Purpose of Committee Term and Membership Responsibilities - Meeting Frequency

Purpose of Committee The purpose of the Audit Committee of Genentech, Inc. (the "Company") is to assist the Board of Directors in fulfilling the Board's oversight responsibilities regarding the Company's accounting and financial reporting. The Audit Committee's responsibilities are limited to oversight. It is the responsibility of management, not the Audit Committee, to prepare and present financial statements, to maintain appropriate financial reporting practices and controls, and to provide reasonable assurance that the Company's financial statements are complete and accurate and in accordance with applicable accounting standards, laws and regulations. It is the responsibility of the independent registered public accountants, not the Audit Committee, to plan and perform independent audits of the Company's financial statements in accordance with auditing standards and to audit management's assessment of the effectiveness of internal controls over financial reporting. Each member of the Audit Committee is entitled to rely on the accuracy of financial or other information provided by persons at Genentech as well as by professionals and experts (including the independent registered public accountants and the Company's general auditor).

The members of the Audit Committee are not auditors and in fulfilling their responsibilities under this charter are not expected to follow the policies or procedures of independent or general auditors. In particular, the term "review" as used in this charter is not intended to have the meaning set forth by the Public Company Accounting Oversight Board for a review of interim financial statements as described in AU 722 Interim Financial Information ("SAS 100") (which defines the term "review" to include a particular set of required procedures to be undertaken by independent registered public accountants).

It is the charter of the Audit Committee to act for the Board as follows:

• Monitoring the integrity of the Company's financial statements and financial reporting process.
• Reviewing management's programs to:
  1. Maintain adequate systems of internal controls regarding finance and accounting, including legal and regulatory compliance matters related thereto,
  2. Safeguard the Company's assets,
  3. Provide appropriate reserves for any legal or regulatory issues, and
  4. Assess and manage risk.
• Monitoring the independence and performance of the Company's independent registered public accountants, including annual financial audit, quarterly reviews and non-audit services. The Audit Committee is responsible for the selection, compensation, evaluation and replacement, where appropriate, of the independent registered public accountants. The independent registered public accountants report directly to, and are directly accountable to the Audit Committee.
• Reviewing the overall scope and plans for the annual general audit, and the integrated audit of the independent registered public accountants, including the adequacy of staffing and budget or compensation.
• Pre-approving all audit services and all other permitted services as follows:
  1. audit- related services,
  2. tax services, and
  3. other services to be performed by the independent registered public accountants.
  The Audit Committee may delegate pre-approval authority to a member of the Audit Committee. The decisions of any Audit Committee member to whom pre-approval authority is delegated must be presented to the full Audit Committee at its next meeting.
• Assuring that the independent registered public accounting firm has a process in place to address the rotation of the lead audit partner and other audit partners serving the account as required under rules of the Securities and Exchange Commission (the "SEC").
• Engaging, monitoring the performance of, and replacing the general auditor and reviewing the scope and results of the Company's general audit program.
• Establishing and reviewing procedures for the receipt, retention, and treatment of complaints regarding the accounting, internal accounting controls or auditing matters, including procedures for the confidential, anonymous submission by employees regarding accounting or auditing matters they consider questionable.
• Reviewing and reassessing this charter at least annually and obtaining the approval of the Board of Directors.
• Discussing with the independent registered public accountants, the matters required to be discussed by the Statement on Auditing Standards No. 61, and as amended by the Statement on Auditing Standards No. 90, and other matters required under SEC and Public Company Accounting Oversight Board (PCAOB) regulations.
• Preparing the report of the Audit Committee as required by SEC to be included in the Company's annual proxy statement, in accordance with the required frequency.
• Requesting the review of significant changes or new events at the Company or significant developments in accounting rules which have significant financial implications or risks or will likely require additional reporting or changes in accounting or operating practices.
• Reviewing and discussing the Company’s quarterly financial statements with management and the independent registered public accountants, including the Company’s specific disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.
• Discussing the Company's earnings press releases, as well as financial information and earnings guidance provided to analysts and rating agencies.
• Discussing policies with respect to risk assessment and risk management.
• Meeting separately, periodically, with management, with general auditors (or other personnel responsible for the general audit function), and with independent registered public accountants.
• Reviewing and discussing the annual audited financial statements, including Management's Discussion and Analysis of Financial Condition and Results of Operations, with management and the independent registered public accountants prior to the filing of the Company's Annual Report on Form 10-K. Also, the Audit Committee shall discuss the results of the annual audit and any matters required to be communicated to the Committee by the independent registered public accountants under the standards of the PCAOB (United States).
• Reviewing the Company's financial statements including: (i) major issues regarding accounting principles and financial statement presentations, including any significant changes in the Company's selection or application of accounting principles, and major issues as to the adequacy of the Company's internal control over financial reporting and any specific remedial actions adopted in the case of significant deficiencies or material weaknesses; (ii) discussions with management and the independent registered public accountants regarding significant financial reporting issues and judgments made in connection with the preparation of the financial statements and the reasonableness of those judgments, including analyses of the effects of alternative GAAP methods on the financial statements; (iii) consideration of the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on the financial statements; (iv) consideration of the judgment of both management and the independent registered public accountants about the quality, not just the acceptability of accounting principles; and (v) the clarity of the disclosures in the financial statements.
• Receiving and reviewing a report from the independent registered public accountants, prior to the filing of the Company's Annual Report on Form 10-K , on all critical accounting policies and practices of the Company; all material alternative treatments of financial information within generally accepted accounting principles that have been discussed with management, including the ramifications of the use of such alternative treatments and disclosures and the treatment preferred by the independent registered public accountants; and other material written communications between the independent registered public accountants and management.
• Reviewing with the independent registered public accountants any audit problems or difficulties encountered during the course of the audit work, including any restrictions on the scope of the independent registered public accountants' activities or access to requested information, and management's response. The Committee should review any accounting adjustments that were noted or proposed by the auditors but were "passed" (as immaterial or otherwise); and any "management" or "internal control" letter issued, or proposed to be issued, by the independent registered public accountants to the Company that is in addition to their audit report on the effectiveness of internal control over financial reporting.
• At least annually reviewing: 1) a description of the quality control procedures the independent registered public accountants firm has established and 2) a report from the independent registered public accountant’s firm describing any material issues raised by the most recent quality control review of the firm or peer review as well as any inquiry or investigation by governmental or professional authorities, within the preceding five years, if any, and describing the steps the firm has taken to deal with any reported problems, and all relationships between the independent registered public accountants and the Company.
• Performing a self-assessment of the performance of the Audit Committee at least annually.

To carry out these responsibilities, the Audit Committee shall meet regularly and report its activities to the full Board after such meetings.

Term and Membership The Audit Committee shall be appointed by the Board of Directors and shall consist of at least three members, all of whom must be independent. Each Audit Committee member shall serve until resignation from the Committee or replacement by the Board.

Each of the Audit Committee members shall meet the independence requirements under the applicable rules of the NYSE and rules and regulations of the SEC. Each Audit Committee member shall be "financially literate," as defined by the Board, or attain such status within a reasonable period after appointment. At least one member shall have "accounting or related financial management expertise" as defined by the Board.

Responsibilities - Meeting Frequency In general, it is expected that the Audit Committee be vigilant and effective overseers of the financial reporting process and the Company's internal financial controls. In so doing, it is intended that the standing annual agenda of the Committee, prepared and reviewed annually, represents the Board's expectations of the Committee's activities and responsibilities. Five meetings and seven teleconferences of the Committee have been established to provide sufficient time for discussion of the agenda topics.

In addition, any other business which either the Audit Committee, the independent registered public accountants, or management feels is appropriate will be added to the agenda. Also, the Audit Committee shall have the authority to retain and compensate (with funding provided by the Company) special legal, accounting or other consultants to advise the Committee. The Audit Committee may request any officer or employee of the Company or the Company's outside counsel or independent registered public accountants to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee. The Audit Committee is also responsible for approving Company hiring policies related to employees or former employees of the independent registered public accountants.