GENENTECH, INC. 2004 EQUITY INCENTIVE PLAN NONQUALIFIED STOCK OPTION GRANT AGREEMENT
Exhibit 10.1
GENENTECH, INC.
2004 EQUITY INCENTIVE PLAN
2004 EQUITY INCENTIVE PLAN
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-five (65), the number of Shares that would otherwise have vested had the Participant
remained employed by the Company and/or a Subsidiary during the twelve (12) 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.
(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. As of the effective date of a change from full-time to part-time
employment status 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 |
However, 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
formula, 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. Unvested Shares
lost pursuant to the above formula are forfeited by the Participant and 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., 0 XXX Xxx, Xxxxx
Xxx Xxxxxxxxx, XX 00000, 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, at:
(650) CALL DNA (000-000-0000)
or via e-mail at: xxxxxxxxx@xxxx.xxx
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
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