1996 STOCK OPTION/STOCK INCENTIVE PLAN
                      (as amended effective October 16, 1996)

                                   ARTICLE ONE

                                GENERAL PROVISIONS

I.  PURPOSES OF THE PLAN

A.  This 1996 Stock Option/Stock Incentive Plan (the "Plan") is intended to 
promote the interests of Genentech, Inc., a Delaware corporation (the 
"Company"), by providing a method whereby the Company may retain the services 
of persons now employed by or serving as consultants or directors to it, 
secure and retain the services of persons capable of filling such positions 
and provide incentives for such persons to exert maximum efforts for the 
success of the Company or its parent or subsidiary corporations.

B.  For purposes of the Plan, the following definitions shall be in effect:

  CHANGE IN CONTROL: "Change in Control" shall have the meaning set forth in 
Article Two, III.C. hereof.

  CHANGE IN CONTROL PRICE: "Change in Control Price" shall have the meaning 
set forth in Article Two, II.C.4.b. hereof.

  CLOSING SELLING PRICE: The Closing Selling Price per share of Special Common 
Stock on any relevant date under the Plan shall be the closing selling price 
per share of Special Common Stock, if such Special Common Stock is reported on 
a national securities exchange or reported on the NASDAQ National Market 
System (or any successor system), for the trading day immediately preceding 
the date in question, as such price is published in the Wall Street Journal 
(or if such publication is not available, a comparable publication selected by 
the Committee).

  CONSULTANT: An individual shall be considered to be a Consultant for so long 
as such individual continues to render personal services to the Company or one 
or more of its Parent or Subsidiaries as an independent contractor or 
continues to have an effective and unexpired consulting agreement with the 
Company.

  CORPORATE TRANSACTION: "Corporate Transaction" shall have the meaning set 
forth in Article Two, III.A. hereof.

  EMPLOYEE: An individual shall be considered to be an Employee for so long as 
such individual remains in the employ of the Company or one or more of its 
Parent or Subsidiaries, irrespective of whether employment services are 
actually provided by the individual.

  PARENT: A corporation shall be deemed to be a parent of the Company if it is 
a corporation (other than the Company) in an unbroken chain of corporations 
ending with the Company, provided each such corporation in the unbroken chain 
(other than the Company) owns, at the time of the determination, stock 
possessing fifty percent (50%) or more of the total combined voting power of 
all classes of stock in one of the other corporations in such chain.

  SECTION 16(b) INSIDER: An individual shall be considered to be a Section 
16(b) Insider on any relevant date under the Plan if such individual (A) is at 
the time an officer or director of the Company subject to the short-swing 
profit restrictions of the regulations promulgated under Section 16 of the 
Securities Exchange Act of 1934, as amended (the "1934 Act") or (B) unless 
Section 16 or regulations promulgated thereunder, are amended to provide 
otherwise, was such an officer or director at any time during the six month 
period immediately preceding the date in question and made any purchase or 
sale of Special Common Stock during such six-month period.

  SERVICE: An individual shall be deemed to be in the Service of the Company 
for so long as such individual renders service on a periodic basis to the 
Company or one or more of its Parent or Subsidiaries as an Employee or 
Consultant.

  SPECIAL COMMON STOCK: The Special Common Stock issuable under the Plan shall 
be shares of the Company's Callable Putable Common Stock, par value $0.02 per 
share. All references to "shares" or "stock", shall be deemed to be references 
to shares of the Special Common Stock.

  SUBSIDIARY: A corporation shall be deemed to be a subsidiary of the Company 
if it is one of the corporations (other than the Company) in an unbroken chain 
of corporations beginning with the Company, provided each such corporation 
(other than the last corporation in the unbroken chain) owns, at the time of 
determination, stock possessing 50 percent or more of the total combined 
voting power of all classes of stock in one of the other corporations in such 
chain. For purposes of non-statutory option grants under Article Two and stock 
incentive grants under Article Four and all Corporate Transaction provisions 
of the Plan, the term "subsidiary" shall also include any partnership, joint 
venture or other business entity of which the Company owns, directly or 
indirectly through another subsidiary corporation, more than a fifty percent 
(50%) interest in voting power, capital or profits.

C.  Neither stock option grants nor stock bonus issuances made to any 
individual under the Plan shall in any way affect, limit or restrict such 
individual's eligibility to participate in any other stock plan or other 
compensation or benefit plan, arrangement or practice now or hereafter 
maintained by the Company or any Parent or Subsidiary.

II.  ADMINISTRATION OF THE PLAN

A.  The Plan shall be administered by the Compensation Committee (the 
"Committee").  The Committee shall be comprised of not less than two (2) Board 
members.  The Board may from time to time appoint members to the Committee in 
substitution for (or in addition to) members previously appointed, and the 
Board shall have the authority to fill any and all vacancies on the Committee, 
however caused.

B.  Subject to limitations contained elsewhere herein and to the provisions of 
Section V., C. and D. of this Article I relating to adjustments upon changes 
in stock, the aggregate number of shares of stock that may be subject to 
options and stock appreciation rights granted hereunder to any Employee in a 
calendar year shall not exceed two hundred fifty thousand (250,000) shares of 
the Company's Special Common Stock.

C.  Subject to the express provisions of the Plan, the Committee shall have 
plenary authority:

  (i) to interpret the Plan, to prescribe, amend and rescind rules and 
regulations relating to it, and to make all other determinations deemed 
necessary or advisable in administering the Plan; and

  (ii) to change the terms and conditions of any outstanding discretionary 
option grant or unvested stock issuance, provided such action does not, 
without the consent of the holder, adversely affect the rights and obligations 
such individual may have under the Plan or the outstanding grant or stock 
issuance.

D.  Determinations of the Committee on all matters relating to the Plan and 
any discretionary option grants or stock issuances made hereunder shall be 
final, binding and conclusive on all persons having any interest in the Plan 
or any options granted or shares issued under the Plan.

III.  STRUCTURE OF THE PLAN

A.  The Plan shall be divided into three separate components: the Regular 
Option Grant Program specified in Article Two, the Automatic Grant Program 
specified in Article Three and the Stock Incentive Program specified in 
Article Four.  Under the Regular Option Grant Program, eligible Employees, 
non-Employee Board members and Consultants may be granted options to purchase 
shares of Special Common Stock at an exercise price equal to not less than 50% 
of the Closing Selling Price per share on the grant date. Under the Automatic 
Grant Program, non-Employee Board members shall automatically be granted 
options to purchase shares of Special Common Stock on the dates and in the 
amounts specified in Article Three below at an exercise price of 100% of the 
Closing Selling Price per share of Special Common Stock on the date of grant.

B.  Under the Stock Incentive Program, eligible Employees, non-Employee Board 
members and Consultants may be awarded shares of Special Common Stock as a 
reward for past services or as an incentive to the performance of future 
services. Such shares may be issued as fully-vested shares or as shares 
vesting over time.

C.  The provisions of Articles One, Five and Six of the Plan shall apply to 
the Regular Option Grant Program, the Automatic Option Grant Program and the 
Stock Incentive Program and shall accordingly govern the interests of all 
individuals in the Plan.

IV.  ELIGIBILITY FOR OPTION GRANTS AND STOCK ISSUANCES

A.  The individuals eligible to receive option grants ("Optionees") and/or 
stock incentives ("Recipients") pursuant to the Plan shall be limited to (i) 
those Employees, non-Employee Board members and Consultants selected by the 
Committee and (ii) those non-Employee Board members who are entitled to option 
grants pursuant to the Automatic Option Grant Program of Article Three. 

V.  STOCK SUBJECT TO THE PLAN

A.  The Special Common Stock issuable under the Plan shall be made available 
either from authorized but unissued shares of Special Common Stock or from 
shares of Special Common Stock reacquired by the Company on the open market. 
The aggregate number of shares of Special Common Stock issuable over the term 
of this Plan, whether through exercised options or direct stock issuances 
shall not exceed 9,000,000 shares (subject to adjustment from time to time in 
accordance with paragraphs C. and D. below).

B.  Should an option granted under this Plan expire or terminate for any 
reason prior to exercise or surrender in full (including options canceled in 
accordance with the cancellation-regrant provisions of the Regular Option 
Grant Program), the shares subject to the portion of the option not so 
exercised or surrendered shall be available for subsequent option grants under 
this Plan. Shares subject to stock appreciation rights exercised in accordance 
with the Stock Appreciation Right provisions of Article Two and shares 
repurchased by the Company pursuant to its repurchase rights under the Plan 
shall not be available for subsequent issuance, whether through option grants, 
stock appreciation rights or direct issuances, under this Plan.

C.  In the event any change is made to the Special Common Stock issuable under 
the Plan by reason of any stock dividend, stock split, combination of shares, 
exchange of shares or other change affecting the outstanding Special Common 
Stock as a class without receipt of consideration, then appropriate 
adjustments shall be made by the Committee to (i) the aggregate number and/or 
class of shares issuable under this Plan, the maximum number and/or class of 
shares purchasable per Employee pursuant to the applicable limitation of 
Section II.B of this Article One and the number and/or class of shares for 
which the automatic option grants are to be made pursuant to the provisions of 
Article Three, to reflect the effect of such change upon the Company's capital 
structure, (ii) the number and/or class of shares and the exercise price per 
share of the stock subject to each outstanding option in order to preclude the 
dilution or enlargement of benefits thereunder and (iii) the number and/or 
class of shares and the exercise price per share in effect under each 
outstanding stock appreciation right in order to preclude the dilution or 
enlargement of benefits thereunder. All adjustments made by the Committee 
pursuant to this paragraph C. shall be final, binding and conclusive.

D.  Subject to the special priority provisions of Article Six of the Plan, in 
the event that (i) the Company is the surviving entity in any Corporate 
Transaction that does not result in the termination of outstanding options 
pursuant to the Corporate Transaction provisions of the Plan or (ii) the 
outstanding options under the Plan are to be assumed in connection with such 
Corporate Transaction, then each such continuing or assumed option shall, 
immediately after such Corporate Transaction, be appropriately adjusted to 
apply and pertain to the number and class of securities which would be 
issuable, in consummation of such Corporate Transaction, to an actual holder 
of the same number of shares of Special Common Stock as are subject to such 
option immediately prior to such Corporate Transaction. Appropriate 
adjustments shall also be made to the exercise price payable per share subject 
to each option, provided that the aggregate exercise price of such option 
shall remain the same. In addition, the aggregate number and/or class of 
shares issuable under this Plan shall be appropriately adjusted to reflect the 
effect of such Corporate Transaction upon the Company's capital structure.

                                  ARTICLE TWO

REGULAR OPTION GRANT PROGRAM

I.  TERMS AND CONDITIONS OF OPTIONS

A.  The Committee shall have plenary authority (subject to the express 
provisions of the Plan and Section 144 of the Delaware General Corporation 
Law) to determine which Employees, non-Employee Board members and Consultants 
are to be granted options under this Regular Option Grant Program, the number 
of shares to be covered by each such option, the status of the granted option 
as either an incentive stock option ("Incentive Option") which meets the 
requirements of Section 422 of the Internal Revenue Code of 1986, as amended 
from time to time (the "Code"), or a non-statutory option not intended to meet 
such requirements, the time or times at which such option is to become 
exercisable, the time or times at which such option (or the Shares subject to 
such option) becomes vested (referred to herein as the "vesting schedule") and 
the term for which the option is to remain outstanding, up to a maximum term 
of ten (10) years.

B.  The granted options shall be evidenced by instruments in such form as the 
Committee shall from time to time approve; provided, however, that each such 
instrument shall comply with and incorporate the terms and conditions 
specified below, except as such terms and conditions must be modified for 
Incentive Options as set forth below in Section IV of this Article Two.

      1.  Exercise Price.

  a.  The exercise price per share shall be fixed by the Committee, but in no 
event shall the exercise price per share be less than fifty percent (50%) of 
the Closing Selling Price per share of Special Common Stock on the date of the 
option grant.

  b.  The exercise price shall become immediately due upon exercise of the 
option and shall, subject to the loan provisions of this Article Two, be 
payable in one of the alternative forms specified below:

     (A) full payment in cash or check made payable to the Company's order; or

     (B) full payment in shares of Special Common Stock held by the Optionee 
for the requisite period necessary to avoid a charge to the Company's reported 
earnings and valued at the Closing Selling Price on the Exercise Date (as such 
term is defined below); or

     (C) full payment in a combination of shares of Special Common Stock held 
by the Optionee for the requisite period necessary to avoid a charge to the 
Company's reported earnings and valued at the Closing Selling Price on the 
Exercise Date and cash or check.

  c.  For purposes of subparagraph b. above, the Exercise Date shall be the 
first date on which there is delivered to the Company both (i) written notice 
of the exercise of the option and (ii) payment of the exercise price for the 
purchased shares.

     2.  Term and Exercise of Options.

  a.  Each option granted under this Regular Option Grant Program shall be 
exercisable in one or more installments over the Optionee's period of Service 
as shall be determined by the Committee and set forth in the instrument 
evidencing such option; provided, however, that no such option granted to a 
Section 16(b) Insider shall become exercisable in whole or in part within the 
first six (6) months after the grant date, except in the event of the 
Optionee's death or disability.

  b.  An option may be exercisable by the Optionee or, in the event the 
Optionee is permanently disabled (as such term is defined in Section 22(e) of 
the Code), by his or her spouse, and such option may be transferred by the 
Optionee to a trust for such Optionee's benefit or the benefit of an immediate 
family member or by will or the laws of descent or distribution.

  c.  The Committee may, at its discretion, accelerate the vesting schedule of 
any outstanding option at any time.

     3.  Termination of Service.

  a.  Should an Optionee cease to continue in Service for any reason (other 
than termination due to death, permanent disability or retirement from 
employment by the Company after reaching age sixty-five (65)) while the holder 
of one or more outstanding options under this Regular Option Grant Program, 
then such options shall not be exercisable at any time after the earlier of 
(i) the specified expiration date of the option term or (ii) the expiration of 
three (3) months after the Optionee's cessation of Service. Each such option 
shall, during the applicable period following cessation of Service, be 
exercisable only to the extent of the number of shares (if any) in which the 
Optionee is vested on the date of such cessation of Service; provided, 
however, that the Committee shall have the discretion to specify, either at 
the time the option is granted or at the time that the Optionee ceases 
Service, that vesting of such option may be extended for a period not to 
exceed three (3) years from the date of cessation of Service and that the 
applicable expiration period set forth in clause (ii) may be increased to a 
period of up to five (5) years.

  b.  Should an Optionee cease to continue in Service due to permanent 
disability while the holder of one or more outstanding options under this 
Regular Option Grant Program, then such options shall not be exercisable at 
any time after the earlier of (i) the specified expiration date of the option 
term or (ii) the expiration of three (3) months after the Optionee's cessation 
of Service. Each such option shall, during the applicable period following 
cessation of Service, be exercisable only to the extent of the number of 
shares (if any) in which the Optionee is vested on the date of such cessation 
of Service; provided, however, that the Committee shall have the discretion to 
specify, either at the time the option is granted or at the time that the 
Optionee ceases Service, that the vesting of such option may be accelerated or 
extended from the date of cessation of Service and that the period of 
exercisability can be increased up to the expiration date of the option term.  
Should an Optionee cease to continue in Service due to death, or retirement 
from employment by the Company after reaching age sixty-five (65), while the 
holder of one or more outstanding options under this Regular Option Grant 
Program, then all unvested options on such date shall automatically become 
vested and the expiration date of the option shall automatically be extended 
to the expiration date of the option term.

  c.  Any option granted to an Optionee under this Regular Option Grant 
Program and outstanding in whole or in part on the date of the Optionee's 
death may be subsequently exercised by the personal representative of the 
Optionee's estate or by the person or persons to whom the option is 
transferred pursuant to the Optionee's will or in accordance with the laws of 
descent and distribution in the case of the Optionee's death, and any option 
granted to an Optionee under this Regular Option Grant Program which is 
outstanding in whole or in part on the date of the Optionee's cessation of 
Service due to permanent disability may be exercised by the Optionee's spouse 
or designee. Any such exercise must be in accordance with subparagraph b.

  d.  The Committee shall have complete discretion, exercisable either at the 
time the option is granted or at the time the Optionee ceases Service, to 
establish as a provision applicable to the exercise of one or more options 
granted under this Regular Option Grant Program that during the limited period 
of exercisability following cessation of Service due to retirement, "plant 
closing" or "mass layoff" (as such terms are defined at 29 U.S.C. Section 
2101) that is subject to the notice requirements of 29 U.S.C. Section 2102, 
the option will continue to vest according to the vesting schedule that would 
have applied had the optionee continued in Service.

     4.  Repurchase Rights.

  a.  Options may provide that notwithstanding any vesting schedule pursuant 
to subparagraph 2. a. above, they may be exercised prior to such vesting 
schedule so long as the Optionee enters into a repurchase agreement 
satisfactory to the Company.  The shares of Special Common Stock acquired upon 
the exercise of one or more options granted under this Regular Option Grant 
Program may be subject to repurchase by the Company, at the exercise price 
paid per share, upon the Optionee's cessation of Service prior to vesting in 
such shares.

  b.  Any such repurchase right shall be exercisable by the Company upon such 
terms and conditions (including the establishment of the appropriate vesting 
schedule and other provision for the expiration of such right in one or more 
installments over the optionee's period of Service) as the Committee may 
specify in the instrument evidencing such right, which instrument shall 
include appropriate terms with respect to the legending of stock certificates 
and the placing of unvested shares into escrow.

  c.  All of the Company's outstanding repurchase rights shall automatically 
terminate, and all shares purchased under this Regular Option Grant Program 
shall immediately vest in full, upon the occurrence of any Corporate 
Transaction or Change in Control; provided, however, that no such termination 
of repurchase rights or immediate vesting of the purchased shares shall occur 
if (and to the extent that): (i) the Company's outstanding repurchase rights 
are to be assigned to the successor corporation (or parent thereof) in 
connection with the Corporate Transaction or (ii) such termination of 
repurchase rights and acceleration of vesting are precluded by other 
limitations imposed by the Committee either at the time the option is granted 
or at the time the option shares are purchased.

     5.  Stockholder Rights.

An option holder shall have none of the rights of a stockholder with respect 
to any shares covered by the option until such individual shall have exercised 
the option, paid the option price and satisfied all other conditions precedent 
to the issuance of certificates for the purchased shares.

II. STOCK APPRECIATION RIGHTS

A.  The Committee shall have full power and authority, exercisable in its sole 
discretion, to grant stock appreciation rights to one or more Employees, non-
Employee Board members or Consultants eligible for option grants under this 
Regular Option Grant Program. Each such right shall entitle the holder to a 
distribution based on the appreciation in the value per share of a designated 
amount of Special Common Stock.

B.  Three types of stock appreciation rights shall be authorized for issuance 
under the Plan:

  1.  Tandem Stock Appreciation Rights.  These rights require the holder to 
elect between the exercise of the underlying option for shares of Special 
Common Stock and the surrender of such option for an appreciation distribution 
equal to the excess of (i) the Closing Selling Price (on the date of option 
surrender) of the vested shares of Special Common Stock purchasable under the 
surrendered option over (ii) the aggregate option price payable for such 
shares.

  2.  Concurrent Stock Appreciation Rights.  Concurrent rights may apply to 
all or any portion of the shares of Special Common Stock subject to the 
underlying option and will be exercised automatically at the same time the 
option is exercised for those shares. The appreciation distribution to which 
the holder of such concurrent right shall be entitled upon exercise of the 
underlying option shall be in an amount equal to the excess of (i) the 
aggregate Closing Selling Price (at date of exercise) of the vested shares 
purchased under the underlying option with such concurrent rights over (ii) 
the aggregate option price paid for those shares.

  3.  Limited Stock Appreciation Rights.  These rights will entitle the holder 
to surrender outstanding options in connection with certain Changes in Control 
(as defined below) for an appreciation distribution equal in amount to the 
excess of (i) the Change in Control Price (as defined below) of the number of 
shares in which the Optionee is at the time vested under the surrendered 
option over (ii) the aggregate option price payable for such vested shares.

C.  The terms and conditions applicable to each Tandem Stock Appreciation 
Right ("Tandem Right"), Concurrent Stock Appreciation Right ("Concurrent 
Right") and Limited Stock Appreciation Right ("Limited Right") shall be as 
follows:

     1.  Tandem Rights.

  a.  Tandem Rights may be tied to either Incentive Options or non-statutory 
options. Each such right shall, except as specifically set forth below, be 
subject to the same terms and conditions applicable to the particular stock 
option grant to which it pertains.

  b.  The Appreciation Distribution payable on the exercised Tandem Right 
shall be in an amount equal to the excess of (i) the Closing Selling Price (on 
the date of the option surrender) of the number of shares of Special Common 
Stock in which the Optionee is vested under the surrendered option over (ii) 
the aggregate option price payable for such vested shares.

  c.  The Appreciation Distribution may, in the Committee's discretion, be 
made in cash, in shares of Special Common Stock or in a combination of cash 
and Special Common Stock. Any shares of Special Common Stock so distributed 
shall be valued at the Closing Selling Price on the date the option is 
surrendered, and the shares of Special Common Stock subject to the surrendered 
option shall not be available for subsequent issuance under this Plan.

     2.  Concurrent Rights.

  a.  Concurrent Rights may be tied to any or all of the shares of Special 
Common Stock subject to any Incentive Option or non-statutory option grant 
made under this Regular Option Grant Program. The Concurrent Right shall, 
except as specifically set forth below, be subject to the same terms and 
conditions applicable to the particular stock option grant to which it 
pertains.

  b.  The Concurrent Right shall be automatically exercised at the same time 
the underlying option is exercised for the particular shares of Special Common 
Stock to which the Concurrent Right pertains.

  c.  The Appreciation Distribution payable on the exercised Concurrent Right 
shall be equal to the excess of (i) the aggregate Closing Selling Price (on 
the Exercise Date) of the vested shares of Special Common Stock purchased 
under the underlying option which have Concurrent Rights appurtenant to them 
over (ii) the aggregate option price paid for such shares.

  d.  The Appreciation Distribution may, in the Committee's discretion, be 
paid in cash, in shares of Special Common Stock or in a combination of cash 
and Special Common Stock. Any shares of Special Common Stock so distributed 
shall be valued at the Closing Selling Price on the date the Concurrent Right 
is exercised and shall reduce on a one-for-one basis the number of shares of 
Special Common Stock thereafter issuable under this Plan.

     3.  Terms Applicable to Both Tandem Rights and Concurrent Rights.

  a.  To exercise any outstanding Tandem or Concurrent Right, the holder must 
provide written notice of exercise to the Company in compliance with the 
provisions of the instrument evidencing such right.

  b.  If a Tandem or Concurrent Right is granted to an individual who is at 
the time a Section 16(b) Insider, then the instrument of grant shall 
incorporate all the terms and conditions at the time necessary to assure that 
the subsequent exercise of such right shall qualify for the safe-harbor 
exemption from short-swing profit liability provided by SEC Rule 16b-3 (or any 
successor rule or regulation).

  c.  No limitation shall exist on the aggregate amount of cash payments the 
Company may make under this Article Two Program in connection with the 
exercise of Tandem or Concurrent Rights.

     4.  Limited Rights.

  a.  Each Section 16(b) Insider shall have the Limited Right, exercisable in 
the event there should occur a Change in Control (as such term is defined 
below), to surrender any or all of the options (whether incentive stock 
options or non-statutory options) held by such individual under this Article 
Two Program, to the extent such options (i) have been outstanding for at least 
six (6) months and (ii) are at the time exercisable for vested shares.

  b.  In exchange for each option surrendered in accordance with subparagraph 
a. above, the Section 16(b) Insider shall receive an Appreciation Distribution 
in an amount equal to the excess of (i) the Change in Control Price 
(determined as of the date of surrender) of the number of shares in which the 
Section 16(b) Insider is at the time vested under the surrendered option over 
(ii) the aggregate option price payable for such vested shares. For purposes 
of such Appreciation Distribution, the Change in Control Price per share of 
the vested Special Common Stock subject to the surrendered option shall be 
deemed to be equal to the greater of (a) the Closing Selling Price per share 
on the date of surrender or (b) the highest reported price per share paid in 
effecting the Change in Control. However, if the option is an Incentive 
Option, then the Change in Control Price of the vested shares subject to the 
surrendered option shall not exceed the value per share determined under 
clause (a) above.

  c.  The Appreciation Distribution shall be made entirely in cash, and the 
shares of Special Common Stock subject to each surrendered option shall not be 
available for subsequent issuance under this Plan.

III. CORPORATE TRANSACTION/CHANGE IN CONTROL

A.  In the event of any of the following transactions (a "Corporate 
Transaction"):

  (i) a merger or acquisition in which the Company is not the surviving 
entity, except for a transaction the principal purpose of which is to change 
the State of the Company's incorporation,

  (ii) the sale, transfer or other disposition of all or substantially all of 
the assets of the Company to any entity other than a Subsidiary of the 
Company, or

  (iii) any reverse merger in which the Company is the surviving entity but in 
which fifty percent (50%) or more of the Company's outstanding voting stock 
held by persons who are not "Subject Persons" as defined in Article Eleventh 
of the Company's Certificate of Incorporation (as in effect on September 7, 
1990) including persons included in such definition by subparagraph (b) 
thereof is transferred to holders different from those who held the stock 
immediately prior to such merger, then the exercisability of each option 
outstanding under this Regular Option Grant Program shall be automatically 
accelerated so that each such option shall, immediately prior to the specified 
effective date for the Corporate Transaction, become fully exercisable with 
respect to the total number of shares of Special Common Stock purchasable 
under such option and may be exercised for all or any portion of such shares. 
However, an outstanding option under this Regular Option Grant Program shall 
not be so accelerated if and to the extent: (i) such option is, in connection 
with the Corporate Transaction, either to be assumed by the successor 
corporation or parent thereof or be replaced with a comparable option to 
purchase shares of the capital stock of the successor corporation or parent 
thereof, or (ii) such option is to be replaced by a comparable cash incentive 
program of the successor corporation based on the value of the option at the 
time of the Corporate Transaction, or (iii) the acceleration of such option is 
subject to other applicable limitations imposed by the Committee at the time 
of grant. The determination of comparability under clause (i) or (ii) above 
shall be made by the Committee, and its determination shall be final, binding 
and conclusive.

B.  Upon the consummation of the Corporate Transaction, all outstanding 
options under this Regular Option Grant Program shall, to the extent not 
previously exercised or assumed by the successor corporation or its parent 
company, terminate and cease to be outstanding.

C.  In the event of any of the following transactions (a "Change in Control"):

  (i) the acquisition by a person or group of related persons, other than the 
Company or any person controlling, controlled by or under common control with 
the Company, of beneficial ownership (as determined pursuant to the provisions 
of Rule 13d-3 under the 1934 Act) of securities of the Company representing 
thirty percent (30%) or more of the combined voting power of the Company's 
then outstanding securities pursuant to a transaction or series of related 
transactions which the Board does not approve; or

  (ii) the first date within any period of thirty-six (36) consecutive months 
or less on which there is effected any change in the composition of the Board 
such that the majority of the Board (determined by rounding up to the next 
whole number) ceases to be comprised of individuals who either (I) have been 
members of the Board continuously since the beginning of such period or (II) 
have been elected or nominated for election as Board members during such 
period by at least a majority of the Board members described in clause (I) who 
were still in office at the time such election or nomination was approved by 
the Board; then the exercisability of each option outstanding under this 
Regular Option Grant Program shall be automatically accelerated so that each 
such option shall become exercisable, immediately prior to such Change in 
Control, for the full number of shares purchasable under such option and may 
be exercised for all or any portion of such shares. However, an outstanding 
option under this Regular Option Grant Program shall not be so accelerated if 
and to the extent one or more limitations imposed by the Committee at the time 
of grant preclude such acceleration upon a Change in Control.

D.  The grant of options under this Regular Option Grant Program shall in no 
way affect the right of the Company to adjust, reclassify, reorganize or 
otherwise change its capital or business structure or to merge, consolidate, 
dissolve, liquidate or sell or transfer all or any part of its business or 
assets.

IV. INCENTIVE OPTIONS

A.  The terms and conditions specified below shall be applicable to all 
Incentive Options granted under this Regular Option Grant Program. Options 
which are specifically designated as "non-statutory" options when issued under 
this Regular Option Grant Program shall not be subject to such terms and 
conditions.

     1.  Option Price.

  The option price per share of the Special Common Stock subject to an 
Incentive Option shall in no event be less than one hundred percent (100%) of 
the Closing Selling Price per share of Special Common Stock on the grant date.

     2.  10% Stockholder.

  If any individual to whom an Incentive Option is to be granted pursuant to 
the provisions of this Regular Option Grant Program is on the grant date the 
owner of stock (as determined under Section 424(d) of the Internal Revenue 
Code) possessing 10% or more of the total combined voting power of all classes 
of stock of the Company or any one of its Parent or Subsidiaries (such person 
to be herein referred to as a 10% Stockholder), then (i) the option price per 
share shall not be less than one hundred and ten percent (110%) of the Closing 
Selling Price per share of Special Common Stock on the grant date and (ii) the 
maximum term of the option shall not exceed five (5) years from the grant 
date.

     3.  Dollar Limitation.

  The aggregate fair market value (determined on the basis of the Closing 
Selling Price in effect on the respective date or dates of grant) of the 
Special Common Stock for which one or more options granted to any Employee 
under this Plan (or any other option plan of the Company or its Parent or 
Subsidiaries) may for the first time become exercisable as incentive stock 
options under the Federal tax laws during any one calendar year shall not 
exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the 
Employee holds two or more such options which become exercisable for the first 
time in the same calendar year, the foregoing limitation on the exercisability 
thereof as incentive stock options under the Federal tax laws shall be applied 
on the basis of the order in which such options are granted.

     4.  Term and Exercise of Options.

  a.  No Incentive Option shall have a term in excess of ten (10) years from 
the grant date.

  b.  An Incentive Option shall not be transferable except by will or by the 
laws of descent and distribution and shall be exercisable during the lifetime 
of the Optionee only by the Optionee.

     5.  Termination of Service.

  A.  Notwithstanding any terms in the Plan to the contrary, an Incentive 
Option must be exercised within the three (3) month period commencing with the 
date of cessation of Employee status for any reason, except that in the event 
the Optionee's cessation of Employee status is due to permanent disability, 
such period shall be one (1) year from the date of such cessation of Employee 
status. Incentive Options not exercised within the applicable period shall be 
treated as non-statutory options.

  B.  Except as modified by the preceding provisions of this Incentive Options 
section, all the provisions of this Regular Option Grant Program shall be 
applicable to the Incentive Options granted hereunder.  If any option 
originally granted as an Incentive Stock Option is modified so as not 
to qualify under the Code as an Incentive Stock Option, such modified 
Incentive Stock Option shall be a non-statutory option.

V.  CANCELLATION AND RE-GRANT OF OPTIONS

  The Committee shall have the authority to effect, at any time and from time 
to time, with the consent of the affected option holders, the cancellation of 
any or all outstanding options under this Regular Option Grant Program and to 
grant in substitution therefor new options under this Plan covering the same 
or different numbers of shares of Special Common Stock but having an option 
price per share not less than fifty percent (50%) of the Closing Selling Price 
(one hundred percent (100%) of the Closing Selling Price in the case of an 
Incentive Option or, in the case of a 10% Stockholder, not less than one 
hundred and ten percent (110%) of the Closing Selling Price) per share of 
Special Common Stock on the new grant date.

VI.  LOANS OR GUARANTEE OF LOANS

  The Committee may assist any Employee (including any officer or director) in 
the exercise of one or more options under this Regular Option Grant Program by 
(a) authorizing the extension of a loan to such Employee from the Company, (b) 
permitting the Employee to pay the option price for the purchased Special 
Common Stock in installments over a period of years or (c) authorizing a 
guarantee by the Company of a third-party loan to the Employee. The terms of 
any loan, installment method of payment or guarantee (including the interest 
rate and terms of repayment) shall be established by the Committee in its sole 
discretion. Loans, installment payments and guarantees may be granted without 
security or collateral, but the maximum credit available to the Optionee shall 
not exceed the sum of (i) the aggregate exercise price (less the par value) of 
the purchased shares plus (ii) any Federal and State income and employment tax 
liability incurred by the Employee in connection with the exercise of the 
option.

                                   ARTICLE THREE

                              AUTOMATIC GRANT PROGRAM

I.  AUTOMATIC GRANTS

  On April 30, 1996 each individual who is a non-Employee member of the Board 
on such date shall automatically be granted a non-statutory option under this 
Article Three to purchase 20,000 shares of Special Common Stock.  Each non-
Employee who is first appointed or elected a member of the Board after April 
30, 1996 shall automatically be granted, on the date of such individual's 
election to the Board, a non-statutory option under this Article Three to 
purchase 20,000 shares of Special Common Stock.  Each Employee director who is 
first elected a member of the Board and who subsequently becomes a non-
Employee director after April 30, 1996 shall automatically be granted, on the 
date of such individual's change from Employee to non-Employee director, a 
non-statutory option under this Article Three to purchase 20,000 shares of 
Special Common Stock.

II.  TERMS AND CONDITIONS OF GRANT

  Each option granted in accordance with the provisions of this Article Three 
shall be evidenced by an instrument in such form as the Committee approves 
from time to time for grants made under Article Two; provided, however, that 
each such automatic grant shall be subject to the following terms and 
conditions:

     A.  Exercise Price.

  The exercise price per share shall be one hundred percent (100%) of the 
Closing Selling Price per share of Special Common Stock on the grant date.

     B.  Term and Vesting of Options.

  1.  Except as otherwise specified below, each option shall vest in 
increments of 5,000 shares on the first, second, third and fourth 
anniversaries of the grant date and shall thereafter remain exercisable until 
the expiration or earlier termination of the option term.

  2.  Each granted option shall have a term of ten (10) years measured from 
the grant date.

     C.  Exercise of Option.

  Upon exercise of the option, the option exercise price for the purchased 
shares shall become immediately due and payable in full in one of the 
alternative forms specified below:

  (i) cash or check payable to the Company's order;

  (ii) shares of Special Common Stock held by the optionee for the requisite 
period necessary to avoid a charge to the Company's reported earnings and 
valued at the Closing Selling Price on the date of exercise; or

  (iii) any combination of the foregoing so long as the total payment equals 
the aggregate exercise price for the purchased shares.

     D.  Effect of Termination of Board Membership.

1.  Should an optionee cease to be a member of the Board for any reason (other 
than death) prior to the expiration date of the automatic grant held by the 
optionee under this Article Three, then each such grant shall remain 
exercisable, for any shares of Special Common Stock for which the option is 
exercisable at the time of such cessation of Board membership, for a period 
not to exceed the earlier of (i) the expiration of the three (3) month period 
following the date of such cessation of Board membership or (ii) the specified 
expiration date of the option term.

2.  Should the optionee's membership on the Board cease by reason of death, 
then each outstanding grant held by the optionee under this Article Three may 
be subsequently exercised, for any shares of Special Common Stock for which 
the option is exercisable at the time of the optionee's cessation of Board 
membership, by the personal representative of the optionee's estate or by the 
person or persons to whom the option is transferred pursuant to the optionee's 
will or in accordance with the laws of descent and distribution. Any such 
exercise must, however, occur prior to the earlier of (i) the expiration of 
the twelve (12) month period following the date of the optionee's death or 
(ii) the specified expiration date of the option term.

     E.  Stockholder Rights.

  An option holder shall have none of the rights of a stockholder with respect 
to any shares covered by an option granted under this Article Three until such 
individual shall have exercised the option, paid the option exercise price in 
full and satisfied all other conditions precedent to the issuance of 
certificates for the purchased shares.

III.  CORPORATE TRANSACTION

  In the event of a Corporate Transaction, options granted under the Automatic 
Grant Program shall be treated as described in Section III of Article Two, 
except the provisions of clause (iii) of the penultimate sentence of Section 
III A.(iii) of Article Two shall not apply.

IV.  CHANGE IN CONTROL

  In the event of a Change in Control, options granted under the Automatic 
Grant Program shall be treated as described in Section III of Article Two, 
except the last sentence of Section III C.(ii) of Article Two shall not apply.

                                  ARTICLE FOUR

                             STOCK INCENTIVE PROGRAM

I.  TERMS AND CONDITIONS OF STOCK ISSUANCES

A.  Shares may be issued under this Stock Incentive Program as a reward for 
past services rendered the Company or one or more of its Parent or 
Subsidiaries or as an incentive for future service with such entities. Any 
unvested shares so issued shall be evidenced by a Restricted Stock Issuance 
Agreement ("Issuance Agreement") which complies with the terms and conditions 
of this Stock Incentive Program and shall include appropriate terms with 
respect to legending of certificates and escrow of unvested shares.

     1.  Vesting Schedule.

  a.  The Recipient's interest in the issued shares of Special Common Stock 
may, in the absolute discretion of the Committee, be fully and immediately 
vested upon issuance or may vest in one or more installments.

  b.  The elements of the vesting schedule applicable to any unvested shares 
issued under this Stock Incentive Program, namely the number of installments 
in which the shares are to vest, the interval or intervals (if any) which are 
to lapse between installments and the effect which death, disability or other 
event designated by the Committee is to have upon the vesting schedule, shall 
be determined by the Committee and set forth in the Issuance Agreement 
executed by the Company and the Recipient at the time of the incentive grant.

  c.  Except as may otherwise be provided in the Issuance Agreement, the 
Recipient may not transfer unvested shares of Special Common Stock. The 
Recipient, however, shall have all the rights of a stockholder with respect to 
such unvested shares, including without limitation the right to vote such 
shares and to receive all dividends paid on such shares.

     2.  Cancellation of Shares.

  a.  In the event the Recipient should, while his/her interest in the issued 
Special Common Stock remains unvested, cease to continue in Service for any 
reason whatsoever, then the Company shall have the right to cancel all such 
unvested shares, and the Recipient shall thereafter have no further 
stockholder rights with respect to such shares.

  b.  The Committee may in its discretion waive such cancellation of unvested 
shares in whole or in part and thereby effect the immediate vesting of the 
Recipient's interest in the shares of Special Common Stock (or other assets) 
as to which the waiver applies.

     3.  Corporate Transaction/Change in Control.

  All unvested shares under the Stock Incentive Program shall immediately vest 
in full immediately prior to the occurrence of any Corporate Transaction or 
Change in Control, except to the extent:

  (i) the Company's outstanding cancellation rights are to be assigned to the 
successor corporation (or parent thereof) in connection with the Corporate 
Transaction, or

  (ii) one or more limitations imposed by the Committee at the time of stock 
issuance preclude such accelerated vesting.





                                   ARTICLE FIVE

                                   MISCELLANEOUS

I.  TAX WITHHOLDING

A.  The Company's obligation to deliver shares upon the exercise or surrender 
of stock options or stock appreciation rights granted under Article Two or 
Article Three or upon the issuance or vesting of shares under Article Four 
shall be subject to the satisfaction of all applicable Federal, State and 
local income and employment tax withholding requirements.

B.  The Committee may, in its discretion and upon such terms and conditions as 
it may deem appropriate (including the applicable safe-harbor provisions of 
SEC Rule 16b-3 or any successor rule or regulation) provide any or all 
Optionees or Recipients with the election to have the Company withhold, from 
the shares of Special Common Stock purchased or issued under the Plan, one or 
more of such shares with an aggregate Closing Selling Price equal to the 
designated percentage (up to 100% specified by the Optionee or Recipient) of 
the Federal and State income taxes ("Taxes") incurred in connection with the 
acquisition of such shares. In lieu of such direct withholding, one or more 
Optionees or Recipients may also be granted the right to deliver unrestricted 
shares of Special Common Stock to the Company in satisfaction of such Taxes. 
The withheld or delivered shares shall be valued at the Closing Selling Price 
on the applicable determination date for such Taxes.

II.  AMENDMENT OF THE PLAN

A.  The Board shall have the complete and exclusive authority to amend or 
modify the Plan in any or all respects whatsoever; provided, however, that no 
such amendment or modification shall, without the consent of the holders, 
adversely affect rights and obligations with respect to any stock options, 
stock appreciation rights or unvested Special Common Stock at the time 
outstanding under the Plan. In addition, with a view to making available the 
benefits provided by Section 422 of the Code and/or SEC Rule 16b-3 as in 
effect from time to time under the 1934 Act, the Board shall, at the time of 
each such amendment, determine whether or not to submit such amendment of the 
Plan to the Company's stockholders for approval.

B.  No material amendments shall be made to the provisions of the Automatic 
Grant Program without the approval of the Company's stockholders.

III.  EFFECTIVE DATE AND TERM OF PLAN

A.  The Plan shall become effective when adopted by the Board, but no stock 
option or stock appreciation right granted under the Plan shall become 
exercisable, and no shares shall be issued, unless and until the Plan shall 
have been approved by the Company's stockholders. If such stockholder approval 
is not obtained within twelve (12) months after the date of the Board's 
adoption of the Plan, then all stock options and stock appreciation rights 
previously granted under the Plan shall terminate and no further stock options 
or stock appreciation rights shall be granted. Subject to such limitation, the 
Committee may grant stock options and stock appreciation rights under the Plan 
at any time after the effective date and before the date fixed herein for 
termination of the Plan.

B.  The Plan shall in all events terminate on the date determined by the Board 
but in no event shall the Plan terminate later than February 6, 2006. Upon 
such termination, any stock options, stock appreciation rights and unvested 
shares at the time outstanding under the Plan shall continue to have force and 
effect in accordance with the provisions of the instruments evidencing such 
grants or issuances.

C.  Options may be granted under this Plan to purchase shares of Special 
Common Stock in excess of the number of shares then available for issuance 
under the Plan, provided (i) an amendment to increase the maximum number of 
shares issuable under the Plan is adopted by the Board prior to the initial 
grant of any such option and within one year thereafter such amendment is 
approved by the Company's stockholders, if such stockholder approval is deemed 
necessary by the Board, and (ii) each option granted is not to become 
exercisable, in whole or in part, at any time prior to the obtaining of such 
stockholder approval, and provided further that at any time that the Amended 
and Restated Governance Agreement dated as of October 25, 1995 between the 
Company and Roche Holdings, Inc. (the "Amended Governance Agreement") remains 
in effect, any action by the Board pursuant to the foregoing shall require the 
approval of a majority of the Independent Directors (as such term is defined 
in Article Eleventh of the Certificate of Incorporation of the Company).

IV.  MISCELLANEOUS PROVISIONS

A.  Any cash proceeds received by the Company from the issuance of shares 
hereunder shall be used for general corporate purposes.

B.  The implementation of the Plan, the granting of any stock option or stock 
appreciation right hereunder, and the issuance of Special Common Stock under 
the Regular Option Grant, the Automatic Grant Program or Stock Incentive 
Program shall be subject to the Company's procurement of all approvals and 
permits required by regulatory authorities having jurisdiction over the Plan, 
the stock options and stock appreciation rights granted under it and the 
Special Common Stock issued pursuant to it.

C.  Neither the action of the Company in establishing the Plan, nor any action 
taken by the Board or the Committee hereunder, nor any provision of the Plan 
itself shall be construed so as to grant any individual the right to remain in 
the employ or service of the Company or any of its Parent or Subsidiaries for 
any period of specific duration, and the Company (or any parent or subsidiary 
retaining the services of such individual) may terminate such individual's 
employment or service at any time and for any reason, with or without cause.

D.  Nothing contained in the Plan shall be construed to limit the authority of 
the Company to exercise its corporate rights and powers, including (without 
limitation) the right of the Company (a) to grant options for proper corporate 
purposes otherwise than under this Plan to any Employee or other person, firm 
or company or association or (b) to grant options to, or assume the option of, 
any person in connection with the acquisition (by purchase, lease, merger, 
consolidation or otherwise) of the business and assets (in whole or in part) 
of any person, firm, company or association.

                                   ARTICLE SIX

                      SPECIAL REDEMPTION AND PUT PROVISIONS

I.  PRIORITY

  To the extent there is a conflict between any of the provisions of this 
Article Six and any other provision of the Plan, the specific provisions of 
this Article Six shall be controlling and shall govern the disposition of all 
such options outstanding at the time of  the Redemption (as defined below), 
upon the exercise of the Put Rights (as defined below), or when both events 
may no longer occur.  Any rights under Section 1.04 of the Governance 
Agreement dated as of September 7, 1990 between the Company and Roche 
Holdings, Inc., ("Roche") and Section 1.04 of the Amended Governance Agreement 
which a holder of an option, stock appreciation right, or stock issued under 
the Stock Incentive Program may have are superseded in their entirety by this 
Article Six.

II.  EFFECT OF REDEMPTION ON VESTED OPTIONS AND VESTED STOCK APPRECIATION 
RIGHTS AND VESTED SHARES ISSUED UNDER THE STOCK INCENTIVE PROGRAM

A.  If the Special Common Stock shall be redeemed by the Company (the 
"Redemption") at any time as provided in Section (c)(ii) of Article Third of 
the Certificate of Incorporation of the Company as in effect on October 25, 
1995 (the "Certificate") or the put rights are exercisable by the stockholders 
of the Company (the "Put Rights") at any time as provided in Section (c)(iii) 
of Article Third of the Certificate, then holders of all outstanding options 
and stock appreciation rights granted hereunder, to the extent vested 
immediately prior to the date fixed for the Redemption or to the extent to 
which the Put Rights were properly exercised by such holder for their 
outstanding vested options and stock appreciation rights granted hereunder 
("Vested Securities"), shall promptly be paid for such Vested Securities an 
amount equal to the product of (i) the excess of the redemption price or put 
price per share fixed in Section (c)(ii) or (iii) of Article Third of the 
Certificate, as applicable (without reduction for the payment of any cash 
dividends as provided in the fourth sentence of Section (c)(ii)(C) of Article 
Third of the Certificate), over the exercise price per share, times (ii) the 
number of shares covered by such Vested Security.  If either the Redemption or 
exercise of the Put Rights occurs as described in the preceding sentence, then 
holders of all outstanding shares issued under the Stock Incentive Program, to 
the extent vested immediately prior to the date fixed for the Redemption or to 
the extent to which the Put Rights were properly exercised by such holder for 
their outstanding vested shares issued under the Stock Incentive Program 
("Vested Shares"), shall promptly be paid for such Vested Shares an amount 
equal to the product of (i) the redemption price or put price per share fixed 
in Section (c)(ii) or (iii) of Article Third of the Certificate, as applicable 
(without reduction for the payment of any cash dividends as provided in the 
fourth sentence of Section (c)(ii)(C) of Article Third of the Certificate), 
times (ii) the number of Vested Shares.  All payments hereunder shall be 
reduced by any appropriate tax withholding.

III.  EFFECT OF REDEMPTION ON UNVESTED OPTIONS AND STOCK APPRECIATION RIGHTS, 
AND UNVESTED SHARES ISSUED UNDER THE STOCK INCENTIVE PROGRAM

A.  Upon the Redemption each option and stock appreciation right granted under 
this Plan, to the extent not vested immediately prior to the date fixed for 
the Redemption shall be canceled.   Upon the Redemption, all unvested shares 
issued under the Stock Incentive Program shall be canceled.

IV.  EFFECT OF NO REDEMPTION 

A.  If the Redemption does not occur, each option and stock appreciation right 
granted and each share awarded under the Stock Incentive Program under this 
Plan which is outstanding on July 1, 1999 shall remain outstanding on the same 
terms and conditions (including, without limitation, the exercise price per 
share (in the case of options and stock appreciation rights), and the number 
of shares for options, stock appreciation rights and shares issued under the 
Stock Incentive Program) in effect for such option, stock appreciation right 
or share issued under the Stock Incentive Program immediately prior to July 1, 
1999, except that the shares purchasable under each such option, stock 
appreciation right or shares issued under the Stock Incentive Program shall 
continue to be shares of Special Common Stock prior to the Conversion Date (as 
defined in Section (c)(vi) of Article Third of the Certificate) and shares of 
Common Stock on and after the Conversion Date.  Each such continuing option, 
stock appreciation right and share issued under the Stock Incentive Program 
will become exercisable, and shall vest in accordance with the same 
installment dates such option, stock appreciation right or share issued under 
the Stock Incentive Program would have become exercisable at the time of 
grant.  Notwithstanding any provision in this Article Six, Section IV, to the 
contrary, if at any time following July 1, 1999 the shares of Genentech's 
capital stock are no longer listed for trading on the New York Stock Exchange, 
the Nasdaq National Market, or any other national exchange for any reason, any 
unvested options, stock appreciation rights and shares issued under the Stock 
Incentive Program shall automatically be cancelled as of such date.

V.  EXAMPLE

A.  For purposes of this example assume that it is July 1, 1999, the 
Redemption has not occurred, the Put Rights are exercisable, an individual 
holds an option for 100 shares of Special Common Stock with an exercise price 
of $50 per share, 75 of such shares are vested and 25 shares are unvested, the 
Special Common Stock is trading on the New York Stock Exchange at $62 per 
share, and the Put Price (as defined in the Certificate) is $60 per share.  
During the Put Period (as defined in the Certificate) the holder may properly 
exercise the holder's Put Rights with respect to none, some or all of the 75 
vested shares.  If, for example, the holder exercised Put Rights for 40 of the 
75 shares, that holder would receive (40 shares) x (60 - 50 dollars per share) 
= $400, reduced by appropriate tax withholding.  So long as the Special Common 
Stock (during the Put Period) or the Common Stock (following the Put Period) 
are listed for trading on the New York Stock Exchange, the Nasdaq National 
Market, or any other national exchange, (i) the 35 remaining vested shares for 
which Put Rights were not exercised shall remain exercisable to acquire shares 
of Special Common Stock or Common Stock, as appropriate, and (ii) the 25 
unvested shares would continue to vest and, to the extent vested, be 
exercisable to acquire shares of Special Common Stock or Common Stock, as 
appropriate.  If the Special Common Stock or the Common Stock is no longer 
listed for trading on the New York Stock Exchange, the Nasdaq National Market, 
or any other national exchange for any reason, any of the 25 shares that are 
unvested on such date shall automatically be cancelled. 

VI.  OTHER

A.  On the Conversion Date, all references in the Plan to Special Common Stock 
shall automatically become references to Common Stock.

B.  The exercise by Roche Holdings, Inc. or its affiliates of its right to 
designate nominees to the Board of Directors pursuant to Sections 3.01 and 
3.02 of the Amended Governance Agreement shall not constitute a Change in 
Control.