----

**Exhibit      10.3**

**G**
**ENENTECH,      INC.**

**TAX      REDUCTION INVESTMENT PLAN**

----

**TABLE      OF CONTENTS**

|                                         |  **Page**                                                  |
|----------------------------------------------|-----------------------------------------------------------------|
|  SECTION                  1 DEFINITIONS |  2                                                         |
|  1.1                                    |  Affiliate                                                 |  2 |
|  1.2                                    |  Alternate                  Payee                          |  2 |
|  1.3                                    |  Beneficiary                                               |  2 |
|  1.4                                    |  Board                  of Directors                       |  2 |
|  1.5                                    |  Catch-Up                  Contributions                   |  2 |
|  1.6                                    |  Code                                                      |  2 |
|  1.7                                    |  Committee                                                 |  3 |
|  1.8                                    |  Common                  Stock                             |  3 |
|  1.9                                    |  Common                  Stock Fund                        |  3 |
|  1.10                                   |  Company                                                   |  3 |
|  1.11                                   |  Compensation                                              |  3 |
|  1.12                                   |  Compensation                  Limit                       |  4 |
|  1.13                                   |  Disability                                                |  4 |
|  1.14                                   |  Eligible                  Bonus                           |  4 |
|  1.15                                   |  Eligible                  Commissions                     |  4 |
|  1.16                                   |  Eligible                  Employee                        |  5 |
|  1.17                                   |  Employee                                                  |  5 |
|  1.18                                   |  Employer                                                  |  5 |
|  1.19                                   |  Employer                  Contributions                   |  5 |
|  1.20                                   |  Entry                  Date                               |  5 |
|  1.21                                   |  ERISA                                                     |  6 |
|  1.22                                   |  Highly                  Compensated Employee or HCE       |  6 |
|  1.23                                   |  Hour                  of Service                          |  7 |
|  1.24                                   |  Investment                  Funds                         |  8 |
|  1.25                                   |  Investment                  Manager                       |  8 |
|  1.26                                   |  Leased                  Employee                          |  8 |
|  1.27                                   |  Leave                  of Absence                         |  8 |
|  1.28                                   |  Matching                  Contributions                   |  9 |
|  1.29                                   |  1934                  Act                                 |  9 |
|  1.30                                   |  Nonelective                  Contributions                |  9 |
|  1.31                                   |  Normal                  Retirement Age                    |  9 |
|  1.32                                   |  Participant                                               |  9 |
|  1.33                                   |  Participant’s                  Accounts or Accounts |  9 |
|  1.34                                   |  Plan                                                      |  11 |
|  1.35                                   |  Plan                  Year                                |  11 |
|  1.36                                   |  Salary                  Deferrals                         |  11 |
|  1.37                                   |  Trust                  Agreement                          |  11 |
|  1.38                                   |  Trust                  Fund                               |  11 |
|  1.39                                   |  Trustee                                                   |  11 |
|  1.40                                   |  Valuation                  Date                           |  12 |

----

**TABLE          OF CONTENTS**

**(Continued)**

|                                                                         |  **Page**                                                                |
|------------------------------------------------------------------------------|-------------------------------------------------------------------------------|
|  SECTION                  2 ELIGIBILITY AND PARTICIPATION               |  12                                                                      |
|  2.1                                                                    |  Initial                  Eligibility                                    |  12 |
|  2.2                                                                    |  Employer                  Aggregation                                   |  12 |
|  2.3                                                                    |  Participation                                                           |  12 |
|  2.4                                                                    |  Voluntary                  Suspension                                   |  13 |
|  2.5                                                                    |  Mandatory                  Suspension                                   |  13 |
|  2.6                                                                    |  Provision                  of Information                               |  14 |
|  2.7                                                                    |  Termination                  of Participation                           |  14 |
|  2.8                                                                    |  Acquisitions                                                            |  14 |
|  SECTION                  3 SALARY DEFERRALS AND CATCH-UP CONTRIBUTIONS |  15                                                                      |
|  3.1                                                                    |  Salary                  Deferrals                                       |  15 |
|  3.2                                                                    |  Catch-Up                  Contributions                                 |  18 |
|  3.3                                                                    |  Salary                  Deferral and Catch-Up Contribution Elections    |  18 |
|  3.4                                                                    |  Payment                  of Salary Deferrals and Catch-Up Contributions |  21 |
|  SECTION                  4 EMPLOYER CONTRIBUTIONS                      |  22                                                                      |
|  4.1                                                                    |  Matching                  Contributions                                 |  22 |
|  4.2                                                                    |  Nonelective                  Contributions                              |  25 |
|  4.3                                                                    |  Timing                                                                  |  26 |
|  4.4                                                                    |  Periodic                  Contributions                                 |  26 |
|  4.5                                                                    |  Reinstatements                                                          |  26 |
|  4.6                                                                    |  Profits                  Not Required                                   |  26 |
|  4.7                                                                    |  No                  After-Tax Contributions                             |  26 |
|  SECTION                  5 ALLOCATION OF CONTRIBUTIONS AND INVESTMENTS |  27                                                                      |
|  5.1                                                                    |  Salary                  Deferrals and Catch-Up Contributions            |  27 |
|  5.2                                                                    |  Matching                  Contributions                                 |  27 |
|  5.3                                                                    |  Nonelective                  Contributions                              |  27 |
|  5.4                                                                    |  Investment                                                              |  28 |
|  5.5                                                                    |  Limitations                  on Allocations                             |  29 |
|  SECTION                  6 ACCOUNTS AND INVESTMENT FUNDS               |  33                                                                      |
|  6.1                                                                    |  Participants’                  Accounts                           |  33 |
|  6.2                                                                    |  Trust                  Fund Assets                                      |  33 |
|  6.3                                                                    |  Investment                  Funds                                       |  34 |
|  6.4                                                                    |  Valuation                  of Participants’ Accounts              |  36 |
|  6.5                                                                    |  Valuation                  of Shares                                    |  36 |
|  6.6                                                                    |  Statements                  of Participants’ Accounts             |  36 |
|  6.7                                                                    |  Vesting                  of Participants’ Accounts                |  37 |
|  SECTION                  7 DISTRIBUTIONS                               |  37                                                                      |
|  7.1                                                                    |  Events                  Permitting Distribution                         |  37 |
|  7.2                                                                    |  Times                  for Distribution                                 |  38 |
|  7.3                                                                    |  Consent                  Requirement and Immediate Distributions        |  39 |
|  7.4                                                                    |  Form                  of Distribution                                   |  40 |

----

**TABLE          OF CONTENTS**

**(Continued)**

|                                                                                                         |  **Page**                                                        |
|--------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------|
|  7.5                                                                                                    |  Common                  Stock Restrictions                      |  42 |
|  7.6                                                                                                    |  Beneficiary                  Designations                       |  42 |
|  7.7                                                                                                    |  Payments                  to Minors or Incompetents             |  43 |
|  7.8                                                                                                    |  Undistributable                  Accounts                       |  44 |
|  SECTION                  8 WITHDRAWALS, LOANS AND QUALIFIED DOMESTIC RELATIONS                  ORDERS |  44                                                              |
|  8.1                                                                                                    |  General                  Rules                                  |  44 |
|  8.2                                                                                                    |  Hardship                  Withdrawal                            |  45 |
|  8.3                                                                                                    |  Age                  59½ Withdrawal                        |  47 |
|  8.4                                                                                                    |  Loans                  to Participants                          |  48 |
|  8.5                                                                                                    |  Qualified                  Domestic Relations Orders            |  51 |
|  SECTION                  9 ADMINISTRATION OF THE PLAN                                                  |  53                                                              |
|  9.1                                                                                                    |  Plan                  Administrator                             |  53 |
|  9.2                                                                                                    |  Committee                                                       |  53 |
|  9.3                                                                                                    |  Actions                  by Committee                           |  53 |
|  9.4                                                                                                    |  Powers                  of Committee                            |  53 |
|  9.5                                                                                                    |  Fiduciary                  Responsibilities                     |  55 |
|  9.6                                                                                                    |  Investment                  Responsibilities                    |  55 |
|  9.7                                                                                                    |  Voting                  and Tender Offer Rights in Common Stock |  56 |
|  9.8                                                                                                    |  Decisions                  of Committee                         |  60 |
|  9.9                                                                                                    |  Administrative                  Expenses                        |  60 |
|  9.10                                                                                                   |  Eligibility                  to Participate                     |  60 |
|  9.11                                                                                                   |  Indemnification                                                 |  60 |
|  SECTION                  10 TRUST FUND AND ROLLOVER CONTRIBUTIONS                                      |  61                                                              |
|  10.1                                                                                                   |  Trust                  Fund                                     |  61 |
|  10.2                                                                                                   |  No                  Diversion of Assets                         |  61 |
|  10.3                                                                                                   |  Continuing                  Conditions                          |  62 |
|  10.4                                                                                                   |  Change                  of Investment Alternatives              |  62 |
|  10.5                                                                                                   |  Rollover                  Contributions                         |  63 |
|  SECTION                  11 MODIFICATION OR TERMINATION OF PLAN                                        |  64                                                              |
|  11.1                                                                                                   |  Employers’                  Obligations Limited           |  64 |
|  11.2                                                                                                   |  Right                  to Amend or Terminate                    |  65 |
|  11.3                                                                                                   |  Effect                  of Termination                          |  65 |
|  SECTION                  12 TOP-HEAVY PLAN                                                             |  66                                                              |
|  12.1                                                                                                   |  Top-Heavy                  Plan Status                          |  66 |
|  12.2                                                                                                   |  Top-Heavy                  Plan Provisions                      |  67 |
|  SECTION                  13 GENERAL PROVISIONS                                                         |  68                                                              |
|  13.1                                                                                                   |  Plan                  Information                               |  68 |
|  13.2                                                                                                   |  Inalienability                                                  |  68 |
|  13.3                                                                                                   |  Rights                  and Duties                              |  68 |
|  13.4                                                                                                   |  No                  Enlargement of Employment Rights            |  69 |

----

**TABLE            OF CONTENTS**

**(Continued)**

|                              |  **Page**                                           |
|-----------------------------------|----------------------------------------------------------|
|  13.5                        |  Apportionment                  of Duties           |  69 |
|  13.6                        |  Merger,                  Consolidation or Transfer |  69 |
|  13.7                        |  Military                  Service                  |  70 |
|  13.8                        |  Applicable                  Law                    |  70 |
|  13.9                        |  Severability                                       |  70 |
|  13.10                       |  Captions                                           |  70 |
|  Appendix                  A |  A-1                                                |

----

**GENENTECH,        INC.**

**TAX        REDUCTION INVESTMENT PLAN**

**(January 1,        2006 Restatement)**

**PREAMBLE**

*Company*
*Plan*

----

**SECTION 1**

**DEFINITIONS**

*Affiliate*

*Alternate      Payee*

*Beneficiary*

*Board      of Directors*

*Catch-Up      Contributions*

*Code*

----

*Committee*

*Common      Stock*

*Common      Stock Fund*

*Company*

*Compensation*
*even      if*
*such      as*

----

*Compensation      Limit*
*e.g.*

*Disability*

*Eligible      Bonus*
*4*
*th*

*      Quarter Payout*
*provided,      however,*
*Eligible      Bonus*

*Eligible      Commissions*

----

*Eligible      Employee*

*even      if*

*Employee*

*Employer*

*Employer      Contributions*

*Entry      Date*

----

*ERISA*

*Highly      Compensated Employee*
*HCE*

*Highly      Compensated Active Employee*

*e.g.,*

*Highly      Compensated Former Employee*

*Compensation*

*Determination      Year*

*Look-Back      Year*

----

*Hour      of Service*

*Paid      Hours*
*Hour      of Service*

*No      Duties Performed*

*Crediting      Rules*

*Family-Related      Absences*

*FMLA*

*Hour      of Service*

----

*Investment      Funds*

*Investment      Manager*

*Leased      Employee*
*leasing      organization*

*Leave      of Absence*

*provided      *

*provided      *

----

*Matching      Contributions*

*1934      Act*

*Nonelective      Contributions*

*Normal      Retirement Age*

*Participant*

*Active      Participant*

*Inactive      Participant*

*Participant’s      Accounts*
*Accounts*

----

*Catch-Up      Contribution Account*

*GenenFlex      Account*
*Prior      Excess Flex Credit Contributions*
*GenenFlex*

*Loan      Account*

*Matching      Account*

*Nonelective      Contribution Account*

*Rollover      Account*

----

*Salary      Deferral Account*

*Plan*

*Plan      Year*

*Salary      Deferrals*

*Trust      Agreement*

*Trust      Fund*

*Trustee*

----

*Valuation      Date*

**SECTION 2**

**ELIGIBILITY      AND PARTICIPATION**

*Initial      Eligibility*

*Employer      Aggregation*

*Participation*

*Active      Participation*
*provided      *

*Inactive      Participation*

----

*Effect      of Inactive Participation*

*Voluntary      Suspension*

*Mandatory      Suspension*

----

*Provision      of Information*

*Termination      of Participation*

*Acquisitions*

----

**SECTION 3**

**SALARY      DEFERRALS AND CATCH-UP CONTRIBUTIONS**

*Salary      Deferrals*

*General*
*provided*

----

*Section      401(k) Ceiling*

*Section 401(k)      Ceiling*
*e.g.,*

*Limitations      on HCE Participants*

----

*HCE      and Non-HCE Participants*
*HCE      Participants*
*Non-HCE      Participants*

*Deferral      Percentage Limitation*
*ADP*

| *If                the ADP for the Non-HCE**Participants                (“NHCEs’ ADP”) is:* | *Then                the Maximum ADP for**the                HCE Participants is:* |
|---------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------|
|  Less                than 2%                                                                             |  2.0                x NHCEs’ ADP                                        |
| 2%                to 8%                                                                                       | NHCEs’                ADP + 2%                                               |
| More                than 8%                                                                                   | 1.25                x NHCEs’ ADP                                             |

*Actual      Deferral Percentage*
*Deferral      Rates*

----

*Testing      Compensation*
*Testing      Compensation*

*Catch-Up      Contributions*

*Eligible      Participants*

*Certain      Code Limitations Inapplicable*

*Salary      Deferral and Catch-Up Contribution Election*

----

*Amounts*

*Changes*

*Potential      Excess ADP*

----

*ADP        Maximum*

*Actual      Excess ADP*

*Determination      and Allocation of Excess Contributions*

----

*Forfeiture      of Related Matching Contributions*

*Incorporation      By Reference*

*Payment      of Salary Deferrals and *
*Catch-Up      Contributions*

----

**SECTION 4**

**EMPLOYER      CONTRIBUTIONS**

*Matching      Contributions*

*Basic      Matching Contributions.*

*True-Up      Matching Contributions*

*True-Up      for Quarter Ending September 30, 2006.*

*2006      Year-End True-Up.*

----

*True-Up      for Plan Years Beginning January 1, 2007 and After.*

*Calculation      Rules*

----

*Limitations      on HCE Participants*

*Contribution      Percentage Limitation*
*ACP*

| *If                the ACP for the Non-HCE**Participants                (“NHCEs’ ACP”) is:* | *Then                the Maximum ACP for**the                HCE Participants is* |
|---------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------|
|  Less                than 2%                                                                             |  2.0                x NHCEs’ ACP                                       |
| 2%                to 8%                                                                                       | NHCEs’                ACP + 2%                                              |
| More                than 8%                                                                                   | 1.25                x NHCEs’ ACP                                            |

*Actual      Contribution Percentage*
*Contribution      Rates*

*Potential      Excess ACP*
*ACP      Maximum*

----

*Actual      Excess ACP*

*Determination      and Allocation of Excess Aggregate Contributions*

*Determination      of Allocable Income*

*Incorporation      By Reference*

*Nonelective      Contributions*
*Nonelective      Contribution*

----

*Timing*

*Periodic      Contributions*

*Reinstatements*

*Profits      Not Required*

*No      After-Tax Contributions*

----

**SECTION 5**

**ALLOCATION      OF CONTRIBUTIONS AND INVESTMENT**
**S**

*Salary      Deferrals and Catch-Up Contributions*

*Matching      Contributions*

*Nonelective      Contributions*

----

*Investment*
*provided      *

*Changes*
*e.g.,*

*Failure      to Elect*

----

*Participant      Loans*
*Loan      Account*

*Limitations      on Allocations*

*Annual      Addition Limitation*
*provided,      however*

*Definitions*

*Affiliate*

----

*Aggregated      Plan*

*Annual      Addition*

*“Defined      Contribution Dollar Limit” *
*e.g.,*

*Total      Compensation*

*such      as*

----

*Other      Defined Contribution Plans*
*provided      *

*Adjustments*

----

*Suspense      Accounts*

*Limitation      Year*

----

**SECTION 6**

**ACCOUNTS      AND INVESTMENT FUNDS**

*Participants’      Accounts*

*Trust      Fund Assets*

----

*Investment      Funds*

*Investment      Media*

*Changes.*

----

*Reinvestments      and Cash*

*Company      Stock Fund.*

*Limitation      on Investment in Company Stock Fund.*

----

*Valuation      of Participants’ Accounts*

*Valuation      of Shares*
*The      Wall Street Journal*

*Statements      of Participants’ Accounts*

----

*Vesting      of Participants’ Accounts*

**SECTION 7**

**DISTRIBUTIONS**

*Events      Permitting Distribution*

*“5-Percent      Owner”)*

----

*Times      for Distribution*

*General      Rule. *

*Distribution      Deadline*

*provided,      however*

----

*Deadline      Date*

*the      later of*

*Age      70½ Rule for 5-Percent Owners*

*Consent      Requirement*
*      and Immediate Distributions*

*Consent      Required Over Threshold Amount. *
*Threshold      Amount*

*Immediate      Distributions of Small Accounts Permitted.*

----

*Form      of Distribution*

*Cash*

*Common      Stock*

*Fractional      Shares*

----

*No      Annuities*

*Direct      Rollovers*

*IRA*

*provided      *

*Distributee*

*Eligible      Rollover Distribution*

----

*Common      Stock Restrictions*

*Beneficiary      Designations*

*Spousal      Consent*

----

*Changes      and Failed Designations*

*Payments      to Minors or Incompetents*

----

*Undistributable      Accounts*

**SECTION 8**

**WITHDRAWALS,      LOANS AND QUALIFIED DOMESTIC RELATIONS ORDERS**

*General      Rules*

----

*Hardship      Withdrawal*

*Permissible      Financial Obligations*

*Dependents*

----

*Withdrawal      Necessary to Meet Financial Obligation*

*Mandatory      Suspension and Contribution Limitations*

----

*Limit      on Withdrawal*

*Order      of Withdrawal From Accounts*

*Age      59½ Withdrawal*

----

*Loans      to Participants*

*General      Loan Rules*

*      Amount*

*Available      Balance*

*Additional      Limits*
*Other      Plan*

*Maximum      Number of Loans*

*Twelve      Months Required Between Loans*

*Unpaid      Leave of Absence*

----

*provided,        however,*

*Minimum      Requirements of Each Loan*

*Separate      Accounting*

*Term*
*provided      *
*e.g.,*

*Interest      Rate*

*Payment      Schedule*

*Withholding      Payments*

----

*On      Payroll*

*Off      Payroll*

*Failure      to Authorize*

*Security*

*Default*

----

*Effect      of Distributions*

*Transferred      participant Loans*

*Qualified      Domestic Relations Orders*
*QDRO*

*No      Payment Unless a QDRO*

----

*Immediate      Payment Required*

*Deferred      Payment*

*Hold      Procedures*
*hold*

----

**SECTION 9**

**ADMINISTRATION      OF THE PLAN**

*Plan      Administrator*

*Committee*

*Actions      by Committee*

*Powers      of Committee*

----

----

*Fiduciary      Responsibilities*

*Investment      Responsibilities*

----

*Investment      Manager Appointment*
*Investment      Managers*

*Eligibility*

*Voting      and Tender Offer Rights in Common Stock*

*Pass-Through      Issues*
*Pass-Through      Issue*

----

*Voting      On Issues Other Than Pass-Through Issues*

*Named      Fiduciary Status*
*Allocable      Shares*

----

*Confidentiality*

*Directed      Voting and Consents*

----

*Tender      or Exchange Offers*

----

*Decisions      of Committee*

*Administrative      Expenses*
*Administrative      Expenses*

*Eligibility      to Participate*

*Indemnification*

----

**SECTION 10**

**TRUST      FUND AND ROLLOVER CONTRIBUTIONS**

*Trust      Fund*
*provided,      however*

*No      Diversion of Assets*

----

*Continuing      Conditions*
*provided,      however*
*provided,      further*

*Change      of Investment Alternatives*

----

*Rollover      Contributions*
*Qualified      Plan*

*Rollover      Account*

----

*Nonqualifying      Rollovers*

*10.5.3       *
*Rollover      of Certain Participant Loans Permitted. *

**SECTION 11**

**MODIFICATION      OR TERMINATION OF PLAN**

*Employers’      Obligations Limited*

----

*Right      to Amend or Terminate*
*provided,      however*

*Effect      of Termination*

----

**SECTION 12**

**TOP-HEAVY      PLAN**

*Top-Heavy      Plan Status*
*Top-Heavy      Plan*

*60%      Rule*

*Top-Heavy      Determinations*

*Determination      Date*

----

*Top-Heavy      Plan Provisions*

*Minimum      Allocation*
*provided,      however*

*Key      Employee Percentage*

----

*Top-Heavy      Compensation*

**SECTION 13**

**GENERAL      PROVISIONS**

*Plan      Information*

*Inalienability*

*Rights      and Duties*

----

*No      Enlargement of Employment Rights*

*Apportionment      of Duties*

*Merger,      Consolidation or Transfer*

----

*Military      Service*

*Applicable      Law*

*Severability*

*Captions*

----

**EXECUTION**

*In      Witness Whereof*

|   | **GENENTECH,                  INC.** |
|--------|--------------------------------------|
|   | By                                   | /s/                  DAVID A. EBERSMAN |
|   |                                 | David                  A. Ebersman |
|   |                                 |   |
|   | Title                                | Executive                  Vice President and Chief                  Financial Office |
|   | Date                                 | September                  1, 2006 |
|   |                                 |   |
|   |                                 |   |
|   | And                  by              | /s/                  DENISE SMITH-HAMS |
|   |                                 | Denise                  Smith-Hams |
|   |                                 |   |
|   | Title                                | Vice                  President, Human Resources |
|   | Date                                 | September                  1, 2006 |

----

**APPENDIX      A**

**PUERTO      RICO SUPPLEMENT TO THE **

**GENENTECH,      INC. TAX REDUCTION INVESTMENT PLAN**

**A.       **
**Purpose**
**.      **

**B.       **
**Applicable      Trust**
**.      **

**C.  **
**Definitions.**

----

*Distributee*

*Eligible      Retirement Plan*

*Eligible      Rollover Distribution*

----

**D.       **
**Effective      Date**
**.      **

**E.       **
**Rollover      Contributions**
**.      **

**F.       **
**Salary      Deferrals**
**.**

**G.       **
**Annual      Limitation on Salary Deferrals**
**.**

**H.       **
**Minimum      Coverage Requirements**
**.**

----

**I.       **
**Nondiscrimination      Testing Rules**
**.      **
** **

----

**J.       **
**Company      Contributions**
**.**

**K.       **
**In-Service      Withdrawals**
**.      **

----

**L.       **
**Distributions**
**.      **

**M.       **
**Plan      Provisions and Terms**
**.      **

**N.       **
**Miscellaneous**

----