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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).
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Number of unvested Shares
remaining
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X
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Participant’s part-time percentage of employment
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=
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New number of
Shares set to vest
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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):
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Number of unvested Shares as
of the change in employment status
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X
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Participant’s part-time percentage of employment
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=
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New number of Shares
that will vest
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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 tr
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