Document:

dna-ex10_9.htm

    
      

    

     

    EXHIBIT
10.9

    

     

    GENENTECH,
INC.

     

    TAX
REDUCTION INVESTMENT PLAN

    

    

    

    

    

    

    

    

    

    

    

    Restatement
Effective Date: November 1, 2007

     

    (except
as otherwise stated herein)

    

    

    

    

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE
OF CONTENTS

    

    
      	 
      	 
      	
              Page

            
	
              SECTION 1
      DEFINITIONS

            	
              2

            
	
              1.1

            	
              Account
      or Participant’s Account

            	
              2

            
	
              1.2

            	
              Affiliate

            	
              3

            
	
              1.3

            	
              Alternate
      Payee

            	
              4

            
	
              1.4

            	
              Beneficiary

            	
              4

            
	
              1.5

            	
              Board
      of Directors

            	
              4

            
	
              1.6

            	
              Catch-Up
      Contributions

            	
              4

            
	
              1.7

            	
              Code

            	
              4

            
	
              1.8

            	
              Committee

            	
              4

            
	
              1.9

            	
              Company

            	
              4

            
	
              1.10

            	
              Company
      Match Contributions

            	
              4

            
	
              1.11

            	
              Company
      Stock

            	
              5

            
	
              1.12

            	
              Company
      Stock Fund

            	
              5

            
	
              1.13

            	
              Compensation

            	
              5

            
	
              1.14

            	
              Compensation
      Limit

            	
              5

            
	
              1.15

            	
              Disability

            	
              6

            
	
              1.16

            	
              Elective
      Deferrals

            	
              6

            
	
              1.17

            	
              Eligible
      Bonus

            	
              6

            
	
              1.18

            	
              Eligible
      Commissions

            	
              6

            
	
              1.19

            	
              Eligible
      Employee

            	
              6

            
	
              1.20

            	
              Employee

            	
              7

            
	
              1.21

            	
              Employee
      Pre-Tax Catch-Up Contributions

            	
              7

            
	
              1.22

            	
              Employee
      Pre-Tax Contributions

            	
              7

            
	
              1.23

            	
              Employer

            	
              8

            
	
              1.24

            	
              Employer
      Contributions

            	
              8

            
	
              1.25

            	
              Entry
      Date

            	
              8

            
	
              1.26

            	
              ERISA

            	
              8

            
	
              1.27

            	
              Highly
      Compensated Employee or HCE

            	
              8

            
	
              1.28

            	
              Investment
      Funds

            	
              9

            
	
              1.29

            	
              Investment
      Manager

            	
              9

            
	
              1.30

            	
              Leased
      Employee

            	
              9

            
	
              1.31

            	
              Leave
      of Absence

            	
              9

            
	
              1.32

            	
              1934
      Act

            	
              10

            
	
              1.33

            	
              Non-Elective
      Contributions

            	
              10

            
	
              1.34

            	
              Normal
      Retirement Age

            	
              10

            
	
              1.35

            	
              Participant

            	
              10

            
	
              1.36

            	
              Plan

            	
              10

            
	
              1.37

            	
              Plan
      Year

            	
              11

            
	
              1.38

            	
              Rollover
      Contributions

            	
              11

            
	
              1.39

            	
              Roth
      Basic Contributions

            	
              11

            
	
              1.40

            	
              Roth
      Catch-Up Contributions

            	
              11

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    TABLE
OF CONTENTS

    (Continued)

    

    
      	 
      	 
      	
              Page

            
	
              1.41

            	
              Roth
      Rollover Contributions

            	
              11

            
	
              1.42

            	
              Trust
      Agreement

            	
              11

            
	
              1.43

            	
              Trust
      Fund

            	
              11

            
	
              1.44

            	
              Trustee

            	
              11

            
	
              1.45

            	
              Valuation
      Date

            	
              12

            
	
              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

            
	
              2.9

            	
              Erroneous
      Participation

            	
              15

            
	
              SECTION 3
      ELECTIVE DEFERRALS

            	
              15

            
	
              3.1

            	
              Employee
      Pre-Tax Contributions and Roth Basic Contributions

            	
              15

            
	
              3.2

            	
              Catch-Up
      Contributions

            	
              19

            
	
              3.3

            	
              Deferral
      Elections

            	
              19

            
	
              3.4

            	
              Payment
      of Elective Deferrals

            	
              22

            
	
              SECTION 4
      EMPLOYER CONTRIBUTIONS

            	
              23

            
	
              4.1

            	
              Company
      Match Contributions

            	
              23

            
	
              4.2

            	
              Non-Elective
      Contributions

            	
              26

            
	
              4.3

            	
              Timing

            	
              26

            
	
              4.4

            	
              Periodic
      Contributions

            	
              27

            
	
              4.5

            	
              Reinstatements

            	
              27

            
	
              4.6

            	
              Profits
      Not Required

            	
              27

            
	
              SECTION 5
      ALLOCATION OF CONTRIBUTIONS AND INVESTMENTS

            	
              27

            
	
              5.1

            	
              Elective
      Deferrals

            	
              27

            
	
              5.2

            	
              Company
      Match Contributions

            	
              28

            
	
              5.3

            	
              Non-Elective
      Contributions

            	
              28

            
	
              5.4

            	
              Investment

            	
              28

            
	
              5.5

            	
              Limitations
      on Allocations

            	
              29

            
	
              SECTION 6
      PARTICIPANT ACCOUNTS AND INVESTMENT FUNDS

            	
              31

            
	
              6.1

            	
              Participant
      Accounts

            	
              31

            
	
              6.2

            	
              Trust
      Fund Assets

            	
              32

            
	
              6.3

            	
              Investment
      Funds

            	
              33

            

    

    

    
      
         

      

      
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    TABLE
OF CONTENTS

    (Continued)

    

    
      	 
      	 
      	
              Page

            
	
              6.4

            	
              Valuation
      of Participants’ Accounts

            	
              34

            
	
              6.5

            	
              Valuation
      of Shares

            	
              35

            
	
              6.6

            	
              Statements
      of Account

            	
              35

            
	
              6.7

            	
              Vesting
      of Participants’ Accounts

            	
              35

            
	
              6.8

            	
              Forfeitures

            	
              35

            
	
              SECTION 7
      DISTRIBUTIONS

            	
              36

            
	
              7.1

            	
              Events
      Permitting Distribution

            	
              36

            
	
              7.2

            	
              Times
      for Distribution

            	
              37

            
	
              7.3

            	
              Consent
      Requirement and Immediate Distributions

            	
              38

            
	
              7.4

            	
              Form
      of Distribution

            	
              39

            
	
              7.5

            	
              Company
      Stock Restrictions

            	
              41

            
	
              7.6

            	
              Beneficiary
      Designations

            	
              41

            
	
              7.7

            	
              Payments
      to Minors or Incompetents

            	
              42

            
	
              7.8

            	
              Undistributable
      Accounts

            	
              43

            
	
              SECTION 8
      WITHDRAWALS, LOANS AND DOMESTIC RELATIONS ORDERS

            	
              43

            
	
              8.1

            	
              General
      Rules

            	
              43

            
	
              8.2

            	
              Hardship
      Withdrawal

            	
              44

            
	
              8.3

            	
              Age
      591⁄2 Withdrawal

            	
              46

            
	
              8.4

            	
              Withdrawal
      From Company Match Account at Normal Retirement Age

            	
              46

            
	
              8.5

            	
              Withdrawal
      From Rollover Contributions Accounts

            	
              46

            
	
              8.6

            	
              Loans
      to Participants

            	
              46

            
	
              8.7

            	
              Qualified
      Domestic Relations Orders

            	
              50

            
	
              8.8

            	
              Qualified
      Reservist Distribution

            	
              51

            
	
              SECTION 9
      ADMINISTRATION OF THE PLAN

            	
              51

            
	
              9.1

            	
              Plan
      Administrator

            	
              51

            
	
              9.2

            	
              Committee

            	
              52

            
	
              9.3

            	
              Actions
      by Committee

            	
              52

            
	
              9.4

            	
              Powers
      of Committee

            	
              52

            
	
              9.5

            	
              Fiduciary
      Responsibilities

            	
              54

            
	
              9.6

            	
              Investment
      Responsibilities

            	
              54

            
	
              9.7

            	
              Voting
      and Tender Offer Rights in Company Stock

            	
              55

            
	
              9.8

            	
              Decisions
      of Committee

            	
              55

            
	
              9.9

            	
              Administrative
      Expenses

            	
              55

            
	
              9.10

            	
              Eligibility
      to Participate

            	
              56

            
	
              9.11

            	
              Indemnification

            	
              56

            
	
              SECTION 10
      TRUST FUND, ROLLOVER CONTRIBUTIONS AND PLAN MERGERS

            	
              57

            
	
              10.1

            	
              Trust
      Fund

            	
              57

            
	
              10.2

            	
              No
      Diversion of Assets

            	
              57

            

    

     

     

    
      
        
        

      

      
        -iii-

        
          

        

      

      
        
        

      

       

    

    TABLE
OF CONTENTS

    (Continued)

    

    
      	 
      	 
      	
              Page

            
	
              10.3

            	
              Continuing
      Conditions

            	
              57

            
	
              10.4

            	
              Change
      of Investment Alternatives

            	
              58

            
	
              10.5

            	
              Rollover
      Contributions

            	
              59

            
	
              10.6

            	
              Merger
      of Other Plans

            	
              60

            
	
              SECTION 11
      MODIFICATION OR TERMINATION OF PLAN

            	
              61

            
	
              11.1

            	
              Employers’
      Obligations Limited

            	
              61

            
	
              11.2

            	
              Right
      to Amend or Terminate

            	
              61

            
	
              11.3

            	
              Effect
      of Termination

            	
              62

            
	
              SECTION 12
      TOP-HEAVY PLAN

            	
              62

            
	
              12.1

            	
              Top-Heavy
      Plan Status

            	
              62

            
	
              12.2

            	
              Top-Heavy
      Plan Provisions

            	
              63

            
	
              SECTION 13
      GENERAL PROVISIONS

            	
              64

            
	
              13.1

            	
              Plan
      Information

            	
              64

            
	
              13.2

            	
              Inalienability

            	
              65

            
	
              13.3

            	
              Rights
      and Duties

            	
              65

            
	
              13.4

            	
              No
      Enlargement of Employment Rights

            	
              65

            
	
              13.5

            	
              Apportionment
      of Duties

            	
              65

            
	
              13.6

            	
              Merger,
      Consolidation or Transfer

            	
              66

            
	
              13.7

            	
              Military
      Service

            	
              66

            
	
              13.8

            	
              Applicable
      Law

            	
              66

            
	
              13.9

            	
              Severability

            	
              66

            
	
              13.10

            	
              Exhaustion
      of Claims Procedure and Right to Bring Legal Claim

            	
              67

            
	
              13.11

            	
              Captions

            	
              67

            
	 
      	 
      	 
      
	
              APPENDIX
      A – Puerto Rico Supplement

            	
              A-1

            
	
              APPENDIX
      B – Plan-to-Plan Transfer of Tanox, Inc. 401(k) Plan
    Accounts

            	
              B-1

            

    

    

    
      
         

      

      
        -iv-

        
          

        

      

      
         

      

    

    GENENTECH,
INC.

    TAX
REDUCTION INVESTMENT PLAN

    (November 1,
2007 Restatement)

    

    PREAMBLE

    

    GENENTECH,
INC. (the “Company”),
having established the Genentech, Inc. Tax Reduction Investment Plan (the “Plan”) effective as of
January 1, 1985, and having amended and restated the Plan effective (most
recently) as of January 1, 2006, hereby again amends and restates the Plan
in its entirety effective as of November 1, 2007, except as otherwise
indicated herein.

    The
Plan was established and is maintained for the benefit of Eligible Employees of
the Company and its participating Affiliates in order to provide them with
(1) a means of supplementing their retirement income on a tax-favored
basis, (2) an incentive to continue and increase their efforts to
contribute to the success of the Company, and (3) the opportunity to
acquire an equity ownership interest in the Company.

    The
Plan is intended to qualify as (a) a profit-sharing plan (within the
meaning of Section 401(a) of the Code), which includes a qualified cash or
deferred arrangement (within the meaning of Section 401(k) of the Code),
(b) a 404(c) plan (within the meaning of Section 404(c) of ERISA), and
(c) an eligible individual account plan (within the meaning of
Section 407(d)(3) of ERISA).  Effective as of January 1, 2008,
the Plan permits Participants to elect to make salary deferrals as designated
Roth contributions.

    The
Plan also is designed to constitute a tax-qualified plan and related tax-exempt
trust under Sections 1165(a), 1165(e) and 1101(17) of the Puerto Rico
Internal Revenue Code of 1994, as amended, as detailed in
Appendix A.

    
      
         

      

      
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    Effective
on November 1, 2007, the Tanox, Inc. 401(k) Plan was merged with and into
the Plan, as detailed in Appendix B.

     

    SECTION 1

     

    DEFINITIONS

     

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

    1.1           Account or Participant’s
Account.  “Account” or “Participant’s Account” means
as to any Participant the account maintained in order to reflect his or her
interest in the Plan.  Each Participant’s Account shall be comprised
of several separate subaccounts (as specified by the Committee in its
discretion), including, but not limited to, the following
subaccounts:

    1.1.1                      “Company Match
Account” means the subaccount maintained to record any Company Match
Contributions made on behalf of the Participant pursuant to Sections 4.1 and
5.2, and any adjustments relating thereto.

    1.1.2                      “Employee Pre-Tax
Account” means the subaccount maintained to record any Employee Pre-Tax
Contributions that the Participant has elected to have contributed to his or her
Employee Pre-Tax Account pursuant to Sections 3.1 and 3.3, and any
adjustments relating thereto.

    1.1.3                      “Employee Pre-Tax Catch-Up
Account” means the subaccount maintained to record any Pre-Tax Catch-Up
Contributions that the Participant has elected to have contributed to his or her
Employee Pre-Tax Catch-Up Account pursuant to Sections 3.2 and 3.3, and any
adjustments relating thereto.

    1.1.4                      “Genenflex Account”
means the subaccount maintained to record any excess “flex credits” that the
Participant previously elected under Genenflex to have contributed to his
or

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    her
Genenflex Account during Plan Years when such contributions were permitted under
the Plan (“Prior Excess Flex Credit Contributions”), and any adjustments
relating thereto.  For this purpose, “Genenflex” means the cafeteria
plan maintained by the Company under Section 125 of the Code.

    1.1.5                       “Non-Elective Contribution
Account” means the subaccount maintained to record any Non-Elective
Contributions made on behalf of the Participant pursuant to Sections 4.2
and 5.3, and any adjustments relating thereto.

    1.1.6                      “Rollover Contributions
Account” means the subaccount maintained to record any transfers to the
Plan made by or on behalf of a Participant pursuant to Section 10.5.2, and
any adjustments relating thereto.

    1.1.7                      “Roth Basic Account”
means the subaccount maintained to record any Roth Basic Contributions that the
Participant has elected to have contributed to his or her Roth Basic Account
pursuant to Sections 3.1 and 3.3, and any adjustments relating
thereto.

    1.1.8                      “Roth Catch-Up
Account” means the subaccount maintained to record any Roth Catch-Up
Contributions that the Participant has elected to have contributed to his or her
Roth Catch-Up Account pursuant to Sections 3.2 and 3.3, and any adjustments
relating thereto.

    1.1.9                      “Roth Rollover
Account” means the subaccount maintained to record any transfers to the
Plan made by or on behalf of a Participant pursuant to Section 10.5.3, and
any adjustments relating thereto.

    1.2           Affiliate. 
“Affiliate” means a
corporation, trade or business which is, together with any Employer, a member of
a controlled group of corporations or an affiliated service group or under
common control (within the meaning of Section 414(b), (c), (m) or (o) of
the Code), but only for the period during which such other entity is so
affiliated with the Employer.

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    1.3           Alternate
Payee.  “Alternate
Payee” means any spouse, former spouse, child or other dependent (within
the meaning of Section 152 of the Code) of a Participant who is recognized
by a QDRO (as defined in Section 8.7) as having a right to receive any
immediate or deferred payment of all or a portion of the balance credited to a
Participant’s Account under the Plan.

    1.4           Beneficiary. 
“Beneficiary” means the
individual person and/or entity entitled to receive benefits under the Plan upon
the death of a Participant in accordance with Section 7.6.

    1.5           Board of
Directors.  “Board
of Directors” means the Board of Directors of the Company, as from time
to time constituted.

    1.6           Catch-Up
Contributions.  “Catch-Up Contributions” means
(collectively) Employee Pre-Tax Catch-Up Contributions and Roth Catch-Up
Contributions.

    1.7           Code.  “Code” means the Internal
Revenue Code of 1986, as amended.  Reference to a specific Section of
the Code shall include such Section, any valid regulation promulgated
thereunder, and any comparable provision of any future legislation amending,
supplementing or superseding such Section.

    1.8           Committee. 
“Committee” means the
administrative committee charged with responsibility for the general
administration of the Plan pursuant to Section 9, as it may be constituted
from time to time.

    1.9           Company.  “Company” means Genentech,
Inc., a Delaware corporation, and any successor by merger, consolidation or
otherwise that assumes (in writing) the obligations of the Company under the
Plan.

    1.10           Company Match
Contributions.  “Company Match Contributions”
means as to each Participant the amounts (if any) contributed to the Trust Fund
by the Employers on account of

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    Employee
Pre-Tax Contributions and/or Roth Basic Contributions in accordance with
Sections 4.1 and 5.2.

    1.11           Company Stock. 
“Company Stock” means
the common stock of the Company, as from time to time constituted.

    1.12           Company Stock
Fund.  “Company
Stock Fund” means the Investment Fund that is wholly or primarily
invested in shares of Company Stock.

    1.13           Compensation. 
“Compensation” means
all salary, wages, Eligible Commissions and Eligible Bonuses paid by any
Employer with respect to services performed during any period by an Employee,
including Elective Deferrals, but excluding (a) any contributions made by
any Employer under this Plan (other than Elective Deferrals) or any other
employee benefit plan (within the meaning of Section 3(3) of ERISA), and
(b) other items, even
if reported as income on the Employee’s Internal Revenue Service (“IRS”) Form W-2, such as income from the
exercise of stock options, proceeds from the redemption of Company Stock,
tuition reimbursements, reimbursements of health club dues, Genenchecks, sign-on
bonuses, referral bonuses, severance payments, and relocation expenses, subject
to the following:

    (a)           A
Participant’s Compensation shall be determined without regard to any increase or
decrease in the amount of his or her total remuneration that is paid in cash as
the result of compensation reductions elected under Sections 125 or
132(f)(4) of the Code; and

     

    (b)           The
determination of the amount of a Participant’s Compensation shall be made by his
or her Employer (or its designee), in accordance with the records of the
Employer, and shall be conclusive.

     

    1.14           Compensation
Limit.  “Compensation Limit” means the
dollar limit prescribed in Section 401(a)(17) of the Code, as adjusted
pursuant to Sections 401(a)(17) and 415(d) of the Code (e.g., $225,000 for 2007 and
$230,000 for 2008).  No portion of any Participant’s Compensation
for

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

    a
Plan Year that exceeds the Compensation Limit shall be taken into account for
any purpose under the Plan for any Plan Year.

    1.15           Disability. 
“Disability” means the
mental or physical inability of a Participant to perform his or her normal job
as evidenced by the certificate of a medical examiner satisfactory to the
Committee (in its discretion) certifying that the Participant is disabled under
the standards of the Company’s long-term disability plan.

    1.16           Elective
Deferrals.  “Elective Deferrals” means
(collectively) Employee Pre-Tax Contributions, Roth Basic Contributions,
Employee Pre-Tax Catch-Up Contributions and Roth Catch-Up
Contributions.

    1.17           Eligible Bonus. 
“Eligible Bonus” means
any of the following payments paid by the Employer to an Employee: (a) any
annual cash bonus under the Company’s Corporate Bonus Program, (b) any
fourth calendar quarter commission payment under the Company’s Field Sales
Incentive Compensation Plan; (c) any bonus paid by the Company and
designated as an “incremental
sales bonus,” and/or (d) any bonus paid by the Company and
designated as a “key
contributor bonus.”  Notwithstanding the foregoing, all
Eligible Bonus amounts shall be determined net of mandatory deductions
including, without limitation, Employee-paid FICA and SDI withholdings (but
not
net of employee stock purchase plan deductions).

    1.18           Eligible
Commissions.  “Eligible Commissions” means
any first, second or third calendar quarter commission payments under the
Company’s Field Sales Incentive Compensation Plan.

    1.19             Eligible
Employee.  “Eligible Employee” means
every Employee of an Employer except:

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

    (a)           An
Employee who is a member of a collective bargaining unit and who is covered by a
collective bargaining agreement where retirement benefits were the subject of
good faith bargaining, unless the agreement specifically provides for coverage
of such Employee under this Plan;

     

    (b)           An
individual employed by any corporation or other business entity that is merged
or liquidated into, or whose assets are acquired by any Employer, unless any two
members of the Committee, acting in their capacities as officers of the Company
rather than as fiduciaries with respect to the Plan, designate (in writing) the
employees of that corporation or other business entity as Eligible Employees
under the Plan;

     

    (c)           An
Employee whose Compensation is not paid from any Employer’s United States
payroll;

     

    (d)           An
Employee who does not have a United States Social Security Number;
and

     

    (e)           An
individual who, as to any period of time, is classified or treated by an
Employer as an independent contractor, a consultant, a Leased Employee or an
employee of an employment agency or any entity other than an Employer, even if such individual is
subsequently determined to have been a common-law employee of the Employer
during such period.

     

    1.20           Employee. 
“Employee” means an individual who is (a) a common-law employee of any
Employer or Affiliate, or (b) a Leased Employee.  However, if
Leased Employees constitute less than 20% of the nonhighly compensated work
force (within the meaning of Section 414(n)(5)(C)(ii) of the Code), the
term “Employee” shall
not include those Leased Employees who are covered by a plan described in
Section 414(n)(5) of the Code.

    1.21           Employee Pre-Tax Catch-Up
Contributions.  “Employee Pre-Tax Catch-Up
Contributions” means as to each Participant the amounts (if any)
contributed to the Trust Fund by the Employers in accordance with
Sections 3.4 and 5.1, pursuant to the salary deferral election made by the
Participant in accordance with Sections 3.2 and 3.3.

    1.22           Employee Pre-Tax
Contributions.  “Employee Pre-Tax
Contributions” means as to each Participant the amounts (if any)
contributed to the Trust Fund by the Employers in accordance

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

    with
Sections 3.4 and 5.1, pursuant to the salary deferral election made by the
Participant in accordance with Sections 3.1 and 3.3.

    1.23           Employer. 
“Employer” means the
Company and each Affiliate that adopts this Plan with the approval of the Board
of Directors.

    1.24           Employer
Contributions.  “Employer Contributions” means
(collectively) Company Match Contributions and Non-Elective
Contributions.

    1.25           Entry Date. 
“Entry Date” means each
calendar day in each Plan Year.

    1.26           ERISA.  “ERISA” means the Employee
Retirement Income Security Act of 1974, as amended.  Reference to a
specific Section of ERISA shall include such Section, any valid regulation
promulgated thereunder, and any comparable provision of any future legislation
amending, supplementing or superseding such Section.

    1.27           Highly Compensated Employee
or HCE.  “Highly
Compensated Employee” or “HCE” means a Highly
Compensated Active Employee or a Highly Compensated Former Employee, as defined
below:

    (a)           “Highly Compensated Active
Employee” means any Employee who performs services for an Employer or
Affiliate during the Determination Year and who:

     

    (1)           During
the Look-Back Year (A) received Compensation in excess of the dollar limit
prescribed in Section 414(q)(1)(B) of the Code, as adjusted pursuant to
Sections 414(q)(1) and 415(d) of the Code (e.g., $100,000 for 2007 and
$105,000 for 2008), and (B) was a member of the top-paid group (within the
meaning of Section 414(q)(3) of the Code) for such Year; or

     

    (2)           Is
or was a 5-percent owner (within the meaning of Section 414(q)(2) of the
Code) at any time during the Determination Year or the Look-Back
Year.

     

    (b)           “Highly Compensated Former
Employee” means any Employee who (1) separated (or was deemed to
have separated) from service prior to the Determination Year, (2) performed
no services for any Employer or Affiliate during the Determination Year, and
(3) was

     

    
      
         

      

      
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    a
Highly Compensated Active Employee for either the Plan Year in which the
separation occurred or any Determination Year ending on or after his or her 55th
birthday.

     

    (c)           The
determination of who is a Highly Compensated Employee, including the
determinations of the number and identity of Employees who are in the top-paid
group, shall be made in accordance with Section 414(q) of the
Code.

     

    (d)           For
purposes of applying this Section 1.27:

     

    (1)           “Compensation” means Total
Compensation (as defined in Section 5.5.2(e) and applied using the
definition of “Affiliate” in Section 1.2 rather than in
Section 5.5.2(a));

     

    (2)           “Determination Year” means the
Plan Year for which the determination is being made; and

     

    (3)           “Look-Back Year” means the
Plan Year immediately preceding the Determination Year.

     

    1.28           Investment
Funds.  “Investment Funds” means
(collectively) the investment funds described in Section 6.3.

    1.29           Investment
Manager.  “Investment Manager” means any
investment manager appointed by the Committee in accordance with
Section 9.6.

    1.30           Leased
Employee.  “Leased
Employee” means any person (other than a common-law employee of the
Employer or Affiliate) who, pursuant to an agreement between the Employer or
Affiliate and any other person (“leasing organization”), has
performed services for the Employer or Affiliate on a substantially full-time
basis for a period of at least one (1) year, and such services are performed
under the primary direction of or control by the Employer or
Affiliate.

    1.31           Leave of
Absence.  “Leave
of Absence” means the period of an Employee’s absence from active
employment:

    (a)           Authorized
by his or her Employer in accordance with its established and uniformly
administered personnel policies, provided that the Employee
returns to active

     

    
      
         

      

      
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    employment
after the authorized absence period expires, unless the Employee’s failure to
return is attributable to his or her retirement or death; or

     

    (b)           Because
of military service in the armed forces of the United States, provided that the Employee
returns to active employment following discharge within the period during which
he or she retains reemployment rights under federal law.

     

    1.32           1934 Act. 
“1934 Act” means the
Securities Exchange Act of 1934, as amended from time to
time.  Reference to a specific Section of the 1934 Act shall include
any Section, any valid regulation promulgated thereunder, and any comparable
provision of any future legislation amending, supplementing or superseding such
Section.

    1.33           Non-Elective
Contributions.  “Non-Elective Contributions”
means as to each Participant the amounts (if any) contributed to the Trust Fund
by the Employers in accordance with Sections 4.2 and 5.3.

    1.34           Normal Retirement
Age.  “Normal
Retirement Age” means age 55.

    1.35           Participant. 
“Participant” means an
Eligible Employee who has become a Participant in the Plan pursuant to
Section 2.1 and has not ceased to be a Participant pursuant to
Section 2.7, subject to the following:

    (a)           For
each Plan Year, a Participant shall be classified as an “Active Participant” if
(1) he or she has enrolled in the Plan for any portion of the Plan Year by
authorizing Elective Deferrals in accordance with Sections 2.3, 3.1, 3.2
and 3.3, or (2) his or her active participation in the Plan is resumed
during the Plan Year after the end of a suspension period in accordance with
Section 2.4, 2.5 or 8.2.3; and

     

    (b)           A
Participant who is not an Active Participant shall be classified as an “Inactive
Participant.”

     

    1.36           Plan.  “Plan” means the Genentech,
Inc. Tax Reduction Investment Plan, formerly the Genentech, Inc. Tax Incentive
Savings Plan, as set forth in this instrument and as heretofore or hereafter
amended from time to time in accordance with Section 11.2.

    
      
         

      

      
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    1.37           Plan Year. 
“Plan Year” means the
calendar year.

    1.38           Rollover
Contributions.  “Rollover Contributions” means
as to each Participant the pre-tax amounts (if any) contributed to the Trust
Fund in accordance with Section 10.5.2.

    1.39           Roth Basic
Contributions.  “Roth Basic Contributions”
means as to each Participant the amounts (if any) contributed to the Trust Fund
by the Employers in accordance with Sections 3.4 and 5.1, pursuant to the
salary deferral election made by the Participant in accordance with
Sections 3.1 and 3.3.

    1.40           Roth Catch-Up
Contributions.  “Roth Catch-Up Contributions”
means as to each Participant the amounts (if any) contributed to the Trust Fund
by the Employers in accordance with Sections 3.4 and 5.1, pursuant to the
salary deferral election made by the Participant in accordance with
Sections 3.2 and 3.3.

    1.41           Roth Rollover
Contributions.  “Roth Rollover Contributions”
means as to each Participant the amounts (if any) contributed to the Trust Fund
in accordance with Section 10.5.3.

    1.42           Trust
Agreement.  “Trust
Agreement” means the trust agreement entered into by and between the
Company and the Trustee, as amended from time to time for the purpose of
establishing and maintaining the Trust Fund.

    1.43           Trust Fund. 
“Trust Fund” means all
of the assets, at any time and from time to time, of the trust established by
the Trust Agreement to hold the assets of the Plan.

    1.44           Trustee.  “Trustee” means Fidelity
Management Trust Company, a Massachusetts trust company, and any additional,
successor or substitute trustee or trustees from time to time acting as Trustee
of the Trust Fund.

    
      
         

      

      
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    1.45           Valuation Date. 
“Valuation Date” means
the last financial business day of each Plan Year, any other financial business
day where a valuation is required under the terms of the Plan, and such other
date(s) as the Committee (in its discretion) may designate from time to
time.

     

    SECTION 2

     

    ELIGIBILITY
AND PARTICIPATION

     

    2.1           Initial
Eligibility.  An Employee shall become a Participant in the Plan on
the date he or she becomes an Eligible Employee.

    2.2           Employer
Aggregation.  The status of an Employee as an Eligible Employee
shall not be adversely affected merely by reason of his or her employment by
more than one Employer during any Plan Year.  The transfer of a
Participant from employment with an Employer to employment with an Affiliate
that is not an Employer shall not constitute an event entitling the Participant
to a distribution under Section 7.

    2.3           Participation. 

    2.3.1                      Active
Participation.  Each Participant’s decision to become an Active
Participant shall be entirely voluntary.  An Employee who has become a
Participant under Section 2.1 may elect to become an Active Participant as
of any Entry Date following the Employee’s receipt of his or her first pay check
from the Employer, provided that he or she is
then an Eligible Employee, and provided further, that he or
she enrolls in the Plan and elects to make Elective Deferrals, in such manner as
the Committee (in its discretion) shall specify, in accordance with
Section 3.  Such Employee’s status as an Active Participant shall
be effective as soon as administratively feasible following his or her
enrollment.

    
      
         

      

      
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    2.3.2                      Inactive
Participation.  A Participant who does not elect to become an
Active Participant when first eligible to do so, or whose active participation
in the Plan is suspended pursuant to Section 2.4, 2.5 or 8.2.3, shall be
treated as an Inactive Participant until the Entry Date as of which he or she
elects to become an Active Participant in accordance with Section 2.3.1 or
Section 2.5(d).

    2.3.3                      Effect of Inactive
Participation.  An Inactive Participant shall not be able to
make Elective Deferrals nor share in the allocation of Company Match
Contributions, and he or she may not later make the Elective Deferrals that he
or she might otherwise have made during the Participant’s period of inactive
participation in the Plan.  However, an Inactive Participant’s Account
shall continue to share in the allocation of earnings and gains (or losses) of
the Trust Fund as provided in Section 6.4.  No distribution shall
be made to a Participant solely as the result of any suspension of his or her
active participation in the Plan.

    2.4           Voluntary
Suspension.  An Active Participant may voluntarily suspend his or
her active participation in the Plan, thereby suspending his or her Elective
Deferrals and becoming an Inactive Participant for future payroll periods during
the suspension period by giving notice to such person, in such manner and within
such advance notice period as the Committee (in its discretion) shall
specify.  A Participant whose active participation in the Plan has
been voluntarily suspended pursuant to this Section 2.4 may resume his or
her status as an Active Participant only in accordance with
Section 2.3.1.

    2.5           Mandatory
Suspension.  If a Participant (1) ceases to be an Eligible
Employee because he or she ceases to meet the requirements of Section 1.19,
(2) is transferred to employment

    
      
         

      

      
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    with
an Affiliate which is not an Employer, (3) is granted a Leave of Absence
without pay, (4) is on long-term disability, or (5) is placed on
layoff or furlough status, then:

    (a)           His
or her active participation in the Plan shall be suspended (in accordance with
Section 2.3.3) for each payroll period beginning during the continuation of
such ineligible status;

     

    (b)           He
or she shall be treated as an Inactive Participant for the duration of the
suspension period; and

     

    (c)           After
he or she again becomes an Eligible Employee and the conditions described in
clauses (1) through (5) above cease to apply, his or her status as an Active
Participant may be resumed only in accordance with
Section 2.3.1.

     

    (d)           Notwithstanding
the foregoing, if a Participant’s active participation in the Plan is suspended
because he or she is granted an unpaid Leave of Absence, his or her status as an
Active Participant automatically will resume as of the Entry Date that coincides
with or next follows his or her return to active employment with an Employer
(provided that he or she is then an Eligible Employee).

     

    2.6           Provision of
Information.  Each Participant shall comply with such enrollment
procedures as are required by the Committee and shall make available to the
Committee and the Trustee any information they may reasonably
request.  By virtue of his or her participation in the Plan, a
Participant agrees, on his or her own behalf and on behalf of all persons who
may make any claim arising out of, relating to, or resulting from his or her
participation in the Plan, to be bound by all of the provisions of the Plan, the
Trust Agreement and any other related agreements.

    2.7           Termination of
Participation.  An Eligible Employee who has become a Participant
shall remain a Participant until his or her employment with all Employers and
Affiliates terminates, or if later, until his or her entire Account balance is
distributed.

    2.8           Acquisitions. 
If determined by the Committee (in its discretion), an Acquired Employee may
elect to become an Active Participant sooner than the date specified in
Section 2.3.1.  As determined in the discretion of the Committee,
such date shall be as soon as administratively

     

    
      
        
        

      

      
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    feasible
on or after the later of (a) the date on which the Acquired Employee
becomes an Eligible Employee, or (b) such other date as may be specified by
the Committee (which shall in no event be later than the Entry Date following
the Acquired Employee’s receipt of his or her first pay check from the
Employer).  For purposes of this Section 2.8, an “Acquired Employee” is an
Eligible Employee who becomes an Employee by reason of the acquisition by the
Company or its Affiliate of the assets and liabilities of, or the voting stock
of, another corporation or other business entity, or another type of business
transaction effected by the Company or its Affiliate.

    2.9           Erroneous
Participation. 

    (a)           Erroneous Elective
Deferrals.  If Elective Deferrals are erroneously made on
behalf of an individual who is not eligible to participate in the Plan and/or,
in the case of Catch-Up Contributions, who is determined not to be eligible to
make Catch-Up Contributions in accordance with Section 3.2, then such
amounts, including any earnings and gains (or losses) thereon, shall be (1)
segregated from all other Plan assets, (2) treated as a nonqualified trust
established by and for the benefit of such individual, and (3) distributed to
the individual as soon as administratively practicable after discovery of such
error.

     

    (b)           Other Erroneous
Contributions.  If any contributions (other than Elective
Deferrals, as set forth in paragraph (a) above) are erroneously made on
behalf of an individual who is not entitled to such contributions, then such
contributions, including any earnings and gains (or losses) thereon, shall be
forfeited and utilized in accordance with Section 6.8 or returned to the
Employer in accordance with Section 10.3, to the extent that such
contributions are made as a result of a good faith mistake of fact.

     

     

    SECTION 3

     

    ELECTIVE
DEFERRALS

     

    3.1           Employee Pre-Tax Contributions and Roth Basic
Contributions. 

    3.1.1                      General.  Each
Active Participant may elect to defer portions of his or her Compensation
payments and to have the amounts of such Employee Pre-Tax Contributions and,
effective as of January 1, 2008, Roth Basic Contributions, contributed by the
Employer to the Trust Fund and credited to his or her Employee Pre-Tax Account
or Roth Basic Account, as applicable,

     

    
      
        
        

      

      
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    under
the Plan, provided that
he or she elects to make Elective Deferrals in accordance with
Section 3.3.  Subject to Section 5.5, an Active Participant
may elect to defer:

    (a)           A
portion of each payment of Compensation, other than any Eligible Bonus, that
would otherwise be made to him or her, after the election becomes and while it
remains effective, equal to any whole percentage from 1% to 50% (inclusive) of
such payment;

     

    (b)           In
addition to any election made under subsection (a) above, a portion of any
Eligible Bonus payment that would otherwise be made to him or her, after the
election becomes and while it remains effective, equal to any whole percentage
from 1% to 99% (inclusive) (or such lesser percentage as is determined by the
Company to comply with mandatory tax withholding and applicable payroll
deductions) of such payment.

     

    3.1.2                      Section 401(k)
Ceiling.  Notwithstanding any contrary Plan provision, the
Committee:

    (a)           May
suspend or limit any Participant’s salary deferral election at any time in order
to prevent the cumulative amount of the Employee Pre-Tax Contributions and Roth
Basic Contributions contributed on behalf of the Participant for any calendar
year from exceeding the Section 401(k) Ceiling, except to the extent
permitted under Section 3.2 and Section 414(v) of the
Code.

     

    (b)           Shall
cause any amount allocated to the Participant’s combined Pre Tax 401(k)
Deferrals Account and Roth Basic Account (combined) as an excess deferral
(calculated by taking into account only amounts deferred under this and any
other cash or deferred arrangement maintained by any Employer or Affiliate and
qualified under Section 401(k) of the Code), together with any income or
loss allocable thereto for the calendar year to which the excess deferral
relates, as well as, for the Gap Period, to be distributed to the Participant no
later than the April 15 that next follows the year of deferral in
accordance with Section 402(g)(2)(A) of the Code.  For this
purpose, the “Gap
Period” means the period beginning on the first day of the subsequent
Plan Year and ending on either the day before the date of distribution or on a
date selected in accordance with the safe harbor method set forth in Treas. Reg.
§ 1.401(k)-2(b)(2)(iv)(D).

     

    (c)           May
cause any other amount allocated to the Participant’s Employee Pre-Tax Account
and/or Roth Basic Account and designated by the Participant as an excess
deferral, together with any income or loss allocable thereto for the calendar
year to which the excess deferral relates, as well as for the Gap Period, to be
distributed to the Participant in accordance with Section 402(g)(2)(A) of
the Code.

     

    (d)           Shall
cause any Company Match Contributions allocated to the Participant’s Company
Match Account by reason of any excess deferral distributed pursuant to
subsection (b) or (c), together with any income or loss allocable thereto for
the calendar year to

     

    
      
         

      

      
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    which
the excess deferral relates, as well as for the Gap Period, to be forfeited at
the time such distribution is made and applied to reduce the next succeeding
Matching Contribution to the Plan.

     

    For
purposes of this Section 3.1.2 and Section 4.1.2, the “Section 401(k) Ceiling”
means the dollar limit prescribed in Section 402(g)(1) of the Code, as
adjusted pursuant to Sections 402(g)(5) and 415(d) of the Code (e.g., $15,500 in 2007 and
2008).

    3.1.3                      Limitations on HCE
Participants.  For any Plan Year, the Committee (in its
discretion) may limit the period for which, and/or specify a lesser maximum
percentage at which, Employee Pre-Tax Contributions and Roth Basic Contributions
may be elected by HCE Participants (as defined in Section 3.1.4) in such
manner as may be necessary or appropriate in order to assure that the limitation
described in Section 3.1.5 will be satisfied.

    3.1.4                      HCE and Non-HCE
Participants.  All Participants who are Eligible Employees at
any time during a Plan Year (whether or not they are Active Participants), and
who are Highly Compensated Employees with respect to the Plan Year, shall be
“HCE Participants” for
the Plan Year.  All other Participants who are Eligible Employees at
any time during the Plan Year shall be “Non-HCE Participants” for the
Plan Year.

    3.1.5                      Deferral Percentage
Limitation.  In no event shall the actual deferral percentage,
determined in accordance with Section 3.1.6 (the “ADP”), for the HCE
Participants for a Plan Year exceed the maximum ADP, as determined by reference
to the ADP for the Non-HCE Participants, in accordance with the following
table:

    
      	
              If
      the ADP for the Non-HCE

              Participants
      (“NHCEs’ ADP”) is:

            	
              Then
      the Maximum ADP for

               the
      HCE Participants is:

            
	
              Less
      than 2%

              2%
      to 8%

              More
      than 8%

            	
              2.0
      x NHCEs’ ADP

              NHCEs’
      ADP + 2%

              1.25
      x NHCEs’ ADP

            

    

    

    
      
         

      

      
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    3.1.6                      Actual Deferral
Percentage.  The actual deferral percentage for the HCE or
Non-HCE Participants for any Plan Year shall be calculated by computing the
average of the deferral percentages (calculated separately for each HCE or
Non-HCE Participant) (the “Deferral Rates”) determined
by dividing (1) the total for the Plan Year of all Employee Pre-Tax
Contributions and Roth Basic Contributions made by the Participant and credited
to his or her Pre-Tax 401(k) Deferral Account or Roth 401(k) Deferral Account,
as applicable, by (2) the Participant’s Testing Compensation (as defined in
Section 3.1.7) for the Plan Year.  In computing a Participant’s
Deferral Rate, the following special rules shall apply:

    (a)           If
any Employer or Affiliate maintains any other cash or deferred arrangement which
is aggregated by the Company with this Plan for purposes of applying
Section 401(a)(4) or 410(b) of the Code, then all such cash or deferred
arrangements shall be treated as one plan for purposes of applying
Section 3.1.5.

     

    (b)           If
an HCE Participant is a participant in any other cash or deferred arrangement
maintained by any Employer or Affiliate and qualified under Section 401(k)
of the Code, the separate deferral rates determined for the Participant under
all such cash or deferred arrangements shall be aggregated with the separate
Deferral Rate determined for the Participant under this Section 3.1.6 for
purposes of applying Section 3.1.5.

     

    3.1.7                      Testing
Compensation.  For purposes of applying Sections 3.1, 3.3
and 4.1 and the non-discrimination tests of Sections 401(k)(3) and
401(m)(2) of the Code, “Testing Compensation” means
with respect to any Participant, his or her Total Compensation (as defined in
Section 5.5.2(e) and applied using the definition of “Affiliate” in
Section 1.2 rather than in Section 5.5.2(a)), subject to the
following:

    (a)           For
any Plan Year, the Committee may specify an alternate definition of Testing
Compensation, provided that such alternate definition satisfies the applicable
requirements of Treas. Reg. § 1.401(k)-6;

     

    (b)           No
amount in excess of the Compensation Limit shall be taken into account under
this Section 3.1.7 for any Plan Year; and

     

    
      
         

      

      
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    (c)           Compensation
for periods prior to the time that the individual became a Participant shall not
be taken into account.

     

    3.2           Catch-Up
Contributions.  Notwithstanding any contrary Plan
provision:

    (a)           Eligible
Participants.  All Employees who are Participants eligible to
make Elective Deferrals under this Plan and who have attained age fifty (50)
before the close of the Plan Year shall be eligible to make Employee Pre-Tax
Catch-Up Contributions (and, effective as of January 1, 2008, Roth Catch-Up
Contributions) for the Plan Year in accordance with, and subject to the
limitations of, Section 414(v) of the Code.  An Active
Participant who meets the foregoing requirements may elect to defer a portion of
each payment of Compensation that would otherwise be made to him or her, after
the election becomes and while it remains effective, equal to any whole
percentage from 1% to 75% (inclusive) of such payment.

     

    (b)           Certain Code Limitations
Inapplicable.  A Participant’s Catch-Up Contributions shall not
be taken into account for purposes of applying Plan provisions implementing the
required limitations of Sections 402(g) and 415 of the Code, and the Plan
shall not be treated as failing to satisfy Plan provisions implementing the
requirements of Section 401(k)(3), 401(k)(11), 401(k)(12), 410(b) or 416 of
the Code, as applicable, by reason of Catch-Up Contributions being or having
been made under the Plan.

     

    (c)           No Company Match
Contributions.  Catch-Up Contributions shall not be eligible
for Company Match Contributions under the Plan.

     

    (d)           Crediting of Catch-Up
Contributions.  A Participant’s Catch-Up Contributions shall be
credited to his or her Employee Pre-Tax Catch-Up Account or Roth Catch-Up
Account, as applicable, under the Plan.

     

    3.3           Deferral
Elections.  Each Active Participant shall determine the
percentage(s) of his or her Compensation that shall be deferred and contributed
to the Trust Fund as his or her Employee Pre-Tax Contributions, Roth Basic
Contributions, Employee Pre-Tax Catch-Up Contributions and/or Roth Catch-Up
Contributions in accordance with Sections 3.1.1 and 3.2, respectively, at
the time he or she becomes an Active Participant.  The Participant
thereafter may redetermine such percentage(s) from time to time in accordance
with 3.3.2.  In either event –

    (a)           The
Active Participant shall make such Elective Deferral elections, in such manner
and within such advance notice period as the Committee (in its discretion) shall
specify;

     

    
      
         

      

      
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    (b)           No
Employee Pre-Tax Contributions or Roth Basic Contributions shall be made by any
Active Participant except in accordance with his or her Elective Deferral
election and the limitations of Sections 3.1 and 5.5; and

     

    (c)           No
Employee Pre-Tax Catch-Up Contributions or Roth Catch-Up Contributions shall be
made by any Active Participant except in accordance with his or her Elective
Deferral election and the limitations of Section 3.2.

     

    3.3.1                      Amounts.  Notwithstanding
anything in Section 3.1.1 (other than Eligible Bonus deferral elections in
accordance with Section 3.1.1(b)) or 3.2 to the contrary, no Active Participant
may elect to defer an amount of his or her Compensation for any pay period as
all types of Elective Deferrals that, when combined, exceeds 75% of each payment
of Compensation.  The amount of Elective Deferrals that may be made by
each Active Participant for each payroll period shall be the amount in dollars
and cents that is nearest to the amount of Compensation subject to the deferral
election(s) multiplied by the percentage(s) elected by the Participant pursuant
to Section 3.1.1 or 3.2(a), as applicable.

    3.3.2                      Changes.  An
Active Participant may change the percentage(s) determined under the first
sentence of this Section 3.3 by giving notice in such manner and within
such advance notice period as the Committee (in its discretion) shall specify,
effective with respect to Compensation paid on such date as the Committee (in
its discretion) may specify.  The Elective Deferral elections made by
an Active Participant shall remain in effect until his or her active
participation in the Plan is terminated, except to the extent that the election
is suspended in accordance with Sections 2.4, 2.5 or 8.2.3, changed in
accordance with this Section 3.3.2, or reduced pursuant to
Section 3.1.2 or 3.1.3 (as applicable).

    3.3.3                      Potential Excess
ADP.  In the event that (but for the application of this
Section 3.3.3) the Committee determines that the ADP for HCE Participants
would exceed the

    
      
         

      

      
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    maximum
permitted under Section 3.1.5 for a Plan Year (the “ADP Maximum”), then the
Committee (in its discretion) may reduce, in accordance with Section 3.1.3,
the percentages or amounts of Pre Tax 401(k) Deferrals and/or Roth Basic
Contributions subsequently to be contributed on behalf of the HCE Participants
by such percentages or amounts as, and for as long as, the Committee (in its
discretion) may determine is necessary or appropriate in the circumstances then
prevailing.  If the Committee determines that it is no longer
necessary to reduce the Pre Tax 401(k) Deferrals and/or Roth Basic Contributions
contributed on behalf of the HCE Participants, the Committee (in its discretion)
may permit some or all HCE Participants, on a uniform and nondiscriminatory
basis, to make new Elective Deferral elections with respect to their subsequent
Compensation payments and with respect to Pre Tax 401(k) Deferrals and/or Roth
Basic Contributions, and shall establish a policy as to the deferral percentages
that shall apply with respect to those HCE Participants who do not make new
elections.

    3.3.4                      Actual Excess
ADP.  In the event that the Committee determines that the ADP
for the HCE Participants exceeds the ADP Maximum for any Plan Year, then the
amount of any excess contributions (within the meaning of
Section 401(k)(8)(B) of the Code) contributed on behalf of any HCE
Participant shall be distributed, together with any income or loss allocable
thereto for the Plan Year to which the excess contributions relate as well as
for the Gap Period (as defined in Section 3.1.2(b)), to the HCE Participant
before the close of the next following Plan Year.

    (a)           Determination and Allocation
of Excess Contributions.  The amount of excess contributions
for HCE Participants for the Plan Year shall be determined and allocated among
HCE Participants in the following manner:

     

    (1)           With
respect to each HCE Participant whose Deferral Rate exceeds the ADP Maximum, the
Committee shall calculate an excess contribution amount by calculating the
excess of (A) his or her Pre Tax 401(k) Deferrals and/or Roth Basic
Contributions, over (B) the product of the ADP Maximum times his or her
Testing Compensation.  The aggregate

     

    
      
         

      

      
        -21-

        
          

        

      

      
         

      

    

    of
the excess contributions for all such HCE Participants shall be the total excess
contributions to be distributed pursuant to this
Section 3.3.4.

     

    (2)           The
Pre Tax 401(k) Deferrals and/or Roth Basic Contributions of the HCE Participant
with the highest total dollar amount of Pre Tax 401(k) Deferrals and/or Roth
Basic Contributions contributed shall be reduced to the extent necessary to
cause the total dollar amount of his or her Pre Tax 401(k) Deferrals and/or Roth
Basic Contributions contributed to equal the lesser of the dollar amount of
excess contributions for all HCE Participants calculated pursuant to subsection
(a)(1) above or the dollar amount of Pre Tax 401(k) Deferrals and/or Roth Basic
Contributions of the HCE Participant with the next highest total dollar amount
of Pre Tax 401(k) Deferrals and/or Roth Basic Contributions
contributed.  This process shall be repeated until the total dollar
amount of reductions of such Pre Tax 401(k) Deferrals and/or Roth Basic
Contributions equals the total excess contributions calculated pursuant to
subsection (a)(1) above.

     

    (3)           The
amount of excess contributions to be distributed to an HCE Participant pursuant
to this Section 3.3.4 shall be equal to the total amount by which his or
her actual Pre Tax 401(k) Deferrals and/or Roth Basic Contributions is reduced
under subsection (a)(2) above, but reduced by the amount of any excess deferrals
previously distributed to the HCE Participant for the Plan Year under
Section 3.1.2.

     

    (b)           Forfeiture of Related
Company Match Contributions.  Any Company Match Contributions
allocated to the HCE Participant’s Company Match Account by reason of any excess
contributions distributed pursuant to this Section 3.3.4, together with any
income allocable thereto for the Plan Year to which the excess contributions
relate, shall be forfeited and applied to reduce the next succeeding Matching
Contribution to the Plan.

     

    (c)           Incorporation By
Reference.  The foregoing provisions of this Section 3 are
intended to satisfy the requirements of Section 401(k)(3) of the Code and,
to the extent not otherwise stated above, the provisions of
Section 401(k)(3) of the Code, Treas. Reg. § 1.401(k)-1(a)(iv) (to the
extent not inconsistent with amendments to the Code), and subsequent Internal
Revenue Service guidance under Section 401(k)(3) of the Code are
incorporated herein by reference.

     

    3.4           Payment of Elective
Deferrals.  Subject to the foregoing provisions of this
Section 3, Sections 5.5, 10.3 and Section 11, the Employers shall
pay to the Trust Fund the amounts elected by Active Participants to be
contributed as Elective Deferrals.  Any Elective Deferrals to be
contributed for a payroll period in accordance with the preceding sentence shall
be paid to the Trust Fund as soon as administratively practicable thereafter,
and in no event later than the 15th business day of the month that next follows
the month in which such Compensation was paid.

    
      
         

      

      
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    SECTION 4

     

    EMPLOYER
CONTRIBUTIONS

     

    4.1           Company Match
Contributions.  Subject to the provisions of this Section  4.1,
Sections 5.5, 10.3 and Section 11, the Employers shall contribute to
the Trust Fund as Company Match Contributions amounts equal to the
following:

    4.1.1                      Basic Company Match
Contributions.  The Employer will make Company Match
Contributions for each eligible Active Participant on a payroll by payroll basis
equal to 100% of the eligible Active Participant’s Employee Pre-Tax
Contributions and, effective as of January 1, 2008, Roth Basic Contributions,
for the pay period, but not to exceed 5% of the eligible Active Participant’s
Compensation for the pay period against which such contributions are
made.

    4.1.2                      True-Up Company Match
Contributions.  In addition to the Company Match Contributions
set forth in Section 4.1.1, the Employer will make additional Company Match
Contributions for the Plan Year, to be allocated as of the last Valuation Date
of the Plan Year to eligible Participants as an adjustment to take into account
any changes in Compensation or Participant deferral elections which may have
occurred during the Plan Year.  The amount of the additional Company
Match Contributions for each eligible Participant shall be equal to the
difference, if any, between (i) the Company Match Contributions allocated
to the eligible Participant pursuant to Section 4.1.1 for the Plan Year,
and (ii) a Matching Contribution equal to 100% of the eligible
Participant’s Employee Pre-Tax Contributions and/or, effective January 1, 2008,
Roth Basic Contributions for the Plan Year, but not to exceed 5% of the eligible
Participant’s Compensation for the Plan Year.  Notwithstanding the
foregoing, the only Compensation that shall be taken into account with respect
to a Participant for purposes of this additional Matching Contribution shall
be

    
      
         

      

      
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    Compensation
paid (or payable if deferred under Section 3) to the eligible Participant
for payroll periods for which he or she made Employee Pre-Tax Contributions
and/or, effective January 1, 2008, Roth Basic Contributions, to the Plan or
after which the Section 401(k) Ceiling took effect under the
Plan.  In order to be eligible for this additional Matching
Contribution, a Participant must be an Eligible Employee on the last Valuation
Date of the Plan Year, or his or her employment with the Employer must have been
terminated during the Plan Year due to Disability or death.

    4.1.3                      Calculation
Rules.  Only those Employee Pre-Tax Contributions and Roth
Basic Contributions that are made pursuant to Sections 3.1 and 3.3 shall be
taken into account in calculating the amount of the Company Match Contributions
(if any) to be made in respect of the Participant’s Employee Pre-Tax
Contributions and Roth Basic Contributions for any payroll period.  In
no event shall the amount of any Catch-Up Contributions contributed to any
Participant’s Employee Pre-Tax Catch-Up Account and/or Roth Catch-Up Account, be
taken into account in determining the amount of Company Match Contributions to
be made to the Trust Fund and/or allocated to his or her Company Match
Account.

    4.1.4                      Limitations on HCE
Participants.  For any Plan Year, the Committee (in its
discretion) may limit the Company Match Contributions to be made on behalf of
HCE Participants (as defined in Section 3.1.4) in such manner as may be
necessary or appropriate in order to assure that the limitation described in
Section 4.1.5 will be satisfied.

    4.1.5                      Contribution Percentage
Limitation.  In no event shall the actual contribution
percentage, determined in accordance with Section 4.1.6 (the “ACP”), for the HCE
Participants for a Plan Year exceed the maximum ACP, as determined by reference
to the ACP for the Non-HCE Participants (as defined in Section 3.1.4), in
accordance with the following table:

     

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

       

    

    
      	
              If
      the ACP for the Non-HCE

              Participants
      (“NHCEs’ ACP”) is:

            	
              Then
      the Maximum ACP for

              the
      HCE Participants is

            
	
              Less
      than 2%

              2%
      to 8%

              More
      than 8%

            	
              2.0
      x NHCEs’ ACP

              NHCEs’
      ACP + 2%

              1.25
      x NHCEs’ ACP

            

    

    

    4.1.6                      Actual Contribution
Percentage.  The actual contribution percentage for the HCE or
Non-HCE Participants for a Plan Year shall be calculated by computing the
average of the percentages (calculated separately for each HCE or Non-HCE
Participant) (the “Contribution Rates”)
determined by dividing (a) the total of all Company Match Contributions
made on behalf of the Participant and credited to his or her Company Match
Account for the Plan Year, by (b) the Participant’s Testing Compensation
(as defined in Section 3.1.7) for the Plan Year.  The special
testing and aggregation rules set forth in Section 3.1.6 with respect to
calculation of the Participants’ Deferral Rates shall also apply to the
calculation of their Contribution Rates.

    4.1.7                      Potential Excess
ACP.  In the event that (but for the application of this
Section 4.1.7) the Committee determines that the ACP for the HCE
Participants would exceed the maximum permitted under Section 4.1.5 for a
Plan Year (the “ACP
Maximum”), then the Committee (in its discretion) may reduce, in
accordance with Section 4.1.4, the percentages or amounts of Company Match
Contributions subsequently to be made on behalf of the HCE Participants by such
percentages or amounts as, and for as long as, the Committee (in its discretion)
may determine is necessary or appropriate in the circumstances then
prevailing.

    4.1.8                      Actual Excess
ACP.  In the event that the Committee determines that the ACP
for the HCE Participants exceeds the ACP Maximum for a Plan Year, then the
amount of any excess aggregate contributions (within the meaning of
Section 401(m)(6)(B) of the Code) contributed on

    
      
         

      

      
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    behalf
of any HCE Participant shall be distributed, together with any income or loss
allocable thereto for the Plan Year to which the excess aggregate contributions
relate, as well as for the Gap Period (as defined in Section 3.1.2(b)), to
the HCE Participant before the close of the next following Plan
Year.

    (a)           Determination and Allocation
of Excess Aggregate Contributions.  The amount of excess
aggregate contributions for HCE Participants for the Plan Year shall be
determined and allocated among HCE Participants in the manner provided in
Section 3.3.4 with respect to excess contributions.

     

    (b)           Determination of Allocable
Income.  The income allocable to any excess aggregate
contributions for the Plan Year shall be determined in the manner provided in
Section 3.3.4 with respect to excess contributions.

     

    (c)           Incorporation By
Reference.  The foregoing provisions of this Section 4.1 are
intended to satisfy the requirements of Section 401(m) of the Code and, to
the extent not otherwise stated above, the provisions of Section 401(m)(2)
and (9) of the Code, Treas. Reg. §1.401(m) 1(b) (to the extent not inconsistent
with amendments to the Code), and subsequent Internal Revenue Service guidance
under Section 401(m)(2) and (9) of the Code are incorporated herein by
reference.

     

    4.2           Non-Elective
Contributions.  Subject to the provisions of Sections 5.3 and
Section 11, for any Plan Year each Employer shall also contribute to the
Trust Fund such amount (if any) as the Board of Directors (in its discretion)
may direct be contributed (a “Non-Elective Contribution”)
on behalf of those Participants who are eligible to share in the allocation of
the Non-Elective Contribution pursuant to Section 5.3.

    4.3           Timing.  Subject
to the foregoing provisions of this Section 4, Section 10.3 and
Section 11, Employer Contributions shall be paid to the Trust Fund within
the time prescribed by law (including extensions) for filing the Company’s
federal income tax return for its taxable year that ends with or within the Plan
Year for which the Contributions are made.

    
      
         

      

      
        -26-

        
          

        

      

      
         

      

    

    

    4.4           Periodic
Contributions.  Subject to the foregoing provisions of this
Section 4, Sections 5.4 and Section 11, any Employer
Contributions to be made for a Plan Year may be paid in installments from time
to time during or after the Plan Year for which they are made.  The
Employers shall specify, as to each Employer Contribution payment made to the
Trust Fund, the Plan Year to which the payment relates.  The Employers
intend the Plan to be permanent, but the Employers do not obligate themselves to
make any Employer Contributions under the Plan whatsoever.

    4.5           Reinstatements. 
The Employers shall also contribute to the Trust Fund any amount necessary to
reinstate a closed Account pursuant to Section 7.8.

    4.6           Profits Not
Required.  Each Employer shall make any contributions otherwise
required to be made for a Plan Year without regard to its current or accumulated
earnings or profits for the taxable year that ends with or within the Plan Year
for which the contributions are made.  Notwithstanding the foregoing,
the Plan is designed to qualify as a profit sharing plan under
Section 401(a) of the Code.

     

    SECTION 5

     

    ALLOCATION
OF CONTRIBUTIONS AND INVESTMENTS

     

    5.1           Elective
Deferrals.  Except as provided in Sections 3.1.2 and 3.3.4, the
Elective Deferrals made on behalf of an Active Participant for any period shall
be allocated to his or her Pre Tax 401(k) Deferrals Account, Roth Basic Account,
Employee Pre-Tax Catch-Up Account or Roth Catch-Up Account, as applicable, as of
the Valuation Date that coincides with or next follows the date on which such
Elective Deferrals are received by the Trustee.

    
      
         

      

      
        -27-

        
          

        

      

      
         

      

    

    

    5.2           Company Match
Contributions.  Except as provided in Section 4.1.8, the
Company Match Contributions made on behalf of a Participant shall be allocated
to his or her Company Match Account as of the Valuation Date that coincides with
or next follows the date on which such Company Match Contributions are received
by the Trustee.

    5.3           Non-Elective
Contributions.  Any Non-Elective Contributions made by an Employer
for a Plan Year shall be allocated, as of the Valuation Date that coincides with
or next follows the date on which such Non-Elective Contributions are received
by the Trustee, to the Non-Elective Contributions Accounts of:

    (a)           All
Participants (as determined under Section 2) who are Eligible Employees as
of the last Valuation Date of the Plan Year for which the Non-Elective
Contributions were made; and

     

    (b)           Those
Participants who, during such Plan Year, ceased to be Employees on account of
death or Disability.

     

    The
portion of the Employer’s Non-Elective Contributions to be allocated to the
Non-Elective Contribution Account of each Participant who is eligible to share
in the allocation pursuant to the preceding sentence shall be determined by
multiplying the total amount of the Non-Elective Contributions by a fraction, of
which (1) the numerator is the total Compensation received by the Participant
while employed by the Employer during the Plan Year, and (2) the denominator is
the aggregate total Compensation of all such Participants eligible to share in
the allocation for such Plan Year.

    5.4           Investment. 
Each Participant (or, if deceased, his or her Beneficiary) shall elect, in such
manner and at such times as the Committee (in its discretion) shall specify, the
percentages of all amounts allocated to his or her Account that are to be
invested in each of the Investment Funds.

    
      
         

      

      
        -28-

        
          

        

      

      
         

      

    

    A
Participant (or Beneficiary) may specify as to any Investment Fund any
percentage that is a whole multiple of 1%, provided that the total of
the percentages specified shall not exceed 100%.

    5.4.1                      Changes.  The
elections of a Participant (or Beneficiary) concerning the investment of the
amounts allocated to his or her Account may be changed in accordance with such
procedures as the Committee (in its discretion) may designate from time to
time.  The designated procedures may include such rules and
limitations (e.g., with
respect to the timing and frequency of elections) as the Committee may specify
from time to time, but at all times shall permit Participants (and
Beneficiaries) to make investment changes in a manner designed to permit the
Plan to qualify as a 404(c) plan (within the meaning of Section 404(c) of
ERISA).

    5.4.2                      Failure to
Elect.  If a Participant (or Beneficiary) fails to direct the
manner in which the amounts allocated (or to be allocated) to his or her Account
are to be invested, such amounts shall be invested in the Investment Fund
designated by the Committee for such purpose.  Whenever the Committee
discontinues an Investment Fund and the Participant (or Beneficiary) does not
make a new election with respect to amounts allocated (or to be allocated) to
the discontinued Investment Fund, such amounts shall be invested in the
Investment Fund designated by the Committee for such purpose.

    5.5           Limitations
on Allocations. 

    5.5.1                      Annual Addition
Limitation.  Notwithstanding any contrary Plan provision, in no
event shall the Annual Addition to any Participant’s Account for any Plan Year
exceed the lesser of: (a) the Defined Contribution Dollar Limit, or
(b) 100% of the Participant’s Total Compensation for the Plan Year, except
to the extent permitted under Section 3.2 and Section 414(v) of the
Code;

    
      
         

      

      
        -29-

        
          

        

      

      
         

      

    

    provided, however, that
clause (b) above shall not apply to Annual Additions described in clauses (5)
and (6) of Section 5.5.2(c).

    5.5.2                      Definitions.  For
purposes of this Section 5.5, the following definitions shall
apply:

    (a)           “Affiliate” means a
corporation, trade or business which is, together with any Employer, a member of
a controlled group of corporations or an affiliated service group or under
common control (within the meaning of Section 414(b), (c), (m) or (o) of
the Code, as modified by Section 415(h) of the Code), but only for the
period during which such other entity is so affiliated with any
Employer.

     

    (b)           “Aggregated Plan” means any
defined contribution plan that is aggregated with this Plan pursuant to
Section 5.5.3.

     

    (c)           “Annual Addition” means with
respect to each Participant the sum for a Plan Year of (1) the Participant’s
Employee Pre-Tax Contributions and Roth Basic Contributions to be credited to
the Participant’s Employee Pre-Tax Account or Roth Basic Account, as applicable;
(2) the share of any Company Match Contributions and/or Non-Elective
Contributions to be credited to the Participant’s Company Match Account and/or
Non-Elective Contributions Account, as applicable; (3) the share of all
contributions made by all Employers and Affiliates (including salary reduction
contributions made pursuant to Section 401(k) of the Code) and any
forfeitures to be credited to the Participant’s account under any Aggregated
Plan; (4) any after-tax employee contributions made by the Participant for the
Plan Year under any Aggregated Plan; (5) any amount allocated to the
Participant’s individual medical account (within the meaning of
Section 415(l) of the Code) under a defined benefit plan maintained by an
Employer or Affiliate; and (6) any amount attributable to post-retirement
medical benefits that is allocated pursuant to Section 419A of the Code to
the Participant’s separate account under a welfare benefits fund (within the
meaning of Section 419(e) of the Code) maintained by an Employer or
Affiliate.

     

    (d)           “Defined Contribution Dollar
Limit” means the dollar limit prescribed in Section 415(c)(1)(A) of
the Code, as adjusted in accordance with Section 415(d) of the Code (e.g., $45,000 for 2007 and
$46,000 for 2008).

     

    (e)           “Total Compensation” means the
amount of an Employee’s:

     

    (1)           Wages
(within the meaning of Section 3401(a) of the Code) and all other payments
of compensation which an Employer or Affiliate is required to report in Box 1
(“wages, tips, other compensation”) of IRS Form W 2 (or its
successor):

     

    (A)           Including
the aggregate of his or her elective deferrals (within the meaning of
Section 402(g)(3) of the Code) and any other amounts that are
(i) contributed

     

    
      
         

      

      
        -30-

        
          

        

      

      
         

      

    

    by
any Employer or Affiliate at his or her election, and (ii) not includible
in his or her gross income under Section 125, 132(f)(4) or 457 of the Code;
but

     

    (B)           Excluding
amounts paid or reimbursed by the Employer or Affiliate for moving expenses
incurred by the Participant, to the extent that at the time of payment it is
reasonable to believe that such amounts qualify as a “qualified moving expense
reimbursement” (within the meaning of Section 132(a)(6) of the Code);
and

     

    (C)           Determined
without regard to any rules that limit the remuneration included in wages based
on the nature or location of the employment or the services performed (such as
the agricultural labor exception); or

     

    (2)           Compensation
calculated by the Committee in a manner that satisfies the applicable
requirements of Section 415(c)(3) of the Code and Treas. Reg.
§1.415-2(d).

     

    5.5.3                      Other Defined Contribution
Plans.  All defined contribution plans (terminated or not)
maintained by any Employer or Affiliate shall be aggregated with this Plan, and
all plans so aggregated shall be considered as one plan in applying the
limitations of this Section 5.5, provided that the special
limitation applicable to employee stock ownership plans under
Section 415(c)(6) of the Code shall be taken into account with respect to a
Participant who participates in any such plan.

    5.5.4                      Limitation
Year.  For purposes of applying the limitations of
Section 415 of the Code, the limitation year shall be the Plan
Year.

     

    SECTION 6

     

    PARTICIPANT
ACCOUNTS AND INVESTMENT FUNDS

     

    6.1           Participant
Accounts.  At the direction of the Committee, there shall be
established and maintained for each Participant within his or her Account, the
following subaccounts, as appropriate:

    (a)           An
Employee Pre-Tax Account, to which shall be credited all Employee Pre-Tax
Contributions paid to the Trust Fund at his or her election under
Section 3;

     

    (b)           A
Roth Basic Account, to which shall be credited all Roth Basic Contributions paid
to the Trust Fund at his or her election under Section 3;

     

    
      
         

      

      
        -31-

        
          

        

      

      
         

      

    

    (c)           An
Employee Pre-Tax Catch-Up Account, to which shall be credited all Employee
Pre-Tax Catch-Up Contributions paid to the Trust Fund at his or her election
under Section 3;

     

    (d)           A
Roth Catch-Up Account, to which shall be credited all Roth Catch-Up
Contributions paid to the Trust Fund at his or her election under
Section 3;

     

    (e)           A
Company Match Account, to which shall be credited all Company Match
Contributions paid to the Trust Fund on his or her behalf under
Section 4;

     

    (f)           A
Non-Elective Contribution Account, to which shall be credited all Non-Elective
Contributions paid to the Trust Fund on his or her behalf under
Section 4;

     

    (g)           A
Rollover Contributions Account, to which shall be credited all pre-tax transfers
made to the Trust Fund by or on behalf of the Participant under Section
10.5.2;

     

    (h)           A
Roth Rollover Account, to which shall be credited all transfers made to the
Trust Fund by or on behalf of the Participant under
Section 10.5.3;

     

    (i)           A
Genenflex Account, which shall continue to hold any Prior Excess Flex Credit
Contributions (as defined in Section 1.1.4); and

     

    (j)           Such
other Account(s) as the Committee shall deem necessary or appropriate, from time
to time.

     

    Each
Participant’s Account also shall reflect the total value of its proportionate
interest in each of the Investment Funds as of each Valuation
Date.  The maintenance of a separate Account for each Participant
shall not be deemed to segregate for the Participant, nor to give the
Participant any ownership interest in, any specific assets of the Trust
Fund.

    6.2           Trust Fund
Assets.  The Trust Fund shall consist of the Participants’ Elective
Deferrals, Company Match Contributions, Non-Elective Contributions, Prior Excess
Flex Credit Contributions (as defined in Section 1.1.4), Rollover
Contributions or Roth Rollover Contributions, or other transfers made pursuant
to Section 10.5, all investments and reinvestments made therewith, and all
earnings and gains (less any losses) thereon.  The Trustee shall hold
and administer all assets

    
      
         

      

      
        -32-

        
          

        

      

      
         

      

    

    of
the Trust Fund in the Investment Funds, and each Participant and his or her
Account shall have only an undivided interest in any of the Investment
Funds.

    6.3           Investment
Funds. 

    6.3.1                      General.  The
Trustee shall establish three or more Investment Funds which shall be maintained
for the purpose of investing such portions of Participants’ Accounts as are
properly allocable to each such Fund pursuant to Section 5.4.  At
least three of the Investment Funds shall (a) be diversified, (b) have
materially different risk and return characteristics, and (c) be designed
to satisfy the broad range of investment alternatives requirement of 29 C.F.R.
§ 2550.404c 1(b)(3), all in a manner designed to permit the Plan to qualify
as a 404(c) plan (within the meaning of Section 404(c) of
ERISA).

    6.3.2                      Investment
Media.  Except to the extent that such investment
responsibility has been transferred to the Trustee or an Investment Manager in
accordance with Section 9.6, the Committee (in its discretion) shall direct
the Trustee to invest each Investment Fund in units, shares or other interests
in one or more common, pooled, collective or other investment media that are
(a) designated by the Committee, and (a) either (1) maintained by any
person described in Section 3(38)(B) of ERISA or an affiliate of such
person, or (2) registered under the Investment Company Act of 1940, as
amended.

    6.3.3                      Changes.  The
Committee may from time to time change the number, identity or composition of
the Investment Funds made available under this
Section 6.3.  Except to the extent that such investment
responsibility has been transferred to the Trustee or an Investment Manager in
accordance with Section 9.6, the Committee also may select different
investment media for the investment of any Investment Fund.

    
      
         

      

      
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    6.3.4                      Reinvestments and
Cash.  All interest, dividends or other income realized from
the investments of any of the Investment Funds shall be reinvested in the
Investment Fund that realized such income.  Temporary cash balances
arising in any of the Investment Funds shall be invested in a manner that
produces a reasonable rate of return and is consistent with the liquidity needs
of the Fund.

    6.3.5                      Company Stock
Fund.  Notwithstanding the foregoing provisions of this
Section 6.3, one of the Investment Funds shall be a Company Stock
Fund.

    6.3.6                      Limitation on Investment in
Company Stock Fund.  Notwithstanding anything in the Plan to
the contrary, the following restrictions on investment in the Company Stock Fund
shall apply:

    (a)           Investment
of future contributions (Elective Deferrals, Employer Contributions, Rollover
Contributions and Roth Rollover Contributions) in the Company Stock Fund shall
be limited to 30% of new money invested;

     

    (b)           Exchanges
of existing assets into the Company Stock Fund will be limited to 30% of the
Participant’s total Plan Account at the time of the exchange; and

     

    (c)           Existing
investments in the Company Stock Fund may be sold at any time (subject to any
applicable trading restrictions) but once sold, reinvestment in the Company
Stock Fund is limited to the above restrictions.

     

    6.4           Valuation of Participants’
Accounts.  The Trustee shall determine the fair market values of the
assets of the Investment Funds, and the Committee shall determine the fair
market value of each Participant’s Account, as of each Valuation
Date.  In making such determinations and in crediting net earnings and
gains (or losses) in the Investment Funds to the Participants’ Accounts, the
Committee (in its discretion) may employ, and may direct the Trustee to employ,
such accounting methods as the Committee (in its discretion) deems appropriate
in order fairly to reflect the fair market values of the Investment Funds and
each Participant’s Account.  For this purpose the

    
      
         

      

      
        -34-

        
          

        

      

      
         

      

    

    Trustee
and the Committee (as appropriate) may rely upon information provided by the
Committee, the Trustee or other persons believed by the Trustee or the Committee
to be competent.  The value of the interest of any Participant’s
Account in the Company Stock Fund may be measured in units (rather than shares
of Company Stock) in such manner as the Committee (in its discretion) shall
specify.

    6.5           Valuation of
Shares.  For all purposes of the Plan, the Trustee shall determine
the fair market value of a share of Company Stock, which, as of any date, shall
be (except as set forth below) the closing price of the Company Stock on the New
York Stock Exchange on that date, as published in The Wall Street Journal or,
if no report is available for that date, on the next preceding date for which a
report is available, except that in the case of a transaction involving the
purchase or sale of share(s) of Company Stock, the fair market value of any
share of Company Stock shall be the purchase or sale price of such share on the
New York Stock Exchange.

    6.6           Statements of
Account.  Each Participant, Beneficiary or Alternate Payee shall be
furnished with periodic statements reflecting his or her interest in the Plan at
least once each calendar quarter.  Within sixty (60) days of receipt
of any such statement, each such individual must notify the Committee (or its
designee) of any error in the statement and provide any documents and/or
information as the Committee (or its designee) may require.

    6.7           Vesting of Participants’
Accounts.  Each Participant shall at all times be 100% vested in his
or her Account under the Plan.

    6.8           Forfeitures. 
Any amounts attributable to forfeitures transferred pursuant to the merger of
another tax qualified plan with this Plan, and any other amounts to be treated
as forfeitures under the Plan, shall be applied, at the Committee’s election and
in its discretion, to: (a) reduce the

    
      
         

      

      
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    Employer’s
obligation to make Company Match Contributions; (b) reduce the Employer’s
obligation to make Non-Elective Contributions; (c) fund any other Employer
contributions (e.g.,
Qualified Non-Elective Contributions) determined by the Committee to be
necessary or appropriate; and/or (d) pay administrative expenses under the
Plan in accordance with Section 9.9.

     

    SECTION 7

     

    DISTRIBUTIONS

     

    7.1           Events Permitting
Distribution.  Subject to Section 7.3, the balance credited to
a Participant’s Account shall become distributable only in the following
circumstances:

    (a)           Upon
the Participant’s severance from employment with all Employers and Affiliates at
or after Normal Retirement Age, on account of Disability or death, or for any
other reason;

     

    (b)           If
the Participant is a 5-percent owner within the meaning of
Section 416(i)(1)(B) of the Code (a “5-Percent Owner”), at any
time during (and no later than) the April 1 that next follows the calendar
year in which the Participant attains age 701⁄2;

     

    (c)           Upon
the Committee’s approval of the Participant’s application for a withdrawal from
his or her Account, but only to the limited extent provided in
Section 8;

     

    (d)           In
accordance with and to the limited extent provided in Sections 3.1.2, 3.3.4
or 4.1.8; or

     

    (e)           Upon
the creation or recognition of an Alternate Payee’s right to all or a portion of
a Participant’s Account under a domestic relations order which the Committee
determines is a QDRO (as defined in Section 8.7), but only as to the
portion of the Participant’s Account that the QDRO states is payable to the
Alternate Payee.

     

    For
purposes of determining whether a Participant has met the foregoing
requirements, if a Participant experiences a change in employment status to that
of a Leased Employee (as defined in Section 1.30) and he or she continues
to work for the Employer or any Affiliate, such change will not be treated as a
severance from employment with all Employers and Affiliates for purposes of
receiving a distribution under the Plan.

    
      
         

      

      
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    7.2           Times for
Distribution. 

    7.2.1                      General
Rule.  Subject to the consent requirements of Section 7.3
and except as provided in Section 8.7 (relating to QDROs), distributions
from a Participant’s Account shall normally be made or commenced as soon as
practicable after the Valuation Date that coincides with or next follows the
later of (a) the date on which the event permitting the distribution
occurs, or (b) the date on which any consent required under
Section 7.3 is granted in such manner and within such advance notice period
as the Committee (in its discretion) shall specify.

    7.2.2                      Distribution
Deadline.  Subject to all other provisions of this
Section 7, all distributions not made sooner pursuant to the first sentence
of Section 7.2.1 shall be made no later than sixty (60) days after the end
of the Plan Year in which a distribution event described in Section 7.1(a)
occurs with respect to the Participant, or the Participant attains Normal
Retirement Age (whichever is later), subject also to the following:

    (a)           A
Participant’s failure to consent to a distribution (if such consent is required
under Section 7.3) shall be deemed to be an election to defer distribution
of his or her Account; provided, however, that the
Participant’s Account shall be distributed no later than his or her Deadline
Date (as defined in Section 7.2.3).

     

    (b)           If
the amount of the distribution or the location of the Participant or his or her
Beneficiary (after a reasonable search) cannot be ascertained by the deadline
described above, distribution shall be made no later than sixty (60) days after
the earliest date on which the amount or location (as appropriate) is
ascertained, subject to the other provisions of this
Section 7.

     

    (c)           Distributions
permitted by reason of the Participant’s death shall be made within five (5)
years after his or her death.

     

    7.2.3                      For
purposes of applying this Section 7.2, “Deadline Date”
means:

    (a)           With
respect to a Participant who is a 5-Percent Owner (as defined in
Section 7.1(b)), the April 1 that next follows the calendar year in
which the Participant attains age 701⁄2.

     

    
      
         

      

      
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    (b)           With
respect to a Participant who is not a 5-Percent Owner, the April 1 that
next follows the later
of (i) the calendar year in which the Participant attains age 701⁄2,
or (ii) the calendar year in which the Participant incurs a severance from
employment with all Employers and Affiliates.

     

    7.2.4                      Age 701⁄2 Rule for
5-Percent Owners.  If the Account of a Participant who
continues in employment after attaining Normal Retirement Age becomes
distributable pursuant to Section 7.1(b), the Account shall be distributed
no later than the Deadline Date, and any subsequent allocations to the Account
shall be distributed by the April 1 that next follows the Plan Year to
which those allocations pertain.

    7.3           Consent
Requirement and Immediate Distributions. 

    7.3.1                      Consent Required Over
Threshold Amount.  If the balance credited to a Participant’s
Account exceeds $1,000 (the “Threshold Amount”) as of the
Valuation Date that next precedes the date of distribution from the Account,
then no portion of the Participant’s Account shall be distributed to the
Participant until he or she attains age 62, unless the Participant (or, if
deceased, his or her Beneficiary) has consented to an earlier distribution in
such manner and within such advance notice period as the Committee (in its
discretion) shall specify.

    7.3.2                      Immediate Distributions of
Small Accounts Permitted.  Notwithstanding any contrary Plan
provision, if the balance credited to a Participant’s Account does not exceed
the Threshold Amount (as defined in Section 7.3.1) as of the Valuation Date
that next precedes the date of distribution from the Account, and if the
Participant does not elect to have such distribution paid directly to an
eligible retirement plan specified by the Participant in a direct rollover or to
receive the distribution directly in accordance with this Section 7, then
the distribution shall be paid in a single lump sum as soon as administratively
practicable in accordance with the procedures prescribed by the
Committee.

    
      
         

      

      
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    7.4           Form of
Distribution. 

    7.4.1                      Cash.  With
respect to any portion of a Participant’s Account as is not invested in the
Company Stock Fund, any distribution from such portion of the Account shall be
made in the form of a single lump sum payment of cash (or its equivalent), such
amount to be equal to the balance credited to such portion of the Account as of
the relevant Valuation Date.

    7.4.2                      Company
Stock.  Any distribution from such portion of a Participant’s
Account as is invested in the Company Stock Fund as of the Valuation Date shall
be made in the form of a single lump sum payment, as elected by the distributee,
in –

    (a)           Such
whole number of shares of Company Stock as is equivalent to the full value of
the units of the Company Stock Fund then credited to such portion of the
Account, with fractional shares paid in cash;

     

    (b)           Cash
(or its equivalent) equal to the full value of the units of the Company Stock
Fund then credited to such portion of the Account; or

     

    (c)           A
combination of both.

     

    7.4.3                      In-Kind Rollover to Fidelity
IRA.  Notwithstanding the provisions of Sections 7.4.1 and
7.4.2 above, a Participant may elect that a distribution be made in-kind,
provided that (a) the distribution consists of marketable securities (as
defined in Section 731(c)(2) of the Code), and (b) the distribution
will be in the form of a Direct Rollover to a Fidelity Investments® individual
retirement account (“IRA”).

    7.4.4                      No
Annuities.  In no event shall any distribution from a
Participant’s Account be made in the form of a life annuity.

    7.4.5                      Direct
Rollovers.  Notwithstanding any contrary Plan
provision:

    (a)           General
Rule.  If the Distributee of an Eligible Rollover Distribution
(1) elects to have at least $500 of the Eligible Rollover Distribution or, if
less, the entire Eligible Rollover Distribution, paid directly to an Eligible
Retirement Plan, and (2) specifies the Eligible

     

    
      
         

      

      
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    Retirement
Plan to which the Eligible Rollover Distribution is to be paid in such manner
and within such advance notice period as the Committee (in its discretion) may
specify, then the Eligible Rollover Distribution (or elected portion thereof)
shall be paid to that Eligible Retirement Plan in a Direct Rollover, in
accordance with and subject to the conditions and limitations of
Section 401(a)(31) and related provisions of the Code; and

     

    (b)           Definitions.

     

    (1)           “Direct Rollover” means an
Eligible Rollover Distribution paid directly to an Eligible Retirement Plan for
the benefit of a Distributee.

     

    (2)           “Distributee” means a
Participant, a Beneficiary (if the surviving spouse of a Participant), or an
Alternate Payee (if the spouse or former spouse of a Participant under a QDRO
(as defined in Section 8.7)).

     

    (3)           “Eligible Retirement Plan”
means (A) an individual retirement account described in Section 408(a)
of the Code or an individual retirement annuity described in Section 408(b)
of the Code (other than an endowment contract) (an “IRA”), (B) a qualified
plan described in Section 401(a) of the Code, which has agreed to accept
the Distributee’s Eligible Rollover Distribution, (C) an annuity plan
described in Section 403(a) of the Code, (D) an annuity contract
described in Section 403(b) of the Code, and (E) an eligible plan under
Section 457(b) of the Code maintained by a state, political subdivision of
a state, or any agency or instrumentality of a state or political subdivision of
a state and which agrees to separately account for amounts transferred into such
plan from this Plan.

     

    (4)           “Eligible Rollover
Distribution” means a distribution of any portion of the balance credited
to the Account of a Participant and which is not:

     

    (A)           One
of a series of substantially equal periodic payments made over (A) a
specified period of ten years or more, or (B) the life (or life expectancy)
of the Distributee or the joint lives (or joint life expectancies) of the
Distributee and the Distributee’s designated Beneficiary;

     

    (B)           Any
distribution to the extent such distribution is required under
Section 401(a)(9) of the Code;

     

    (C)           Any
hardship distribution described in Section 410(k)(2)(B)(i)(IV) of the Code;
and

     

    (D)           The
portion of any distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with respect to
Company Stock).

     

    (c)           Distributions to Nonspouse
Beneficiary.  Notwithstanding the provisions of subsections
(b)(2) and (b)(3) above, the term “Distributee” shall also
include a

    
      
         

      

      
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    Beneficiary
who is designated by a Participant under Section 7.6 and who is not the
surviving spouse of the Participant (a “Nonspouse Beneficiary”), and
solely with respect to a Nonspouse Beneficiary, the term “Eligible Retirement
Plan” shall mean an IRA that is established for purposes of receiving a Direct
Rollover of an Eligible Rollover Distribution on behalf of the Nonspouse
Beneficiary, and is treated as an inherited IRA (within the meaning of
Section 408(d)(3)(C) of the Code).

     

    (d)           Notice.  Such
Distribution may commence less than 30 days after the notice required under
Treas. Reg. § 1.411(a)-11(c) is given to the Distributee, provided that (1) the
Distributee is clearly informed that he or she has a right to consider, for a
period of at least 30 days after receiving the notice, a decision on whether to
elect a distribution (and, if applicable, a particular distribution option), and
(2) the Distributee, after receiving the notice, affirmatively elects a
distribution.

     

    7.5           Company Stock
Restrictions.  Any Participant or other prospective Distributee who
is to receive a distribution of Company Stock may be required to execute an
appropriate stock transfer agreement, implementing and evidencing such
restrictions on transferability as may be imposed by applicable federal and
state securities laws, prior to receiving a distribution of the Company
Stock.  Any shares of Company Stock held or distributed by the Trustee
may include such legend restrictions on transferability as the Company may
reasonably require in order to assure compliance with applicable federal and
state securities laws.

    7.6           Beneficiary
Designations.  Each Participant may designate one or more
Beneficiaries in such manner as the Committee (in its discretion) shall
specify.  No such designation shall become effective until its receipt
by the Company (as the Committee’s delegate under Section 9.4(v)) in the
manner specified.

    7.6.1                      Spousal
Consent.  If a Participant designates any person other than his
or her spouse as a primary Beneficiary, the designation shall be ineffective
unless the Participant’s spouse consents to the designation.  Any
spousal consent required under this Section 7.6.1 shall be void unless it
(a) is set forth in writing, (b) acknowledges the effect of the
Participant’s designation of another person as his or her Beneficiary under the
Plan, and (c) is signed by the spouse and

    
      
         

      

      
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    witnessed
by an authorized agent of the Committee or a notary
public.  Notwithstanding the foregoing, if the Participant establishes
to the satisfaction of the Committee that written spousal consent may not be
obtained because there is no spouse or the spouse cannot be located, or because
of other circumstances specified under Section 417(a)(2) of the Code, his
or her designation shall be effective without spousal consent.  Any
spousal consent required under this Section 7.6.1 shall be irrevocable and
valid only with respect to the spouse who signs the consent.  A
Participant may revoke his or her Beneficiary designation at any time,
regardless of his or her spouse’s previous consent to the revoked designation,
and any such revoked designation shall be void.

    7.6.2                      Changes and Failed
Designations.  A Participant may designate different
Beneficiaries (or revoke a prior Beneficiary designation) at any time by making
a new designation (or a revocation of a prior designation) in such manner as the
Committee (in its discretion) shall specify.  No such designation
shall become effective until its receipt by the Company (as the Committee’s
delegate under Section 9.4(v)) in the manner specified, and the last
effective designation received by the Company shall supersede all prior
designations.  If a Participant dies without having effectively
designated a Beneficiary, or if no Beneficiary survives the Participant, the
Participant’s Account shall be payable to his or her surviving spouse or, if the
Participant is not survived by his or her spouse, the Account shall be paid to
the Participant’s estate.

    7.7           Payments to Minors or
Incompetents.  If any individual to whom a benefit is payable under
the Plan is a minor, or if the Committee (in its discretion) determines that any
individual to whom a benefit is payable under the Plan is physically or mentally
incompetent to receive such payment or to give a valid release therefore,
payment shall be made to the guardian, committee or other representative of the
estate of such individual which has been duly appointed by a court
of

    
      
         

      

      
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    competent
jurisdiction.  If no guardian, committee or other representative has
been appointed, payment:

    (a)           May
be made to any person as custodian for the minor or incompetent under the
California Uniform Transfers to Minors Act (or comparable law of another state),
or

     

    (b)           May
be made to or applied to or for the benefit of the minor or incompetent, his or
her spouse, children or other dependents, the institution or persons maintaining
him or her, or any of them, in such proportions as the Committee (in its
discretion) from time to time shall determine.

     

    (c)           The
release of the person or institution receiving the payment shall be a valid and
complete discharge of any liability of the Plan with respect to any benefit so
paid.

     

    7.8           Undistributable
Accounts.  Each Participant and (in the event of death) his or her
Beneficiary shall keep the Committee advised of his or her current
address.  If the Committee is unable to locate the Participant or
Beneficiary to whom a Participant’s Account is payable under this
Section 7, (a) the Participant’s Account may be closed after 24 months
have passed since the date the Account first became distributable to such
Participant or Beneficiary, and (b) the balance credited to any Account so
closed shall be credited as an offset against future Employer Contribution
payments.  If the Participant or Beneficiary whose Account were closed
under the preceding sentence subsequently files a claim for distribution of his
or her Account, and if the Committee (in its discretion) determines that such
claim is valid, then the balance previously removed upon closure of the Account
shall be restored to the Account by means of a special contribution which shall
be made to the Trust Fund by the Employers.

     

    SECTION 8

     

    WITHDRAWALS,
LOANS AND DOMESTIC RELATIONS ORDERS

     

    8.1           General Rules. 
In accordance with Sections 8.2 and 8.3, a Participant who is an Employee
may request a withdrawal from his or her Account in cash (or its
equivalent).  Any

    
      
         

      

      
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    application
for a withdrawal shall be submitted, in such manner and within such advance
notice period as the Committee (in its discretion) may specify from time to
time.  Except as otherwise specified below, any amount withdrawn under
this Section 8 shall be deducted from the Participant’s Account in such
order as may be determined by the Committee from time to time.

    8.2           Hardship
Withdrawal.  The Committee shall authorize a withdrawal (a “Hardship Withdrawal”) under
this Section 8.2 if the Participant provides evidence that is sufficient to
enable the Committee to determine that the Hardship Withdrawal is in connection
with a Financial Hardship, and is subject to the following rules:

    8.2.1                      General
Rules.

    (a)           Subject
to the provisions of this Section 8.2, a Participant may make a Hardship
Withdrawal under this Section 8.2 no more frequently than once in any
calendar year.

     

    (b)           No
Hardship Withdrawal shall be granted under this Section 8.2 unless the
Participant has elected to receive all distributions, withdrawals and loans
available under this Plan and all other qualified plans maintained by the
Employers and Affiliates.

     

    (c)           The
amount available to a Participant for a Hardship Withdrawal shall not exceed the
amount that the Committee (in its discretion) determines is necessary to satisfy
the Participant’s Financial Hardship (net of income taxes or penalty taxes
reasonably anticipated to result from the Hardship Withdrawal).

     

    (d)           Notwithstanding
paragraph (c) above, the maximum amount that may be withdrawn from a
Participant’s Elective Deferrals Accounts and Genenflex Account for this purpose
shall be equal to the excess of (1) the sum of all Elective Deferrals and Prior
Excess Flex Credit Contributions (as defined in Section 1.1.4) allocated to
the Participant’s applicable Elective Deferrals Accounts and/or Genenflex
Account (as applicable) on the date of the withdrawal plus the amount of any
earnings credited to his or her Employee Pre-Tax Account as of December 31,
1988, over (2) the sum of all amounts previously withdrawn or distributed from
the Participant’s Elective Deferrals Accounts and Genenflex
Account.

     

    (e)           Any
amount withdrawn under this Section 8.2 shall be funded from the Investment
Funds in which the Participant’s Account is invested in such order or allocation
among such Investment Funds as is determined under such rules as may be
established by the Committee from time to time.

     

    
      
         

      

      
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    8.2.2                      Financial
Hardship.  For purposes of applying this Section 8.2, a
“Financial Hardship”
means and shall be deemed to exist only on account of one or more of the
following:

     

    (a)           Expenses
incurred for medical care that would be deductible under Section 213(d) of
the Code (determined without regard to whether the expenses exceed 71⁄2% of
adjusted gross income);

     

    (b)           Costs
(excluding mortgage payments) relating to the purchase of a principal residence
for the Participant;

     

    (c)           Payment
of tuition, related educational fees and room and board expenses, for up to the
next 12 months of post-secondary education for the Participant, his or her
Spouse, children or dependents (as defined in Section 152 of the Code,
without regard to Section 152(b)(1), (b)(2) and (d)(1)(B) of the
Code);

     

    (d)           Payments
necessary to prevent the eviction of the Participant from his or her principal
residence or foreclosure on the mortgage or deed of trust on that principal
residence;

     

    (e)           Payments
for burial or funeral expenses for the Participant’s deceased parent, Spouse,
children or dependents (as defined in Section 152 of the Code, without
regard to Section 152(d)(1)(B) of the Code); or

     

    (f)           Expenses
for the repair of damage to the Participant’s principal residence that would
qualify for the casualty deduction under Section 165 of the Code
(determined without regard to whether the loss exceeds 10% of adjusted gross
income).

     

    8.2.3                      Mandatory Suspension and
Contribution Limitations.  If determined by the Committee to be
necessary or appropriate in order to preserve the tax-qualification of the Plan,
no Hardship Withdrawal shall be made under this Section 8.2 unless the
Participant irrevocably agrees in his or her Hardship Withdrawal application,
evidenced in such manner as the Committee (in its discretion) may specify, that
the Participant shall not make contributions to, compensation deferrals under or
payments in connection with the exercise of any rights granted under this Plan
or any other qualified plan or any nonqualified stock option, stock purchase,
deferred compensation or similar plan (but not any health or welfare plan)
maintained by any Employer or Affiliate for a period of six (6) months following
receipt of the Hardship Withdrawal.  The Participant may elect to
resume his

    
      
         

      

      
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    or
her active participation in the Plan as of any Entry Date following the end of
the suspension period described above, provided that he or she elects to become
an Active Participant in accordance with Section 2.3.1.

    8.3           Age 591⁄2
Withdrawal.  At any time after a Participant attains age 591⁄2, the
Participant (subject to other applicable provisions of the Plan) may request a
withdrawal from his or her Account in any amount, up to the value of his or her
Account.

    8.4           Withdrawal From Company
Match Account at Normal Retirement Age.  At any time after a
Participant attains Normal Retirement Age, the Participant (subject to other
applicable provisions of the Plan) may request a withdrawal from his or her
Company Match Account in any amount, up to the value of his or her Company Match
Account.

    8.5           Withdrawal From Rollover
Contributions Accounts.  At any time, a Participant (subject to
other applicable provisions of the Plan) may request a withdrawal from his or
her Rollover Contributions Account or Roth Rollover Account in any amount, up to
the value of such Account(s).

    8.6           Loans
to Participants. 

    8.6.1                      General Loan
Rules.  A Participant who is an Employee may, upon application
to such person, in such manner and within such advance notice period as the
Committee (in its discretion) shall specify, obtain a loan from the portion of
the Trust Fund allocated to the Participant’s Account in accordance with the
provisions of this Section 8.6.  Loans shall be available to all
Participants who are Employees, and to parties in interest (within the meaning
of Section 3(14) of ERISA) with respect to the Plan who are non-Employee
Participants or Beneficiaries of deceased Participants, on a reasonably
equivalent basis.

    
      
         

      

      
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    (a)           Amount.  The
amount of the loan shall be neither less than $1,000 nor more than the excess of
(1) 50% of the Participant’s Available Balance (as defined below), determined as
of the Valuation Date that occurs on the date the loan is processed, over (2)
the sum of the outstanding balances (including both principal and accrued
interest) on all prior outstanding loans to the Participant under this
Plan.

     

    (b)           “Available
Balance” means the total balance credited to the Participant’s Account as
of the applicable date.

     

    (c)           Additional
Limits.  The amount borrowed under this Section 8.6 shall
not cause the sum of (i) the amount of the loan, plus (ii) the
aggregate outstanding balance (including both principal and accrued interest) on
all prior loans to the Participant under this Plan or any other qualified plan
maintained by any Employer or Affiliate (an “Other Plan”), to exceed an
amount equal to $50,000, reduced by the excess (if any) of (1) the highest
aggregate outstanding balance on all loans under this Plan and all Other Plans
during the one-year period ending on the day before the date the loan is to be
made, over (2) the aggregate outstanding balance on all such loans on the date
the loan is made.

     

    (d)           Maximum Number of
Loans.  No Participant shall be permitted to borrow under this
Section 8.6 if the borrowing would result in his or her having more than
three (3) loans outstanding.

     

    (e)           Twelve Months Required
Between Loans.  Notwithstanding the foregoing, no additional
loan may be made to a Participant under this Section 8.6 until at least 12
months after the next earliest loan was made.

     

    (f)           Unpaid Leave of
Absence.  If a Participant is granted an unpaid Leave of
Absence and remains an Employee, he or she may elect to have his or her loan
payments be suspended for the lesser of the duration of the approved Leave of
Absence or one year.  If the Participant’s loan payments are so
suspended and he or she returns to active employment with an Employer or
Affiliate, the Committee shall recompute the monthly loan payment amount and the
recomputed amount shall be payable for the balance of the original term of the
loan in accordance with this Section 8.6.  If the Participant
fails to return to active employment with an Employer or Affiliate or terminates
his or her employment with all Employers and Affiliates, the provisions of
Sections 8.6.2(e)(2), 8.6.2(g), 8.6.2(h), 8.6.2(i), 8.6.3 and 8.6.4 shall
apply; provided,
however, that the Committee shall recompute the monthly loan payment
amount and the recomputed amount shall be payable for the balance of the
original term of the loan if the Participant authorizes an automatic payment
method described in Section 8.6.2(e)(2) for such remaining loan
payments.

     

    8.6.2                      Minimum Requirements of Each
Loan.  Any loan made under this Section 8.6 shall be
evidenced by a loan agreement and promissory note, and the Participant must
evidence his

    
      
         

      

      
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    or
her agreement to the terms thereof in writing.  Such terms shall
satisfy the following minimum requirements:

    (a)           Separate
Accounting.  Each loan shall be considered as a separate,
earmarked investment of the Participant’s Account.  Interest and
principal payments on Participant loans shall be reallocated to the Investment
Funds in the same percentages as specified by the Participant pursuant to
Section 5.4, or if there is no such designation currently in force, as the
Committee (in its discretion) shall determine.

     

    (b)           Term.  The
term of the loan shall not exceed five years.  The Participant may
elect a term of either three or five years for each loan.  However,
the term of the loan may be fifteen years, provided that the Participant
(1) certifies in writing that the loan proceeds will be used to purchase a
dwelling unit which (within a reasonable period of time after the loan is made)
will be the Participant’s principal residence, and (2) submits such
certification to the Committee together with such supporting documentary
evidence (e.g., a copy
of the signed sale contract) as the Committee (in its discretion) may
request.

     

    (c)           Interest
Rate.  Each loan shall bear a reasonable rate of interest, as
determined by the Committee (in its discretion), which shall be comparable to
the interest rates charged under similar circumstances by persons in the
business of lending money.

     

    (d)           Payment
Schedule.  A definite payment schedule shall be established for
each loan which shall require level and monthly payments of both principal and
interest over the agreed term of the loan in accordance with the provisions of
this Section 8.6.  A Participant may prepay at any time the
entire amount remaining due under the loan, but no partial prepayments shall be
permitted.

     

    (e)           Withholding
Payments.  No loan shall be made unless the Participant agrees
to make principal and interest payments on each loan, together with any and all
reasonable charges imposed by the Trustee at the direction of the Committee in
connection with the loan:

     

    (1)           By
payroll withholding, in the case of a Participant who is receiving periodic wage
payments from an Employer or Affiliate; or

     

    (2)           By
an automatic payment method which the Committee (in its discretion) determines
will provide security comparable to that of payroll withholding, in the case of
a Participant who is not receiving periodic wage payments from an Employer or
Affiliate.

     

    (f)           On
Payroll.  If during the term of the loan, a Participant who has
been making payments by the automatic payment method described in
Section 8.6.2(e)(2) begins receiving periodic wage payments from an
Employer or Affiliate, the Participant shall authorize in writing payroll
withholding for the remaining loan payments.

     

    
      
         

      

      
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    (g)           Off
Payroll.  Subject to Section 8.6.1(f), if during the term
of the loan, a Participant who has been making loan payments by payroll
withholding ceases to receive periodic wage payments from an Employer or
Affiliate (and distribution of the Participant’s Account has not begun), the
Participant shall authorize in writing an automatic payment method described in
Section 8.6.2(e)(2) for the remaining loan payments.

     

    (h)           Failure to
Authorize.  If any Participant fails to authorize any change in
the method of payment required by Section 8.6.2(f) or (g), the outstanding
balance (including unpaid principal and interest) on the loan shall become
immediately due and payable.

     

    (i)           Security.  Each
loan shall be adequately secured by collateral of sufficient value to secure
payment of the loan principal and interest.  Notwithstanding the
provisions of Section 13.2, the Participant shall pledge 50% of his or her
Available Balance (as defined in Section 8.6.1(b)), and shall provide such
other collateral as the Committee (in its discretion) may require, to secure his
or her loan payment obligations.

     

    8.6.3                      Default.  If
a Participant defaults on his or her loan payment obligations and does not cure
the default within thirty days of the date the Participant is notified of the
default, the Committee shall take, or direct the Trustee to take, such action as
shall be necessary or appropriate in the circumstances prevailing: (a) to
realize upon the security interest of the Trust Fund in the collateral pledged
to secure the loan, and/or (b) to reduce the balance credited to the
Participant’s Account by the amount required to cure the default.

    8.6.4                      Effect of
Distributions.  If any amount remains outstanding as a loan
obligation of a Participant when a distribution is made from his or her Account
in connection with the Participant’s severance from employment with all
Employers and Affiliates, (a) the outstanding loan balance (including both
principal and accrued interest) shall then become immediately due and payable,
and (b) the balance credited to the Participant’s Account shall be reduced
to the extent necessary to discharge the obligation.

    8.6.5                      Transferred participant
Loans.  Notwithstanding any contrary Plan provision, any
Participant loans that are transferred to the Trust Fund pursuant to
Section 10.5.5 shall be

    
      
         

      

      
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    administered
under this Plan in accordance with such loans’ terms and conditions in effect as
of the date of the transfer or as may be otherwise modified to conform to the
administrative and/or payroll procedures of the Employer.

    8.7           Qualified Domestic Relations
Orders.  The Committee shall establish written procedures for
determining whether a domestic relations order (within the meaning of
Section 414(p)(1)(B) of the Code) purporting to dispose of any portion of a
Participant’s Account is a qualified domestic relations order (within the
meaning of Section 414(p)(1)(A) of the Code) (a “QDRO”).

    8.7.1                      No Payment Unless a
QDRO.  No payment shall be made to an Alternate Payee until the
Committee (in its discretion), or a court of competent jurisdiction reversing an
initial adverse determination by the Committee, determines that the order is a
QDRO.  Payment shall be made to an Alternate Payee only in a form of
distribution that is available to the Participant under the Plan, and as
specified in the QDRO.

    8.7.2                      Immediate Payment
Permitted.  Payment may be made to an Alternate Payee, in
accordance with a QDRO, as soon as practicable after the QDRO determination is
made, without regard to whether the distribution, if made to the Participant at
the time specified in the QDRO, would be permitted under the terms of the
Plan.

    8.7.3                      Deferred
Payment.  If the QDRO does not provide for immediate payment to
an Alternate Payee, the Committee shall direct the Trustee to establish a Plan
Account for the Alternate Payee’s portion of the Participant’s
Account.  All investment decisions with respect to amounts credited to
the Alternate Payee’s Plan Account shall be made by the Alternate Payee in the
manner provided in Section 5.4.  Payment to the Alternate Payee
shall not be deferred beyond the

    
      
         

      

      
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    date
on which distribution to the Participant or (in the event of death) his or her
Beneficiary is made or commenced.

    8.7.4                      Hold
Procedures.  Notwithstanding any contrary Plan provision, at
any time the Committee (in its discretion) may place a hold upon all or a
portion of a Participant’s Account for a reasonable period of time (as
determined by the Committee) if the Committee receives notice that (a) a
domestic relations order is being sought by the Participant, his or her spouse,
former spouse, child or other dependent and (b) the Participant’s Account
is a source of payment under such order.  For purposes of this
Section 8.7.4, a “hold” means that no
withdrawals, loans or distributions may be made from a Participant’s
Account.  The Committee shall notify the Participant if a hold is
placed upon his or her Account pursuant to this Section 8.7.4.

    8.8           Qualified Reservist
Distribution.  Notwithstanding anything in the Plan to the contrary,
a Participant who is a reservist or national guardsman (as defined in 37 U.S.
Code 101(24)) and who is ordered or called to active duty after
September 11, 2001 and before December 31, 2007 (or such later date as
may be determined by applicable legislation) for a period in excess of one
hundred seventy-nine (179) days or for an indefinite period, may request a
withdrawal from his or her Elective Deferrals Accounts; provided that the
request is made during the period beginning on the date or such order to call to
duty and ending at the close of the active duty period.

     

    SECTION 9

     

    ADMINISTRATION
OF THE PLAN

     

    9.1           Plan
Administrator.  The Company is hereby designated as the
administrator of the Plan (within the meaning of Sections 414(g) and
3(16)(A) of the Code and ERISA, respectively).

    
      
         

      

      
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    9.2           Committee.  The
Plan shall be administered by a Committee consisting of at least three members,
appointed by and holding office at the pleasure of the Board of
Directors.  The Committee shall have the authority to control and
manage the operation and administration of the Plan as a named fiduciary under
Section 402(a)(1) of ERISA.  Any member of the Committee who is
also an Employee shall serve as such without additional
compensation.  Any member of the Committee may resign at any time by
notice in writing mailed or delivered to the Board of Directors.  The
Board of Directors may remove any member of the Committee at any time and may
fill any vacancy that exists.

    9.3           Actions by
Committee.  Each decision of a majority of the members of the
Committee then in office shall constitute the final and binding act of the
Committee.  The Committee may act with or without a meeting being
called or held and shall keep minutes of all meetings held and a record of all
actions taken.  Except as otherwise specifically or generally directed
by the Committee, any action of the Committee may be evidenced by a writing
signed by any two (2) members of the Committee.

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

    (a)           To
grant or deny benefits under the Plan;

     

    (b)           To
interpret the provisions of the Plan and to determine any question arising
under, or in connection with the administration or operation of, the
Plan;

     

    (c)           To
determine all questions concerning the eligibility of any Employee to become or
remain a Participant and/or an Active Participant in the Plan;

     

    (d)           To
cause one or more separate subaccounts to be maintained for each
Participant;

     

    
      
         

      

      
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    (e)           To
establish and revise an accounting method or formula for the Plan, as provided
in Section 6.4;

     

    (f)           To
determine the manner and form, and to notify the Trustee, of any distribution to
be made under the Plan;

     

    (g)           To
grant or deny withdrawal and loan applications under
Section 8;

     

    (h)           To
determine the status and rights of Participants and their spouses, Beneficiaries
or estates under this Plan;

     

    (i)           To
instruct the Trustee with respect to matters within the jurisdiction of the
Committee;

     

    (j)           To
direct the Trustee, in accordance with Section 6.3, and subject to
Section 6.3.4, as to the establishment of Investment Funds and the
investment of the Plan assets held in the Investment Funds;

     

    (k)           to
appoint one or more Investment Managers in accordance with
Section 9.6.1;

     

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

     

    (m)           To
prescribe the form, manner and/or notice period in which any Participant, or his
or her spouse or other Beneficiary, may make any election or designation
provided under the Plan;

     

    (n)           To
establish rules for the performance of its powers and duties and for the
administration of the Plan;

     

    (o)           To
arrange for distribution to each Participant, Beneficiary or Alternate Payee of
a statement of his or her Account at least once each calendar quarter, as
described in Section 105(a) of ERISA;

     

    (p)           To
establish rules, regulations and/or procedures by which requests for Plan
information from Participants are processed expeditiously and
completely;

     

    (q)           To
provide to each terminated Participant notice of his or her vested interest
under the Plan and the explanation described in Section 402(f) of the
Code;

     

    (r)           To
establish a claims and appeal procedure satisfying the minimum standards of
Section 503 of ERISA pursuant to which Participants or their spouses,
Beneficiaries or estates may claim Plan benefits and appeal denials of such
claims (the “Claims
Procedure”);

     

    
      
         

      

      
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    (s)           To
determine the liabilities of the Plan, to establish and communicate a funding
policy to the Trustee and any Investment Manager appointed pursuant to
Section 9.6, and in accordance with such funding policy, to coordinate the
Plan’s investment policy with the Plan’s requirements for funds to pay expenses
and benefits as they become due;

     

    (t)           To
act as agent for the Company in keeping all records and assisting with the
preparation of all reports and disclosures necessary for purpose of complying
with the reporting and disclosure requirements of ERISA and the
Code;

     

    (u)           To
arrange for the purchase of any bond required of the Committee members or others
under Section 412 of ERISA;

     

    (v)           To
delegate to the Trustee, the Company’s Payroll or Human Resources Department, or
any other (including third-party) recordkeeper the authority, acting as an agent
of the Committee, to give or receive notices, elections and other directions to
or from Participants and Beneficiaries as provided in the Plan; and

     

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

     

    9.5           Fiduciary
Responsibilities.  To the extent permissible under ERISA, any person
may serve in more than one fiduciary capacity with respect to the
Plan.  Except as required by specific provisions of ERISA, no person
who is a fiduciary with respect to the Plan shall be under any obligation to
perform any duty or responsibility with respect to the Plan which has been
specifically allocated to another fiduciary.

    9.6           Investment
Responsibilities.  The Committee shall direct the Trustee to invest
the Investment Funds in the investment media specified in
Section 6.3.2.  Subject to the provisions of this
Section 9.6 and any contrary provision of the Plan or Trust Agreement,
exclusive authority and discretion to manage and control the assets of the Trust
Fund shall be vested in the Trustee, and the Trustee from time to time shall
review the assets and make its determinations as to the investments of the Trust
Fund.

    
      
         

      

      
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    9.6.1                      Investment Manager
Appointment.  The Committee (in its discretion) may appoint,
and thereafter may discharge, one or more investment managers (the “Investment Managers”) to
manage the investment of one or more of the Investment Funds and/or other
designated portions of the Trust Fund.  In the event of any such
appointment, the Trustee shall follow the instructions of the Investment Manager
in investing and administering Trust Fund assets managed by the Investment
Manager.  Alternatively, the Committee (in its discretion) may
delegate investment authority and responsibility with respect to any Investment
Fund directly to any Investment Manager that has investment management
responsibility for any collective investment fund in which the Investment Fund
is invested.

    9.6.2                      Eligibility.  Any
person, firm or corporation appointed as Investment Manager (a) shall be a
person described in Section 3(38)(B) of ERISA, (b) shall make such
representations from time to time as the Committee (in its discretion) may
require in order to determine itsqualifications to be appointed and to continue
to serve in such capacity, and (c) shall acknowledge in writing its status
as a fiduciary with respect to the Plan upon acceptance of its
appointment.

    9.7           Voting and Tender Offer
Rights in Company Stock.  All Company Stock held in the Trust Fund
shall be voted, tendered or exchanged as set forth in the Trust
Agreement.

    9.8           Decisions of
Committee.  All decisions of the Committee, and any action taken by
it with respect to the Plan and within the powers granted to it under the Plan,
and any interpretation of the provisions of the Plan or the Trust Agreement by
the Committee, shall be conclusive and binding on all persons, and shall be
given the maximum possible deference allowed by law.

    9.9           Administrative
Expenses.  All reasonable expenses incurred in the administration of
the Plan by the Employers, the Committee or otherwise, including legal,
Trustee’s and investment

    
      
         

      

      
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    management
fees and expenses, and premiums for any bonds authorized by Section 9.4(u),
(“Administrative
Expenses”), shall be payable from the Trust Fund, except to the extent
paid by the Employers under clause (a) below.  Notwithstanding
the foregoing, Administrative Expenses shall be paid from the Trust Fund only to
the extent that such payments (to the extent prohibited by Section 406) are
exempt under Section 408 of ERISA.  The Committee (in its
discretion) shall determine which Administrative Expenses are not payable from
the Trust Fund under the foregoing rules.  The Company (in its
discretion) may (a) direct the Employers to pay any or all Administrative
Expenses, and/or (b) direct the Employers not to pay a greater share,
portion or amount of such Expenses which would otherwise be allocable to the
Accounts of Participants who are no longer employed by any Employer or
Affiliate.

    9.10           Eligibility to
Participate.  No member of the Committee, who is also an Eligible
Employee and otherwise eligible under Section 2, shall be excluded from
participating in the Plan, but he or she, as a member of the Committee, shall
not act or pass upon any matters pertaining specifically to his or her own
Account under the Plan.

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

    
      
         

      

      
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    SECTION 10

     

    TRUST
FUND, ROLLOVER CONTRIBUTIONS AND PLAN MERGERS

     

    10.1           Trust Fund.  The
Company shall establish a Trust Agreement with the Trustee in order to provide
for the safekeeping, administration and investment of all amounts contributed or
transferred to the Plan and the payment of benefits as provided in the
Plan.  The Trustee shall receive and place in the Trust Fund all such
amounts and shall hold, invest, reinvest and distribute the Trust Fund in
accordance with the provisions of the Plan and Trust
Agreement.  Assets of this Plan may be commingled with the assets of
other qualified plans through one or more collective investment funds described
in Section 6.3; provided,
however, that the assets of this Plan shall not be available to provide
any benefits under any other such plan.  The benefits provided under
the Plan shall be only such as can be provided by the assets of the Trust Fund,
and no liability for payment of benefits shall be imposed upon the Employers or
any of their shareholders, directors or Employees.  The Trust Fund
shall continue for such time as may be necessary to accomplish the purposes for
which it is created.

    10.2           No Diversion of
Assets.  Notwithstanding any contrary Plan provision, at no time
shall any assets of the Plan be used for, or diverted to, purposes other than
for the exclusive benefit of Eligible Employees, Participants, Beneficiaries and
other persons receiving or entitled to receive benefits or payments under the
Plan.  Except to the limited extent permitted by Sections 7.8 and
10.3, no assets of the Plan shall ever revert to or become the property of the
Employers.

    10.3           Continuing
Conditions.  Any obligation of the Employer to contribute Elective
Deferrals, Company Match Contributions and/or Non-Elective Contributions under
the Plan is hereby conditioned upon the deductibility of such Elective
Deferrals, Company Match Contributions

    
      
         

      

      
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    and/or
Non-Elective Contributions under Section 404(a) of the
Code.  That portion of any Elective Deferrals, Company Match
Contributions or Non-Elective Contributions that is contributed or made by
reason of a good faith mistake of fact, or by reason of a good faith mistake in
determining the deductibility of such portion, shall be returned to the
Employers as promptly as practicable, but not later than one year after the
contribution was made or the deduction was disallowed (as the case may
be).  The amount returned pursuant to the preceding sentence shall be
an amount equal to the excess of the amount actually contributed over the amount
that would have been contributed if the mistake had not been made; provided, however, that gains
attributable to the returnable portion shall be retained in the Trust Fund; and
provided, further, that
the returnable portion shall be reduced (a) by any losses attributable
thereto and (b) to avoid a reduction in the balance of any Participant’s
Account below the balance that would have resulted if the mistake had not been
made.

    10.4           Change of Investment
Alternatives.  The Company reserves the right to change at any time
the means through which the Plan is funded, including adding or substituting one
or more contracts with an insurance company or companies, and thereupon may make
suitable provision for the use of a designated portion of the assets of the
Trust Fund to provide for the funding and/or payment of Plan benefits under any
such insurance contract.  No such change shall constitute a
termination of the Plan or result in the diversion to the Employers of any
portion of the Trust Fund.  Notwithstanding the implementation of any
such change of funding medium, all references in the Plan to the Trust Fund
shall also refer to the Plan’s interest in or the assets held under any other
such funding medium.

    
      
         

      

      
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    10.5           Rollover
Contributions. 

    10.5.1                      General
Rule.  If directed by the Committee, the Trustee shall accept a
transfer of assets for the benefit of an Eligible Employee or a group of
Eligible Employees, subject to the applicable requirements set forth in this
Section 10.5.

    10.5.2                      Pre-Tax Rollover
Contributions.  The transfer of pre-tax amounts may be in the
form of: (i) a trust-to-trust transfer from the trustee of a tax-qualified
plan under Code Section 401(a) and related tax-exempt trust under Code
Section 501(a) that is not subject to the funding requirements of Code
Section 412; (ii) a rollover by the Eligible Employee, or (iii) a
Direct Rollover from: (A) a qualified plan described in Code
Section 401(a) or 403(a), excluding after-tax employee contributions;
(B) an annuity contract described in Code Section 403(b), excluding
after-tax employee contributions; (C) an eligible plan under Code
Section 457(b) which is maintained by a state, political subdivision of a
state, or any agency or instrumentality of a state or political subdivision of a
state; or (D) an individual retirement account or annuity described in Code
Section 408(a) or 408(b) that is eligible to be rolled over and would
otherwise be includible in gross income.

    10.5.3                      Transfer of Designated Roth
Contributions.  The transfer of designated Roth contributions
may be made in the form of (i) a trust-to-trust transfer from the trustee
of a tax qualified plan under Code Section 401(a) and related tax-exempt
trust under Code Section 501(a) that permits designated Roth elective
deferral contributions as described in Code Section 402A(e)(1), or
(ii) a Direct Rollover on behalf of an Eligible Employee from a qualified
plan described in Code Section 401(a) that permits designated Roth elective
deferral contributions as described in Code Section 402A(e)(1), and only to
the extent the Direct Rollover is permitted under

    
      
         

      

      
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    the
rules of Code Section 402(c).  Any such amounts shall be
deposited in the Participant’s Roth Rollover Account.

    10.5.4                      Nonqualifying
Rollovers.  If it is later determined that a transfer to the
Trust Fund made pursuant to this Section 10.5 did not in fact qualify as an
eligible rollover contribution as described above, then the balance credited to
the Participant’s Rollover Contributions Account or Roth Rollover Account, as
applicable, shall immediately be (a) segregated from all other Plan assets,
(b) treated as a nonqualified trust established by and for the benefit of
the Participant, and (c) distributed to the Participant.  Such a
nonqualifying rollover shall be deemed never to have been a part of the Trust
Fund.

    10.5.5                      Rollover of Certain
Participant Loans Permitted.  At the direction of the Committee
(in its discretion), in the case of a Participant who becomes an Eligible
Employee by reason of the acquisition by the Company or its Affiliate of the
assets and liabilities of, or the voting stock of, another corporation or other
business entity, or another type of business transaction effected by the Company
or its Affiliate, assets may be transferred to the Trust Fund pursuant to
Section 10.5 above in a direct rollover from the Qualified Plan maintained
by the Participant’s prior employer (the “Prior Plan”) in the form of
loan promissory notes, provided that the Participant elects to directly rollover
his or her entire Prior Plan account balance that qualifies as an eligible
rollover contribution to this Plan as described in
Section 10.5.

    10.6           Merger of Other
Plans.  Assets of certain qualified plans may be merged into and
commingled with the assets held under the provisions of this
Plan.  Assets transferred to the Trust Fund on behalf of a Participant
pursuant to this Section 10.6 shall be credited to such Plan subaccounts of
the Participant as the Committee (in its discretion) may
specify.

    
      
         

      

      
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    SECTION 11

     

    MODIFICATION
OR TERMINATION OF PLAN

     

    11.1           Employers’ Obligations
Limited.  The Plan is voluntary on the part of the Employers, and
the Employers shall have no responsibility to satisfy any liabilities under the
Plan.  Furthermore, the Employers do not guarantee to continue the
Plan, and the Company may, by appropriate amendment of the Plan, discontinue
contributions of Employee Pre-Tax Contributions, Roth Basic Contributions,
Employee Pre-Tax Catch-Up Contributions, Roth Catch-Up Contributions, Company
Match Contributions and/or Non-Elective Contributions for any reason at any
time.  Complete discontinuance of all Elective Deferrals and Employer
Contributions shall be deemed a termination of the Plan.

    11.2           Right to Amend or
Terminate.  The Company reserves the right to alter, amend or
terminate the Plan, or any part thereof, in such manner as it may
determine.  Amendments which do not add materially to the Company’s
cost under the Plan and which are (i) necessary to comply with the Code,
ERISA or other applicable law, (ii) technical, or (iii) intended to
ease administration may be adopted if approved in writing by any two members of
the Committee, acting in their capacities as officers of the Company rather than
as fiduciaries with respect to the Plan.  All other amendments shall
be approved by the Board of Directors.  Any such alteration, amendment
or termination shall take effect upon the date indicated in the document
embodying such alteration, amendment or termination; provided, however,
that:

    (a)           No
such alteration or amendment shall (1) divest any portion of an Account that is
then vested under the Plan, or (2) except as may be permitted by regulations or
other IRS guidance, eliminate any optional form of benefit (within the meaning
of Section 411(d)(6)(B)(ii) of the Code) with respect to benefits accrued
prior to the adoption of the amendment; and

     

    
      
         

      

      
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    (b)           Any
alteration, amendment or termination of the Plan or any part thereof, shall be
subject to the restrictions in Section 10.2 with respect to diversion of
the assets of the Plan.

     

    11.3           Effect of
Termination.  If the Plan is terminated or partially terminated, or
if there is a complete discontinuance of all Elective Deferrals and Employer
Contributions, the interests of all affected Participants in their Accounts
shall remain fully (100%) vested and nonforfeitable.  In the event the
Plan is terminated, the balance credited to the Company Match Accounts,
Non-Elective Contribution Account and Rollover Accounts and, to the extent
permitted by Section 401(k)(2)(B) of the Code, the Elective Deferrals
Accounts and/or Genenflex Accounts, of Participants who are affected by the
termination may be distributed prior to the occurrence of a distribution event
described in Section 7.1.

     

    SECTION 12

     

    TOP-HEAVY
PLAN

     

    12.1           Top-Heavy Plan
Status.  Notwithstanding any contrary Plan provision, the provisions
of this Section 12 shall apply with respect to any Plan Year for which the
Plan is a top-heavy plan (within the meaning of Section 416(g) of the Code)
(a “Top-Heavy
Plan”).

    12.1.1                      60%
Rule.  The Plan shall be a Top-Heavy Plan with respect to any
Plan Year if, as of the Determination Date, the value of the aggregate of the
Accounts under the Plan for key employees (within the meaning of
Sections 416(i)(1) and (5) of the Code) exceeds 60% of the value of the
aggregate of the Accounts under the Plan for all Participants.  For
purposes of determining the value of the Accounts, the provisions of
Sections 416(g)(3) and 416(g)(4)(E) of the Code are incorporated herein by
reference.

    
      
         

      

      
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    12.1.2                      Top-Heavy
Determinations.  The Committee, acting on behalf of the
Employers, shall determine as to each Plan Year whether or not the Plan is a
Top-Heavy Plan for that Plan Year.  For purposes of making that
determination as to any Plan Year:

    (a)           “Determination Date” means the
last day of the immediately preceding Plan Year;

    (b)           The
Plan shall be aggregated with each other qualified plan of any Employer or any
Affiliate (1) in which a key employee (within the meaning of
Sections 416(i)(1) and (5) of the Code) participates, and/or (2) which
enables the Plan or any plan described in clause (1) above to meet the
requirements of Section 401(a)(4) or 410(b) of the Code;

     

    (c)           The
Plan may be aggregated with any other qualified plan of any Employer or
Affiliate, which plan is not required to be aggregated under subsection (b) (1)
above, if the resulting group of plans would continue to meet the requirements
of Sections 401(a)(4) and 410(b) of the Code; and

     

    (d)           In
determining which Employees are key and non-key employees, an Employee’s
compensation for the Plan Year shall be his or her Total Compensation (as
defined in Section 5.5.2(e) and applied using the definition of “Affiliate”
in Section 1.2 rather than in Section 5.5.2(a)).

     

    12.2           Top-Heavy Plan
Provisions.  For any Plan Year for which the Plan is a Top-Heavy
Plan, the following provisions shall apply:

    12.2.1                      Minimum
Allocation.  The Employers shall make an additional
contribution to the Account of each Participant who is a non-key employee
(within the meaning of Sections 416(i)(2) and (5) of the Code), and who is
employed on the last day of the Plan Year, in an amount which equals 3% of his
or her Top-Heavy Compensation for the Plan Year; provided, however, that if
the Key Employee Percentage (as defined in subsection (a) below) is less than
3%, then the percentage rate at which that additional Employer contribution
shall be made for that Plan Year shall be reduced from 3% to the Key Employee
Percentage.  Company Match Contributions shall be taken into account
for purposes of satisfying the minimum contribution requirements
of

    
      
         

      

      
        -63-

        
          

        

      

      
         

      

    

    Section 416(c)(2)
of the Code and the Plan.  Company Match Contributions that are used
to satisfy such minimum contribution requirements shall be treated as Company
Match Contributions for purposes of the actual contribution percentage
limitation in Section 4.1.5 and other requirements of Section 401(m)
of the Code.

    (a)           The
determination of who is a key employee will be made in accordance with
Section 416(i)(1) of the Code and the applicable regulations and other
guidance of general applicability thereunder.

     

    (b)           “Key Employee Percentage”
means the largest percentage computed by dividing (1) the total amount of all
Employer contributions allocated for that Plan Year to the Account of each
Participant who is a key employee (within the meaning of Sections 416(i)(1)
and (5) of the Code), by (2) his or her Top-Heavy Compensation.

     

    (c)           The
additional contribution required under this Section 12.2.1 shall be made
without regard to the level of the Participant’s Top-Heavy Compensation for the
Plan Year.

     

    (d)           Notwithstanding
the foregoing, if a Participant is also covered under any Other Plan (as defined
in Section 8.4.1(c)) and the minimum allocation of benefit requirement
applicable to Top-Heavy Plans will be met under such Other Plan or Plans, no
additional contribution will be made for the Participant under this
Plan.

     

    12.2.2                      “Top-Heavy Compensation”
means, with respect to any Participant for a Plan Year, his or her Total
Compensation (as defined in Section 5.5.2(e) and applied using the
definition of “Affiliate” in Section 1.2 rather than in
Section 5.5.2(a)) and except that, for this purpose, no amount in excess of
the Compensation Limit shall be taken into account for any Plan
Year.

     

    SECTION 13

     

    GENERAL
PROVISIONS

     

    13.1           Plan
Information.  Each Participant shall be advised of the general
provisions of the Plan and, upon written request addressed to the Committee,
shall be furnished with any information requested, to the extent required by
applicable law, regarding his or her status, rights and privileges under the
Plan.

    
      
         

      

      
        -64-

        
          

        

      

      
         

      

    

    13.2           Inalienability. 
Except to the extent otherwise provided in Sections 8.6 and 8.7 or mandated
by Section 401(a)(13)(C) of the Code or other applicable law, in no event
may any Participant, former Participant or his or her spouse, Beneficiary or
estate sell, transfer, anticipate, assign, hypothecate, or otherwise dispose of
any right or interest under the Plan; and such rights and interests shall not at
any time be subject to the claims of creditors nor be liable to attachment,
execution or other legal process.

    13.3           Rights and
Duties.  No person shall have any rights in or to the Trust Fund or
other assets of the Plan, or under the Plan, except as, and only to the extent,
expressly provided for in the Plan.  To the maximum extent permissible
under Section 410 of ERISA, neither the Employers, the Trustee nor the
Committee shall be subject to any liability or duty under the Plan except as
expressly provided in the Plan, or for any other action taken, omitted or
suffered in good faith.

    13.4           No Enlargement of Employment
Rights.  Neither the establishment or maintenance of the Plan, the
making of any contributions nor any action of any Employer, the Trustee or
Committee, shall be held or construed to confer upon any individual any right to
be continued as an Employee nor, upon dismissal, any right or interest in the
Trust Fund or any other assets of the Plan, except to the extent provided in the
Plan.  Employment with the Employers is on an at-will basis
only.  Each Employer expressly reserves the right to discharge any
Employee at any time, with or without cause.

    13.5           Apportionment of
Duties.  All acts required of the Employers under the Plan may be
performed by the Company for itself and its Affiliates.  Any costs
incurred by the Company for itself or its Affiliates in connection with the Plan
and the costs of the Plan, if not paid from the Trust Fund pursuant to
Section 9.9, shall be equitably apportioned among the Company and the other
Employers, as determined by the Committee (in its
discretion).  Whenever an Employer is permitted

    
      
         

      

      
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    or
required under the terms of the Plan to do or perform any act, matter or thing,
it shall be done and performed by any officer or employee of the Employer who is
duly authorized to act for the Employer.

    13.6           Merger, Consolidation or
Transfer.  This Plan shall not be merged or consolidated with any
other plan, nor shall there be any transfer of any assets or liabilities from
this Plan to any other plan, unless immediately after such merger, consolidation
or transfer, each Participant’s accrued benefit, if such other plan were then to
terminate, is at least equal to the accrued benefit to which the Participant
would have been entitled if this Plan had been terminated immediately before
such merger, consolidation or transfer.  Subject to the foregoing, the
Board of Directors shall have the power (in its discretion) to direct that this
Plan shall participate in any such transaction.

    13.7           Military
Service.  Notwithstanding any contrary Plan provision, Elective
Deferrals and Employer Contributions with respect to the qualified military
service of an Employee on a Leave of Absence pursuant to Section 1.31(b)
will be provided in accordance with Section 414(u) of the
Code.  In addition, Participant loan repayments under
Section 8.6.2 shall be suspended as permitted under Section 414(u) of
the Code, and interest on Participant loans shall be adjusted, if necessary, to
conform to the requirements of the Servicemembers Civil Relief Act of 2003 or
other applicable law.

    13.8           Applicable Law. 
The provisions of the Plan shall be construed, administered and enforced in
accordance with ERISA and, to the extent applicable, the laws of the State of
California.

    13.9           Severability. 
If any provision of the Plan is held invalid or unenforceable, its invalidity or
unenforceability shall not affect any other provisions of the Plan, and the Plan
shall be construed and enforced as if such provision had not been
included.

    
      
         

      

      
        -66-

        
          

        

      

      
         

      

    

    

    13.10                      Exhaustion of Claims
Procedure and Right to Bring Legal Claim.  Notwithstanding any
contrary Plan provision, no legal action for Plan benefits may be brought by any
claimant unless and until he or she has followed the Claims Procedure (as
described in Section 9.4(r)) and has had his or her claim for such benefits
denied both initially and on appeal.  In addition, no legal action for
Plan benefits may be brought by any claimant more than one year after his or her
claim for such benefits has been denied on appeal under the Claims Procedure,
or, if earlier, more than four years after the facts or events giving rise to
the claimant’s allegation(s) or claim(s) first occurred.

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

    
      
         

      

      
        -67-

        
          

        

      

      
         

      

    

    EXECUTION:

    

    

    In Witness Whereof,
Genentech, Inc., by its duly authorized officers, has executed this restated
Plan on the date indicated below.

    

    
      	 
      	
              GENENTECH,
      INC.

            
	 
      	 
      	 
      
	 
      	
              By

            	
              
                /s/
      MARKUS GEMUEND

              

            
	 
      	
              Title

            	
              
                Senior
      Vice President Biochemical Manufacturing

              

            
	 
      	
              Dated

            	
              
                December
      20, 2007

              

            
	 
      	 
      	 
      
	 
      	
              By

            	
              
                /s/
      MICHAEL D. VARNEY

              

            
	 
      	
              Title

            	
              
                Vice
      President Small Molecule Drug Discovery

              

            
	 
      	
              Dated

            	
              
                December
      20, 2007

              

            

    

    

    
      
         

      

      
        -68-

        
          

        

      

      
         

      

    

    APPENDIX
A

     

    PUERTO
RICO SUPPLEMENT TO THE

    GENENTECH,
INC. TAX REDUCTION INVESTMENT PLAN

    

    This
Puerto Rico Supplement (the “Supplement”) pertains only to Puerto Rico Employees
who are Participants (“Puerto Rico Participants”) in the Genentech, Inc. Tax
Reduction Investment Plan (the “Plan”).  Except as otherwise specified
in this Supplement, (1) the provisions of the Plan shall apply to Puerto Rico
Employees, and (2) all defined terms used in this Supplement shall have the
meaning set forth in the Plan.

     

    A.    Purpose.  The
purpose of this Supplement is to comply with the qualification requirements of
Section 1165(a) of the PR Code.  Accordingly, to the extent
inconsistent with the general provisions of the Plan, the following provisions
shall apply to Puerto Rico Employees.  In the event of an amendment to
the PR Code or enactment of a successor statute that replaces or renumbers a
section of the PR Code references in this Supplement, all such references shall
automatically be renumbered or replaced, as applicable.

     

    B.    Applicable
Trust.  Plan assets attributable to Puerto Rico Participants
shall be held by the Trustee and invested under the Plan in the Trust
Fund.  The Trust Fund, to the extent of assets attributable to Puerto
Rico Participants, shall be exempt from Puerto Rico income taxes in accordance
with PR Code Section 1165(a) and exempt from United States income taxes
pursuant to Section 501(a) of the US Code and Section 1022(i) of
ERISA.

     

    C.    Definitions.

     

    1.           Affiliate.  “Affiliate”
and/or “member of a controlled group” means a related employer of the Company
that belongs to the Company’s “controlled group” (as that term is defined by PR
Code Section 1028).

     

    2.           Catch-Up
Contributions.  “Catch-Up Contributions” means, as to each
Puerto Rico Participant, the amounts (if any) contributed under the Plan by the
Employers in accordance with Paragraph F.3 below.

     

    3.           Compensation.  “Compensation”
for a Puerto Rico Participant, shall:

     

    a.           for
purposes of Salary Deferrals, Company Match Contributions and Non-Elective
Contributions, have the same meaning as set forth in Section 1.13 of the
Plan, except that references to IRS Form W-2 shall mean Puerto Rico Form
499R-2/W-2PR; and

     

    b.           for
all other purposes, have the same meaning as set forth in Section 5.5.2(e)
of the Plan, consistent with PR Code Section 1165(h)(9).

     

    
      
         

      

      
        A-1

        
          

        

      

      
         

      

    

    4.           Direct
Rollover.  “Direct Rollover” means, with respect to a Puerto
Rico Participant, a Direct Rollover as defined in Section 7.4.5 of the
Plan, but with the following applicable definitions:

     

    a.           Distributee:  A
Distributee includes a Puerto Rico Participant.

     

    b.           Eligible Retirement
Plan:  An Eligible Retirement Plan refers to an individual
retirement account described in PR Code Section 1169(a), an annuity plan
described in PR Code Section 1165(a), or a qualified trust described in PR
Code Section 1165(a), that accepts the Distributee’s Eligible Rollover
Distribution.

     

    c.           Eligible Rollover
Distribution:  An Eligible Rollover Distribution includes any
distribution of all of the balance to the credit of the Distributee, except that
an Eligible Rollover Distribution does not include:  any distribution
that is one of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy) of the
Distributee or the joint lives (or joint life expectancies) of the Distributee
and the Distributee’s designated beneficiary, or for a specified period of 10
years or more; and the portion of any distribution that is not includable in
gross income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).

     

    5.           Highly Compensated Puerto
Rico Employees.  “Highly Compensated Puerto Rico Employees” for
each Plan Year means Puerto Rico Employees who have greater Compensation than
two-thirds of all other Puerto Rico Employees for that Plan Year (as set forth
in Section 1165(e)(3)(E)(iii) of the PR Code).

     

    6.           Non-Highly Compensated
Puerto Rico Employees.  “Non-Highly Compensated Puerto Rico
Employees” for each Plan Year means Puerto Rico Employees who are not Highly
Compensated Puerto Rico Employees.

     

    7.           PR
Code.  “PR Code” means the Puerto Rico Internal Revenue Code of
1994, as amended.  Reference to any Section or Subsection of the PR
Code and the regulations promulgated thereunder includes reference to any
comparable or succeeding provisions of any legislation that amends, supplements,
or replaces such section or subsection.

     

    8.           Puerto Rico
Employee.  “Puerto Rico Employee” means an Employee whose
compensation is subject to Puerto Rico income tax and who is a bona fide
resident of Puerto Rico.

     

    9.           Puerto Rico
Participant.  “Puerto Rico Participant” means a Puerto Rico
Employee who is an Eligible Employee, who has become a Participant in the Plan
pursuant to Section 2.1 and who has not ceased to be a Participant pursuant
to Section 2.7.

     

    10.           Rollover
Contribution.  “Rollover Contribution” means, with respect to a
Puerto Rico Participant, a Rollover contribution that fulfills the requirements
of PR Code Section 1165(b)(2).

     

    
      
         

      

      
        A-2

        
          

        

      

      
         

      

    

    11.           Salary
Deferrals.  “Salary Deferrals” means, as to each Puerto Rico
Participant, the amounts (if any) contributed under the Plan by the Employers in
accordance with Paragraph F.1 below.

     

    12.           US
Code.  “US Code” means the United States Internal Revenue Code
of 1986, as amended.

     

    D.    Effective
Date.  The provisions of this Supplement are amended effective
as of November 1, 2007.

     

    E.    Rollover
Contributions.  A Puerto Rico Participant may elect to make
pre-tax Rollover Contributions into the Plan, subject to the requirements of
Section 1165(b)(2) of the PR Code.  In addition, if so directed
by the Committee, the Trustee will accept a direct transfer from another
retirement plan qualified under Section 1165 of the PR Code on behalf of
Puerto Rico Participants.  Such transferred amounts will be treated as
Rollover Contributions.

     

    F.    Salary
Deferrals and Catch-Up Contributions.

     

    1.           A
Puerto Rico Participant may elect to defer a portion of his or her Compensation
and to have the amounts of such Salary Deferrals contributed by his or her
Employer to the Trust Fund.  A Puerto Rico Participant may elect to
defer an amount not less than 1% and not more than 10% (the maximum currently
permissible under the PR Code), in whole increments of 1%.

     

    2.           In
addition to the above, the Actual Deferral Percentage for any Highly Compensated
Puerto Rico Employee for the Plan Year who is eligible to have Salary Deferrals
allocated to his or her account under two or more plans or arrangements
described in PR Code Section 1165(e) that are maintained by the Employer,
shall be determined as if such Salary Deferrals were made under a single
arrangement.

     

    3.           A
Puerto Rico Participant who will be age fifty (50) or more by the end of a Plan
Year may elect to defer a portion of his or her Compensation for the Plan Year
and to have the amounts contributed by his or her Employer to the Trust Fund as
Catch-Up Contributions.  A Puerto Rico Participant may elect to defer
an amount not less than 1% and not more than 10% (the maximum currently
permissible under the PR Code), in whole increments of 1%.

    

    G.    Limitations
on Deferrals.

     

    1.           Notwithstanding
Section 3.1 of the Plan, a Puerto Rico Participant’s Salary Deferrals are
limited to the amount specified under the PR Code.  As of the
Effective Date, that is the lesser of 10% of his or her Compensation or
$8,000.  These limits may be adjusted from time to time in accordance
with applicable Puerto Rico tax laws.

     

    2.           Notwithstanding
Section 3.2 of the Plan, a Puerto Rico Participant’s Catch-Up Contributions are
limited to the amount specified under the PR Code.  As of the
Effective Date, that

     

    
      
         

      

      
        A-3

        
          

        

      

      
         

      

    

    is
$1,000 per Plan Year.  This limit may be adjusted from time to time in
accordance with applicable Puerto Rico tax laws.

     

    3.           A
Puerto Rico Participant may not elect to make deferrals to the Plan in the form
of Roth Basic Contributions.

     

    H.    Minimum
Coverage Requirements.  In applying the statutory minimum
coverage requirements to Puerto Rico Employees, which as to Employees other than
Puerto Rico Employees are governed by US Code Section 410(b), the
applicable provisions of the PR Code shall govern.  In accordance with
such provisions:

     

    1.           at
least 70% or more of Non-Highly Compensated Puerto Rico Employees are covered or
eligible to participate in the Plan;

     

    2.           the
Plan shall benefit a percentage of Non-Highly Compensated Puerto Rico Employees
that is at least 70% of the percentage of Highly Compensated Puerto Rico
Employees who benefit under the Plan; or

     

    3.           the
Plan shall pass the ‘average benefit test’ (as described in PR Code
Section 1165(a)(3)(B)).

     

    I.    Nondiscrimination
Testing Rules.  Notwithstanding Section 3.1 of the Plan,
which sets out the nondiscrimination provisions of the Plan with respect to
Eligible Employees other than Puerto Rico Employees, the following
nondiscrimination requirements shall apply to Puerto Rico
Employees:

     

    1.           ‘Puerto Rico Actual Deferral
Percentage Test’ means the Puerto Rico Actual Deferral Percentage (as
defined in subsection b below) of Highly Compensated Puerto Rico Employees for
any Plan Year as compared to the Puerto Rico Actual Deferral Percentage for
Non-Highly Compensated Puerto Rico Employees that must meet either of the
following tests:

     

    a.           The
Puerto Rico Actual Deferral Percentage of Highly Compensated Puerto Rico
Employees shall not be more than the Puerto Rico Actual Deferral Percentage of
Non-Highly Compensated Puerto Rico Employees multiplied by 1.25; or

     

    b.           The
Puerto Rico Actual Deferral Percentage of Highly Compensated Puerto Rico
Employees shall not be more than the Puerto Rico Actual Deferral Percentage of
Non-Highly Compensated Puerto Rico Employees multiplied by 2.0 and the excess of
the Puerto Rico Actual Deferral Percentage of Highly Compensated Puerto Rico
Employees over the Actual Deferral Percentage for Non-Highly Compensated Puerto
Rico Employees is not more than 2 percentage points.

     

    2.           ‘Puerto Rico Actual Deferral
Percentage’ means a percentage calculated separately for each of the
following groups (i) Highly Compensated Puerto Rico Employees, and
(ii) Non-Highly Compensated Puerto Rico Employees.

     

    
      
         

      

      
        A-4

        
          

        

      

      
         

      

    

    3.           Determination of Puerto Rico
Actual Deferral Percentage. For each group being tested, the Puerto Rico
Actual Deferral Percentage shall be the average of the ‘Employer Contributions’
(as defined in subsection 4 below) actually deposited in the Trust on behalf of
each Puerto Rico Participant for the Plan Year, divided by his or her
Compensation for the Plan Year (calculated separately for each member of each
group).

     

    4.           ‘Employer
Contributions’ mean Salary Deferrals and Qualified Non-Elective
Contributions (defined in subsection 5.b below) made on behalf of a Puerto Rico
Participant with respect to the Plan Year being tested.

     

    5.           Corrective
Procedures.  If the Puerto Rico Actual Deferral Percentage Test
is not met as of the end of the Plan Year, then the Committee may, in its sole
and absolute discretion, take either of the following actions:

     

    a.           cause
the Salary Deferrals for Highly Compensated Puerto Rico Employees to be reduced
and refunded to Highly Compensated Puerto Rico Employees until the Puerto Rico
Actual Deferral Percentage Test is satisfied.  The sequence of such
reductions and refunds shall begin with Highly Compensated Puerto Rico
Employee(s) who deferred the greatest percentage starting with the unmatched
Salary Deferrals, then the second greatest percentage, continuing until the
Puerto Rico Actual Deferral Percentage Test is satisfied.  This
process shall continue through the remaining unmatched Salary Deferrals until
all such applicable unmatched Salary Deferrals have been
reduced.  Next, the matched Salary Deferrals shall be reduced until
the Puerto Rico Actual Deferral Percentage Test is satisfied.  Once
the Puerto Rico Actual Deferral Percentage Test is met, then the Committee shall
direct the Trustee to distribute to each affected Highly Compensated Puerto Rico
Employee the amount of the reduction of his or her Salary Deferrals, and to
treat as forfeitures the proportionate amount of Company Match Contributions, if
any, together with the earnings (gains or losses) allocable
thereto.  The Committee shall designate such distribution and
forfeiture as a distribution and forfeiture of excess contributions, determine
the amount of the allocable earnings (gains or losses) to be distributed as it
deems appropriate in it sole and absolute discretion, and cause such
distributions and forfeitures to occur prior to the end of the Plan Year
following the Plan Year in which the excess Salary Deferrals and related Company
Match Contributions were made; or

     

    b.           require
the Employer to make “Qualified Non-Elective Contributions” (as such amounts are
contemplated in Article 1165-8(b)(3) of the Puerto Rico Tax Regulations) on
behalf of each Non-Highly Compensated Puerto Rico Employee for the Plan Year in
which the Puerto Rico Actual Deferral Percentage Test was not met.  If
made, a Qualified Non-Elective Contribution shall be consistent with the
provisions of Article 1165 8(b)(3) of the Puerto Rico Tax Regulations, and shall
be in such amount as will cause the Puerto Rico Average Deferral Percentage Test
to be met.  Any such Qualified Non-Elective Contributions will be
allocated, in the sole discretion of the Committee, to the Account of Non-Highly
Compensated Puerto Rico Employees (1) in an equal dollar amount based on the
number of Non-Highly Compensated Puerto Rico Employees eligible to receive an
allocation of the Qualified Non-Elective Contributions, or (2) to

     

    
      
         

      

      
        A-5

        
          

        

      

      
         

      

    

    such
Non-Highly Compensated Puerto Rico Employees and in such amounts as are
necessary to satisfy the Puerto Rico Actual Deferral Percentage
Test.

     

    6.           The
Catch-Up Contributions of Puerto Rico Participants are not subject to the Puerto
Rico Actual Deferral Percentage Test as set forth above.

    

    J.    Company
Contributions.  The Committee, in its discretion, may elect to
have all or a portion of the Company contributions (that meet the requirements
of the applicable Puerto Rico Treasury Regulations) for a calendar year taken
into account in calculating the PR Code Section 1165(a)(3) tests for that
year.

     

    K.    In-Service
Withdrawals.  In accordance with Sections 8.2 and 8.3 of
the Plan, a Puerto Rico Participant who is an Employee may make a withdrawal
from his or her Account in cash (or its equivalent).  Any application
for a withdrawal shall be submitted to such person, in such manner and within
such advance notice period as the Committee (in its discretion) shall
specify.  The active membership of a Puerto Rico Participant who makes
a withdrawal under Section 8.2 shall be suspended, in the manner set forth
in Section 8.2.3, for each payroll period that begins during the period
starting on the withdrawal approval date and ending 12 months following that
date.  Following that suspension period, the Puerto Rico Participant
may again become an Active Participant and resume his or her Salary Deferrals by
again electing to become an Active Participant in the Plan.

     

    L.    Plan
Provisions and Terms.  All terms and provisions of the Plan
shall apply to this Supplement, except that where the terms and provisions of
the Plan and this Supplement conflict, the terms and provisions of this
Supplement shall govern.

     

    M.    Miscellaneous.

     

    1.           Information between
Committee and Trustee.  The Committee and Trustee will furnish
each other such information relating to the Plan and Trust as may be required
under the PR Code and any regulations issued or forms adopted by the Puerto Rico
Treasury Department thereunder or under ERISA and any regulations issued or
forms adopted by the US Labor Department thereunder.

     

    2.           Governing
Law.  With respect to Puerto Rico Employees, the Plan will be
construed, administered and enforced according to the laws of the Commonwealth
of Puerto Rico to the extent such laws are not inconsistent with and preempted
by ERISA and/or any applicable Section of the US
Code.  Notwithstanding any provision of this Supplement, to the extent
that any provision described herein is modified by applicable Puerto Rico law,
any such applicable modification shall be deemed to be incorporated herein by
reference.

     

    
      
         

      

      
        A-6

        
          

        

      

      
         

      

    

    APPENDIX
B

     

    PLAN-TO-PLAN
TRANSFER OF

    TANOX,
INC. 401(k) PLAN ACCOUNTS

     

    The
Tanox, Inc. 401(k) Plan (the “Tanox Plan”) was merged with
and into the Plan effective as of November 1, 2007 (the “Tanox Transfer
Date”).  All outstanding account balances under the Tanox Plan
(the “Tanox Transferred
Accounts”) were transferred in a plan-to-plan transfer (the “Tanox Plan-to-Plan Transfer”)
from the Tanox Plan to this Plan.  The Plan-to-Plan Transfer was
effected in accordance with the following provisions:

     

    B.1           Transfer of Account
Balances.  The amounts credited to a Tanox Participant’s
account under the Tanox Plan immediately before the Tanox Transfer Date were
credited to his or her Account under this Plan on the Tanox Transfer
Date.  For this purpose, a “Tanox Participant” means a
Participant whose account balance under the Tanox Plan was transferred to this
Plan by reason of the Tanox Plan-to-Plan Transfer.

     

    B.2           Investment of Transferred
Account Balances.  The Tanox Participants’ Plan Account
balances transferred in the Tanox Plan-to-Plan Transfer were initially invested
in such Investment Fund(s) as the Committee deemed appropriate, in its sole and
absolute discretion.  As soon as administratively practicable after
the Tanox Transfer Date, the Tanox Participants were able to direct the
investment of such amounts in accordance with the procedures established under
the Plan allowing such investment direction.

     

    B.3           Vesting of Plan
Accounts.  Each Tanox Participant shall be 100% vested in all
of his or her Plan Account balance (including any amounts vested pursuant to
actions taken under the Tanox Plan prior to the Tanox Transfer Date) plus any
earnings thereon.

     

    B.4           Optional Forms of
Distribution.  Notwithstanding any contrary Plan provision, a
Tanox Participant’s Plan Account attributable to amounts accrued under the Tanox
Plan and transferred to this Plan in the Tanox Plan-to-Plan Transfer shall
continue to be subject to any optional form of distribution available with
respect to such assets under the Tanox Plan to the extent that under
Section 411(d)(6) of the Code such optional forms of distribution cannot be
eliminated; however, effective with this restatement of the Plan, any such Tanox
Plan benefits required to be preserved have been incorporated into the terms of
the Plan and made available to all Plan Participants.

     

    
      
         

      

      
        B-1Unassociated Document

    
      
        

      

    

     

    EXHIBIT
10.17

    

     

    Appendix
A

    

    GENENTECH,
INC.

    2004
EQUITY INCENTIVE PLAN

    NONQUALIFIED
STOCK OPTION GRANT AGREEMENT

     

    Genentech,
Inc. (the “Company”) hereby grants you (the “Participant”), a nonqualified stock
option (“Option”) under the Company’s 2004 Equity Incentive Plan
(the “Plan”) to purchase shares of common stock of the Company
(“Shares”).  The date of this Nonqualified Stock Option Grant
Agreement (the “Agreement”) is the date of grant as indicated on the
Participant’s Stock Option Data Sheet (the “Grant Date”).  Subject to
the provisions of this Agreement and of the Plan, the principal features of this
option are as follows:

     

    

     

    TERMS
AND CONDITIONS OF NONQUALIFIED STOCK OPTION GRANT

     

    

     

    1.           Vesting:  Subject
to any changes in vesting upon the occurrence of certain events, this Option is
scheduled to become exercisable (vest) as to the number of Shares, and on the
dates shown, on the Participant’s Stock Option Data Sheet.  Vesting
will not occur unless the Participant remains continuously employed by the
Company and/or a Subsidiary through the applicable vesting date.

    

    2.           Termination of
Service: Regardless of the reason for Termination of Service, if the
vested Option is not exercised within the appropriate exercise period, the
Option will automatically terminate and the Shares covered by the Option will
revert to the Plan.  If applicable, the provisions of Section 3 shall
determine the appropriate number of Shares and vesting schedule upon Termination
of Service.

    

    (a)           General. If the Participant’s
Termination of Service is for any reason other than Retirement, Disability or
death, the unvested portion of Participant’s Option will terminate immediately
and the Shares covered by such portion will revert to the Plan.  The
Participant may exercise any vested but unexercised portion of the Option within
three (3) months after the date of the Termination of Service, or prior to the
expiration date indicated on his or her Stock Option Data Sheet (the “Expiration
Date”), whichever occurs first.

    

    (b)           Retirement.  If
Participant’s Termination of Service is due to Retirement after reaching age
sixty (60) and completing at least ten (10) Years of Service with the Company
and/or a Subsidiary, the number of Shares that would otherwise have vested had
the Participant remained employed by the Company and/or a Subsidiary during the
twenty-four (24) months following his or her Retirement date will accelerate and
become exercisable until the Expiration Date.  After applying this
provision, any remaining unvested portion of the Option will immediately
terminate and the Shares covered by such portion will revert to the Plan. In
this section, "Year of Service" shall mean a continuous year of employment with
Genentech as an eligible employee from a Participant’s initial date of
employment until Termination of Service.

    

    (c)           Disability.  If
Participant’s Termination of Service is due to Disability, the Participant may
exercise any vested but unexercised portion of his or her Option within twelve
(12) months after the date of the Termination of Service, or prior to the
Expiration Date, whichever occurs first.  After applying this
provision, any unvested portion of the Option will terminate and the Shares
covered by such portion will revert to the Plan.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    (d) Death.  Unless
otherwise provided for by the Committee in the Agreement, if Participant’s
Termination of Service is due to his or her death, one hundred percent (100%) of
the Shares subject to the Option shall vest on the date of the Participant’s
death, and the option shall be exercisable for up to three (3) years after the
date of death, or prior to the Expiration Date, whichever occurs first. The
Option may be exercised by the beneficiary designated by the Participant (as
provided in Section 9.6 of the Plan), the executor or administrator of the
Participant’s estate or, if none, by the person(s) entitled to exercise the
Option under the Participant’s will or the laws of descent or
distribution.

    

    3. Other
Events:

    

    (a)           Leave of Absence. Each of
Participant’s scheduled vesting dates will be delayed one (1) month each time a
Participant takes a personal leave of absence (“LOA”) for ten (10) or more
successive business days in a given calendar month.

    

    (b)           Part-time
Status.

    

    (i)           As
of the end of an initial six-month period following a change to part-time
employment status of at least twenty (20) hours per week with the Company or a
Subsidiary prior to full vesting, the Participant’s vesting schedule will apply
to a reduced number of shares, adjusted in proportion to the percentage of hours
worked per week on that date in accordance with the following formula (rounded
to the nearest whole Share).

    

     

    
      	
              Number
      of unvested Shares

              remaining

            	
              X

            	
              Participant’s
      part-time percentage of employment

            	
              =

            	
              New
      number of

              Shares
      set to vest

            

    

    

    After
this initial six-month period, further changes in part-time status of at least
twenty (20) hours per week or to full-time status will be adjusted in accordance
with the above formula as of the effective date of the change. If a
Participant’s part-time status will apply for six (6) months or less, his or her
vesting will not apply to a reduced number of shares.

    

    (ii)           As
of the effective date of a change to part-time employment status of less than
twenty (20) hours per week with the Company or a Subsidiary prior to full
vesting, the Participant’s total number of unvested shares will be decreased in
accordance with the following formula (rounded to the nearest whole
Share):

    

    
      	
              Number
      of unvested Shares as

              of
      the change in employment status

            	
              X

            	
              Participant’s
      part-time percentage of employment

            	
              =

            	
              New
      number of Shares

               that
      will vest

            

    

    

    If
a Participant’s part-time status will apply for six (6) months or less, his or
her Shares will not decrease.

    

    If
applicable law prohibits the modification under the preceding formulas, the
Participant agrees that the Committee or its duly authorized delegate may extend
the vesting period with respect to the Option or reduce the Shares awarded by
this Agreement on a pro rata basis, as reasonably determined by the Committee or
its duly authorized delegate and to the extent permitted under applicable law;
provided that any such modification shall not affect a greater number of Shares
than the number of Shares that would have been modified pursuant to the
preceding formula.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    A
change to part-time status will not affect Shares that have already
vested.  The vesting period will end in accordance with the original
vesting schedule, and Shares that have not vested pursuant to the formula in
Section (3)(b)(i) of this Agreement will be forfeited upon the final scheduled
vesting date. However, Shares that have been lost in accordance with the formula
in Section (3)(b)(ii) of this Agreement will be immediately forfeited by the
Participant. Once forfeited, Shares will revert to the Plan.

    

    (c)           Consultancy Arrangements. A
change in status from Employee to Consultant, as such terms are defined in the
Plan, will not affect the vesting schedule or cause the option to expire, so
long as Participant continues to perform services and job duties for the Company
or a Subsidiary.

    

    4. Persons Eligible to Exercise
Option. Except as determined by the Committee in its discretion, this
Option shall be exercisable during the Participant’s lifetime only by the
Participant unless (i) Participant is permanently disabled (as defined in
Section 22(e) of the Code), in which case it may be exercised by Participant’s
spouse or other individual to whom he or she has validly granted a durable power
of attorney, or (ii) Participant has transferred the Option to a trust for his
or her benefit, in which case it may be exercised only by the trustee of such
trust.

    

    5. Option is Not
Transferable.  Except to the extent provided in the Plan, the
unvested Shares subject to this grant and the rights and privileges conferred
hereby shall not be sold, transferred, pledged, assigned or otherwise alienated
or hypothecated in any way (whether by operation of law or otherwise except
pursuant to a qualified domestic relations order, as determined by the Company)
other than by will or by the laws of descent and distribution.

    

    6. Conditions to
Exercise.  This Option may be exercised by the person then
entitled to do so as to any whole Shares which may then be purchased by (a)
giving notice in such form or manner as the Company may designate, (b) providing
full payment of the exercise price as indicated on the Participant’s Stock
Option Data Sheet (the “Exercise Price”) and the amount of any income tax the
Company determines is required to be withheld by reason of the exercise of this
Option or as is otherwise required under Section 10 below, and (c) giving
satisfactory assurances in the form or manner requested by the Company that the
Shares to be purchased upon the exercise of this Option are being purchased for
investment and not with a view to the distribution thereof.

    

    7. Payment Methods.
Except as otherwise required as a matter of law, the Exercise Price may be paid
in one (or a combination of two or more) of the following forms:

    

    (a)           Cash
or its equivalent.  The Company reserves the right to limit the
availability of certain other methods of exercise as it deems
necessary;

    

    (b)           By
tendering previously acquired Shares that have an aggregate Fair Market Value,
as such term is defined in the Plan, at the time of exercise equal to the total
Exercise Price;

    

    (c)           Consideration
under a cashless method of exercise;

    

    (d)           By
any other means that the Committee, in its sole discretion, determines to both
provide legal consideration for the Shares and to be consistent with the terms
of the Plan.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    8.           Timing
Considerations.  Notwithstanding any contrary provision of this
Agreement, if the Expiration Date of this Option falls on a Saturday, Sunday or
holiday, the Participant may exercise any vested but unexercised portion of this
Option at any time prior to the close of business on the first business day
following that Saturday, Sunday or holiday.  In addition, if the
Option is to be exercised through a stock broker-assisted transaction, it must
be exercised while the applicable stock market is open for trading and before
the Option otherwise expires.  If the Participant receives a hardship
withdrawal from his or her account (if any) under the Company’s Tax Reduction
Investment Plan (the “401(k) Plan”) for U.S. employees, this Option may not be
exercised during the six (6) month period following the hardship withdrawal
(unless the Company determines that exercise would not jeopardize the
tax-qualification of the 401(k) Plan).

    

    9.           Trusts.  The
Option may be transferred by the Participant to a trust for his or her benefit
or by will or the laws of descent or distribution, all in accordance with such
procedures as the Company in its discretion may designate from time to time. In
the event the Participant decides to transfer the Option to a trust for his or
her benefit, the Participant must obtain the consent of the Company to such
transfer and the trustee shall be required to make certain representations in
writing to the Company regarding the exercise of the Option and the trading of
the Shares obtained upon the exercise of the Option.

    

    10.           Tax
Withholding.  The Company shall assess its requirements
regarding tax, social insurance and any other payroll tax withholding and
reporting in connection with this Option, including the grant, vesting or
exercise of this Option or sale of Shares acquired pursuant to the exercise of
this Option (“tax-related items”).  These requirements may change from
time to time as laws or interpretations change.  Regardless of the
Company’s actions in this regard, the Participant hereby acknowledges and agrees
that the ultimate liability for any and all tax-related items is and remains his
or her responsibility and liability and that the Company (a) makes no
representations or undertaking regarding treatment of any tax-related items in
connection with any aspect of this Option grant, including the grant, vesting or
exercise of this Option and the subsequent sale of Shares acquired pursuant to
the exercise of this Option; and (b) does not commit to structure the terms of
the grant or any aspect of this Option to reduce or eliminate the Participant’s
liability regarding tax-related items.  In the event the Company
determines that it and/or a Subsidiary must withhold any tax-related items as a
result of the Participant’s participation in the Plan, the Participant agrees as
a condition of the grant of this Option to make arrangements satisfactory to the
Company to enable it to satisfy all withholding requirements.  The
Participant authorizes the Company and/or a Subsidiary to withhold all
applicable withholding taxes from the Participant’s
wages.  Furthermore, the Participant agrees to pay any amount of taxes
to the Company and/or a Subsidiary as one or both may be required to withhold as
a result of the Participant’s participation in the Plan and that cannot be
satisfied by deduction from the Participant’s wages or other cash compensation
paid to the Participant. The Participant acknowledges that he or she may not
exercise this Option unless the tax withholding obligations of the Company
and/or any Subsidiary are satisfied.

    

    11.           Section 409A. Under
Section 409A of the Code, an Option that vests after December 31, 2004,
that was granted with a per share exercise price that is determined by the
Internal Revenue Service (the “IRS”) to be less than the fair market value of a
share of common stock on the date of grant (a “Discount Option”) may be
considered “deferred compensation.”  A Discount Option may result
in (i) income recognition by the Participant prior to the exercise of
the Option, (ii) an additional twenty percent (20%) tax, and (iii)
potential penalty and interest charges.  The Participant acknowledges
that

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    the
Company cannot and has not guaranteed that the IRS will agree that the per share
exercise price of this Option equals or exceeds the Fair Market Value of a
Share on the date of grant in a later examination.  The Participant
agrees that if the IRS determines that this Option was granted with a per
share exercise price that was less than the Fair Market Value of a Share on the
date of grant, the Participant will be solely responsible for his or her costs
related to such a determination.

    

    12.           Suspension of
Exercisability.  This Option, in the sole discretion of
the Company, may not be exercised, in whole or in part, and the Company shall
not be required to issue any certificate or certificates for Shares hereunder
prior to fulfillment of all the following conditions: (a) the admission of such
Shares to listing on all stock exchanges on which such class of stock is then
listed; (b) the completion of any registration or other qualification of such
Shares, the filing of quarterly reports and the completion of any restatement of
financial statements required under any state or federal law or under the
rulings or regulations of the Securities and Exchange Commission or any other
governmental regulatory body, which the Committee shall, in its absolute
discretion, deem necessary or advisable; (c) the obtaining of any approval or
other clearance from any state or federal governmental agency, which the
Committee shall, in its absolute discretion, determine to be necessary or
advisable; and (d) the lapse of such reasonable period of time following the
date of exercise of the Option as the Committee may establish from time to
time for reasons of administrative convenience.  Any suspension of
exercise or delay in the issuance of Shares as a result of one or more of the
following conditions shall not extend the Expiration Date of this Option,
and the Company shall have no further obligation or liability with respect to
this Option as of and following the Expiration Date.

    

     

    13.           Address for
Notices.  Address any notice given to the Company under this
Agreement to:  Corporate Securities Administration, MS 49, Legal
Department, Genentech, Inc., 1 DNA Way, South San Francisco, CA 94080, or at
such other address as the Company may subsequently designate in
writing.

    

    14.           No Rights of
Stockholder.  Neither the Participant nor any beneficiary shall
be or have any of the rights or privileges of a stockholder of the Company with
respect to any of the Shares issuable pursuant to the exercise of this Option,
unless and until certificates representing such Shares have been issued,
recorded on the records of the Company or its transfer agents or registrars, and
delivered to the Participant (or beneficiary).  Nothing in the Plan or
this Option shall create an obligation on the part of the Company to repurchase
any Shares purchased hereunder.

    

    15.           No Effect on
Employment.  Subject to any employment contract with the
Participant, Participant’s terms of employment shall be determined from time to
time by the Company and/or the Subsidiary employing the Participant, which
entity hereby expressly reserves the right to terminate or change the terms of
the employment of the Participant at any time for any reason whatsoever, with or
without good cause.  Neither the transaction(s) contemplated hereunder
nor the vesting schedule indicated on the Participant’s Stock Option Data Sheet
constitutes an express or implied promise of continued employment for any period
of time.  A leave of absence or an interruption in service (including
an interruption during military service) authorized or acknowledged by the
Company or the Subsidiary employing the Participant, including the transfer of a
Participant between the Company and any of its Subsidiaries (or between
Subsidiaries) shall not be deemed a Termination of Service for the purposes of
this Agreement.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    16.           Plan
Governs.  This Agreement is subject to all terms and provisions
of the Plan.  In the event of a conflict between one or more
provisions of this Agreement and one or more provisions of the Plan, the
provisions of the Plan shall govern.  Terms used and not defined in
this Agreement shall have the meaning set forth in the Plan.  This
Option is not an incentive stock option as defined in Section 422 of the
Internal Revenue Code. The Company may, in its discretion, issue newly issued
Shares or treasury shares pursuant to this Option.

    

    17.           Binding
Agreement.  Subject to the limitation on the transferability of
this Option contained herein, this Agreement shall be binding upon and inure to
the benefit of the heirs, legatees, legal representatives, successors and
assigns of the parties hereto.

    

    18.           Committee
Authority.  The Committee shall have the power to interpret the
Plan and this Agreement, and to adopt rules consistent with the Plan for the
administration, interpretation and application of the Plan and to interpret or
revoke any such rules.  All actions taken and all interpretations and
determinations made by the Committee in good faith shall be final and binding
upon the Participant, the Company and all other interested
persons.  The Committee shall not be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan or
this Agreement.

    

    19.           Captions.  Captions
provided herein are for convenience only, and shall not serve as a basis for
interpretation or construction of this Agreement.

    

    20.           Agreement
Severable.  In the event that any provision in this Agreement
shall be held illegal or invalid for any reason, such provision shall be
severable from, and such illegality or invalidity shall not be construed to have
any effect on, the remaining provisions of this Agreement.

    

    21.           Modifications to the
Agreement.  This Agreement constitutes the entire understanding
of the parties on the subjects covered.  The Participant expressly
warrants that he or she is not accepting this Agreement in reliance on any
promises, representations, or inducements other than those contained
herein.  Modifications to this Agreement or the Plan can be made only
in an express written contract executed by a duly authorized officer of the
Company.

    

    22.           Amendment, Suspension or
Termination of the Plan.  By accepting this award, the
Participant expressly warrants that he or she has received an Option under the
Plan, and has received, read and understood a description of the
Plan.  The Participant understands that the Plan is discretionary in
nature and may be amended, suspended or terminated by the Company at any
time.

    

    23.           Labor
Law.  By accepting this Option, the Participant acknowledges
that:  (a) the grant of this Option is a one-time benefit which does
not create any contractual or other right to receive future grants of Options,
or benefits in lieu of Options; (b) all determinations with respect to any
future grants, including, but not limited to, the times when the Options shall
be granted, the number of Shares subject to each Option, the Exercise Price, and
the time or times when each Option shall be exercisable, will be at the sole
discretion of the Company; (c) the Participant’s participation in the Plan is
voluntary; (d) the value of this Option is an extraordinary item of compensation
which is outside the scope of the Participant’s employment contract, if any; (e)
this Option is not part of the Participant’s normal or expected compensation for
purposes of calculating any severance, resignation, redundancy, end of service
payments, bonuses, long-service awards, pension or retirement benefits or
similar

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    payments;
(f) the vesting of this Option ceases upon termination of employment for any
reason except as may otherwise be explicitly provided in the Plan or this
Agreement; (g) the future value of the underlying Shares is unknown and cannot
be predicted with certainty; (h) if the underlying Shares do not increase in
value, this Option will have no value; (i) this Option has been granted to the
Participant in accordance with the Participant’s status as an Employee or
Consultant of the Company or its Subsidiaries; (j) any claims resulting from
this Option shall be enforceable, if at all, against the Company;  (k)
there shall be no additional obligations for any Subsidiary employing the
Participant as a result of this Option and (l) no claim or entitlement to
compensation or damages arises if the Option does not increase in value and the
Participant irrevocably releases the Company and its Subsidiaries from any such
claim that does arise.

    

    24.           Disclosure of Participant
Information.  By accepting this Option, the Participant
consents to the collection, receipt, use, retention and transfer of personal
data as described in this Section 24. The Participant understands that the
Company and its Subsidiaries hold certain personal information about him or her,
including his or her name, home address and telephone number, date of birth,
social security or identity number, salary, nationality, job title, data for tax
withholding purposes, any Shares or directorships held in the Company, details
of all Options or any other entitlement to Shares awarded, canceled, exercised,
vested, unvested or outstanding in his or her favor, for the purpose of managing
and administering the Plan (“Data”). The Participant further understands that
the Company and/or its Subsidiaries will transfer Data amongst themselves as
necessary for the purpose of implementation, administration and management of
his or her participation in the Plan, and that the Company and/or any of its
Subsidiaries may each further transfer Data to any third parties assisting the
Company in the implementation, administration and management of the Plan. The
Participant understands that these recipients may be located in the European
Economic Area, or elsewhere, such as in the U.S. or Asia. The Participant
expressly authorizes the Company to collect, receive, use, retain and transfer
the Data in electronic or other form, for the purposes of implementing,
administering and managing his or her participation in the Plan and/or the
subsequent holding of Shares on his or her behalf, including any requisite
transfer to a broker or other third party with whom he or she may elect to
deposit any Shares acquired upon exercise of this Option.   The
Participant understands that he or she may, at any time, without cost, view the
Data, require any necessary amendments to the Data or withdraw his or her
consent herein in writing by contacting the human resources department and/or
the stock option administrator for his or her employer.  The
Participant understands, however, that refusing or withdrawing his or her
consent may affect his or her ability to accept an Option under the
Plan.

    

    25.           Notice of Governing
Law.  This option shall be governed by, and construed in
accordance with, the laws of the State of California without regard to
principles of conflict of laws.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    GENENTECH,
INC.

     

    2004
EQUITY INCENTIVE PLAN

     

    STOCK
OPTION DATA SHEET

    

     

    
      	
               Optionee:

            	
               [NAME]

            
	
               Date
      of Grant:

            	
               [GRANT
      DATE]

            	
               Grant
      Number:

            	
              [GNT
      NUMBER]  

            
	
               Shares
      subject to option:

            	
              [SHR
      NUMBER] 

            
	
               Exercise
      price per share:

            	
              [PRICE] 
      

            
	
               Scheduled
      date of vesting of first installment ("Initial Vesting
    Date"):

            	
              [VEST
      DATE]  

            
	
               Number
      of shares scheduled to vest on Initial Vesting Date:

            	
              [SHR
      ON IVD]  

            
	
               Number
      of shares scheduled to vest per month after the Initial Vesting
      Date:

            	
              [SHR
      PER MO]  

            
	
               Expiration
      Date of the Option:

            	
              [EXP
      DATE]  

            

    

     

    On
the date specified above, Genentech, Inc. (the “Company”) approved the grant to
you of the option described above to purchase shares of Company Common Stock
(the "Shares") under the Genentech, Inc. 2004 Equity Incentive Plan (the
"Plan").

     

     

    In
addition to this Stock Option Data Sheet, you will need to carefully read your
nonqualified stock option grant agreement (the “Agreement”), the Plan, and the
Plan prospectus (the “Prospectus”) to understand the terms and conditions of
your grant.  These and other documents relating to the Plan or the
underlying shares can be found by clicking on the following links:

     

     

    1. Agreement

     

     

    2. Prospectus

     

     

    3. Plan

     

     

    4. Annual
Report

     

     

    5. Notice of
Exercise

     

     

    6. Instructions to Notice of
Exercise

     

     

    This
option is a valuable security and should be safeguarded accordingly. After you
have reviewed these documents and understand your rights and obligations, please
submit the Acknowledgment below by clicking on the "I accept" button. This
Acknowledgment does not commit or obligate you to purchase any shares from this
option.

     

     

    It
is your responsibility to exercise this option before it
terminates.

     

     

    Once
you are able to begin exercising your option, you may be required to complete a
Notice of Exercise and submit it to Corporate Securities Administration (MS
#49), along with a form of payment permitted under the option for the full
purchase price of the shares being purchased and any applicable
taxes.

     

    If
you have any questions, please feel free to contact Corporate Securities
Administration.

     

     

    
      

    

     

    ACKNOWLEDGMENT

     

    By
accepting this option, I, [EMPLOYEE NAME]:

     

     

    (a)
agree that I have read the Agreement, the Stock Option Data Sheet, and the
Prospectus, and that I have been able to access and view the Plan, and
understand the rights and obligations with respect to this option as set forth
in the Agreement and the Plan, including, for example, the rules on vesting and
early termination;

     

     

    (b)
agree to all the terms and conditions contained in the Agreement, the Stock
Option Data Sheet and the Plan; and

     

     

    (c)
agree that as of the date hereof, the Agreement, the Stock Option Data Sheet and
the Plan set forth the entire understanding between the Company and me regarding
the acquisition of the shares and supersede all prior oral and written
agreements with respect thereto.

     

     

    Please
click the button below to indicate your acceptance of this option.

     

    

    
      	
              I
      accept

            

    

    

    

    

    FOR
SECURITY REASONS, PLEASE CLOSE DOWN YOUR BROWSER AFTER VIEWING ANY OF THIS
MATERIAL

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