GENENTECH, INC.
                         DEFERRED COMPENSATION PLAN


          GENENTECH, INC., a Delaware corporation, hereby adopts the 
Genentech, Inc. Deferred Compensation Plan.  The Plan will become effective 
upon the occurrence of a Redemption or Delisting, whichever shall first occur.

                                 SECTION 1
                               DEFINITIONS

            The following words and phrases shall have the following meanings 
unless a different meaning is plainly required by the context:

            1.1  "Account" or "Account(s)" means as to any Participant the 
separate account(s) maintained on the books of the Company in order to reflect 
his or her interest under the Plan.

            1.2  "Affiliate" means any Parent or Subsidiary of the Company, 
but only for the period during which such other entity actually qualifies as a 
Parent or Subsidiary.

            1.3  "Beneficiary" means the person or persons entitled (under 
Section 5.4) to receive any vested balance credited to a Participant's Account 
upon the death of the Participant.

            1.4  "Board of Directors" means the Board of Directors of the 
Company, as constituted from time to time.

            1.5  "Committee" shall have the same meaning as assigned from time 
to time to the identical term under the Stock Option Plan.

            1.6  "Company" means Genentech, Inc., a Delaware corporation.

            1.7  "Consultant" means a Consultant (as defined from time to time 
under the Stock Option Plan) who, on the Effective Date, possesses one or more 
unvested, in-the-money Options which, on the Effective Date, will be cancelled 
under Article Six of the Stock Option Plan due to the occurrence of a 
Redemption or Delisting.

            1.8  "Delisting" means the failure of the Special Common Stock to 
be listed for trading on at least one of: (a) the New York Stock Exchange, (b) 
the Nasdaq National Market, or (c) any other national exchange.

            1.9  "Delisting Value" means the greater of (a) the arithmetic 
mean of the Closing Selling Prices (as defined in the Stock Option Plan) of 
the Special Common Stock on the twenty trading days immediately preceding the 
date on which Delisting occurs, or (b) $60 per share of Special Common Stock 
(adjusted for any reorganizations, consolidations, recapitalizations, stock 
dividends, split-ups, or other changes in the corporate structure of the 
Company which affect the Special Common Stock).

            1.10 "Disability" or "Disabled" means permanent and total 
disability as defined in section 22(e)(3) of the Internal Revenue Code of 
1986, as amended, including any valid regulation promulgated thereunder, and 
any comparable provision of any future legislation or regulation amending, 
supplementing or superseding such section or regulation.

            1.11 "Effective Date" means the date on which the Plan becomes 
effective.  The Plan shall become effective on the first to occur of a 
Redemption or Delisting.  The Plan shall not be effective prior to the 
occurrence of either such event.

            1.12 "Employee" means an employee of an Employer who, on the 
Effective Date, possesses one or more unvested, in-the-money Options which, on 
the Effective Date, will be cancelled under Article Six of the Stock Option 
Plan due to the occurrence of a Redemption or Delisting, irrespective of 
whether employment services are actually provided by the individual.

            1.13 "Employer" means the Company and each of its Affiliates that 
adopts the Plan as a participating Employer.  With respect to an individual 
Participant, Employer means the Company or the Affiliate that has adopted the 
Plan and that directly employs the Participant.

            1.14 "Employer Contributions" means the amounts credited to 
Participants' Accounts under the Plan pursuant to Section 3.

            1.15 "Nonemployee Director" means any individual who is a member 
of the Board of Directors of the Company (but who is an employee of neither 
the Company nor of any Affiliate) who, on the Effective Date, possesses one or 
more unvested, in-the-money Options which, on the Effective Date, will be 
cancelled under Article Six of the Stock Option Plan due to the occurrence of 
a Redemption or Delisting.

            1.16 "Option" means a stock option granted pursuant to the Stock 
Option Plan.

            1.17 "Parent" shall have the same meaning as assigned from time to 
time to the identical term under the Stock Option Plan.

            1.18 "Participant" means a Consultant, Employee or Nonemployee 
Director who (a) has become a Participant in the Plan pursuant to Section 2.1 
and (b) has not ceased to be a Participant pursuant to Section 2.2.

            1.19 "Plan" means the Genentech, Inc. Deferred Compensation Plan, 
as set forth in this instrument and as hereafter amended from time to time.

            1.20 "Redemption" means the redemption of the Special Common Stock 
as provided in Section (c)(ii) of Article Third of the Certificate of 
Incorporation of the Company.

            1.21 "Redemption Value" means the value specified for redemption 
of the Special Common Stock as set forth in Section (c)(ii)(A) of Article 
Third of the Certificate of Incorporation of the Company (and as adjusted 
pursuant to Section (c)(ii)(C) of Article Third of the Certificate of 
Incorporation).

            1.22 "Retirement" means the Participant's termination of 
employment with the Company and all of its Affiliates on account of his or her 
retirement at or after age 65.

            1.23 "Special Common Stock" shall have the same meaning as 
assigned from time to time to the identical term under the Stock Option Plan.

            1.24 "Stock Option Plan" means the Genentech, Inc. 1996 Stock 
Option/Stock Incentive Plan, as hereafter amended from time to time.

            1.25 "Subsidiary" shall have the same meaning as assigned from 
time to time to the identical term under the Stock Option Plan.


                                   SECTION 2
                                 PARTICIPATION

            2.1  Participation.  Each individual who is a Consultant, Employee 
or Nonemployee Director on the Effective Date automatically shall become a 
Participant in the Plan on such date.

            2.2  Termination of Participation.  An individual who has become a 
Participant shall remain a Participant until his or her entire vested Account 
balance is distributed.


                                   SECTION 3
                            EMPLOYER CONTRIBUTIONS

                  3.1  Employer Contributions.  On the Effective Date, each 
Participant shall have Employer Contributions credited to his or her 
Account(s) in an amount determined in the manner prescribed in this Section 
3.1.  If the Effective Date occurs due to a Delisting, such amount shall be 
determined in accordance with Section 3.1.1.  If the Effective Date occurs due 
to a Redemption, such amount shall be determined in accordance with Section 
3.1.2.  For each Participant, the calculation under Section 3.1.1 or Section 
3.1.2 (as the case may be) shall be performed for each of the Participant's 
unvested, in-the-money Options which are cancelled on the Effective Date due 
to the Delisting or Redemption.  Options which are not in-the-money (i.e., 
which have exercise prices greater than the Delisting Value or Redemption 
Value, whichever is applicable) shall not be considered for purposes of 
determining Employer Contributions.
                                                                          
                  3.1.1  Delisting.  With respect to any Option, the amount 
credited to a Participant's Account shall equal the product of:

            (a)   The amount by which the Delisting Value of a share exceeds 
the exercise price of the Option, times

            (b)  The number of shares covered by the Option.

                  3.1.2  Redemption.  With respect to any Option, the amount 
credited to a Participant's Account shall equal the product of:

            (a)  The amount by which the Redemption Value of a share exceeds 
the exercise price of the Option, times

            (b)  The number of shares covered by the Option.

            3.2  Crediting of Employer Contributions.  The Employer 
Contributions on any Option shall be credited to a separate Account created 
for each such Option.  All Employer Contributions shall be credited as of the 
Effective Date (but may or may not become vested, as provided in Section 6).  
The exact dollar amount to be credited shall be determined by the Committee 
under such formulas (consistent with the Plan) as the Committee shall adopt.

          3.3  Deemed Interest on Accounts.  Each Account shall be credited 
with deemed interest as of the end of each calendar quarter.  The annual rate 
for crediting deemed interest during any quarter (which rate shall be adjusted 
quarterly) shall be the rate paid by two-year U.S. Treasury notes (at 
issuance) which are last issued during such quarter.  Deemed interest under 
this Section 3.3 shall be calculated using a 360-day year and shall be 
compounded on a quarterly basis.

            3.4  Form and Timing of Payment.  On or prior to the Effective 
Date, each Participant shall elect the form and timing of payment for the 
vested portion (if any) of his or her Account(s).  A Participant may elect (a) 
payment as of each March 31, June 30, September 30 and December 31 (of all 
amounts which are then vested), (b) payment as of each June 30 and December 31 
(of all amounts which are then vested) or (c) payment of all vested amounts as 
soon as administratively practicable after the Participant's last scheduled 
vesting date.  A Participant later may change his or her election as to the 
form and timing of payment with respect to amounts which are scheduled to vest 
in any future calendar year.  However, any election under the preceding 
sentence will be effective only if (1) the election is received by the 
Committee (or its delegate) no later than last day of the calendar year prior 
to the year in which the amounts with respect to which the election is being 
made become vested, and (2) the Participant acknowledges in writing (in a form 
acceptable to the Committee) that any income tax consequences from the 
Participant's election will be solely the responsibility of the Participant.  
A Participant may not change his or her election with respect to already 
vested amounts.  Each election under this Section 3.4 shall be made in such 
manner as the Committee may specify.


                                   SECTION 4
                                  ACCOUNTING

            4.1  Participants' Accounts.  At the direction of the Committee, 
there shall be established and maintained on the books of the Company, a 
separate Account or Accounts for each Participant to which shall be credited 
Employer Contributions made on behalf of the Participant, and the deemed 
interest on such Employer Contributions.  A separate Account shall be 
established for the crediting of Employer Contributions (and deemed interest 
thereon) on each of the Participant's unvested, in-the-money Options which are 
cancelled on the Effective Date due to the Delisting or Redemption.

            4.2  Participants Remain Unsecured Creditors.  All amounts 
credited to a Participant's Account under the Plan shall continue for all 
purposes to be a part of the general assets of the Company.  Each 
Participant's interest in the Plan shall make him or her only a general, 
unsecured creditor of the Company.

            4.3  Accounting Methods.  The accounting methods or formulas to be 
used under the Plan for the purpose of maintaining the Participants' Accounts, 
including the calculation and crediting of any deemed interest shall be 
determined by the Committee in its sole discretion.  The accounting methods or 
formulas selected by the Committee may be revised from time to time.

            4.4  Reports.  Each Participant shall be furnished with periodic 
statements of his or her Account, reflecting the status of his or her interest 
in the Plan, at least annually.


                                  SECTION 5
                                DISTRIBUTIONS

            5.1  Normal Distribution Timing and Rules.  Subject to Sections 
5.2 and 5.3, distribution of the vested balance credited to a Participant's 
Account(s) shall be made as soon as administratively practicable after the 
date or dates elected by the Participant under Section 3.4.  Subject to the 
provisions of this Section 5, payment shall be made to the Participant, or in 
the event of the Participant's death, to the Participant's Beneficiary (or 
estate, as provided in Section 5.4).  A Participant (or Beneficiary) shall be 
paid all vested amounts credited to his or her Account(s) (if any) no later 
than the last scheduled vesting date for the applicable Option.

            5.2  Special Rule for Death or Disability.  If a Participant dies, 
the vested balance then credited to his or her Account (including any amounts 
vested pursuant to Section 6.2.2) shall be immediately distributed to the 
Participant's Beneficiary as soon as administratively practicable after the 
date of death.  If a Participant becomes Disabled, the vested balance credited 
to the Participant's Account (including any amounts vested pursuant to Section 
6.2.2) shall be distributed to the Participant at the time and in the form 
elected by the Participant pursuant to Section 3.4; provided, however, that 
the Committee, in its sole discretion, may elect to distribute the vested 
balance of the Participant's Account in a lump sum as of any date after the 
date of Disability.

            5.3  Special Rule for Termination of Employment.  If a Participant 
terminates his or her employment with the Company and all of its Affiliates 
for a reason other than death or Disability, the vested balance then credited 
to his or her Account shall be distributed to him or her in a lump sum as soon 
as administratively practicable after such termination.

          5.4  Beneficiary Designations.  Each Participant may, pursuant to 
such procedures as the Committee may specify, designate one or more 
Beneficiaries.

                  5.4.1  Spousal Consent.  If a Participant does not designate 
his or her spouse as sole primary Beneficiary, the beneficiary designation 
shall be ineffective unless such spouse consents to the designation.  Any 
spousal consent required under this Section 5.4 shall be ineffective unless it 
is set forth in writing and signed by the spouse.  Notwithstanding the 
preceding, if the Participant establishes to the satisfaction of the Company 
that written spousal consent may not be obtained because the spouse cannot be 
located, his or her designation shall be effective without a spousal consent. 
 Any spousal consent required under this Section 5.4 shall be valid only with 
respect to the spouse who signs the consent.

               5.4.2  Changes and Failed Designations.  A Participant may 
change or revoke Beneficiary designations by delivering a new designation (or 
revocation) in the manner described in Section 5.4.1.  Any designation or 
revocation shall be effective only if it is received by the Company.  However, 
when so received, the designation or revocation shall be effective as of the 
date the notice is executed (whether or not the Participant still is living), 
but without prejudice to the Company on account of any payment made before the 
change is recorded.  The last effective designation received by the Company 
shall supersede all prior designations.  If a Participant dies without having 
effectively designated a Beneficiary, or if no Beneficiary survives the 
Participant, the vested portion (if any) of the Participant's Account shall be 
payable (a) to his or her surviving spouse (if any), or (b) if the Participant 
is not survived by a spouse, to the Participant's estate.

            5.5  Financial Hardship.  In the event that a Participant incurs a 
"financial hardship", the Committee, in its sole discretion and 
notwithstanding any contrary provision of the Plan, may determine that all or 
part of the vested portion of the Participant's Account(s) shall be paid to 
him or her immediately; provided, however, that the amount paid to the 
Participant pursuant to this Section 5.5 shall be limited to the amount 
reasonably necessary to alleviate the Participant's hardship.  For purposes of 
this Section 5.5, a "financial hardship" shall mean a severe financial 
emergency which is caused by a sudden and unexpected accident, illness or 
other event beyond the control of the Participant which, without an acceler-
ated distribution from the Plan, would result in severe financial burden to 
the Participant or a member of his or her immediate family.  A financial 
hardship does not exist to the extent that the hardship may be relieved by 
(a) reimbursement or compensation by insurance, (b) liquidation of the 
Participant's other assets (to the extent such liquidation would not itself 
cause severe financial hardship), or (c) any loan available to the Participant 
(to the extent the payments on such loan would not themselves cause severe 
financial hardship).

            5.6  Payments to Incompetents.  If any individual to whom a 
benefit is payable under the Plan is a minor or legally incompetent, the 
Committee shall determine whether payment shall be made directly to the 
individual, any person acting as his or her custodian or legal guardian under 
the California Uniform Transfers to Minors Act, his or her legal 
representative or a near relative, or directly for his or her support, 
maintenance or education.

            5.7  Undistributable Accounts.  Each Participant (and in the event 
of the Participant's death, his or her Beneficiary) shall keep the Committee 
advised of his or her current address.  If the Committee is unable to locate 
the Participant or Beneficiary to whom a Participant's Account is payable 
under this Section 5, the Participant's Account shall be frozen and no further 
deemed interest under Section 3.3 shall be credited to the Account.  Accounts 
that, in accordance with the preceding sentence, have been undistributable for 
a period of 35 months shall be forfeited as of the end of the 35th month.  If 
a Participant whose Account was forfeited under this Section 5.7 (or his or 
her Beneficiary) files a claim for distribution of the Account after the date 
that it was forfeited, and if the Committee determines that such claim is 
valid, then the forfeited balance shall be paid in a lump sum cash payment as 
soon as administratively practicable thereafter (without any deemed interest 
for the period during which the account was frozen or forfeited).

            5.8  Payment in Cash or Its Equivalent.  All payments from the 
Plan shall be made in cash or its equivalent.

            5.9  Tax Withholding.  The Company shall withhold all applicable 
taxes from any payment, including but not limited to, any federal, FICA, 
state, and local income and employment taxes.

            5.10  Committee Discretion.  Within the specific time periods 
described in this Section 5, the Committee shall have sole discretion to 
determine the specific timing of the payment of any Account balance under the 
Plan.  


                                   SECTION 6
                       PARTICIPANT'S INTEREST IN ACCOUNT

            6.1  Vesting in Accounts.  A Participant's vested interest (if 
any) in his or her Account(s) shall be determined in accordance with Section 
6.2.  The vested portion of a Participant's Account(s) (if any) shall be 
distributed to the Participant in the manner and at the time set forth in 
Section 5, and any unvested portion shall be permanently forfeited as provided 
in Section 6.2.

            6.2  Vesting Rules.  With respect to each Account of a 
Participant, his or her interest in the Account shall be vested in accordance 
with the same schedule, and on the same terms and conditions, as the Option 
(or applicable portion thereof) with respect to which the Employer 
Contributions in the Account were calculated.  For example, suppose that 
Employer Contributions of $4,000 are credited to a Participant's Account on 
January 10, 1998, based on an Option covering 200 shares of Special Common 
Stock.  If the Option had been scheduled to vest as to 100 shares on June 30, 
1998, and as to the remaining 100 shares on June 30, 1999, the Participant 
would be scheduled to vest in $2,000 of Employer Contributions (and deemed 
interest thereon) on June 30, 1998, and as to an additional $2,000 of Employer 
Contributions (and deemed interest thereon) on June 30, 1999.  On any 
scheduled vesting date, vesting actually will occur only if the terms and 
conditions set forth in the applicable Option agreement are satisfied (for 
example, with respect to continuous employment with the Company and 
Affiliates).  Consistent with the Plan, the specific vesting schedule for any 
Account shall be determined by the Committee in its discretion.

                  6.2.1  Termination.  Upon termination of the Participant's 
employment with all Employers and Affiliates for any reason at any time, the 
vested portion of his or her Account(s) shall be distributable to him or her 
in the manner and at the times set forth in Section 5, and the unvested 
portion of such Account shall be permanently forfeited.

                  6.2.2  Full Vesting.  Notwithstanding any contrary provision 
of Section 6.2.1, a Participant's interest in his or her entire Account may 
become 100% vested and nonforfeitable in accordance with the rules of this 
Section 6.2.2.  A Participant's interest in his or her entire Account shall 
become 100% vested and nonforfeitable upon the date of his or her death or 
Retirement.  If a Participant becomes Disabled, the Committee, in its sole 
discretion, may provide that all or part of the Participant's Account shall 
become vested upon the date of his or her Disability.

                 6.3  Transfers of Employment.  The transfer of a Participant 
from employment with an Employer to employment with another Affiliate shall 
not constitute a termination of employment under the Plan.  Upon termination 
of his or her employment with such other Affiliate (other than for transfer to 
employment with another Affiliate), the Participant's employment shall be 
deemed then to have terminated.


                                   SECTION 7
                          ADMINISTRATION OF THE PLAN

            7.1  Committee.  The Plan shall be administered by the Committee. 
The Committee shall have the authority to control and manage the operation and 
administration of the Plan.

            7.2  Actions by Committee.  Each decision of a majority of the 
members of the Committee then in office shall constitute the final and binding 
act of the Committee.  The Committee may act with or without a meeting being 
called or held and shall keep minutes of all meetings held and a record of all 
actions taken by written consent.

            7.3  Powers of Committee.  The Committee shall have all powers and 
discretion necessary or appropriate to supervise the administration of the 
Plan and to control its operation in accordance with its terms, including, but 
not by way of limitation, the following powers:

            (a)   To interpret and determine the meaning and validity of the 
provisions of the Plan and to determine any question arising under, or 
in connection with, the administration, operation or validity of the 
Plan or any amendment thereto;

            (b)   To determine any and all considerations affecting the 
eligibility of any employee to become a Participant or remain a 
Participant in the Plan;

            (c)   To cause one or more separate Accounts to be maintained for 
each Participant;

            (d)   To cause Employer Contributions and deemed interest to be 
credited to Participants' Accounts;

            (e)   To establish and revise an accounting method or formula for 
the Plan, as provided in Section 4.3;

            (f)   To determine the status and rights of Participants and 
their spouses, Beneficiaries or estates;

            (g)   To employ such counsel, agents and advisers, and to obtain 
such legal, clerical and other services, as it may deem necessary or 
appropriate in carrying out the provisions of the Plan;

            (h)   To establish, from time to time, rules for the performance 
of its powers and duties and for the administration of the Plan;

            (i)   To arrange for annual distribution to each Participant of a 
statement of benefits accrued under the Plan;

            (j)   To publish a claims and appeal procedure pursuant to which 
individuals or estates may claim Plan benefits and appeal denials of 
such claims;

            (k)   To delegate to any one or more of its members or to any 
other person, severally or jointly, the authority to perform for and on 
behalf of the Committee one or more of the functions of the Committee 
under the Plan; and

            (l)   To decide all issues and questions regarding Account 
balances, and the time, form, manner, and amount of distributions to 
Participants.

            7.4  Decisions of Committee.  All actions, interpretations, and 
decisions of the Committee shall be conclusive and binding on all persons, and 
shall be given the maximum deference permitted by law.

            7.5  Administrative Expenses.  All expenses incurred in the 
administration of the Plan by the Committee, or otherwise, including legal 
fees and expenses, shall be paid and borne by the Employers.

            7.6  Eligibility to Participate.  No member of the Committee who 
also is a Participant shall be excluded from participating in the Plan, but as 
a member of the Committee, he or she shall not be entitled to act or pass upon 
any matters pertaining specifically to his or her own Account.

            7.7  Indemnification.  Each of the Employers shall, and hereby 
does, indemnify and hold harmless the members of the Committee, from and 
against any and all losses, claims, damages or liabilities (including 
attorneys' fees and amounts paid, with the approval of the Board of Directors, 
in settlement of any claim) arising out of or resulting from the 
implementation of a duty, act or decision with respect to the Plan, so long as 
such duty, act or decision does not involve gross negligence or willful 
misconduct on the part of any such individual.


                                  SECTION 8
                                   FUNDING

            8.1  Unfunded Plan.  All amounts credited to a Participant's 
Account under the Plan shall continue for all purposes to be a part of the 
general assets of the Company.  The interest of the Participant in his or her 
Account, including his or her right to distribution thereof, shall be an 
unsecured claim against the general assets of the Company.  Nothing contained 
in the Plan shall give any Participant or Beneficiary any interest in or claim 
against any specific assets of the Company.


                                  SECTION 9
                     MODIFICATION OR TERMINATION OF PLAN

            9.1  Employers' Obligation is Limited.  The Employers intend to 
continue the Plan indefinitely, and to maintain each Participant's Account 
until it is scheduled to be paid to him or her in accordance with the 
provisions of the Plan.  However, the Plan is voluntary on the part of the 
Employers, and the Employers do not guarantee to continue the Plan.  The 
Company at any time may amend the Plan, with or without cause.

            9.2  Right to Amend or Terminate.  The Board of Directors reserves 
the right to alter, amend or terminate the Plan, or any part thereof, at any 
time and for any reason provided that (a) no amendment or termination of the 
Plan shall, without the consent of the Participant, reduce the vested balance 
then credited to the Participant's Account, and (b) the Plan shall not be 
terminated until all vested amounts (and amounts which possibly still may 
vest) have been distributed to the Participants (or Beneficiaries).  


                                  SECTION 10
                              GENERAL PROVISIONS

            10.1  Inalienability.  In no event may either a Participant, a 
former Participant or his or her Beneficiary, spouse or estate sell, transfer, 
anticipate, assign, hypothecate, or otherwise dispose of any right or interest 
under the Plan; and such rights and interests shall not at any time be subject 
to the claims of creditors nor be liable to attachment, execution or other 
legal process.  Accordingly, for example, a Participant's interest in the Plan 
is not transferable pursuant to a domestic relations order.

            10.2  Participation by Affiliates.  One or more Affiliates of the 
Company may become participating Employers by adopting the Plan.  By adopting 
the Plan, an Affiliate is deemed to agree to all of its terms, including (but 
not limited to) the provisions granting exclusive authority to the Board of 
Directors to amend the Plan and the provisions granting exclusive authority to 
the Committee to administer and interpret the Plan.  Any Affiliate may 
terminate its participation in the Plan at any time by resolution of its board 
of directors.  The liabilities incurred under the Plan to the Participants 
shall be solely the liabilities of the Company, and no other Employer shall be 
liable for benefits accrued under the Plan.  An Affiliate's participation in 
the Plan shall be deemed terminated if it ceases to be an Affiliate.

            10.3  Rights and Duties.  Neither the Employers nor the Committee 
shall be subject to any liability or duty under the Plan except as expressly 
provided in the Plan, or for any action taken, omitted or suffered in good 
faith.

            10.4  Apportionment of Costs and Duties.  All acts required of the 
Employers under the Plan may be performed by the Company for itself and its 
Affiliates, and the costs of the Plan may be equitably apportioned by the 
Committee among the Company and the other Employers.

            10.5  No Effect on Employment.  Neither the establishment or 
maintenance of the Plan, the making of any Employer Contributions nor any 
action of any Employer or the Committee, shall be held or construed to confer 
upon any individual any right to be continued as an employee, or upon 
dismissal, any right or interest in any specific assets of the Employers other 
than as provided in the Plan.  Each Employer expressly reserves the right to 
discharge any employee at any time, with or without cause.

            10.6  Employer Contributions Not Counted Under Other Employee 
Benefit Plans.  Employer Contributions under the Plan will not be considered 
for purposes of contributions or benefits under any other employee benefit 
plan sponsored by the Employers.

            10.7  Compliance with Rule 16b-3.  Payments under the Plan are 
intended to be exempt from liability under section 16 of the Securities 
Exchange Act of 1934, as amended ("section 16").  To the extent deemed 
necessary or advisable by the Committee, any payment to an individual who is 
subject to section 16(a) with respect to the Special Common Stock may be 
delayed in order to ensure that such payment will not result in any liability 
under section 16(b) to such individual.

            10.8  Applicable Law.  The provisions of the Plan shall be 
construed, administered and enforced in accordance with the laws of the State 
of California (other than its conflict of laws provisions).

            10.9  Severability.  If any provision of the Plan is held invalid 
or unenforceable, its invalidity or unenforceability shall not affect any 
other provisions of the Plan, and in lieu of each provision which is held 
invalid or unenforceable, there shall be added as part of the Plan a provision 
that shall be as similar in terms to such invalid or unenforceable provision 
as may be possible and be valid, legal, and enforceable.

            10.10  Captions.  The captions contained in and the table of 
contents prefixed to the Plan are inserted only as a matter of convenience and 
for reference and in no way define, limit, enlarge or describe the scope or 
intent of the Plan nor in any way shall affect the construction of any 
provision of the Plan.

                                  EXECUTION

            IN WITNESS WHEREOF, the Company, by its duly authorized officers, 
has executed the Plan on the date indicated below.

                                    GENENTECH, INC.



Dated:                              By:                            
                                    Title:






                                GENENTECH, INC.
                          DEFERRED COMPENSATION PLAN


                         TABLE OF CONTENTS

                                                             Page

SECTION 1  DEFINITIONS

     1.1  "Account" or "Account(s)"                             1
     1.2  "Affiliate"                                           1
     1.3  "Beneficiary"                                         1
     1.4  "Board of Directors"                                  1
     1.5  "Committee"                                           1
     1.6  "Company"                                             1
     1.7  "Consultant"                                          1
     1.8  "Delisting"                                           1
     1.9  "Delisting Value"                                     2
     1.10 "Disability"                                          2
     1.11 "Effective Date"                                      2
     1.12 "Employee"                                            2
     1.13 "Employer"                                            2
     1.14 "Employer Contributions"                              2
     1.15 "Nonemployee Director"                                2
     1.16 "Option"                                              2
     1.17 "Parent"                                              2
     1.18 "Participant"                                         3
     1.19 "Plan"                                                3
     1.20 "Redemption"                                          3
     1.21 "Redemption Value"                                    3
     1.22 "Retirement"                                          3
     1.23 "Special Common Stock"                                3
     1.24 "Stock Option Plan"                                   3
     1.25 "Subsidiary"                                          3

SECTION 2  PARTICIPATION

     2.1  Participation                                         3
     2.2  Termination of Participation                          3

SECTION 3  EMPLOYER CONTRIBUTIONS

     3.1  Employer Contributions                                4
            3.1.1  Delisting                                    4
            3.1.2  Redemption                                   4
     3.2  Crediting of Employer Contributions                   4
     3.3  Deemed Interest on Accounts                           4
     3.4  Form and Timing of Payment                            5

SECTION 4  ACCOUNTING

     4.1  Participants' Accounts                                5
     4.2  Participants Remain Unsecured Creditors               5
     4.3  Accounting Methods                                    5
     4.4  Reports                                               6

SECTION 5  DISTRIBUTIONS

     5.1  Normal Distribution Timing and Rules                  6
     5.2  Special Rule for Death or Disability                  6
     5.3  Special Rule for Termination of Employment            6
     5.4  Beneficiary Designations                              6
            5.4.1  Spousal Consent                              6
            5.4.2  Changes and Failed Designations              7
     5.5  Financial Hardship                                    7
     5.6  Payments to Incompetents                              7
     5.7  Undistributable Accounts                              8
     5.8  Payment in Cash or Its Equivalent                     8
     5.9  Tax Withholding                                       8
     5.10 Committee Discretion                                  8

SECTION 6  PARTICIPANT'S INTEREST IN ACCOUNT

     6.1  Vesting in Accounts                                   8
     6.2  Vesting Rules                                         8
            6.2.1  Termination                                  9
            6.2.2  Full Vesting                                 9
     6.3  Transfers of Employment                               9

SECTION 7  ADMINISTRATION OF THE PLAN

     7.1  Committee                                             9
     7.2  Actions by Committee                                 10
     7.3  Powers of Committee                                  10
     7.4  Decisions of Committee                               11
     7.5  Administrative Expenses                              11
     7.6  Eligibility to Participate                           11
     7.7  Indemnification                                      11

SECTION 8  FUNDING

     8.1  Unfunded Plan                                        11

SECTION 9  MODIFICATION OR TERMINATION OF PLAN

     9.1  Employers' Obligation is Limited                     12
     9.2  Right to Amend or Terminate                          12

SECTION 10  GENERAL PROVISIONS

     10.1  Inalienability                                      12
     10.2  Participation by Affiliates                         12
     10.3  Rights and Duties                                   13
     10.4  Apportionment of Costs and Duties                   13
     10.5  No Effect on Employment                             13
     10.6  Employer Contributions Not Counted Under Other Employee Benefit 
Plans                             13
     10.7  Compliance with Rule 16b-3                          13
     10.8  Applicable Law                                      13
     10.9  Severability                                        13
     10.10 Captions                                            13