GENENTECH, INC.

                        1991 Employee Stock Plan
                  (As amended effective April 10, 1997)

1. Purpose

  The purpose of this 1991 Employee Stock Plan (the "Plan") is to 
provide employees of Genentech, Inc. (the "Company"), and its U.S. 
subsidiaries designated by the Company's Board of Directors, who wish to 
become stockholders of the Company an opportunity to purchase (i) shares 
of Callable Putable Common Stock of the Company, or (ii) shares of 
Common Stock of the Company, to the extent shares of Callable Putable 
Common Stock are converted to Common Stock in accordance with the 
Company's Certificate of Incorporation (the shares referred to in 
clauses (i) and (ii) above being hereinafter referred to collectively as 
the "Shares"). The Plan is intended to qualify as an "employee stock 
purchase plan" within the meaning of Section 423 of the Internal Revenue 
Code of 1986, as amended (the "Code").

2. Eligible Employees

  Subject to the provisions of Sections 7, 8 and 9 below, any individual 
who is in the full-time employment of the Company on the day on which a 
Grant Date (as defined in Section 3 below) occurs is eligible to 
participate in an offering of Shares made by the Company hereunder. In 
addition, the Board of Directors may at any time designate one or more 
of the Company's U.S. subsidiary corporations (as defined in Section 
425(f) of the Code) to be included in an offering of Shares under the 
Plan. Full-time employment shall mean employment by the Company or its 
designated U.S. subsidiary for:

     (a) 20 hours or more per week; and

     (b) more than five months in the calendar year.

3. Grant Dates

  From time to time, the Board of Directors may fix a date (a "Grant 
Date") or a series of dates (each of which is a "Grant Date") on which 
the Company will grant rights to purchase Shares ("Rights") to employees 
eligible to participate.

4. Prices

  The purchase price per Share for Shares covered by a grant of Rights 
hereunder shall be determined by the Board of Directors, but in no event 
shall be less than the lesser of:

     (a) eighty-five percent (85%) of the fair market value of a Share 
on the Grant Date on which such Right was granted; or

     (b) eighty-five percent (85%) of the fair market value of a Share 
on the date such Right is exercised as to that Share.

5. Exercise of Rights and Method of Payment

     (a) Rights granted under the Plan will be exercisable on specific 
dates as determined by the Board of Directors.

     (b) The method of payment for Shares purchased upon exercise of 
Rights granted hereunder shall be through regular payroll deductions or 
by lump sum cash payment, or both, as determined by the Board of 
Directors. No interest shall be paid upon payroll deductions or other 
payments in exercise of Rights unless specifically provided for by the 
Board of Directors.

6. Terms of Rights

  Rights granted hereunder shall be exercisable during a twenty-seven 
(27) month period or such shorter period as determined by the Board of 
Directors. All Rights granted to an employee shall terminate upon 
termination of full-time employment of the employee. Any payments 
received by the Company from a participating employee with respect to a 
Right granted hereunder and not utilized for the purchase of Shares upon 
exercise of such Right shall be promptly returned to such employee by 
the Company after termination of such Right, except that amounts that 
were not so utilized because such amounts were insufficient to purchase 
a whole Share may be applied toward the purchase of Shares pursuant to a 
Right subsequently granted hereunder, if any.

7. Shares Subject to the Plan

  No more than four million five hundred thousand (4,500,000) Shares may 
be sold pursuant to Rights granted under the Plan. Appropriate 
adjustments in the above figure, in the number of Shares covered by 
outstanding Rights granted hereunder, in the exercise price of the 
Rights and in the maximum number of Shares which an employee may 
purchase (pursuant to Section 9 below) shall be made to give effect to 
any mergers, consolidations, reorganizations, recapitalizations, stock 
splits, stock dividends or other relevant changes in the capitalization 
of the Company occurring after the effective date of the Plan, provided 
that no fractional Shares shall be subject to a Right and each Right 
shall be adjusted downward to the nearest full Share. Any agreement of 
merger or consolidation will include provisions for protection of the 
then existing Rights of participating employees under the Plan. Either 
authorized and unissued Shares or issued Shares heretofore or hereafter 
reacquired by the Company may be made subject to Rights under the Plan. 
If for any reason any Right under the Plan terminates in whole or in 
part, Shares subject to such terminated Right may again be subject to a 
Right under the Plan.

8. Limitations on Grants

  Anything to the contrary notwithstanding, pursuant to Section 423 of 
the Code:

     (a) No employee shall be granted a Right hereunder if such 
employee, immediately after the Right is granted, owns stock possessing 
five percent (5%) or more of the total combined voting power or value of 
all classes of stock of the Company, its parent corporation (as defined 
in Section 425(c) of the Code) or any subsidiary corporation, in each 
case computed in accordance with Section 423(b)(3) of the Code.

     (b) No employee shall be granted a Right which permits his Rights 
to purchase Shares under all employee stock purchase plans of the 
Company and its subsidiaries to accrue at a rate which exceeds twenty-
five thousand dollars ($25,000) (or such other maximum as may be 
prescribed from time to time by the Code) of fair market value of such 
Shares (determined at the time such Right is granted) for each calendar 
year in which such Right is outstanding at any time, all in accordance 
with the provisions of Section 423(b)(8) of the Code.

9. Limits on Participation

     (a) Participation shall be limited to eligible employees who enroll 
under the Plan.

     (b) No Right granted to any participating employee shall cover more 
than twelve thousand (12,000) Shares.

     (c) No more than One Hundred Eighty Thousand (180,000) Shares may 
be purchased during any calendar quarter upon the exercise of Rights 
granted under the Plan; provided, however, that for those calendar 
quarters in which the Company pays regular annual bonuses to eligible 
employees, the maximum aggregate numbers of Shares which may be 
purchased upon the exercise of Rights shall be Two Hundred Thousand 
(200,000) Shares. If the aggregate purchases of Shares upon exercises of 
Rights granted under the Plan would exceed the applicable maximum number 
for a particular calendar quarter, the maximum permitted number of 
Shares shall be allocated to the exercising participants in proportion 
to the number of Shares they would otherwise purchase during such 
calendar quarter.

10.  Employee's Rights as Stockholder

  No participating employee shall have any Rights as a stockholder in 
the Shares covered by a Right granted hereunder until such Right has 
been exercised, full payment has been made for the corresponding Shares 
and the purchase has been entered in the records of the Transfer Agent 
for the Shares.

11.  Rights Not Transferable

  Rights under the Plan are not assignable or transferable by a 
participating employee.

12.  Amendments or Discontinuance of the Plan

  The Board of Directors of the Company shall have the right to amend, 
modify or terminate the Plan at any time without notice; provided, 
however, that the then existing Rights of all participating employees 
shall not be adversely affected thereby, except that in the case of a 
participating employee of a foreign branch of the Company or a 
designated U.S. subsidiary corporation the Plan may be varied to conform 
with local laws, and provided further that, subject to the provisions of 
Section 7 above, no such amendment to the Plan shall, without the 
approval of the stockholders of the Company:

     (a) Increase the total number of Shares which may be offered under 
the Plan;

     (b) Amend the Plan in any manner which would render Rights granted 
hereunder unqualified for special tax treatment under Section 421 of the 
Code.

13.  Effective Date and Approvals

  The Plan shall become effective as of January 1, 1991. The Company's 
obligation to offer, sell or deliver its Shares under the Plan is 
subject to the approval of the Company's stockholders and any 
governmental approval required in connection with the authorized 
issuance or sale of such Shares and is further subject to the 
determination by the Company that all applicable securities laws have 
been complied with.

14.  Administration of the Plan

  The Board of Directors or any committee or person(s) to whom it 
delegates its authority (the "Administrator") shall administer, 
interpret and apply all provisions of the Plan. The Administrator may 
waive such provisions of the Plan as it deems necessary to meet special 
circumstances not anticipated or covered expressly by the Plan. Nothing 
contained in this Section shall be deemed to authorize the Administrator 
to alter or administer the provisions of the Plan in a manner 
inconsistent with the provisions of Section 423 of the Code.

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