addition to the other
limitations set forth in this Section 6(d), which are applicable
to Trust investments in all Mutual Funds, Trust investments and
transactions involving any Non-Fidelity Mutual Fund shall be done
in accordance with the Operation Guidelines for Non-Fidelity
Mutual Funds attached hereto as Schedule "H".
(8) Amending Schedule "A" by replacing the list of "investment
options" under Administration with the following list:
* Maintenance of the following investment options under the Plan:
Sponsor Stock
Fidelity Growth & Income Portfolio
Fidelity Growth Company Fund
Fidelity Magellan Fund
Fidelity Money Market Trust: Retirement Money Market Portfolio
Spartan U.S. Equity Index Fund
INVESCO Total Return Fund
Janus Worldwide Fund
MAS High Yield Portfolio
Neuberger & Berman Genesis Trust
PIMCO Total Return Fund
Fidelity Asset Manager
Fidelity Asset Manager: Growth
Fidelity Asset Manager: Income
Fidelity Balanced Fund
Fidelity Intermediate Bond Fund
Fidelity Overseas Fund
(9) Effective starting on the close of business on December 31, 1998,
amending Schedule "A" by removing the following Fidelity funds
previously offered as investment options under the Plan
(hereinafter the "Frozen Funds") from the list of "investment
options" under Administration: Fidelity Asset Manager, Fidelity
Asset Manager: Growth, Fidelity Asset Manager: Income, Fidelity
Balanced Fund, Fidelity Intermediate Bond Fund and Fidelity
Overseas Fund.
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(10) Effective starting on the close of business on December 31, 1998,
amending Schedule "A" by adding the following under
Administration:
* Maintenance of frozen accounts for Plan participants who elect
to maintain any balance in any of the following Frozen Funds:
Fidelity Asset Manager
Fidelity Asset Manager: Growth
Fidelity Asset Manager: Income
Fidelity Balanced Fund
Fidelity Intermediate Bond Fund
Fidelity Overseas Fund
(11) Amending Schedule "A" by adding the following under
Administration:
* Effective starting on the close of business on December 31,
1998, no contribution, exchange or other investment into a
Frozen Fund shall be permitted. Exchanges out of a Frozen Fund
shall be permitted, subject to the same procedures as exchanges
into all other Mutual Funds as provided in the Agreement.
(12) Deleting the prior Schedule "C" to the Trust Agreement in its
entirety and replacing it with a new Schedule "C", Investment
Options, which is attached hereto and incorporated into the Trust
Agreement by this reference.
(13) Amending Schedule "B" by adding the following item after
"Withdrawals by Phone":
Non-Fidelity Mutual Funds: .35% annual administration fee on
assets invested in the following
Non-Fidelity Mutual Funds: INVESCO
Total Return Fund and Neuberger &
Berman Genesis Trust; .25% trust
administration fee on all other
Non-Fidelity Mutual Fund
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assets. All fees in this paragraph
are to be paid by the Non-Fidelity
Mutual Fund vendor, and not by the
Sponsor.
(14) Amending Schedule "F", Telephone Exchange Procedures, by adding
the following after the first paragraph of the Mutual Funds
portion:
II. FROZEN FUNDS
Notwithstanding anything in these procedures to the contrary,
effective starting on the close of business on December 31,
1998, no exchanges shall be permitted into any Mutual Fund
designated as a Frozen Fund on Schedules "A" and "C".
(15) Adding a new Schedule "H", Operational Guidelines for Non-Fidelity
Mutual Funds, which is attached hereto and incorporated into the
Trust Agreement by this reference.
(16) Amending Section 9 of the Trust Agreement as follows:
(A) Amending the first sentence of Section 9(b) to read as
follows:
Except as otherwise provided for herein, whenever the
Administrator provides a direction to the Trustee, the Trustee
shall not be liable for any loss, or by reason of any breach,
arising from the direction if the direction is contained in a
writing (or is oral and immediately confirmed in a writing)
signed by an individual whose name and signature have been
submitted (and not withdrawn) in writing to the Trustee by the
Administrator in the form attached hereto as Schedule "D",
provided that (i) the Trustee reasonably believes the
signature of the individual to be genuine and (ii) the Trustee
acts reasonably and prudently in carrying out such direction.
(B) Amending Section 9(c) to read as follows:
Except as otherwise provided for herein, whenever the
Committee provides a direction to the
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<PAGE> 6
Trustee, the Trustee shall not be liable for any loss, or by
reason of any breach, arising from the direction if the
direction is contained in a writing (or is oral and
immediately confirmed in a writing) signed by any individual
whose name and signature have been submitted (and not
withdrawn) in writing to the Trustee by the Committee in the
form attached hereto as Schedule "E", provided that (i) the
Trustee reasonably believes the signature of the individual to
be genuine and (ii) the Trustee acts reasonably and prudently
in carrying out such direction, unless in any case the actions
to be taken under the direction would be prohibited by the
fiduciary duty rules of Section 404(a) of ERISA or would be
contrary to the terms of the Plan or this Agreement.
(C) Amending Section 9(d) by adding a new second sentence thereto
as follows:
The Trustee shall indemnify and hold harmless the Sponsor, the
Administrator, the Committee and any and all individual Plan
participant accounts from and against any and all loss
(including lost investment gain), resulting directly from the
Trustee's untimely receipt of Mutual Fund pricing information
for any Non-Fidelity Mutual Fund, or from the Trustee's
untimely implementation of any investment direction contrary
to the terms of the Plan or Agreement.
(D) Amending Section 9(e) to read as follows:
The Sponsor shall indemnify the Trustee against, and hold the
Trustee harmless from, any and all loss, damage, penalty,
liability, cost, and expense, including without limitation,
reasonable attorneys' fees and disbursements, that may be
incurred by, imposed upon, or asserted against the Trustee by
reason of any claim, regulatory proceeding, or litigation
arising from any act done or omitted to be done by any
individual or person with respect to the Plan or Trust,
excepting only any and all loss, etc., arising from the
Trustee's negligence or bad faith or
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breach of fiduciary duty under this Agreement or under Part 4
of Title I of ERISA.
IN WITNESS WHEREOF, the Trustee and the Sponsor have caused this Sixth
Amendment to be executed by their duly authorized officers effective as of the
day and year first above written.
GENENTECH, INC. FIDELITY MANAGEMENT TRUST COMPANY
By: /s/ LOUIS J. LAVIGNE, JR. 9/29/98 By: /s/ CAROLYN REDDEN 10/16/98
---------------------------------- ----------------------------
Date Vice President Date
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SCHEDULE "C"
INVESTMENT OPTIONS
In accordance with Section 6(b) of the Agreement, the Committee hereby
directs the Trustee that, effective starting October 1, 1998, Members' Accounts
may be invested in the following investment options:
- Sponsor Stock
- Fidelity Growth & Income Portfolio
- Fidelity Growth Company Fund
- Fidelity Magellan Fund
- Fidelity Money Market Trust: Retirement Money Market Portfolio
- Spartan U.S. Equity Index Fund
- INVESCO Total Return Fund
- Janus Worldwide Fund
- MAS High Yield Portfolio
- Neuberger & Berman Genesis Trust
- PIMCO Total Return Fund
- Fidelity Asset Manager
- Fidelity Asset Manager: Growth
- Fidelity Asset Manager: Income
- Fidelity Balanced Fund
- Fidelity Intermediate Bond Fund
- Fidelity Overseas Fund
Effective on the close of business on December 31, 1998, the following
funds shall become Frozen Funds (as defined in Schedule "A"):
- Fidelity Asset Manager
- Fidelity Asset Manager: Growth
- Fidelity Asset Manager: Income
- Fidelity Balanced Fund
- Fidelity Intermediate Bond Fund
- Fidelity Overseas Fund
Effective starting on the close of business on December 31, 1998, the
Committee hereby directs the Trustee that the Trustee is to disregard any
participant's instructions to direct any further contribution, exchange or other
investment into (but not
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any exchange out of) any of the Frozen Funds, and in lieu thereof shall direct
such contribution, exchange or investment as follows, unless and until alternate
instruction is received from the participant in accordance with the Agreement:
- Fidelity Asset Manager - invest instead in the INVESCO Total Return
Fund
- Fidelity Asset Manager: Growth - invest instead in the Fidelity
Growth Company Fund
- Fidelity Asset Manager: Income - invest instead in the INVESCO Total
Return Fund
- Fidelity Balanced Fund - invest instead in the INVESCO Total Return
Fund
- Fidelity Intermediate Bond Fund - invest instead in the PIMCO Total
Return Fund
- Fidelity Overseas Fund - invest instead in the Janus Worldwide Fund
The investment option referred to in Section 6(c) of the Agreement
shall be Fidelity Money Market Trust: Retirement Money Market Portfolio.
GENENTECH, INC.
By: /s/ LOUIS J. LAVIGNE, JR. 9/29/98
----------------------------------
Date
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<PAGE> 10
SCHEDULE "H"
OPERATIONAL GUIDELINES FOR NON-FIDELITY MUTUAL FUNDS
PRICING
By 7:00 p.m. Eastern Time ("ET") each Business Day, the Non-Fidelity Mutual Fund
Vendor (Fund Vendor) will input the following information ("Price Information")
into the Fidelity Participant Recordkeeping System ("FPRS") via the remote
access price screen that Fidelity Investments Institutional Operations Company,
Inc. ("FIIOC"), an affiliate of the Trustee, has provided to the Fund Vendor:
(1) the net asset value for each Fund at the Close of Trading, (2) the change in
each Fund's net asset value from the Close of Trading on the prior Business Day,
and (3) in the case of an income fund or funds, the daily accrual for interest
rate factor ("mil rate"). FIIOC must receive Price Information each Business Day
(a "Business Day" is any day the New York Stock Exchange is open). If on any
Business Day the Fund Vendor does not provide such Price Information to FIIOC,
FIIOC shall pend all associated transaction activity in the Fidelity Participant
Recordkeeping System ("FPRS") until the relevant Price Information is made
available by Fund Vendor.
TRADE ACTIVITY AND WIRE TRANSFERS
By 7:00 a.m. ET each Business Day following Trade Date ("Trade Date plus One"),
FIIOC will provide, via facsimile, to the Fund Vendor a consolidated report of
net purchase or net redemption activity that occurred in each of the Funds up to
4:00 p.m. ET on the prior Business Day. The report will reflect the dollar
amount of assets and shares to be invested or withdrawn for each Fund. FIIOC
will transmit this report to the Fund Vendor each Business Day, regardless of
processing activity. In the event that data contained in the 7:00 a.m. ET
facsimile transmission represents estimated trade activity, FIIOC shall provide
a final facsimile to the Fund Vendor by no later than 9:00 a.m. ET. Any
resulting adjustments shall be processed by the Fund Vendor at the net asset
value for the prior Business Day.
The Fund Vendor shall send via regular mail to FIIOC transaction confirms for
all daily activity in each of the Funds. The Fund Vendor shall also send via
regular mail to FIIOC, by no later than the fifth Business Day following
calendar month close, a monthly statement for each Fund. FIIOC agrees to notify
the
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Fund Vendor of any balance discrepancies within twenty (20) Business Days of
receipt of the monthly statement.
For purposes of wire transfers, FIIOC shall transmit a daily wire for aggregate
purchase activity and the Fund Vendor shall transmit a daily wire for aggregate
redemption activity, in each case including all activity across all Funds
occurring on the same day.
PROSPECTUS DELIVERY
FIIOC shall be responsible for the timely delivery of Fund prospectuses and
periodic Fund reports ("Required Materials") to Plan participants, and shall
retain the services of a third-party vendor to handle such mailings. The Fund
Vendor shall be responsible for all materials and production costs, and hereby
agrees to provide the Required Materials to the third-party vendor selected by
FIIOC. The Fund Vendor shall bear the costs of mailing annual Fund reports to
Plan participants. FIIOC shall bear the costs of mailing prospectuses to Plan
participants.
PROXIES
The Fund Vendor shall be responsible for all costs associated with the
production of proxy materials. FIIOC shall retain the services of a third-party
vendor to handle proxy solicitation mailings and vote tabulation. Expenses
associated with such services shall be billed directly to the Fund Vendor by the
third-party vendor.
PARTICIPANT COMMUNICATIONS
The Fund Vendor shall provide internally-prepared fund descriptive information
approved by the Funds' legal counsel for use by FIIOC in its written participant
communication materials. FIIOC shall utilize historical performance data
obtained from third-party vendors (currently Morningstar, Inc., FACTSET Research
Systems and Lipper Analytical Services) in telephone conversations with plan
participants and in quarterly participant statements. The Sponsor hereby
consents to FIIOC's use of such materials and acknowledges that FIIOC is not
responsible for the accuracy of such third-party information. FIIOC shall seek
the approval of the Fund Vendor prior to
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<PAGE> 12
retaining any other third-party vendor to render such data or materials under
this Agreement.
COMPENSATION
FIIOC shall be entitled to fees as set forth in a separate agreement with the
Fund Vendor.
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<PAGE> 1
EXHIBIT 99.12
SEVENTH AMENDMENT TO TRUST AGREEMENT BETWEEN
FIDELITY MANAGEMENT TRUST COMPANY AND
GENENTECH, INC.
THIS SEVENTH AMENDMENT, effective as of the first day of October, 1999,
by and between Fidelity Management Trust Company (the "Trustee") and Genentech,
Inc. (the "Sponsor");
WITNESSETH:
WHEREAS, the Trustee and the Sponsor heretofore entered into a Trust
Agreement dated July 1, 1991, and amended May 1, 1994, December 1, 1995, May 8,
1996, April 1, 1997, November 9, 1997 and October 1, 1998 (as amended, the
"Trust Agreement"), with regard to the Genentech, Inc. Tax Reduction Investment
Plan (the "Plan"); and
WHEREAS, the Trustee and the Sponsor now desire to amend said Trust
Agreement as provided for in Section 15 thereof;
NOW THEREFORE, in consideration of the above premises, the Trustee and
the Sponsor hereby amend the Trust Agreement, effective as of October 1, 1999,
by:
(1) Adding a new Section 16, Electronic Services, as follows, and
renumbering all subsequent subsections accordingly:
SECTION 16. ELECTRONIC SERVICES.
(a) The Trustee may provide communications and services via
electronic medium ("Electronic Services"), including, but not
limited to, Fidelity Plan Sponsor WebStation, Client Intranet,
Client e-mail, interactive software products or any other
information provided in an electronic format. The Sponsor, its
agents and employees agree to keep confidential and not publish,
copy, broadcast, retransmit, reproduce, commercially exploit or
otherwise redisseminate the data, information, software or
services without the Trustee's written consent.
(b) The Sponsor shall be responsible for installing and
maintaining all Electronic Services on its computer network and/or
Intranet upon receipt in a manner so that the information provided
via the
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Electronic Service will appear in the same form and content as it
appears on the form of delivery, and for any programming required
to accomplish the installation. Materials provided for Plan
Sponsor's intranet web sites shall be installed by the Sponsor and
shall be clearly identified as originating from Fidelity. The
Sponsor shall promptly remove Electronic Services from its
computer network and/or Intranet, or replace the Electronic
Service with an updated service provided by the Trustee, upon
written notification (including written notification via
facsimile) by the Trustee.
(c) Subject to the other terms of the Agreement, all
Electronic Services shall be provided to the Sponsor without any
express or implied legal warranties or acceptance of legal
liability by the Trustee relative to the use of material or
Electronic Services by the Sponsor. No rights are conveyed to any
property, intellectual or tangible, associated with the contents
of the Electronic Services and related material.
(d) To the extent that any Electronic Services utilize
Internet services to transport data or communications, the Trustee
will take, and Plan Sponsor agrees to follow, reasonable security
precautions; however, the Trustee disclaims any liability for
interception of any such data or communications. The Trustee shall
not be responsible for, and makes no warranties regarding access,
speed or availability of Internet or network services. The Trustee
shall not be responsible for any loss or damage related to or
resulting from any changes or modifications to the electronic
material after delivering it to the Plan Sponsor.
(2) Amending the "Other" Section of Schedule "A" to add the following:
- Rollover Processing. The Trustee shall process the
qualification of rollover contributions to the Trust. The
procedures for qualifying a rollover are directed by the
Sponsor and the Trustee shall accept or deny each rollover
based upon the Plan's written criteria and any written
guidelines provided by the Administrator and documented in the
Plan
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Administrative Manual, or, if none, as set forth below:
To process a rollover request the participant must obtain the
signature from the distributing plan, trustee or custodian, on
the designated form, certifying that the monies distributed
originally came from a qualified plan and have not been
commingled with any non-eligible money. If a signature cannot
be obtained a signed letter from the distributing plan,
trustee or custodian on its Company letterhead will also be
acceptable.
Requests that do not meet the specified criteria will be
returned to the participant with further an explanation as to
why the request cannot be processed. If the Sponsor or the
Trustee determine that a request is not a valid rollover, the
full amount of the requested rollover will be distributed to
the participant.
(3) Amending Schedule "B" by adding a new "Rollover Processing" item
as follows:
Rollover Processing: There shall be no fee charged
for this service.
IN WITNESS WHEREOF, the Trustee and the Sponsor have caused this
Seventh Amendment to be executed by their duly authorized officers effective as
of the day and year first above written.
GENENTECH, INC. FIDELITY MANAGEMENT TRUST COMPANY
By: /s/ JUDITH A. HEYBOER 8/13/99 By: /s/ CAROLYN REDDEN 8/27/99
---------------------------------- ---------------------------
Date Vice President Date
3
