-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MCo3LfLhDkzsL2Bjl0Vb/qfTwuDyBXuIRwEIF2TS6NT3gXw30fkR96fSau9NPHGa OZFpJ2qGkbkpv068EH4wTg== 0000318771-99-000010.txt : 19990628 0000318771-99-000010.hdr.sgml : 19990628 ACCESSION NUMBER: 0000318771-99-000010 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990625 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GENENTECH INC CENTRAL INDEX KEY: 0000318771 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 942347624 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 001-09813 FILM NUMBER: 99652173 BUSINESS ADDRESS: STREET 1: 460 POINT SAN BRUNO BLVD CITY: SOUTH SAN FRANCISCO STATE: CA ZIP: 94080 BUSINESS PHONE: 4152251000 MAIL ADDRESS: STREET 1: 460 POINT SAN BRUNO BLVD STREET 2: . CITY: SOUTH SAN FRANCISCO STATE: CA ZIP: 94080 11-K 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended: December 31, 1998 OR TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Commission file number: 1-9813 GENENTECH, INC. TAX REDUCTION INVESTMENT PLAN (Full title of the Plan) GENENTECH, INC. (Name of issuer of the securities held pursuant to the Plan) 1 DNA Way, South San Francisco, California 94080 (Address of principal executive offices and zip code) Genentech, Inc. Tax Reduction Investment Plan Index to Financial Statements Item Page No. - -------------------------------------------------------- -------- Statements of Net Assets Available for Benefits with Fund Information at December 31, 1998 and 1997 3-5 Statements of Changes in Net Assets Available for Benefits with Fund Information for Years Ended December 31, 1998 and 1997 6-9 Notes to Financial Statements 10-20 Report of Ernst & Young LLP, Independent Auditors 21 Signatures 22 Supplemental Schedules for the Year Ended December 31, 1998: Schedule I - Schedule of Assets Held for Investment Purposes 23-24 Schedule II - Schedule of Reportable Transactions 25 Page 2 Genentech, Inc. Tax Reduction Investment Plan Statement of Net Assets Available for Benefits with Fund Information December 31, 1998
FIDELITY FIDELITY GENENTECH FIDELITY GROWTH GROWTH & FIDELITY COMMON MAGELLAN COMPANY INCOME INTERMEDIATE STOCK FUND(2) FUND(1) FUND(1) PORTFOLIO(1) BOND FUND(1) ----------- ----------- ----------- ----------- ----------- ASSETS: Investments, at fair value $12,724,353 $58,505,405 $28,059,164 $55,766,205 $ 3,961,821 Contribution receivable from Genentech, Inc. 384,825 1,524,872 1,138,365 1,632,133 1,815 ----------- ----------- ----------- ----------- ----------- Net assets available for benefits $13,109,178 $60,030,277 $29,197,529 $57,398,338 $ 3,963,636 =========== =========== =========== =========== =========== FIDELITY FIDELITY FIDELITY FIDELITY FIDELITY ASSET ASSET ASSET OVERSEAS BALANCED MANAGER MANAGER: MANAGER: FUND(1) FUND(1) FUND(1) GROWTH FUND(1) INCOME FUND(1) ----------- ---------- ----------- ----------- ----------- ASSETS: Investments, at fair value $ 6,525,200 $19,871,145 $ 2,224,841 $ 3,583,391 $ 631,492 Contribution receivable from Genentech, Inc. 1,207 2,050 194 1,534 412 ----------- ----------- ----------- ----------- ----------- Net assets available for benefits $ 6,526,407 $19,873,195 $ 2,225,035 $ 3,584,925 $ 631,904 =========== =========== =========== =========== =========== FIDELITY FIDELITY PIMCO MAS NEUBERGER & RETIREMENT SPARTAN TOTAL HIGH BERMAN MONEY MARKET U.S. EQUITY RETURN YIELD GENESIS PORTFOLIO(1) INDEX FUND(1) FUND(1) PORTFOLIO(1) TRUST(1) ----------- ----------- ----------- ----------- ----------- ASSETS: Investments, at fair value $13,989,413 $21,449,600 $ 919,321 $ 281,349 $ 702,452 Contribution receivable from Genentech, Inc. 507,072 807,547 205,604 11,095 47,812 ----------- ----------- ----------- ----------- ----------- Net assets available for benefits $14,496,485 $22,257,147 $ 1,124,925 $ 292,444 $ 750,264 =========== =========== =========== =========== ===========
Page 3 Genentech, Inc. Tax Reduction Investment Plan Statement of Net Assets Available for Benefits with Fund Information December 31, 1998
INVESCO TOTAL JANUS RETURN WORLDWIDE PARTICIPANT FUND(1) FUND(1) LOANS TOTAL ----------- ----------- ----------- ------------ ASSETS: Investments, at fair value $ 1,309,198 $ 2,179,825 $ 4,749,358 $237,433,533 Contribution receivable from Genentech, Inc. 662,983 416,196 0 7,345,716 ----------- ----------- ----------- ------------ Net assets available for benefits $ 1,972,181 $ 2,596,021 $ 4,749,358 $244,779,249 =========== =========== =========== ============ (1) Fund shares are in registered investment companies. (2) A unitized stock fund. See accompanying notes.
Page 4 Genentech, Inc. Tax Reduction Investment Plan Statement of Net Assets Available for Benefits with Fund Information December 31, 1997
FIDELITY FIDELITY GENENTECH FIDELITY GROWTH GROWTH & FIDELITY COMMON MAGELLAN COMPANY INCOME INTERMEDIATE STOCK FUND(2) FUND(1) FUND(1) PORTFOLIO(1) BOND FUND(1) ----------- ----------- ----------- ----------- ----------- ASSETS: Investments, at fair value $ 8,888,380 $42,752,024 $22,633,377 $41,214,011 $ 3,550,836 Contribution receivable from Genentech, Inc. 351,640 1,417,772 1,000,970 1,474,291 175,466 ----------- ----------- ----------- ----------- ----------- Net assets available for benefits $ 9,240,020 $44,169,796 $23,634,347 $42,688,302 $ 3,726,302 =========== =========== =========== =========== =========== FIDELITY FIDELITY FIDELITY FIDELITY FIDELITY ASSET ASSET ASSET OVERSEAS BALANCED MANAGER MANAGER: MANAGER: FUND(1) FUND(1) FUND(1) GROWTH FUND(1) INCOME FUND(1) ----------- ----------- ----------- ----------- ----------- ASSETS: Investments, at fair value $ 6,371,403 $17,692,544 $ 1,712,971 $ 2,761,351 $ 561,511 Contribution receivable from Genentech, Inc. 332,306 534,069 94,157 182,941 32,191 ----------- ----------- ----------- ----------- ----------- Net assets available for benefits $ 6,703,709 $18,226,613 $ 1,807,128 $ 2,944,292 $ 593,702 =========== =========== =========== =========== =========== FIDELITY FIDELITY RETIREMENT SPARTAN MONEY MARKET U.S. EQUITY PARTICIPANT PORTFOLIO(1) INDEX FUND(1) LOANS TOTAL ----------- ----------- ----------- ------------ ASSETS: Investments, at fair value $12,205,141 $11,878,056 $ 4,571,014 $176,792,619 Contribution receivable from Genentech, Inc. 502,254 571,775 0 6,669,832 ----------- ----------- ----------- ------------ Net assets available for benefits $12,707,395 $12,449,831 $ 4,571,014 $183,462,451 =========== =========== =========== ============ (1) Fund shares are in registered investment companies. (2) A unitized stock fund. See accompanying notes.
Page 5
Genentech, Inc. Tax Reduction Investment Plan Statement of Changes in Net Assets Available for Benefits with Fund Information Year Ended December 31, 1998 FIDELITY FIDELITY GENENTECH FIDELITY GROWTH GROWTH & FIDELITY COMMON MAGELLAN COMPANY INCOME INTERMEDIATE STOCK FUND FUND FUND PORTFOLIO BOND FUND ----------- ----------- ----------- ----------- ----------- Investment income: Interest and dividends $ 0 $ 2,709,313 $ 1,960,585 $ 2,959,008 $ 256,128 Realized/unrealized gain (loss), net 2,982,770 12,007,895 4,101,097 9,163,353 38,573 ----------- ----------- ----------- ----------- ----------- Total investment income 2,982,770 14,717,208 6,061,682 12,122,361 294,701 Contributions: Basic 794,308 3,502,427 2,558,355 4,020,861 398,426 Rollover 309,795 448,567 237,890 769,875 84,655 Employer match 384,825 1,529,080 1,141,006 1,633,710 2,109 ----------- ----------- ----------- ----------- ----------- Total contributions 1,488,928 5,480,074 3,937,251 6,424,446 485,190 Distributions (803,017) (2,929,529) (1,744,053) (2,968,113) (297,842) Administrative fees (8,113) (15,375) (3,550) (2,800) (212) Transfers between funds 208,590 (1,391,897) (2,688,148) (865,858) (244,503) ----------- ----------- ----------- ----------- ----------- Net change during the year 3,869,158 15,860,481 5,563,182 14,710,036 237,334 Net assets available for benefits: Beginning of year 9,240,020 44,169,796 23,634,347 42,688,302 3,726,302 ----------- ----------- ----------- ----------- ----------- End of year $13,109,178 $60,030,277 $29,197,529 $57,398,338 $ 3,963,636 =========== =========== =========== =========== =========== FIDELITY FIDELITY FIDELITY FIDELITY FIDELITY ASSET ASSET ASSET OVERSEAS BALANCED MANAGER MANAGER: MANAGER: FUND FUND FUND GROWTH FUND INCOME FUND ----------- ----------- ----------- ----------- ----------- Investment income: Interest and dividends $ 130,717 $ 2,057,704 $ 420,360 $ 529,046 $ 55,026 Realized/unrealized gain (loss), net 596,451 1,481,823 (95,956) 17,898 3,575 ----------- ----------- ----------- ----------- ----------- Total investment income 727,168 3,539,527 324,404 546,944 58,601 Contributions: Basic 812,352 1,181,342 247,827 536,181 93,578 Rollover 44,776 93,228 98,861 242,263 21,149 Employer match 4,948 4,048 1,160 1,535 412 ----------- ----------- ----------- ----------- ----------- Total contributions 862,076 1,278,618 347,848 779,979 115,139 Distributions (564,289) (1,140,238) (92,465) (173,656) (25,478) Administrative fees (25) (925) (225) (113) 0 Transfers between funds (1,202,232) (2,030,400) (161,655) (512,521) (110,060) ----------- ----------- ----------- ----------- ----------- Net change during the year (177,302) 1,646,582 417,907 640,633 38,202 Net assets available for benefits: Beginning of year 6,703,709 18,226,613 1,807,128 2,944,292 593,702 ----------- ----------- ----------- ----------- ----------- End of year $ 6,526,407 $19,873,195 $ 2,225,035 $ 3,584,925 $ 631,904 =========== =========== =========== =========== ===========
Page 6
Genentech, Inc. Tax Reduction Investment Plan Statement of Changes in Net Assets Available for Benefits with Fund Information Year Ended December 31, 1998 FIDELITY FIDELITY PIMCO MAS NEUBERGER & RETIREMENT SPARTAN TOTAL HIGH BERMAN MONEY MARKET U.S. EQUITY RETURN YIELD GENESIS PORTFOLIO INDEX FUND FUND PORTFOLIO TRUST ----------- ----------- ----------- ----------- ----------- Investment income: Interest and dividends $ 655,107 $ 370,680 $ 38,293 $ 10,858 $ 11,110 Realized/unrealized gain (loss), net 0 3,909,952 (30,968) 973 17,650 ----------- ----------- ----------- ----------- ----------- Total investment income 655,107 4,280,632 7,325 11,831 28,760 Contributions: Basic 939,098 1,945,725 21,952 3,287 11,608 Rollover 143,485 478,539 3,608 22,229 8,274 Employer Match 507,072 808,550 205,604 11,095 47,812 ----------- ----------- ----------- ----------- ----------- Total contributions 1,589,655 3,232,814 231,164 36,611 67,694 Distributions (1,461,551) (884,111) 0 0 0 Administrative fees (1,437) (400) 0 0 0 Transfers between funds 1,007,316 3,178,381 886,436 244,002 653,810 ----------- ----------- ----------- ----------- ----------- Net change during the year 1,789,090 9,807,316 1,124,925 292,444 750,264 Net assets available for benefits: Beginning of year 12,707,395 12,449,831 0 0 0 ----------- ----------- ----------- ----------- ----------- End of year $14,496,485 $22,257,147 $ 1,124,925 $ 292,444 $ 750,264 =========== =========== =========== =========== =========== INVESCO TOTAL JANUS RETURN WORLDWIDE PARTICIPANT FUND FUND LOANS TOTAL ----------- ----------- ----------- ----------- Investment income: Interest and dividends $ 31,719 $ 7,316 $ 450,587 $ 12,653,557 Realized/unrealized gain, net 28,827 263,891 0 34,487,804 ----------- ----------- ----------- ------------ Total investment income 60,546 271,207 450,587 47,141,361 Contributions: Basic 57,866 48,315 0 17,173,508 Rollover 2,565 68,151 0 3,077,910 Employer match 662,983 416,196 0 7,362,145 ----------- ----------- ----------- ------------ Total contributions 723,414 532,662 0 27,613,563 Distributions 0 0 (320,597) (13,404,939) Administrative fees 0 (12) 0 (33,187) Transfers between funds 1,188,221 1,792,164 48,354 0 ----------- ----------- ----------- ------------ Net change during the year 1,972,181 2,596,021 178,344 61,316,798 Net assets available for benefits: Beginning of year 0 0 4,571,014 183,462,451 ----------- ----------- ----------- ------------ End of year $ 1,972,181 $ 2,596,021 $ 4,749,358 $244,779,249 =========== =========== =========== ============ See accompanying notes.
Page 7
Genentech, Inc. Tax Reduction Investment Plan Statement of Changes in Net Assets Available for Benefits with Fund Information Year Ended December 31, 1997 FIDELITY FIDELITY GENENTECH FIDELITY GROWTH GROWTH & FIDELITY COMMON MAGELLAN COMPANY INCOME INTERMEDIATE STOCK FUND FUND FUND PORTFOLIO BOND FUND ----------- ----------- ----------- ----------- ----------- Investment income: Interest and dividends $ 0 $ 2,750,590 $ 2,145,451 $ 1,818,911 $ 202,838 Realized/unrealized gain, net 1,064,766 6,176,380 1,317,558 7,244,757 31,914 ----------- ----------- ----------- ----------- ----------- Total investment income 1,064,766 8,926,970 3,463,009 9,063,668 234,752 Contributions: Basic 753,851 3,090,832 2,466,941 3,262,951 346,819 Rollover 74,297 524,508 594,466 876,250 73,487 Employer match 351,706 1,417,772 1,000,970 1,474,290 175,466 ----------- ----------- ----------- ----------- ----------- Total contributions 1,179,854 5,033,112 4,062,377 5,613,491 595,772 Distributions (580,069) (2,207,055) (1,251,010) (1,781,627) (104,830) Administrative fees (6,879) (10,596) (2,875) (1,600) (262) Transfers between funds (1,196,910) (2,066,529) (941,140) 1,489,577 (92,289) ----------- ----------- ----------- ----------- ----------- Net change during the year 460,762 9,675,902 5,330,361 14,383,509 633,143 Net assets available for benefits: Beginning of year 8,779,258 34,493,894 18,303,986 28,304,793 3,093,159 ----------- ----------- ----------- ----------- ----------- End of year $ 9,240,020 $44,169,796 $23,634,347 $42,688,302 $ 3,726,302 =========== =========== =========== =========== =========== FIDELITY FIDELITY FIDELITY FIDELITY FIDELITY ASSET ASSET ASSET OVERSEAS BALANCED MANAGER MANAGER: MANAGER: FUND FUND FUND GROWTH FUND INCOME FUND ----------- ----------- ----------- ----------- ----------- Investment income: Interest and dividends $ 315,655 $ 2,137,796 $ 150,048 $ 288,624 $ 35,605 Realized/unrealized gain, net 260,194 1,197,001 175,607 199,601 20,246 ----------- ----------- ----------- ----------- ----------- Total investment income 575,849 3,334,797 325,655 488,225 55,851 Contributions: Basic 786,540 1,169,646 232,970 421,800 80,368 Rollover 162,672 105,177 27,903 116,327 9,704 Employer match 332,306 534,842 94,288 182,942 32,191 ----------- ----------- ----------- ----------- ----------- Total contributions 1,281,518 1,809,665 355,161 721,069 122,263 Distributions (360,071) (608,106) (92,999) (144,742) (26,766) Administrative fees (50) (625) (113) (100) 0 Transfers between funds 118,728 (988,519) (173,776) 354,466 (57,669) ----------- ----------- ----------- ----------- ----------- Net change during the year 1,615,974 3,547,212 413,928 1,418,918 93,679 Net assets available for benefits: Beginning of year 5,087,735 14,679,401 1,393,200 1,525,374 500,023 ----------- ----------- ----------- ----------- ----------- End of year $ 6,703,709 $18,226,613 $ 1,807,128 $ 2,944,292 $ 593,702 =========== =========== =========== =========== ===========
Page 8
Genentech, Inc. Tax Reduction Investment Plan Statement of Changes in Net Assets Available for Benefits with Fund Information Year Ended December 31, 1997 FIDELITY FIDELITY RETIREMENT SPARTAN MONEY MARKET U.S. EQUITY PARTICIPANT PORTFOLIO INDEX FUND LOANS TOTAL ----------- ----------- ----------- ------------ Investment income: Interest and dividends $ 632,790 $ 236,710 $ 406,602 $ 11,121,620 Realized/unrealized gain, net 0 2,203,451 0 19,891,475 ----------- ----------- ----------- ------------ Total investment income 632,790 2,440,161 406,602 31,013,095 Contributions: Basic 1,044,944 1,207,435 0 14,865,097 Rollover 246,640 635,082 0 3,446,513 Employer match 502,926 571,775 0 6,671,474 ----------- ----------- ----------- ------------ Total contributions 1,794,510 2,414,292 0 24,983,084 Distributions (1,154,113) (619,367) (218,297) (9,149,052) Administrative fees (1,287) (237) 0 (24,624) Transfers between funds 304,490 2,193,438 1,056,133 0 ----------- ----------- ----------- ------------ Net change during the year 1,576,390 6,428,287 1,244,438 46,822,503 Net assets available for benefits: Beginning of year 11,131,005 6,021,544 3,326,576 136,639,948 ----------- ----------- ----------- ------------ End of year $12,707,395 $12,449,831 $ 4,571,014 $183,462,451 =========== =========== =========== ============ See accompanying notes.
Page 9 Genentech, Inc. Tax Reduction Investment Plan Notes to Financial Statements (1) Description of the Plan: The following description of the Genentech, Inc. Tax Reduction Investment Plan (the Plan) provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. The Plan was established, effective January 1, 1985, by Genentech, Inc. (the Company) for the benefit of eligible employees of the Company in order to provide them with a means of supplementing their retirement income on a tax-favored basis, an incentive to continue and increase their efforts to contribute to the success of the Company, and an opportunity to acquire an equity interest in the Company. The Plan accomplishes this through a savings program that is based on systematic salary reductions. The employee's salary is reduced by the amount elected to be saved on a pre-tax basis. The "deferred" part of the employee's salary is then invested by the Plan. An individual employee's account is credited with earnings or losses on a pro rata basis as the actual investment funds report their earnings performance. Individuals eligible to participate under the Plan must be employees of the Company or employees of an affiliate of the Company that adopts the Plan with the approval of the Board of Directors. However, the following employees or classes of employees are not eligible to participate: (i) any employee who is classified as temporary by the Company, unless such employee has completed at least 1,000 hours of service in a 12-month period beginning on his or her hire date or any anniversary thereof; (ii) any part-time employee normally scheduled to work less than 20 hours per week, unless such employee has completed at least 1,000 hours of service in a 12-month period beginning on his or her hire date or any anniversary thereof; (iii) any 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; (iv) any individual employed by any corporation or other business entity that is merged or liquidated into the Company, unless the Company designates such employees as eligible employees; (v) any employee paid from a non-U.S. payroll; or (vi) any employee classified or treated as an independent contractor, consultant, leased employee (as defined under the Internal Revenue Code of 1986, as amended (the Code)), or an employee of an employment agency or other entity, even if subsequently determined to have been a common-law employee of the Company. The Board of Directors of the Company has the right under the Plan to alter, amend or terminate the Plan, or any part thereof, in such a manner as it may determine. If the Plan is terminated, the interests of all Plan members would remain fully (100%) vested and nonforfeitable. The balances credited to their accounts would remain with the Plan trustee until they become distributable in accordance with the Plan. The Company matches a portion of employee contributions, up to a maximum of 4% of a participant's eligible compensation (the Match). The Match is effective December 31st of each year (the Effective Date) and contributions under the Match are fully vested at that time. The Match is funded in the first quarter of the subsequent year. In the first quarter of 1999 and 1998, the Company contributed approximately $7.4 million and $6.7 million, respectively, to the Plan in accordance with the terms of the Plan. The Plan trustee is Fidelity Management Trust Company (the Plan Trustee). All amounts contributed to the Plan are deposited in a trust account with the Plan Trustee. The Plan Trustee's fees and expenses are paid by the Company and are not charged to the Plan. Accounts of terminated employees who Page 10 continue to hold an account under the Plan as non-employee participants are charged an annual fee of $50.00 by the Company. The Plan Trustee has blanket bond insurance covering the full market value of the securities and investments of which it has custody. Effective as of May 8, 1996, the Company changed the mechanics of its Genentech Common Stock Fund (the Stock Fund) to a unitized fund that assigns units to participants rather than shares of the Company's stock. These units represent a proportionate interest in all of the assets of the Stock Fund, which includes shares of the Company's callable putable common stock (Special Common Stock) and a small percentage (approximately 2%, although the percentage may vary over time) in short-term investments. A net asset value per unit will be determined daily for each unit outstanding in the Stock Fund. The return earned by the Stock Fund will represent a combination of the dividends paid on the shares of the Company's Special Common Stock (the Company's Special Common Stock currently does not pay a dividend) held by the Stock Fund, gains or losses realized on sales of the Company's Special Common Stock, appreciation or depreciation in the market price of those shares owned, and interest on the short-term investments held by the Stock Fund. On May 21, 1997, the Plan employee eligibility provisions were amended (retroactively effective to January 1, 1985) to clarify that independent contractors, consultants, leased employees (as defined in the Code), and employees of employment agencies or other entities are not eligible to participate in the Plan, even if subsequently determined to have been common- law employees of the Company. On December 31, 1997, the Plan was amended (retroactively effective to January 1, 1985) to clarify in the Plan the manner in a participant's Plan account is treated if and when the Company receives notice that a domestic relations order specifying such account as a source of payment is being sought. The outstanding units and net asset values for the Stock Fund are calculated at the end of each month by the Plan Trustee. The monthly Stock Fund units and net asset value per unit for 1998 and 1997 are as follows: Page 11
Number Net Net Asset For the Period Ending January 31, 1998 of Asset Value through December 31, 1998 Units Value Per Unit - ---------------------------------------- ------- ----------- --------- January 31, 1998: Genentech Common Stock Fund 152,403 $ 9,906,195 $65.00 Fidelity Institutional Cash Portfolio: Money Market Fund 132,110 132,110 1.00 February 28, 1998: Genentech Common Stock Fund 150,103 10,141,334 67.56 Fidelity Institutional Cash Portfolio: Money Market Fund 195,138 195,138 1.00 March 31, 1998: Genentech Common Stock Fund 150,203 10,579,924 70.44 Fidelity Institutional Cash Portfolio: Money Market Fund 147,872 147,872 1.00 April 30, 1998: Genentech Common Stock Fund 148,827 10,306,270 69.25 Fidelity Institutional Cash Portfolio: Money Market Fund 138,514 138,514 1.00 May 31, 1998: Genentech Common Stock Fund 148,734 10,262,646 69.00 Fidelity Institutional Cash Portfolio: Money Market Fund 150,138 150,138 1.00 June 30, 1998: Genentech Common Stock Fund 153,534 10,421,120 67.87 Fidelity Institutional Cash Portfolio: Money Market Fund 143,867 143,867 1.00 July 31, 1998: Genentech Common Stock Fund 154,647 10,680,308 69.06 Fidelity Institutional Cash Portfolio: Money Market Fund 145,858 145,858 1.00 August 31, 1998: Genentech Common Stock Fund 157,407 10,388,862 66.00 Fidelity Institutional Cash Portfolio: Money Market Fund 208,248 208,248 1.00 September 30, 1998: Genentech Common Stock Fund 157,715 11,335,766 71.88 Fidelity Institutional Cash Portfolio: Money Market Fund 172,605 172,605 1.00 October 31, 1998: Genentech Common Stock Fund 155,715 11,153,087 71.63 Fidelity Institutional Cash Portfolio: Money Market Fund 147,364 147,364 1.00 November 30, 1998: Genentech Common Stock Fund 157,215 11,014,876 70.06 Fidelity Institutional Cash Portfolio: Money Market Fund 285,773 285,773 1.00 December 31, 1998: Genentech Common Stock Fund 157,505 12,555,384 79.71 Fidelity Institutional Cash Portfolio: Money Market Fund 168,969 168,969 1.00
Page 12
Number Net Net Asset For the Period Ending January 31, 1997 of Asset Value through December 31, 1997 Units Value Per Unit - ---------------------------------------- ------- ----------- --------- January 31, 1997: Genentech Common Stock Fund 158,035 $ 8,672,171 $ 54.88 Fidelity Institutional Cash Portfolio: Money Market Fund 123,528 123,528 1.00 February 28, 1997: Genentech Common Stock Fund 155,434 8,568,299 55.12 Fidelity Institutional Cash Portfolio: Money Market Fund 125,545 125,545 1.00 March 31, 1997: Genentech Common Stock Fund 154,628 8,833,124 57.12 Fidelity Institutional Cash Portfolio: Money Market Fund 126,485 126,485 1.00 April 30, 1997: Genentech Common Stock Fund 155,559 9,119,646 58.62 Fidelity Institutional Cash Portfolio: Money Market Fund 141,233 141,233 1.00 May 31, 1997: Genentech Common Stock Fund 157,059 9,207,584 58.63 Fidelity Institutional Cash Portfolio: Money Market Fund 137,963 137,963 1.00 June 30, 1997: Genentech Common Stock Fund 157,610 9,289,139 58.94 Fidelity Institutional Cash Portfolio: Money Market Fund 121,349 121,349 1.00 July 31, 1997: Genentech Common Stock Fund 156,110 9,015,353 57.75 Fidelity Institutional Cash Portfolio: Money Market Fund 128,627 128,627 1.00 August 31, 1997: Genentech Common Stock Fund 156,710 8,952,059 57.13 Fidelity Institutional Cash Portfolio: Money Market Fund 122,445 122,445 1.00 September 30, 1997: Genentech Common Stock Fund 153,710 8,934,394 58.13 Fidelity Institutional Cash Portfolio: Money Market Fund 111,522 111,522 1.00 October 31, 1997: Genentech Common Stock Fund 146,410 8,500,931 58.06 Fidelity Institutional Cash Portfolio: Money Market Fund 95,885 95,885 1.00 November 30, 1997: Genentech Common Stock Fund 146,896 8,575,054 58.38 Fidelity Institutional Cash Portfolio: Money Market Fund 89,664 89,664 1.00 December 31, 1997: Genentech Common Stock Fund 144,903 8,782,485 60.61 Fidelity Institutional Cash Portfolio: Money Market Fund 105,895 105,895 1.00
Page 13 Subject to limitations of the Code, each participant in the Plan could elect to defer up to the lower of $10,000 or 12% in 1998; $9,500 or 12% in 1997 of his or her eligible compensation. For the plan years 1998 and 1997, each participant was required to direct the investment of his or her contributions to any of the following twelve investment funds of the Plan (or any combination thereof). Effective at the close of business on December 31, 1998, six of the following investment funds were frozen. See below for further information. Genentech Common Stock Fund This fund invests primarily in the Special Common Stock of the Company, which is purchased at full market price. In addition, a small percentage of this fund (approximately 2%, although the percentage may vary over time) invests in the Fidelity Institutional Cash Portfolios: Money Market Portfolio: Class A, (or other mutual funds or money market funds as may be agreed to by the Company and the Plan Trustee), to provide liquidity for the timely settlement of trades. The Special Common Stock of the Company does not currently pay dividends; therefore the return on this fund is largely dependent on the performance of the stock and, to a lesser degree, the interest received on the short-term investments. See above for information on the unitization of this fund. Fidelity Magellan Fund The Fidelity Magellan Fund is a mutual fund managed by Fidelity Management and Research Company (FMR). The fund invests in the common stock, and securities convertible into common stock, of various types of domestic and foreign companies. Fidelity Growth Company Fund The Fidelity Growth Company Fund is a mutual fund managed by FMR. It invests primarily in common stock of companies that it believes have the potential for above-average growth. Fidelity Growth & Income Portfolio The Fidelity Growth & Income Portfolio is a mutual fund managed by FMR and invests primarily in securities of U.S. and foreign companies that it believes offer growth of earnings potential while paying current dividends. The Portfolio may also invest in bonds. Fidelity Intermediate Bond Fund The Fidelity Intermediate Bond Fund is a mutual fund managed by FMR. The fund invests in various types of U.S. and foreign bonds, including corporate or U.S. government issues. The fund selects bonds that it considers medium- to high-quality and normally maintains an average maturity of 3 to 10 years. Fidelity Overseas Fund The Fidelity Overseas Fund is a mutual fund managed by FMR. The fund invests in foreign securities including common stock and securities convertible to common stock of foreign businesses and debt instruments of foreign businesses and governments. Fidelity Balanced Fund The Fidelity Balanced Fund is a mutual fund managed by FMR that invests in a broad variety of what it believes are high yielding U.S. and foreign securities. The fund maintains at least 25% of its assets in fixed income securities (bonds) and preferred stocks. Page 14 Fidelity Asset Manager, registered trademark, Fund The Fidelity Asset Manager Fund is a mutual fund managed by FMR. The Asset Manager Fund allocates its assets among domestic and foreign equities, bonds and short-term instruments, aiming for an investment mix of 40% stocks, 40% bonds and 20% short-term investments. Fidelity Asset Manager: Growth Fund The Fidelity Asset Manager: Growth Fund, a mutual fund managed by FMR, invests in domestic and foreign stocks, bonds and short-term instruments, aiming for an investment mix of 65% stocks, 30% bonds and 5% short-term investments. Fidelity Asset Manager: Income Fund The Fidelity Asset Manager: Income Fund is a mutual fund managed by FMR that invests in domestic and foreign stocks, bonds and short-term instruments, aiming for an investment mix of 20% stocks, 30% bonds and 50% short-term investments. Fidelity Retirement Money Market Portfolio The Fidelity Retirement Money Market Portfolio is a mutual fund managed by FMR. It invests in what it believes are high-quality U.S. dollar-denominated money market instruments of U.S. and foreign issuers, including short-term corporate obligations and certificates of deposit. Fidelity Spartan U.S. Equity Index Fund The Fidelity U.S. Equity Index Fund, a mutual fund managed by FMR, invests mostly in the common stock of a variety of the 500 companies that make up the Standard & Poor's Composite Index. Effective October 1, 1998, the following five new mutual funds were added to the above list of investment options for participants to direct their contributions. PIMCO Total Return Fund PIMCO Total Return Fund is a mutual fund managed by Pacific Investment Management Company (PIMCO). The fund invests in a variety of bonds, including U.S. government, corporate, mortgage and foreign. While the fund maintains an average portfolio duration of 3 to 6 years, investments may also include short- and long-maturity bonds. MAS High Yield Portfolio MAS High Yield Portfolio is a portfolio managed by Miller Anderson & Sherrerd, LLP (MAS). The portfolio primarily invests in corporate bonds that are below investment grade because the underlying corporations tend to be more financially uncertain than stronger corporations or the government (these investments are often called "junk bonds"). As a result, these bonds have higher yields in return for added risk. This portfolio also carries some investment risk because bond prices go up and down with changes in interest rates. Page 15 INVESCO Total Return Fund The INVESCO Total Return Fund is a mutual fund managed by INVESCO Funds Group, Inc. The fund typically invests 30% in stocks and 30% in fixed and variable income securities (bonds), with the remaining 40% spread out between stocks and bonds based on business, economic and market conditions. The fund may invest in foreign securities, which may involve greater risks. Neuberger & Berman Genesis Trust The Neuberger & Berman Genesis Trust is a portfolio managed by Neuberger & Berman Management Incorporated. The portfolio invests primarily in the common stock of small-cap companies. It looks for growth potential by investing in companies it believes have solid performance histories and proven management. The portfolio diversifies among many companies and industries to reduce risk. Janus Worldwide Fund The Janus Worldwide Fund is a mutual fund managed by Janus Capital Corporation. The fund invests primarily in common stocks of foreign and domestic companies. The fund has the flexibility to invest on a worldwide basis, in companies and organizations of any size. The fund normally invests in issuers from at least five different countries, including the U.S.; however, the fund may at times invest in fewer than five countries or even a single country. In addition, effective at the close of business on December 31, 1998, six of the investment funds listed above were frozen. Participants are no longer be able to direct contributions, exchange or make investments into any of the Frozen Funds; exchanges out of a Frozen Fund are permitted. The six Frozen Funds are as follows: Fidelity Asset Manager Fidelity Asset Manager: Growth Fidelity Asset Manager: Income Fidelity Balance Fund Fidelity Intermediate Bond Fund Fidelity Overseas Fund Participant Loans Loans are made to Plan participants at fixed interest rates (presently 2% above the then-current bank prime interest rate), subject to certain restrictions, principally related to a participant's account balance, permissible loan amount, and repayment through payroll withholding. Loans are repaid through monthly payroll deductions over three or five years, or fifteen years if the purpose of the loan is to purchase a participant's principal residence. Conditions of Withdrawal Distributions under the Plan are made upon a participant's death, disability, retirement or other termination of employment with the Company, attainment of age 70-1/2 (applicable only to participants who own 5% or more of the Company's stock), or authorized exercise of his or her withdrawal rights under the Plan. A participant must consent to a distribution unless he or she has attained age 62, or the balance credited to his or her account under the Plan does not exceed and has not exceeded $3,500 (or $5,000, effective beginning October 1, 1998). Distributions are made upon receipt of the participant's or beneficiary's election directing the method of distribution. Page 16 Anytime prior to termination of employment with the Company, the Plan administration committee may grant a participant's request for a withdrawal from the participant's account if the Plan administration committee makes a determination that such withdrawal is necessary in light of the immediate and heavy financial needs of the participant and is in accordance with the requirements of the Code and regulations promulgated thereunder. In addition, a Plan participant may withdraw up to the entire balance of his or her Plan account if over age 59-1/2 at the time of withdrawal. (2) Summary of Significant Accounting Policies: Investment Valuation Investments are stated at market value at year end. Fidelity Magellan Fund, Fidelity Growth Company Fund, Fidelity Growth & Income Portfolio, Fidelity Intermediate Bond Fund, Fidelity Overseas Fund, Fidelity Balanced Fund, Fidelity Asset Manager Fund, Fidelity Asset Manager: Growth Fund, Fidelity Asset Manager: Income Fund, Fidelity Spartan U.S. Equity Index Fund, PIMCO Total Return Fund, MAS High Yield Portfolio, INVESCO Total Return Fund, Neuberger & Berman Genesis Trust and Janus Worldwide Fund securities are valued at the last reported sales price on the last business day of the year, which for the mutual funds represents the net asset values of shares held by the Plan at year end. The Fidelity Retirement Money Market Portfolio is valued on the basis of historical cost plus accrued interest that approximates fair value. Participant loans are valued at their outstanding balance which approximates fair value. See Note (1) for a description of the investment valuation of the Genentech Common Stock Fund. Contributions Basic contributions are accrued and vested when deducted from employee pay; the Match is accrued and vested on the Effective Date; and qualified rollover contributions are recorded and vested when received by the Plan Trustee. Contributions are invested pursuant to participants' directions to the Plan Trustee after receipt of contributions by the Plan Trustee. Participants may change the amount of contributions (as a percentage reduction of pre-tax eligible compensation) at any time by contacting the Plan Trustee. Transfers between funds and changes in investment allocations can be made at any time, up to ten times per year, effective upon direction by the participant to the Plan Trustee. Distributions Distributions are recorded when paid. Other All security transactions are recorded on the trade date. Gains and losses on the disposals of investments are determined based on the average cost of all securities. Dividend income is recorded on the effective date of a declared dividend. Income from other investments is recorded as earned on an accrual basis. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make certain estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Page 17 (3) Income Tax Status: The Internal Revenue Service (the IRS) has determined and informed the Company by letter dated September 25, 1995, that the December 21, 1984 Plan, as amended and restated, qualified in form under Section 401(a) of the Code and the underlying trust is, therefore, exempt from federal income taxes under Section 501(a) of the Code. Effective as of May 8, 1996, the Plan was again amended and restated. In May 1997 and December 1997, the amended and restated Plan was amended (retroactively effective to January 1, 1985). The changes made in the May 8, 1996 amendment and restatement, the May 1997 amendment and the December 1997 amendment were technical in nature, and in the opinion of the Company and its legal counsel, did not require another determination from the IRS concerning the Plan's tax exempt status. The Company believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the Code. (4) Related Party Transactions: Certain of the investment funds are managed by FMR, an affiliate of the Plan Trustee. Because of this relationship, transactions involving these funds qualify as party-in-interest transactions, as well as transactions in Genentech Special Common Stock and loans to Plan participants. However, loans granted to participants under the guidelines of the Code are exempt as prohibited transactions. The Plan Trustee was also the beneficial owner of 12.58% of the Company's Special Common Stock at December 31, 1998. Page 18
(5) Assets held for investment at December 31, 1998 were as follows: Number of Name of Issuer Shares, Units Fair and Title of Principal or Amount Cost Value - ----------------------------------------------- ------------- ------------ ------------ GENENTECH COMMON STOCK FUND Genentech, Inc. - Special Common Stock....................... 157,505 $ 7,572,135 $ 12,555,384 Fidelity Institutional Cash Portfolio: Money Market Fund.......................... 168,969 168,969 168,969 FIDELITY MAGELLAN FUND Fidelity Magellan Fund....................... 484,236 39,572,310 58,505,405 FIDELITY GROWTH COMPANY FUND Fidelity Growth Company Fund ................ 549,964 21,566,426 28,059,164 FIDELITY GROWTH & INCOME PORTFOLIO Fidelity Growth & Income Portfolio........... 1,216,540 36,557,028 55,766,205 FIDELITY INTERMEDIATE BOND FUND Fidelity Intermediate Bond Fund.............. 385,766 3,934,195 3,961,821 FIDELITY OVERSEAS FUND Fidelity Overseas Fund ...................... 181,356 5,666,305 6,525,200 FIDELITY BALANCED FUND Fidelity Balanced Fund ...................... 1,214,618 16,691,563 19,871,145 FIDELITY ASSET MANAGER, registered trademark, FUND Fidelity Asset Manager Fund.................. 127,938 2,170,409 2,224,841 FIDELITY ASSET MANAGER: GROWTH FUND Fidelity Asset Manager: Growth Fund ......... 191,830 3,431,348 3,583,391 FIDELITY ASSET MANAGER: INCOME FUND Fidelity Asset Manager: Income Fund ......... 51,257 615,507 631,492 FIDELITY RETIREMENT MONEY MARKET PORTFOLIO Fidelity Retirement Money Market Portfolio .. 13,989,413 13,989,413 13,989,413 FIDELITY SPARTAN U.S. EQUITY INDEX FUND Fidelity Spartan U.S. Equity Index Fund ..... 487,934 15,173,825 21,449,600 PIMCO TOTAL RETURN FUND PIMCO Total Return Fund ..................... 87,222 950,293 919,321 MAS HIGH YIELD PORTFOLIO MAS High Yield Portfolio .................... 31,755 280,743 281,349 Page 19
Number of Name of Issuer Shares, Units Fair and Title of Principal or Amount Cost Value - ----------------------------------------------- ------------- ------------ ------------ NEUBERGER & BERMAN GENESIS TRUST Neuberger & Berman Genesis Trust............. 34,536 684,849 702,452 INVESCO TOTAL RETURN FUND INVESCO Total Return Fund.................... 41,747 1,280,343 1,309,198 JANUS WORLDWIDE FUND Janus Worldwide Fund ........................ 46,027 1,915,967 2,179,825 PARTICIPANT LOANS Loans receivable from participants .......... 4,749,358 - 4,749,358 ------------ ------------ TOTAL INVESTMENTS ............................. $172,221,628 $237,433,533 ============ ============ (6) Subsequent Event On June 30, 1999, the Company will redeem all of its outstanding Special Common Stock at a price of $82.50 per share. As a result of the redemption, the Genentech Common Stock Fund will cease to exist. The proceeds from the redemption will be deposited into the Retirement Money Market Fund when they are received by the Plan Trustee on July 6, 1999. Participants may instruct the Plan Trustee to redirect the proceeds from the redemption to another investment fund after July 6, 1999. Participants may also instruct the Plan Trustee after July 6, 1999 to change future contributions directed to the Retirement Money Market Fund to any of the other investment funds available in the Plan. Page 20 Report of Ernst & Young LLP, Independent Auditors To the Participants and Plan Administration Committee of the Genentech, Inc. Tax Reduction Investment Plan We have audited the accompanying statements of net assets available for benefits of the Genentech, Inc. Tax Reduction Investment Plan as of December 31, 1998 and 1997, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Genentech, Inc. Tax Reduction Investment Plan at December 31, 1998 and 1997, and the changes in its net assets available for benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment purposes as of December 31, 1998 and of reportable transactions for the year then ended, are presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and are not a required part of the basic financial statements. The Fund Information in the statements of net assets available for benefits and the statements of changes in net assets available for benefits is presented for purposes of additional analysis rather than to present the net assets available for benefits and changes in net assets available for benefits of each fund. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. ERNST & YOUNG LLP San Jose, California May 7, 1999 Page 21 Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan administrator has duly caused this annual report to be signed by the undersigned hereunto duly authorized. Genentech, Inc. Tax Reduction Investment Plan by Genentech, Inc., Plan Administrator By: /S/LOUIS J. LAVIGNE, JR. Date: June 23, 1999 ---------------------------------- Louis J. Lavigne, Jr. Executive Vice President and Chief Financial Officer and Plan Administration Committee Member for Genentech, Inc. Tax Reduction Investment Plan By: /S/JUDITH A. HEYBOER Date: June 23, 1999 ---------------------------------- Judith A. Heyboer Senior Vice President - Human Resources and Plan Administration Committee Member for Genentech, Inc. Tax Reduction Investment Plan By: /S/JAMES P. PANEK Date: June 23, 1999 ---------------------------------- James P. Panek Vice President - Manufacturing, Engineering and Facilities and Plan Administration Committee Member for Genentech, Inc. Tax Reduction Investment Plan Page 22 SCHEDULE I Genentech, Inc. Tax Reduction Investment Plan Item 27a Schedule of Assets Held For Investment Purposes December 31, 1998
Description Current Identity of Issue of Investment Cost Value - ---------------------------------------- ----------------- ------------ ------------ * GENENTECH COMMON STOCK FUND Genentech, Inc. - Common stock - Special Common Stock................. 157,505 units $ 7,572,135 $ 12,555,384 Fidelity Institutional Cash Portfolio: Mutual Fund - Money Market Fund .................. 168,969 units 168,969 168,969 * FIDELITY MAGELLAN FUND Mutual fund - Fidelity Magellan Fund................ 484,236 shares 39,572,310 58,505,405 * FIDELITY GROWTH COMPANY FUND Mutual fund - Fidelity Growth Company Fund ......... 549,964 shares 21,566,426 28,059,164 * FIDELITY GROWTH & INCOME PORTFOLIO Mutual fund - Fidelity Growth & Income Portfolio ... 1,216,540 shares 36,557,028 55,766,205 * FIDELITY INTERMEDIATE BOND FUND Mutual fund - Fidelity Intermediate Bond Fund ...... 385,766 shares 3,934,195 3,961,821 * FIDELITY OVERSEAS FUND Mutual fund - Fidelity Overseas Fund ............... 181,356 shares 5,666,305 6,525,200 * FIDELITY BALANCED FUND Mutual fund - Fidelity Balanced Fund ............... 1,214,618 shares 16,691,563 19,871,145 * FIDELITY ASSET MANAGER, registered trademark, FUND Mutual fund - Fidelity Asset Manager Fund........... 127,938 shares 2,170,409 2,224,841 * FIDELITY ASSET MANAGER: GROWTH FUND Mutual fund - Fidelity Asset Manager: Growth Fund .. 191,830 shares 3,431,348 3,583,391 * FIDELITY ASSET MANAGER: INCOME FUND Mutual fund - Fidelity Asset Manager: Income Fund .. 51,257 shares 615,507 631,492 * FIDELITY RETIREMENT MONEY MARKET PORTFOLIO Mutual fund - Fidelity Retirement Money Market Portfolio 13,989,413 shares 13,989,413 13,989,413 * FIDELITY SPARTAN U.S. EQUITY INDEX FUND Mutual fund - Fidelity Spartan U.S. Equity Index Fund 487,934 shares 15,173,825 21,449,600 PIMCO TOTAL RETURN FUND Mutual fund - PIMCO Total Return Fund ............. 87,222 shares 950,293 919,321 MAS HIGH YIELD PORTFOLIO Mutual fund - MAS High Yield Portfolio ............. 31,755 shares 280,743 281,349
Page 23 SCHEDULE I Genentech, Inc. Tax Reduction Investment Plan Item 27a Schedule of Assets Held For Investment Purposes December 31, 1998
Description Current Identity of Issue of Investment Cost Value - ---------------------------------------- ----------------- ------------ ------------ NEUBERGER & BERMAN GENESIS TRUST Mutual fund - Neuberger & Berman Genesis Trust ..... 34,536 shares 684,849 702,452 INVESCO TOTAL RETURN FUND Mutual fund - INVESCO Total Return Fund ............ 41,747 shares 1,280,343 1,309,198 JANUS WORLDWIDE FUND Mutual fund - Janus Worldwide Fund ................. 46,027 shares 1,915,967 2,179,825 * PARTICIPANT LOANS Loans receivable from participants ... (1) - 4,749,358 ------------ ------------ TOTAL INVESTMENTS ...................... $172,221,628 $237,433,533 ============ ============ (1) Maturing at various dates through 2013 at interest rates ranging from 8.00% to 12.25%. * Party-in-interest. Loans granted to participants under the guidelines of the Code are exempt as prohibited transactions.
Page 24 SCHEDULE II Genentech, Inc. Tax Reduction Investment Plan Item 27d Schedule of Reportable Transactions For the Year ended December 31, 1998
Purchases Sales -------------------------- -------------------------------------------------- Description Number of Purchase Number of Selling Net of Asset Transactions Price Transactions Cost Price Gain/Loss - ------------------------------------- ----------- ------------ ---------- ----------- ----------- Fidelity Magellan Fund 233 $10,297,753 211 $5,154,278 $6,552,266 $1,397,988 Fidelity Growth Company Fund 227 7,431,031 207 5,150,353 6,106,341 955,988 Fidelity Growth & Income Portfolio 234 13,078,751 204 5,763,423 7,689,911 1,926,488 Fidelity Retirement Money Market Portfolio 202 8,060,864 198 6,276,592 6,276,592 - Fidelity Spartan U.S. Equity Index Fund 200 8,067,475 127 1,848,176 2,405,883 557,707 Reportable transactions include any series of transactions that in the aggregate exceed five percent of the fair market value of Plan assets at the beginning of the year. The transactions can occur on a daily basis. These transactions represent Category (iii) reportable transactions in accordance with Department of Labor regulations. There were no other reportable transactions during 1998.
Page 25 Genentech, Inc. Tax Reduction Investment Plan Index of Exhibits Filed with Form 11-K For the Year Ended December 31, 1998 Exhibit Sequential Number Description Page Numbers - ------- --------------------------------------------------- ------------ 23 Consent of Ernst & Young LLP, Independent Auditors, filed with this document 23 Page 26 EX-23 2 EXHIBIT 23 Consent of Ernst & Young LLP, Independent Auditors We consent to the incorporation by reference in the Registration Statement on Form S-8 pertaining to the Genentech, Inc. Tax Reduction Investment Plan of our report dated May 7, 1999, with respect to the financial statements and supplemental schedules of the Genentech, Inc. Tax Reduction Investment Plan included in this Annual Report (Form 11-K) for the year ended December 31, 1998. ERNST & YOUNG LLP San Jose, California June 23, 1999 -----END PRIVACY-ENHANCED MESSAGE-----