(Exact name of registrant as specified in its charter)
C:
C:C:
Massachusetts (State or other jurisdiction of
incorporation or organization)
06-1047163 (I.R.S. Employer
Identification No.)
500 Kendall Street
Cambridge, Massachusetts (Address of principal executive offices)
02142 (Zip Code)
C:
(617) 252-7500 (Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Name of Each Exchange on Which Registered
Genzyme Common Stock, $0.01 par value
The Nasdaq Global Select Market
(“Genzyme Stock”)
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule
405 of the Securities Act. Yes þ No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section
13 or Section 15(d) of the Act. Yes o No þ
Indicate by check mark whether the registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period
that the registrant was required to submit and post such files). Yes þ No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation
S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in
definitive proxy or information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. þ
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large
accelerated filer,”“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.
Large accelerated filer þ
Accelerated filer o
Non-accelerated filer o
Smaller reporting company o
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of
the Exchange Act). Yes o No þ
Aggregate market value of voting stock held by non-affiliates of the Registrant as of June 30,2010: $12,259,385,395.
Number
of shares of Genzyme Stock outstanding as of March 18, 2011:
263,669,254.
This Amendment No. 1 amends our Annual Report on Form 10-K for the fiscal year ended December31, 2010, which we filed with the Securities and Exchange Commission, or SEC, on March 1, 2011,
which we refer to as the Original Filing. This Amendment is being filed solely for the purpose of
including the information required in Part III (Items 10, 11, 12, 13 and 14) that was omitted from
the Original Filing.
In addition to amending Items 10 through 14 of Part III to provide the omitted information,
this Amendment amends Item 15 of Part IV to include new certifications being provided with this
Amendment pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and amends the cover page to
update the number of shares of Genzyme Stock outstanding and to remove the statement that information is being incorporated by reference from our definitive proxy
statement.
Except as expressly set forth herein, this Amendment does not reflect events occurring after
the date of the Original Filing and does not modify or update disclosures contained in the Original
Filing. Accordingly, this Amendment should be read in conjunction with the Original Filing and
with our filings with the SEC made subsequent to the Original Filing.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
CURRENT DIRECTORS
Biographical information about our current directors, including their qualifications and
experience, is provided below.
Name
Age
Principal Occupation
Director Since
Douglas Berthiaume
62
President, Chief Executive Officer and Chairman
of the Board of Waters Corporation
1988
Robert Bertolini
49
Retired Schering-Plough Corp. executive
2009
Gail Boudreaux
50
Executive Vice President of United Health Group
Incorporated
2004
Steven Burakoff
68
Professor at Mount Sinai School of Medicine
2010
Robert Carpenter
65
President of Boston Medical Investors, Inc.
1994
Charles L. Cooney
66
Professor at Massachusetts Institute of Technology
1983
Victor Dzau
65
President and Chief Executive Officer of Duke
University Health System
2000
Eric J. Ende
42
Managing Director of Silverback Group and
President of Ende Consulting Group
2010
Dennis M. Fenton
59
Former Amgen, Inc. executive
2010
Connie Mack III
70
Consulting Partner at Liberty Partners
2001
Richard F. Syron
67
Professor at Boston College
2006
Henri Termeer
65
President and Chief Executive Officer of Genzyme
1983
Ralph Whitworth
55
Principal of Relational Investors LLC
2010
The following paragraphs provide information about each director, including all positions he
or she holds, his or her principal occupation and business experience for the past five years, and
the names of other publicly-held companies of which he or she currently serves as a director or has
served as a director during the past five years. We believe that all of our directors display
personal and professional integrity; satisfactory levels of education and/or business experience;
broad-based business acumen; an appropriate level of understanding of our business and its industry
and other industries relevant to our business; the ability and willingness to devote adequate time
to the work of the Board and its committees; a fit of skills and personality with those of our
other directors that helps build a board that is effective, collegial and responsive to the needs
of our company; strategic thinking and a willingness to share ideas; a diversity of experiences,
expertise and background; and the ability to represent the interests of all of our shareholders.
Douglas A. Berthiaume has served as Chairman of the Board of Waters Corporation, a
manufacturer of high performance liquid chromatography, mass spectrometry, thermal analysis and
rheology products and services, since February 1996, and as its President and Chief Executive
Officer since August 1994. From 1990 to 1994, Mr. Berthiaume served as President of the Waters
Chromatography Division of Millipore Corporation, the predecessor business of Waters Corporation.
He is Chairman of the Children’s Hospital (Boston) Trust Board, a member of the Children’s Hospital
board of trustees and a trustee of the University of Massachusetts Amherst Foundation.
Robert J. Bertolini retired from Schering-Plough Corp. following its merger with Merck & Co.
in November 2009. From November 2003 until November 2009, he served as Executive Vice President and
Chief Financial Officer at Schering-Plough, with responsibility for tax, accounting and financial
asset management. He worked with the chief executive officer in all aspects of transforming the
company’s operations, building strong finance and information technology functions and leading
business development and strategy. Having joined Schering-Plough at a time when it was facing
challenges across several areas, Mr. Bertolini was part of the team that turned Schering-
Plough around and drove strategic decisions. Prior to joining Schering-Plough, Mr. Bertolini
spent 20 years at public accounting firm PricewaterhouseCoopers, ultimately leading its global
pharmaceutical industry practice.
Gail K. Boudreaux has served since May 2008 as an Executive Vice President of United Health
Group Incorporated, a diversified health and well-being company that offers a broad spectrum of
products and services designed to improve healthcare, and as President of its United Healthcare
business. United Healthcare serves nearly 25 million consumers and manages health benefits for
individuals, public sector employers and businesses of all sizes. From December 2005 to April 2008,
Ms. Boudreaux was Executive Vice President for external operations at Health Care Service
Corporation, or HCSC, the country’s largest non-investor-owned health insurance company. From
September 2002 to December 2005, Ms. Boudreaux served as President of Blue Cross and Blue Shield of
Illinois, a division of HCSC and the oldest and largest health insurance company in Illinois. Prior
to joining HCSC, Ms. Boudreaux held positions of increasing responsibility during 20 years at
Aetna, Inc., a provider of health, dental, group, life, disability and long-term care insurance
benefits. She serves on the board of directors of America’s Health Insurance Plans, the health
insurance industry’s trade association.
Steven J. Burakoff, M.D., is Professor of Medicine, Hematology and Medical Oncology at the
Mount Sinai School of Medicine and Director of the Tisch Cancer Institute at the Mount Sinai
Medical Center, since 2007. Prior to his appointment at Mount Sinai, Dr. Burakoff was the Laura and
Isaac Perlmutter Professor, New York University School of Medicine; Director, New York University
Cancer Institute; and Director, Skirball Institute of Biomolecular Medicine, New York University
School of Medicine, from 2000 to 2007. Previously, Dr. Burakoff was Chair of Pediatric Oncology at
the Dana-Farber Cancer Institute and the Margaret M. Dyson Professor of Pediatrics at the Harvard
Medical School. From 2008 to 2010, Dr. Burakoff has served as a director of Ligand Pharmaceuticals
Incorporated, a publicly traded biotechnology company. Dr. Burakoff served as a director of
Pharmacopeia, a publicly traded biopharmaceutical company, from 2005 to 2008, when Pharmacopeia was
acquired by Ligand.
Robert J. Carpenter is President of Boston Medical Investors, Inc., a privately-held company
he formed in 1994 that invests in early stage health care companies. From January 2002 to August
2007, Mr. Carpenter was Chairman of the Board of Peptimmune Inc., a privately-held company that
develops immunotherapies for treating auto-immune diseases. He also served as President of
Peptimmune from January 2002 until November 2004. From November 1991 until it merged with us in
December 2000, Mr. Carpenter was Chairman of GelTex Pharmaceuticals Inc., which he co-founded in
1991 and where he served as President and CEO until May 1993. He also co-founded VacTex Inc., and
served as its President and CEO from November 1995 until its acquisition by Aquila
Biopharmaceuticals, Inc. in April 1998. Mr. Carpenter was Chairman of the Board, President, and CEO
of Integrated Genetics, Inc., a biotechnology company that merged with us in 1989. Following the
merger and until 1991, he was our Executive Vice President, and CEO and Chairman of the Board of IG
Laboratories, Inc., an affiliated company which merged with us in September 1995. Mr. Carpenter is
Chairman of Hydra Biosciences, Inc., which develops drugs based on recently discovered ion
channels.
Charles L. Cooney, Ph.D. is the Robert T. Haslam (1911) Professor of Chemical and Biochemical
Engineering and Faculty Director, Deshpande Center for Technological Innovation at Massachusetts
Institute of Technology. Dr. Cooney joined the MIT faculty as an Assistant Professor in 1970 and
became a Professor in 1982. Dr. Cooney is a director of Polypore International, Inc., a global high
technology manufacturer of specialized polymer-based membranes used in separation and filtration
processes, and a director of India-based Biocon Limited, a biotechnology healthcare company with
strategic focus on biopharmaceuticals and research services. He is also a principal of
BioInformation Associates, Inc., a consulting company.
Victor J. Dzau, M.D., has served as the Chancellor for Health Affairs and President and Chief
Executive Officer of Duke University Health System in Durham, North Carolina since September 2004.
From July 1996 until September 2004, he was the Hersey Professor of the Theory and Practice of
Medicine at the Harvard Medical
School and Chairman of the Department of Medicine,
Physician-in-Chief and Director of Research at Brigham and Women’s Hospital in Boston,
Massachusetts. Prior to this, Dr. Dzau was the Arthur L. Bloomfield Professor and Chairman of the
Department of Medicine at Stanford University. Dr. Dzau is a founding member of the Executive
Committee of The Academy at Harvard Medical School. He has been elected to the Institute of
Medicine, the National Academy of Science, and the European Academy of Science and Arts. Dr. Dzau
was previously Chairman of the National Institutes of Health Cardiovascular Disease Advisory
Committee and also sat on the advisory
committee to the director of the NIH. Dr. Dzau sits on the board of directors of Pepsico,
Inc., Alnylam Inc., Medtronic, Inc. and the Duke University Health System. From 1999-2006, he also
served as a director of Corgentech, Inc.
Eric J. Ende, M.D., is co-founder and Managing Director of Silverback Group, a private equity
investment firm. Since 2009, Dr. Ende has served as President of Ende Consulting Group, which is
focused on biotechnology industry consulting. From 2002 through 2008, Dr. Ende was the senior
biotechnology analyst at Merrill Lynch. From 2000 to 2002, he was the senior biotechnology analyst
at Banc of America Securities. From 1997 to 2000, he was a biotechnology analyst at Lehman
Brothers. During Dr. Ende’s career as a biotechnology analyst, he was named to Institutional
Investor’s All-America Equity Research Team six times as well as to The Greenwich Survey list of
top analysts.
Dennis M. Fenton, Ph.D, has served as a director of Xenoport, Inc., a biopharmaceutical
company focused on natural drug delivery systems, since August 2009. From 1982 to 2008, Dr. Fenton
held numerous positions, including executive roles in process development, manufacturing, sales and
marketing and research and development at Amgen, Inc., a biotechnology company. From 2000 to 2008,
Dr. Fenton was Executive Vice President responsible for worldwide operations, manufacturing,
process development and quality. From 1995 to 2000, Dr. Fenton was Senior Vice President of
operations, and from 1992 to 1995, Dr. Fenton was Senior Vice President of sales, marketing and
process development for Amgen.
Senator Connie Mack III has served since January 2010 as a government relations consulting
partner at Liberty Partners in Washington D.C. From February 2005 through December 2009 he served
as Senior Policy Advisor and Co-Chairman of the government relations practice group at King &
Spalding LLP, a Washington D.C. law firm. From February 2001 until February 2005, he served as
Senior Policy Advisor in the government relations practice at Shaw Pittman, a Washington, D.C. law
firm. In addition, he served from November 2001 to November 2003 as a member of the NIH Advisory
Committee to the Director. Senator Mack served as a United States Senator from the State of Florida
from January 1989 until January 2001, and served in the House of Representatives from January 1983
to January 1989. Prior to his government service, he spent 16 years in commercial banking,
including five years as president of the Florida National Bank of Lee County. Senator Mack was
founding Chairman of the Board of The Cape Coral Hospital from 1975-1977, leading the creation of a
100-bed, non-profit community-based hospital. Senator Mack is Chairman Emeritus of the parent board
of the H. Lee Moffitt Cancer Center and Research Institute, for which he served as Chairman for
seven years. He is also a director of Mutual of America Life Insurance Co., Darden Restaurants and
Moody’s Corp. From 2006-2008, Senator Mack also served as a director of Spirit Aerosystems, and
from 2001 to 2010 he served as a director to EXACT Sciences Corporation.
Richard F. Syron, Ph.D., is Adjunct Professor of Finance at Boston College. From January 2004
to September 8, 2008 he served as Chairman and Chief Executive Officer of Federal Home Loan
Mortgage Corporation, commonly referred to as Freddie Mac, the second largest source of mortgage
financing in the United States. On September 6, 2008, the board of directors of Freddie Mac adopted
a resolution consenting to the appointment of the Federal Housing Finance Agency as conservator of
Freddie Mac, which appointment was effected the same day. On September 8, 2008, Dr. Syron resigned
as Chairman and Chief Executive Officer of Freddie Mac. From June 1999 to January 2000, Dr. Syron
served as President and Chief Executive Officer of Thermo Electron Corporation, which designs and
develops technology-based instruments and from January 2000 to December 2002 he served as Chairman
of the Thermo Electron board, and from December 2002 until December 2003 as Executive Chairman of
the Thermo Electron board. Prior to that, Dr. Syron served as Chief Executive Officer of the
American Stock Exchange, the Federal Reserve Bank of Boston, and the Federal Home Loan Bank of
Boston. He has also served as deputy assistant secretary of the United States Treasury, principal
assistant to former Federal Reserve chairman Paul A. Volcker, and has held several economic,
research, policy and managerial positions in state and national government. From 1996-2005, Dr.
Syron served as a director of John Hancock Life
Insurance Company and from 2002-2006 he served as a
director of McKesson Corp. Dr. Syron is a Trustee of Boston College and of the Woods Hole
Oceanographic Institute.
Henri A. Termeer has served as our President and a Director since October 1983, as Chief
Executive Officer since December 1985 and as Chairman of the Board since May 1988. Under his
leadership, we have grown from a modest entrepreneurial venture to one of the world’s leading
biotechnology companies. In 2008, he was appointed to Massachusetts Governor Deval Patrick’s
Council of Economic Advisors, and he is a co-chair of the Leadership
Council of the Massachusetts Life Sciences Collaborative. Mr. Termeer is also Chairman
Emeritus of the New England Healthcare Institute, a nonprofit, applied research health policy
organization he was instrumental in founding. He serves on the board of directors of the
Pharmaceutical Research and Manufacturers of America. Mr. Termeer is Chairman of the Federal
Reserve Bank of Boston’s board of directors, a board member of ABIOMED Inc., and a board member of
Massachusetts Institute of Technology Corporation. He is a director of Massachusetts General
Hospital, a board member of Partners HealthCare and a member of the Board of Fellows of Harvard
Medical School.
Ralph V. Whitworth is a Founder, Principal, and Investment Committee member of Relational
Investors LLC, an investment fund specializing in strategic block investments. Mr. Whitworth
founded the fund in 1996. From 1988 to 1996, Mr. Whitworth served as President of Whitworth and
Associates, a firm that advised major corporations and investors on investments, acquisitions, and
corporate governance matters. He was also President of Development at United Thermal Corporation
from 1989 to 1992. Mr. Whitworth held the pro bono position of President of the United Shareholders
Association from 1986 to 1994, and while doing so, authored the petition for rulemaking that in
1992 culminated in a major overhaul of the SEC’s shareholder communication and compensation
disclosure rules. From 1985 to 1988, Mr. Whitworth served as Assistant to the General Partner at
Mesa Limited Partnership, the nation’s largest independent oil and gas exploration company at that
time. In addition, Mr. Whitworth served on the U.S. Senate Judiciary Committee staff of Senator
Paul Laxalt from 1981 to 1984. Mr. Whitworth is the former Chairman of the Board of Apria
Healthcare Group Inc. (1998-2005), former Chairman of the Board of Waste Management, Inc (1999;
director 1998-2004), and a former director of Sovereign Bancorp, Inc. (2006-2009), Sprint Nextel
Corporation (2008), Mattel, Inc. (2000-2003), Tektronix, Inc. (1999-2002), Sirius Satellite Radio,
Inc. (1994-2001), Wilshire Technologies, Inc. (1997-1999), and United Thermal Corporation
(1989-1993). Mr. Whitworth is also a member of Titan Investment Partners, LLC, an investment fund
that focuses on emerging companies. Mr. Whitworth also serves on the Advisory Council of the Public
Company Accounting Oversight Board.
Mr. Termeer has served as our President and a Director since October 1983, as Chief Executive
Officer since December 1985 and as Chairman of the Board since May 1988. Under his leadership, we
have grown from a modest entrepreneurial venture to one of the world’s leading biotechnology
companies. In 2008, he was appointed to Massachusetts Governor Deval Patrick’s Council of Economic
Advisors, and he is a co-chair of the Leadership
Council of the Massachusetts Life Sciences Collaborative. Mr. Termeer is also Chairman
Emeritus of the New England Healthcare Institute, a nonprofit, applied research health policy
organization he was instrumental in founding. He serves on the board of directors of the
Pharmaceutical Research and Manufacturers of America. Mr. Termeer is Chairman of the Federal
Reserve Bank of Boston’s board of directors, a board member of ABIOMED Inc., and a board member of
Massachusetts Institute of Technology Corporation. He is a director of Massachusetts General
Hospital, a board member of Partners HealthCare and a member of the Board of Fellows of Harvard
Medical School.
Mr. Canute joined us as Executive Vice President and President of Global Manufacturing and
Corporate Operations in March 2010. Prior to joining Genzyme, he held several manufacturing
positions at Eli Lilly & Company from 1982 to 2007, including most recently President of Global
Manufacturing Operations from 2004 to 2007. While at Eli Lilly, Mr. Canute also served as Vice
President of Global Manufacturing from 2001 to 2004, Vice President of Global Pharmaceutical
Manufacturing from 1999 to 2001 and General Manager of European Manufacturing Operations from 1998
to 1999.
Mr. Csimma has held the title Senior Vice President and Chief Human Resources Officer since
March 2006. He joined us in July 2000 as Senior Vice President, Human Resources. Prior to joining
Genzyme, he served as Vice President, Human Resources of Wyeth Ayerst Research, a pharmaceutical
research organization, from August 1998 to July 2000. During that time, Mr. Csimma also served as
Site Head, Genetics Institute, for Wyeth Ayerst. From May 1988 to August 1998, he served as Vice
President, Human Resources and Operations of Genetics Institute, Inc., a biotechnology company,
which was integrated into Wyeth Ayerst in March 1998.
Mr. DesRosier has served as Senior Vice President and General Counsel since October 2000 and
as Chief Legal Officer since May 2008. Mr. DesRosier joined Genzyme in 1999 as Senior Vice
President and Chief Intellectual Property Counsel. Before he joined Genzyme, Mr. DesRosier was
assistant general counsel for patents at American Home Products Corp. Mr. DesRosier has also served
as Vice President and Chief Patent Counsel for Genetics Institute Inc. and held several
intellectual property positions at E.I. DuPont de Nemours and Company and New England Nuclear Corp.
Mr. Geraghty has served as a Senior Vice President of Genzyme since May 2003 and, prior to
that, as Vice President since May 2001. He was President of Genzyme Europe from 1998 to 2002 and
served as General Manager of Genzyme’s cardiovascular business from 2004 to 2008. He currently
oversees Genzyme’s ongoing strategic review processes for non-core assets and related transactions,
as well as strategic initiatives in emerging markets and global health. He serves as a Director of
GTC Biotherapeutics (formerly Genzyme Transgenics Corporation) where he was Chairman from 1998 to
2001, and President and Chief Executive Officer from its founding in 1993 until 1997. Prior to
joining Genzyme, Mr. Geraghty was Vice President of Marketing and Strategic Planning for
Baxter/Caremark International. He has also worked as a consultant on international health care
strategy at Bain and Company.
Dr. Meeker has served as Executive Vice President since May 2008 and as Chief Operating
Officer since April 2010, with responsibility for our Personalized Genetic Health and Biosurgery
businesses and our corporate manufacturing operations. From May 2008 until March 2009, he had
responsibility for our transplant business. From March 2003 until May 2008, he served as Senior
Vice President and President, LSD Therapeutics. Dr. Meeker joined Genzyme in 1994 and served as
Vice President, Medical Affairs from October 1996 until June 1998; as Senior Vice President Medical
Affairs from June 1998 through May 2000; and as Senior Vice President Genzyme Europe from May 2000
until March 2003. Prior to joining Genzyme, Dr. Meeker was director of the Pulmonary Critical Care
Fellowship at the Cleveland Clinic. He was also an assistant professor of medicine at Ohio State
University.
Dr. Moscicki became Senior Vice President for Clinical Development and Medical Affairs in June
2010. From May 2008 to May 2010 he served as Senior Vice President, Biomedical & Regulatory Affairs
and he has also served as Chief Medical Officer since September 1996. From September 1996 until May
2008, he served as Senior Vice President, Clinical, Medical and Regulatory Affairs. Dr. Moscicki
joined us in March 1992 as Medical Director, became Vice President, Medical Affairs in early 1993
and served as Vice President, Clinical, Medical and Regulatory Affairs from December 1993 until
September 1996. Since 1979, he has also been a physician staff member at the Massachusetts General
Hospital and a faculty member at the Harvard Medical School.
Dr. Alan Smith joined us in August 1989 as Senior Vice President, Research, and became Chief
Scientific
Officer in September 1996. Prior to joining Genzyme, he served as Vice President — Scientific
Director of Integrated Genetics, Inc., from November 1984 until its acquisition by us in August
1989. From October 1980 to October 1984, Dr. Smith was head of the Biochemistry Division of the
National Institute for Medical Research, Mill Hill, London, England and from 1972 to October 1980,
he was a member of the scientific staff at the Imperial Cancer Research Fund in London, England.
Mr. Sandford Smith has held the title of Executive Vice President since June 2006, Senior Vice
President since January 2003 and President of our International Group since January 2000, with
responsibility for the commercial activities for our products outside of the United States. He
joined us in April 1996 and served as Vice President and General Manager of our International Group
and President of our Therapeutics business. Prior to joining Genzyme, Mr. Smith served as President
and Chief Executive Officer of Repligen Corporation. Before joining Repligen Corporation, Mr. Smith
also served as Vice President of Business Development and Strategic Planning for the Pharmaceutical
Group of Bristol-Myers Squibb Company.
Mr. Wirth joined us in January 1996 and has served as Executive Vice President since September
1996 with responsibility for our corporate development and legal activities. From September 1996
until May 2008, he also served as our Chief Legal Officer. From 2001 through October 2005, Mr.
Wirth had responsibility for our drug discovery and development business. In addition, from
September 1996 until June 2003, Mr. Wirth was responsible for our Oncology business. Prior to
joining Genzyme, Mr. Wirth was a partner at Palmer and Dodge, a Boston law firm, where he was head
of the firm’s technology group.
Mr. Wyzga has served as Executive Vice President, Finance since May 2003 and as Chief
Financial Officer since July 1999. He joined us in February 1998 as Vice President and Corporate
Controller and served as Senior Vice President, Corporate Controller from January 1999 until July
1999. He served as Senior Vice President, Finance from July 1999 until May 2003 and as Chief
Accounting Officer from January 1999 until November 2008. From February 1997 to February 1998, Mr.
Wyzga served as Chief Financial Officer of Sovereign Hill Software, Inc., a software company, and
from 1991 to 1997 held various senior management positions with CACHELINK Corporation and Lotus
Development Corporation. Prior to November 11, 2009, Mr. Wyzga was also a director of Altus
Pharmaceuticals Inc., a developer of protein therapeutics that, on that date, filed a voluntary
petition for relief under Chapter 7 of the United States Bankruptcy Code in the United States
Bankruptcy Court for the District of Massachusetts.
Our executive officers and directors are required under Section 16(a) of the Securities
Exchange Act of 1934 to file reports of ownership and changes in ownership of our securities with
the SEC. Our staff assists our executive officers and directors in preparing ownership reports and
reporting ownership changes, and typically files these reports on their behalf. Based on a review
of the copies of reports filed by us and written representations that no other reports were
required, we believe that during 2010 our executive officers and directors complied with all
Section 16(a) filing requirements, except: a Form 4 was not timely filed for Mr. Jason Amello to
reflect the sale of 595 shares on July 23, 2010 and 1,042 shares on July 26, 2010, which
transactions were reported on Form 5 on February 10, 2011.
CODE OF CONDUCT
We have adopted a Code of Conduct, which applies to our directors and all of our employees,
including our principal executive officer, principal financial officer, principal accounting
officer and controller. A copy of our Code of Conduct is posted on our website at www.genzyme.com
in the Investors section under “Corporate Governance.” We intend to make all required disclosures
concerning amendments to, or waivers of, any provision of the Code of Conduct in the Corporate
Governance section on our website.
AUDIT COMMITTEE
We have a separately designated standing audit committee established by the Board for the
purpose of overseeing our accounting and financial reporting processes and audits of our financial
statements. The audit committee held 11 meetings in 2010. Members of the committee are Mr.
Bertolini (chairman), Ms. Boudreaux,
Senator Mack and Drs. Ende, Fenton and Syron each of whom is independent as defined by the
applicable NASDAQ listing standards. Mr. Bertolini was appointed to the committee in January 2010
and Drs. Ende and Fenton were appointed in June 2010. Until Mr. Bertolini’s appointment, Mr.
Berthiaume served as chairman of the committee. The Board has identified Mr. Bertolini and Dr.
Syron as our audit committee financial experts. The committee evaluates and selects our independent
auditors, reviews our audited financial statements and discusses the adequacy of our internal
controls with management and the outside auditors. The committee also supervises the relationship
between Genzyme and its outside auditors, reviews the scope of both audit and non-audit services
and related fees, and determines the independence of the outside auditors.
Item 11.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 2010 and as of the date of this Amendment No. 1 to Annual Report on Form 10-K, none of
the members of our compensation committee was or is an officer or employer of the Company, and none
of our executive officers served or serves on the compensation committee or board of any company
that employed or employs any member that employed or employs any member of our compensation
committee or board of directors.
COMPENSATION COMMITTEE REPORT
In fulfilling our role to discharge the board’s responsibilities relating to the total
remuneration of the company’s senior executives and the company’s benefit and equity plans, we have
reviewed and discussed with management
the Compensation Discussion and Analysis found below. Based
on the foregoing review and discussions, we recommended to the board that the Compensation
Discussion and Analysis be included in the company’s 2010 Annual Report on Form 10-K for filing
with the SEC.
By the Compensation Committee,
Charles L. Cooney, Chairman
Douglas A. Berthiaume
Steven J. Burakoff
Robert J. Carpenter
Victor J. Dzau
Ralph V. Whitworth
COMPENSATION DISCUSSION AND ANALYSIS
In considering our executive compensation policies and practices, we have an obligation to
balance our interest in conserving cash and minimizing shareholder dilution, with our interest in
using compensation to attract, retain and motivate employees. In reconciling these competing
concerns, we strive to act in the long-term best interests of the company and our shareholders.
The compensation committee works directly with independent compensation consultants, and also may
consult with academics and other experts from time to time to support the board’s commitment to be
knowledgeable and current regarding executive compensation trends and best practices. The
committee has hosted special meetings with the full board to educate board members on key issues in
the business environment and the role those issues play in executive compensation. In 2009, the
committee undertook a complete review of our executive compensation program, and implemented
specific changes which are outlined under the heading “— Changes to 2010 Compensation Program”
below. The review included design recommendations from the committee’s compensation consultant,
members of senior management as well as information and feedback from investors. As part of the
process, the committee also received general information and feedback from additional independent
individuals with compensation expertise (Charles Tharp of the Center on Executive Compensation and
Frederic Cook of Frederic W. Cook & Co., Inc.) and hosted a joint meeting with the nominating and
corporate governance committee in August 2009 to review compensation trends and practices.
Review of 2010. Our results for 2010 reflect increasing supplies of Cerezyme and Fabrazyme,
revenue growth across all other major product lines, and reductions in operation expenses. For
2010, we reported GAAP revenue of
$4.05 billion compared with $3.98 billion in 2009. GAAP net income in 2010 was $422.1
million, or $1.57 per diluted share, compared with $422.3 million, or $1.54 per diluted share, in
2009. Sales of Cerezyme were $719.6 million compared with $793.0 million in 2009. Sales of
Fabrazyme were $188.2 million compared with $429.7 million in 2009. Cerezyme supply increased
throughout 2010, with currently treated patients returning to full dosing by the end of the year.
Fabrazyme supply improved and allocations increased 82 percent from the third quarter to the
fourth. In May 2010, we entered into a consent decree with the Food and Drug Administration, or
the FDA, relating to our Allston facility. Pursuant to the consent decree, we paid $175.0 million
to the FDA as disgorgement of past profits, are required to cease fill-finish operations at the
facility for all products, and are required to implement a plan to bring our Allston facility
operations into compliance with applicable laws and regulations. In addition to the costs
associated with compliance with the consent decree, we incurred increased manufacturing costs in
connection with the consent decree, including consultant fees and costs of implementing compliance
measures.
In 2010, we implemented our plan to increase shareholder value by focusing on our core
businesses, capitalizing on near-term growth drivers, balancing revenue and earnings growth with
cash flow return on investment, improving our operating margins by reducing costs and improving
operational efficiencies across the company and optimizing our capital structure. Our results for
2010 reflected the progress we made in implementing our value improvement program, including:
•
The sale of our genetic testing, diagnostic products and pharmaceutical intermediates
businesses. In November 2010, we completed the sale of the genetics testing business for
net cash proceeds of $915.9 million, and in December 2010, agreed to sell our diagnostics
products business for $265.0 million in cash,
which transaction closed in January 2011.
The sale of our pharmaceutical intermediates business was completed in February 2011.
•
Implementing a program to reduce costs and increase operational efficiencies, primarily
through procurement improvements, spending reductions and workforce reductions, which
resulted in savings of approximately $26 million in the fourth quarter of 2010, and is
expected to result in approximately $275 million in savings in 2011.
•
The repurchase of $1.0 billion of common stock, 15.6 million shares of which were
repurchased in June and 121,344 additional shares were repurchased in October 2010. The
repurchases were funded almost entirely by the proceeds from our sale of $1.0 billion in
notes in June 2010, consisting of $500.0 million of 3.625% senior notes due 2015, and
$500.0 million of 5.0% senior notes due 2020.
Our financial and stock performance in 2010 directly impacted our named executive officers’
compensation. Our 2010 annual incentive program for our named executive officers includes four
components: individual performance, corporate revenue, cash flow return on invested capital, and
identified key business objectives. We did not meet the revenue and cash flow return on investment
targets under our 2010 annual incentive program and, accordingly, no payouts were made to our named
executive officers with respect to these components of this program. The committee reviewed the
three key business objectives for 2010, which were:
•
to materially recover from the manufacturing issues that affected our Personalized
Genetic Health business and implement measures for sustaining operations for this business;
•
advance our product pipeline; and
•
renew the organization through new hires for certain senior positions and progressing
our business excellence initiatives.
The committee discussed the progress the company made in addressing each of these objectives
and approved a payout of 95% to each of the named executive officers for the key business
objectives component. The committee approved payment of the individual performance component
ranging from 80% — 120%.
Changes to 2010 Compensation Program. In 2009, the compensation committee undertook a
comprehensive review of our executive compensation program with the objective of identifying and
implementing changes to ensure that our incentives reflected an appropriate balance with company
performance and did not incent business practices that were reasonably likely to have a material
adverse effect on the company. The committee considered input from Towers Watson, senior
management, investors and others. The committee asked Towers Watson to prepare a competitive
analysis and make design recommendations. Towers Watson reviewed with the committee
the compensation programs of our peer group looking specifically at:
•
components of compensation;
•
performance/payout ranges;
•
financial metrics; and
•
performance measurement.
At the committee’s request, we also formed a senior management committee that included our
chief financial officer, executive vice president for corporate development, chief human resources
officer and senior vice president of compensation and benefits to develop compensation design
alternatives, identify appropriate company performance metrics, and make recommendations to the
compensation committee for our 2010 annual and long-term incentive programs. The compensation
committee asked Towers Watson to evaluate the senior management committee recommendations and
information provided by others and to present their independent assessment to the committee. After
evaluating Towers Watson’s findings, the compensation committee decided to implement certain
changes to our executive compensation program in 2010 that sought to:
•
align incentive compensation with a broader set of measures of company performance that
we believed appropriately reflected the factors most important to the creation of
shareholder value: revenue growth, capital efficiency/profitability, and key business
objectives; and
•
provide greater transparency to our shareholders regarding executive compensation
decisions.
The details of these changes are discussed under the headings “— Annual Incentive Program”
and “— Long-Term Incentive Program” below.
Objectives and Overview of Executive Compensation. We pay our executives using three
components: base salary, annual incentive cash awards and long-term incentive awards. We have
avoided other long-term obligations such as defined benefit programs, supplemental employee
retirement plans, nonqualified deferred compensation plans and retiree health benefits.
Our perspective is long-term and our goal is to create sustained shareholder value. We
operate in a complex, dynamic environment and it often takes years to achieve our goals. For
example, developing a therapeutic product from concept to market can take in excess of 10 years,
and many product candidates never make it to market. Acquisitions, whether of products, companies
or intellectual property rights, are opportunistic in nature and need to balance short-term
financial objectives with long-term opportunities to earn risk-adjusted returns in excess of our
cost of capital. Building an infrastructure to accommodate future products and growth requires
early investment with no guarantee of return. Our compensation program balances these growth and
return on capital objectives and reflects the long product development business cycle in the
healthcare industry. This approach aligns our compensation decisions with our shareholders’
interests in our achievement of sustainable business objectives and corporate performance goals.
We also maintain a philosophy of inclusiveness by expanding our long-term equity program to
include all of our employees, to encourage them to become stakeholders and invest in achieving
success for the company, which helps align employee interests with our shareholders’ interests.
Process and Philosophy for Setting Executive Compensation. We look to our named executive
officer group to focus on building and creating the future of the company and expect them to make
strategic decisions that move the company forward. We apply deliberate, thoughtful processes
throughout the year in a continuing assessment of company and individual executive performance to
guide the committee in making compensation decisions. By making compensation decisions considering
both competitive market practice and our unique organization and culture, we strive to create an
appropriate compensation program for our executives while recognizing shareholder interests in
limiting company expenditures.
Our expectations for our chief executive officer and other executive officers are focused on a
sustainable business strategy that includes:
•
financial performance, with an emphasis on return on capital financial metrics;
•
company growth and internal product development;
•
strategic management of the complexities of a global business with a diverse and growing
product portfolio and expanding the business into a number of new markets; and
•
operational business management, including development of a diverse and complex global
manufacturing infrastructure, investment in strong science and research capabilities,
integration of acquisitions, and development of a strong executive management team.
Risk Considerations. The compensation committee, with the assistance of its independent
compensation consultant, also has considered whether our executive compensation program creates
risks that are reasonably likely to have a material adverse effect on the company and concluded
that it does not. In doing so, the committee considered the company’s strategic goals and
operational practices and evaluated our incentive program design to assess whether these programs
foster a business environment that might drive inappropriate decision-making or behavior. While a
significant portion of our executives’ compensation is performance-based, we believe several
features of our program mitigate inappropriate or excessive risk-taking that could harm shareholder
value: we set performance goals that we believe are reasonable and set targets with payouts at
multiple levels of performance, rather than an “all or nothing” approach; we cap payout levels
under our new short- and long-term incentive plans, which is consistent with market prevalent
practice and does not provide disproportionate leverage for achievement of short- or long-term
results; we use a mix of performance goals in our new annual and long-term incentive programs to
align incentive compensation with a broad set of measures important to the creation of shareholder
value; the majority of compensation is provided in long-term awards that are intended to align
executives’ interests with those of our shareholders; for our new long-term incentive program, we
use both time vesting stock options and
performance vesting restricted stock units that have
staggered vesting schedules; and as described under the heading “— Process and Philosophy for
Setting Executive Compensation,” the committee undertakes a continuing assessment of company and
individual executive performance.
Peer Group and Market Analysis. The compensation committee analyzes the compensation
practices of a group of peer companies for comparison purposes and to gain an external perspective
in preparation for setting executive salaries and short- and long-term incentive compensation. The
committee looks at the data from our peer group to evaluate the appropriateness and competitiveness
of our pay positioning, but does not target a certain level of compensation relative to the group.
The committee reviews the compensation of our peer group regularly, which includes an analysis by
Towers Watson of potential peer companies considering factors that include:
•
revenue size and growth rate;
•
research and development expense;
•
number of employees;
•
market capitalization;
•
one- and three-year total shareholder return;
•
net income;
•
similarity of core businesses to ours;
•
international presence; and
•
labor market competition.
Following the compensation committee’s review of the Towers Watson analysis and discussions
with Towers Watson and senior management personnel, the committee decides which companies are the
most appropriate for our peer group. For 2010, the compensation committee included three
pharmaceutical companies and one medical instruments company. We note that these four companies
are larger than us. We believe, however, that the inclusion of these four companies along with our
traditional biotechnology peer companies is appropriate because these are the companies we consider
to be our primary competitors for recruiting and retaining executive talent for similarly
positioned executive positions. Our peer group for 2010 compensation analysis is comprised of ten
companies: Allergan, Inc., Amgen Inc., Baxter International Inc., Biogen Idec, Inc., Bristol-Myers
Squibb Company, Celgene Corp., Cephalon, Inc., Eli Lilly and Company, Gilead Sciences, Inc., and
Medtronic, Inc.
In addition to peer group analysis, each year the compensation committee considers published
survey data for biotechnology, pharmaceutical and general industry companies to ensure that our
executive positions are paid
appropriately relative to the broader market. These surveys help the committee to match our
incumbent executives to comparable market positions, when data is available, by looking at scope of
responsibilities for various positions as well as internal comparisons. Specifically, for each
executive officer position, the committee reviews competitive levels of base salary, annual
incentive awards and equity incentive grants to supplement the data gathered from our peer
companies listed above.
Annual Incentive Program. The compensation committee establishes annual cash incentive
opportunities for our executive officers. The incentives include a corporate component, an
individual component and for executive officers who have responsibility for a business division, a
division component. The corporate component is intended to link compensation to the company’s
performance relative to financial targets established by the committee. The individual component
allows the committee to reward an executive officer based on an assessment of how well the officer
performed his or her role during the applicable year.
Our 2010 short-term incentive program was intended to:
•
encourage behavior measured in the short-term that would contribute to growth and return
on capital objectives over the following three to five years, focusing on both short-term
financial metrics and key business objectives;
•
create incentives for building sustainable growth and return on capital without
inappropriate risk taking;
•
utilize metrics that would be transparent to both shareholders and participants; and
•
align performance and payment ranges with competitive positioning.
The metrics used for the corporate component of the 2010 annual incentive program and the
relative weighting of corporate and individual performance were:
•
corporate revenue;
•
cash flow return on invested capital; and
•
key business objectives:
o
to materially recover from the manufacturing issues that affected our Genetic
Diseases business and implement measures for sustaining operations for this business,
o
advance our product pipeline, and
o
renew the organization through new hires for certain senior positions and
advance our “business excellence initiatives.”
These metrics were chosen because we believed they provided a balance of short-term
performance with strategic long-term focus on building shareholder value. Revenue continues to be
a common measure used by many companies to align pay and performance. Cash flow return on invested
capital provides balance as it encouraged our executives to concentrate on achieving profitable
growth while paying appropriate attention to expense management and capital investment, important
for both the short- and long-term. The business objectives were important for achieving long-term
sustainable and profitable growth. For executive officers who have responsibilities for a business
division, their goals were comprised of the corporate component plus a separate division component
based on division operating income.
For all executive officers, the relative weight assigned to individual performance was 20% and
awards were expected to be based on the committee’s subjective review of an officer’s performance
during the applicable year. For our executive officers who do not have a business division
component, the corporate component was established at 80% of the bonus target and was comprised of
the following:
•
40% corporate revenue;
•
20% cash flow return on invested capital; and
•
20% key business objectives.
For executive officers who had a division component, the corporate component was set at 65% of
the total bonus target and the division component was set at 15% and is weighted as follows:
•
35% corporate revenue;
•
15% cash flow return on invested capitaI;
•
15% key business objectives; and
•
15% division operating income.
The performance and payout ranges for our 2010 metrics were:
Performance range
Payout range
Revenue
90% - 115
%
30% - 200
%
Cash flow return on
invested capital
90% - 115
%
50% - 200
%
Division operating income
set on a division by division basis
50% - 180
%
Cash flow return on invested capital wascalculated by dividing “adjusted cash profits” by the
two-year average “adjusted invested capital.”
Adjusted cash profits equals GAAP net income excluding (i) acquisition-related one time events
(net of tax) and (ii) non-operating income or expense (net of tax), with the following added back:
(a) R&D expense, (b) lease expense, (c) depreciation expense, (d) amortization expense (net of tax)
and (e) investment income (net of tax).
Adjusted invested capital equals total assets less (i) non-interest-bearing liabilities and
(ii) non-operating items (such as deferred taxes), with the following added back: (a) capitalized
R&D (net of amortization), (b) capitalized operating leases, (c) accumulated depreciation and (d)
accumulated intangible amortization.
Long-Term Incentive Program. From 2007 through 2009, our long-term incentive program for
executive officers was comprised of equity awards in the form of time vesting stock options and
time vesting restricted stock units, or RSUs. Beginning in 2010, our long-term incentive program
for executive officers includes a combination of (i) performance vesting awards, tied to the
achievement of pre-established performance goals over a three-year
performance period, and (ii) time
vesting stock options. Approximately half the grant is made in time vesting stock options with the
remainder in performance vesting RSUs. The number of RSUs is determined by applying a 3:1 ratio
such that one RSU is awarded for every three stock options.
For the 2010-2012 performance period, the performance metrics are:
•
relative total shareholder return, or TSR, measured against the performance of a subset
of biotechnology peer companies (currently 28 companies) in the S&P 500 Health Care Index;
and
•
cash flow return on invested capital.
Each Metric is Weighted Equally. For both metrics, performance between the threshold level
and the target level will be awarded in performance vesting RSUs. The RSUs will be paid out in
shares of our stock at the end of the three-year period if performance between the threshold level
and target level is achieved. If performance above the target level is achieved, the portion of
the award above the target level will be paid out in cash up to a predetermined maximum cash award.
Since it is possible that performance-based RSUs may not pay out at all, it is completely “at
risk” compensation.
In January 2010, the compensation committee approved a range for the three-year cash flow
return on invested capital metric of 85% to 115%. For performance between 85% and 100% of the cash
flow return on invested capital target, the payout range is 50% to 100% of the senior executive’s
target RSU award. Performance between 101% and 115% of the cash flow return on invested capital
target will result in a cash payment that will be awarded based on performance achieved between
target and maximum levels, up to a predetermined maximum. The committee also approved the
following performance levels for relative TSR:
Performance Level
Percentile Rank
Threshold
40th
Target
65th
Maximum
75th
For performance between the relative TSR threshold and target levels, the payout range is 35%
to 100% of the senior executive’s target RSU award. Relative TSR performance between the target
and maximum levels will result in a cash payment that will be awarded based on performance achieved
between target and maximum levels, up to a predetermined maximum.
If a participating senior executive’s employment is terminated before the end of the
performance period because of death, disability or retirement, payment of the performance vesting
award will be pro-rated to the date of termination based upon the company’s actual achievement of
performance levels at the end of the performance period. Pursuant to the terms of the RSU awards,
upon a change in control, payment of a performance vesting award will be paid out at the target
performance level and pro-rated to the date of the change of control. Notwithstanding the
foregoing, in accordance with the terms of the Agreement and Plan of Merger, dated as of February16, 2011, by and among the company, Sanofi-Aventis, or Sanofi, and GC Merger Corp., each RSU
(including any RSUs which vest based on the achievement of
performance conditions)
that is
outstanding immediately prior to the consummation of the tender
offer, or the Tender Offer,
by GC Merger Corp. will vest
in full, if unvested, and the shares of common stock issued
thereunder will be cancelled and converted upon the
consummation of the tender offer into the right to receive the
same
consideration being paid by GC
Merger Corp. for the shares of company common stock, tendered in the Tender Offer.
Without sustained growth and positive stock price performance, our executives carry the risk
that they will not be able to realize gains from the stock option component of their equity-based
awards. Since it is possible that performance-based RSUs may not pay out at all, it is completely
“at risk” compensation. The compensation committee does not consider realized gains from prior
stock option or RSU awards in its compensation decisions for either cash or equity, as such awards
recognize past achievement. While we encourage share ownership through this
program, we do not
have a formal share ownership policy. In addition, we do not have a specific policy regarding
hedging the economic risk of share ownership, but advise our executive officers about the potential
for violations under the short-sale rules of the Exchange Act.
Mr. Termeer’s 2010 Compensation. At its meeting in December 2009, the compensation committee
set base salary and target incentive cash compensation levels for 2010 for Mr. Termeer, our
president and chief executive officer. In setting compensation for Mr. Termeer, the committee
considered cash compensation levels of CEOs in our peer group, survey data provided by Towers
Watson, and the company’s performance over the past year. The committee also considered secondary
factors, including our financial performance prior to 2010 and Mr. Termeer’s cash and equity
compensation during the past 10 years. In addition, citing the company’s business challenges and
the results for 2009, Mr. Termeer requested that he not receive an increase in his base salary or
cash incentive targets for 2010. After discussing this request, the committee determined not to
increase base salary or cash incentive targets for Mr. Termeer for 2010.
The compensation committee believes that an emphasis on cash incentive compensation tied to
corporate performance is appropriate for a chief executive officer. The committee discussed the
alignment of a pay-for-performance philosophy whereby total annual cash compensation is weighted
more heavily toward pay considered to be “at risk”. Accordingly, Mr. Termeer’s level of short-term
incentive compensation reflects our pay-for-performance philosophy under which his target annual
incentive cash compensation makes up more than half of his potential total cash compensation. With
no increase over 2009 cash compensation, the committee set Mr. Termeer’s base salary at $1,643,460
and his cash incentive target at $2,136,500. Of this amount,
approximately 80%, or $1,709,200, was
tied to corporate financial performance and 20%, or $427,300 was tied to Mr. Termeer’s individual
performance. As described above under the heading “— Review of 2010,” we did not meet the
corporate revenue and cash flow return on invested capital goals established under the 2010 annual
incentive program. Accordingly, no amounts were payable to Mr. Termeer for those metrics. In
February 2011, the committee awarded Mr. Termeer 120% of his individual performance target, citing
specifically his leadership in the management of the process with investment bankers and other
outside advisers, including the probing process; his successful negotiations with Sanofi;
his successful communication and execution of the phase 3 alemtuzumab for the multiple sclerosis
program; and his execution of the on-going manufacturing recovery. The committee also awarded Mr.
Termeer 95% of his key business objectives target for a total combined annual incentive payout of
$918,695. This represents a total of 43% of his combined target annual cash incentive for 2010.
In February 2010, the compensation committee granted Mr. Termeer performance vesting RSUs and
in June 2010, granted Mr. Termeer stock options to purchase shares of our common stock. The
committee believes it is appropriate for equity awards to comprise a significant portion of Mr.
Termeer’s total compensation. The committee referenced CEO equity data from the company’s peer
group provided by Towers Watson to guide its decisions. The committee reviewed Mr. Termeer’s
performance and the long-range performance and growth of the company, noting the key performance
measures from 2009 considered in setting Mr. Termeer’s cash compensation discussed above. As a
result of its analysis, the compensation committee decided to award the same number of stock
options as he was awarded in 2009, and the same number of performance RSUs as was granted as time
vesting RSUs in 2009. Accordingly, the committee granted Mr. Termeer stock options to purchase
190,000 shares of our common stock and performance vesting RSUs for 63,650 shares. This resulted
in a decrease in value, at the time of grant, of 9% from his 2009 award.
The following table summarizes the components of 2010 compensation decisions approved by the
committee as a percentage of total compensation for Mr. Termeer:
2010 ($)
% of Total
(approved)
Compensation
Base salary
1,643,460
15
%
Target annual cash incentive
— individual performance
427,300
— corporate revenue
854,600
— cash flow return on invested capital
427,300
— key business objectives
427,300
Total target annual cash incentive (1)
2,136,500
20
%
Total target cash compensation
3,779,960
35
%
Value of equity awards (2)
— stock options
3,768,802
35
%
— performance RSUs
3,186,001
30
%
Total equity value
6,954,803
65
%
Total compensation
10,734,763
100
%
(1)
None of the corporate revenue or cash flow return on invested capital cash incentive was paid
to Mr. Termeer for 2010. Total compensation paid to Mr. Termeer for 2010 is discussed below under
the “Summary Compensation Table” section of this Item 11.
(2)
Based on grant date fair value, discussed below under the “Grants of Plan-Based Awards for
2010” section of this Item 11.
2010 Compensation for Named Executive Officers, Other than Mr. Termeer. To determine
compensation for our other named executive officers in 2010, the compensation committee reviewed
the compensation data of our peer group, as well as survey data provided by the committee’s
compensation consultant. The committee’s objective is to ensure that total compensation for our
named executive officers is appropriate and reflects the individual performance of each executive.
The approach to compensation for our named executive officers also reflects our
non-hierarchical management structure. We employ a relatively flat management structure compared
with the more traditional multi-tiered management structures employed by many other companies. Our
executive officers make up an operating committee that includes business, legal, medical and
scientific officers. This operating committee meets regularly to discuss the ongoing management of
the company as well as strategic planning for the company’s development and future growth. They
have an integral role in helping Mr. Termeer chart the future of the company. Cash and equity
compensation for members of the operating committee falls within relatively narrow ranges,
reflecting the flat management layer directly below the CEO. Due to the way the operating
committee operates, the differential between the compensation levels for our named executive
officers and the compensation for Mr. Termeer is greater than that seen in the more traditional
hierarchical compensation structures employed by many other companies.
For the named executive officers other than himself, Mr. Termeer discusses with the
compensation committee each officer’s individual performance and his recommendation for base salary
increases and target annual cash incentive compensation amounts. Because the named executive
officers are responsible for implementing our strategic direction, Mr. Termeer’s recommendations
focus on sustainable, strategic decision-making capabilities for each individual relative to the
company as a whole and each individual’s areas of responsibility. Mr. Termeer’s recommendations
for 2010 included an emphasis on target incentive compensation to reflect our pay-for-performance
structure. The committee also reviews a two-year history of cash compensation for each named
executive officer. The committee reviews Mr. Termeer’s recommendations and makes its cash
compensation decisions based on each officer’s performance, its assessment of that individual’s
performance relative to the group and each officer’s compensation in light of competitive market
information. At its December 2009 meeting, the committee determined not to increase base salary or
cash incentive targets for 2010, excluding Dr. Meeker, for the named executive officers other than
Mr. Termeer. The committee approved an increase of 3% for Dr. Meeker, to recognize his additional
responsibilities in operations and the Biosurgery business. In addition, Dr. Meeker’s compensation
was increased 23% in April 2010 when he took on the newly created role of Chief Operating Officer.
A significant portion of executive compensation consists of annual cash incentive awards. The
annual cash incentive targets for 2010 were tied to both corporate performance and performance in
individual areas of responsibility. To reflect an emphasis on pay for performance, 80% of the
annual cash incentive target for the
named executive officers, other than Mr. Termeer, was tied to
corporate financial performance. As described above under the heading “— Review of 2010,” we did
not meet the corporate revenue and cash flow return on invested capital goals established under the
2010 annual incentive program. Accordingly, no amounts were payable to any of the named executive
officers for those metrics. In February 2011, the committee awarded each named executive officer
95% of the key business objectives target for 2010 and Mr. Termeer made recommendations to the
committee for the individual performance component of each named executive officer’s annual
incentive, based on his evaluation of each officer’s performance during 2010. Consideration was
given to the individual’s leadership, their management of their respective complex and dynamic
areas of responsibility, and their individual contributions to the company during a very
challenging year. Mr. Wyzga was awarded 80%, Dr. Meeker was awarded 90%, and Messrs. Wirth and
Canute were each awarded 120%, of their respective individual performance targets. In awarding his
annual performance above target, the committee noted Mr. Wirth’s leadership role during 2010 in
negotiating with Mr. Whitworth and Mr. Icahn regarding director seats, as well as his on-going role
in helping determine the strategic direction of the company, including in the negotiations with
Sanofi. In awarding Mr. Canute’s annual performance above target, the committee noted his
strong leadership skills and the significant progress he has made in getting global manufacturing
back on track and assuring the sustainability of operations.
In February 2010, the compensation committee granted performance vesting RSUs and in June
2010, granted stock options to purchase shares of our common stock to each of the named executive
officers. To determine the number of options and performance vesting RSUs to grant to each named
executive officer, the committee considered:
•
Mr. Termeer’s recommendations regarding each named executive officer’s performance in
2009 and assessment of the officer’s long-term potential at Genzyme;
•
equity grant data from our peer group;
•
survey data of long-term incentive practices prepared by Towers Watson; and
•
our equity granting history for the last three years.
The committee approved equity awards of 42,750 stock options and 14,250 performance vesting
RSUs for each of our named executive officers, excluding Dr. Meeker, other than Mr. Termeer. Dr.
Meeker was awarded 14,250 performance vesting RSUs in February 2010, 5,750 performance vesting RSUs
in April 2010 and 60,000 stock options in June 2010. Mr. Canute’s long-term incentive awards were
granted when he joined the company in March 2010. The committee concluded that providing a grant
with no increase in the number of stock options and restricted stock units as was granted in 2009
would be both appropriate and competitive with our peer group. Consistent with the adjustment made
to Mr. Termeer’s awards, these awards had a decrease in value of 9% from 2009 awards. In addition,
Mr. Canute was granted new-hire stock options and time vesting RSUs in March 2010 when he joined
the company.
The following table summarizes the components of 2010 compensation decisions approved by the
committee as a percentage of total compensation for the named executive officers other than Mr.
Termeer listed in the summary compensation table included below:
Mr. Wyzga
Mr. Canute
Dr. Meeker
Mr. Wirth
Base salary
532,000
21
%
485,000
10
%
600,000
18
%
760,000
27
%
Target annual cash incentive
— individual performance
101,000
101,000
122,750
101,000
— corporate revenue
202,000
202,000
245,500
202,000
— cash flow return on
invested capital
101,000
101,000
122,750
101,000
— key business objectives
101,000
101,000
122,750
101,000
Total target cash incentive
(1)
505,000
19
%
505,000
10
%
613,750
18
%
505,000
18
%
Total target cash
compensation
1,037,000
40
%
990,000
20
%
1,213,750
36
%
1,265,000
45
%
Value of equity awards (2)
1,561,264
60
%
4,033,625
80
%
2,156,547
64
%
1,561,264
55
%
Total compensation
2,598,264
100
%
5,023,625
100
%
3,370,297
100
%
2,826,264
100
%
(1)
None of the corporate revenue or cash flow return on invested capital cash incentive was
paid for 2010. Total compensation paid to the named executive officers for 2010 is discussed below
under the “Summary Compensation Table” section of this Item 11.
(2)
Based on grant date fair value, disussed below under the “Grants of Plan-Based Awards for
2010” section of this Item 11.
Executive Employment
Agreements. Messrs. Termeer and Wirth each have an
employment agreement with an initial three-year term that automatically extends by one year each December 31, unless written notice
of non-renewal is given. Each agreement provides that the board, or a duly appointed committee of
the board, shall set the
executive’s base salary annually, and that such base salary shall not be lower than the base
salary for the preceding calendar year. Both agreements provide:
•
certain life and disability insurance benefits;
•
eligibility to participate in the company’s annual cash incentive plan;
•
eligibility to participate in the company’s equity incentive plans;
•
certain payments and benefits for termination without cause, with or without a change in
control event, or termination by the executive for good reason following a change in
control;
•
accelerated vesting of equity awards in the event of termination without a change in
control event without cause, or due to death or disability; and
•
confidentiality, non-competition and ownership of inventions provisions.
Executive Severance Agreements. The committee believes that it is in the best interests of
the company and its shareholders to ensure the continued dedication of our executive officers
should the company be in the situation of facing a change in control. Such a situation would
require our executive officers to remain highly focused and attentive to managing the operations of
the company. The financial security provided by severance benefits can mitigate the inevitable
distractions created by the personal uncertainties and risks created by a pending or threatened
change in control.
Other than Messrs. Termeer and Wirth, whose severance arrangements are included in their
employment agreements and described under the heading “— Executive Employment Agreements” above,
we have severance agreements with all of our executive officers, including our named executive
officers. These agreements have an initial one-year term and renew automatically each December 31
for an additional one-year period, unless written notice of non-renewal is given. Under these
agreements, payments will be made following a change in control upon the involuntary termination of
the named executive officer’s employment by us without cause or by the named executive officer for
good reason.
For a more complete description and quantification of benefits payable to our named executive
officers upon and following termination of employment see below under the “Potential Payments upon
Termination or Change in Control” section of this Item 11.
None of the employment or severance agreements provide for tax gross-up payments, which allows
us to avoid the often significant costs that could be involved in gross-up payments related to a
change in control. None of the employment or severance agreements contain any clawback provisions.
Tax Deduction Limits on Executive Compensation. Section 162(m) of the Code generally does not
permit Genzyme a federal income tax deduction for taxable year compensation in excess of $1,000,000
paid to each of our chief executive officer and our three other highest paid executive officers
excluding the chief financial officer. Certain performance-based compensation that is awarded
under a plan, the material terms of which have been approved by shareholders, is exempt from the
deduction limit. Although the 2010 salary and annual cash incentive awards paid to our named
executive officers do not qualify for the performance-based compensation exemption, our
shareholders have approved the 2001 and 2004 Equity Incentive Plans, which are designed to allow us
to deduct the compensation expense related to stock options granted to our named executive officers
under those plans. We have in the past and may in the future award compensation that is not fully
deductible under Section 162(m).
This compensation discussion and analysis is intended to provide an overview and analysis of
the policies and decisions made for executive compensation. We believe the decisions of the
compensation committee and the company follow a deliberate and thoughtful process and are aligned
with both the short- and long-term objectives of the corporation and its shareholders. The
following tables and disclosures are intended to support and augment this discussion.
SUMMARY COMPENSATION TABLE
The following table provides information about the compensation earned during the last three
years by our Chief Executive Officer, Chief Financial Officer and the three other most highly
compensated executive officers during 2010, whom we refer to collectively as our named executive
officers.
We are required to account for equity awards at fair value. In 2010, we granted equity
awards under a long-term incentive program for senior executives that includes a combination
of time vesting stock options and performance and market vesting restricted stock units, or
PSUs, tied to the achievement of pre-established performance and market goals over a
three-year performance period. The value of stock option awards was determined using the
Black-Scholes option valuation model, which estimates the value of an equity award using
subjective assumptions which can vary over time. PSUs granted in 2010 have a performance
period from 2010 through 2012 and performance metrics of (1) cash flow return on invested
capital and (2) relative total shareholder return, or R-TSR. The fair value of PSUs subject
to the cash flow return on investment performance metric is estimated based on the market
value of our stock on the date of grant using the Black-Scholes valuation model. We use a
lattice model with a Monte Carlo simulation to determine the fair value of PSUs subject to the
R-TSR performance metric. Valuation information regarding the 2010 option and PSU awards can
be found below under the “Grants of Plan-Based Awards for 2010” section of this Item 11. For
a more complete discussion of the relevant assumptions we use to calculate the grant date fair
value of option awards, see Note A, “Summary of Significant Accounting Policies — Stock-Based
Compensation,” and Note N, “Stockholders’ Equity,” to our consolidated financial statements
included in Part II, Item 8. of the Original Filing.
(2)
All other compensation above includes company contributions made under our retirement
savings plan, a 401(k) plan.
(3)
For security purposes we provide a driver to Mr. Termeer for commuting to and from work and
work-related events. The cost to the company of providing this benefit to Mr. Termeer was
$84,329 for 2010, $81,386 for 2009 and $73,599 for 2008 and is included in “All Other
Compensation” for Mr. Termeer. This cost is based on the driver’s salary plus vehicle
expenses, including gas, mileage, and vehicle lease expense.
(4)
Mr. Canute joined the Company on March 1, 2010. All other compensation for Mr. Canute
includes a sign-on bonus of $50,000 and relocation costs totaling $106,158.
(5)
All other compensation for Mr. Termeer for 2010, 2009 and 2008 includes insurance premiums
totaling $28,103 in each year that we paid for life and disability insurance benefits. For
Mr. Wirth, all other compensation includes insurance premiums of $1,911 for each of 2010, 2009
and 2008 that we paid for life insurance benefits. We have provided these insurance policies
to ensure Messrs. Termeer and Wirth receive a similar level of benefit as is provided in our
group plans, as their calculated benefits under our group plan exceed the maximum limits.
The following table provides information about the annual cash awards and equity incentive
awards granted to each of our named executive officers during the year ended December 31, 2010.
Actual amounts paid in March 2011 are included in the “Non-Equity Incentive Plan
Compensation” column of
the preceding Summary Compensation Table. The threshold amounts assume a payout of 30% of each
of the corporate revenue and cash flow return on invested capital components of the named
executive officer’s annual cash incentive. The maximum amounts assume a payout of 200% of each
of the corporate revenue and cash flow return on invested capital components of the named
executive officer’s annual cash incentive.
(2)
Represents target payout under our 2010 long-term incentive program. The threshold amounts
assume a payout of 50% of the executive’s RSU award for the cash flow return on invested
capital target, and 35% of the executive’s RSU award for the relative TSR target.
On February 24, 2010, our compensation committee granted PSUs to the named executive officers
under the 2004 Equity Incentive Plan, with a performance period of January 1, 2010 through December31, 2012. PSUs subject to the cash flow return on investment performance metric granted on
February 24, 2010 had a grant date fair market value of $56.50 per share which was the closing
price of our stock on that date. PSUs subject to the R-TSR performance metric granted on February24, 2010 had a grant date fair market value of $43.61 per share. The committee awarded PSUs to Mr.
Canute on March 1, 2010, when he joined the Company. Mr. Canute was granted time vesting RSUs and
stock options on March 15, 2010 under our new-hire equity grant program. The RSUs had a grant date
fair value and option exercise price of $57.22, which was the closing price of our stock on the
date of grant and the options had a grant date fair value of $20.34 per share, which was based on
the Black-Scholes option pricing model. The committee awarded additional PSUs to Dr. Meeker on
April 1, 2010 under the same performance metrics as the February 2010 awards. On June 16, 2010,
stock options were granted to the named executive officers at the same time that stock options and
time vesting RSUs were granted to all qualified, eligible employees of the company. These stock
options have an exercise price of $51.52 per share, which was the closing price of our stock on the
date of grant. The options have a ten-year term and vest 20% on the date of grant with an
additional 20% vesting annually over the next four years on the anniversary of the date of grant.
The grant date fair value of the stock options granted on June 16, 2010 was $19.84 per share,
which was based on the Black-Scholes option pricing model. For a more complete discussion of the
relevant assumptions we use to calculate the grant date fair value of equity awards can be found in
Note A, “Summary of Significant Accounting Policies — Stock-Based Compensation,” and Note N,
"Stockholders’ Equity,” to our consolidated financial statements included in Part II, Item 8. of
the Original Filing.
The stock option awards for the named executive officers include vesting acceleration in the
event of termination as a result of disability or death, or upon a change in control of the
company. Stock options and time vesting RSUs for Messrs. Termeer and Wirth will automatically vest
if employment is terminated by the company without cause prior to a change in control.
For stock option awards, in the event of termination as a result of disability or death, the
named executive officers, or their beneficiaries, will have one year to exercise vested options
unless the options otherwise would expire under their stated terms. In addition, if the named
executive officer has reached retirement eligibility (defined as age 60 plus completion of at least
five years of service) with the company, at termination of employment for any reason other than
cause, vesting of stock options will be accelerated and the executive officer will have three years
to exercise the options unless they otherwise would expire under their stated terms. This
retirement eligibility provision does not apply to options granted before December 1, 2003. The
named executive officers do not have any acceleration of vesting provision relating to retirement
eligibility for RSU awards. Nonstatutory options for the named executive officers are transferable
to defined family members.
If a named executive officer leaves his employment with us for any reason other than death,
disability, retirement (as described above), following a change in control, or for cause, he may
exercise vested options for a period of 90 days from the date of termination. Unvested options
will be cancelled as of the date of termination.
OUTSTANDING EQUITY AWARDS AT 2010 FISCAL YEAR-END
The following table provides information about outstanding stock option awards and unvested
restricted stock units held by each of our named executive officers as of December 31, 2010.
Includes stock options originally granted in our Biosurgery and Molecular Oncology tracking
stocks which were converted into stock options for Genzyme common stock on June 30, 2003. A total of
40,631 of these converted options are exercisable with exercise prices from $41.50 to $274.31.
(2)
Stock options vest 20% on the date of grant and 20% per year over the next four years on the
anniversary of the date of grant. The grant date of the stock options is ten years prior to
the option expiration date.
(3)
The following table provides information with respect to the vesting of each outstanding
time-vesting RSU and performance-vesting RSU held by the named executive officers as of
December 31, 2010:
The following table provides information about the exercise of stock options and vesting of
restricted stock units during the year ended December 31, 2010 for each of our named executive
officers.
Time vesting RSUs granted in 2007 vested in May 2010 under their terms. For Mr. Termeer,
shares acquired for time vesting RSUs includes vesting of 22,333 shares granted in 2008 and
21,216 shares granted in 2009, under the retirement eligibility vesting provisions of those
awards.
On February 23, 2009, Mr. Termeer entered into a Rule 10b5-1 trading plan to exercise 400,000
stock options due to expire in May 2010 and sell the exercised shares at specified prices. Mr.
Termeer’s trading plan included provisions to exercise and sell the shares at certain
pre-determined dates if his limit prices are not met, in order to ensure that all of the shares are
exercised and sold prior to the expiration date of the stock options. As a result of not meeting a
limit order sale price, in November 2009, 200,000 shares were exercised and sold under the plan. In
February 2010, an additional 100,000 shares were exercised and sold under the plan and on May 17,2010, the final 100,000 shares were exercised and sold under the plan.
Mr. Wirth
entered into a Rule 10b5-1 trading plan to exercise 48,216 stock options due to
expire in May 2010 and to sell the exercised shares. Dr. Meeker entered into a Rule 10b5-1
trading plan to exercise 16,488 stock options that were due to expire in May 2010 and to sell the exercised
shares.
We encourage our officers to establish Rule 10b5-1 trading plans. Given the limited times
during the year when our officers are allowed to trade, transactions under a Rule 10b5-1 trading
plan allow our officers to trade in our stock without becoming subject to the presumption that they
are basing their trades on non-public information.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
Due to factors such as the timing during the year of an event, the company’s stock price and
the executive’s age, any of which can affect the nature and amount of benefits provided upon the
events discussed below, actual amounts paid or distributed may vary. All equity calculations in
this discussion assume a stock price of $71.20, which was the closing price of our stock on
December 31, 2010, the last trading day of the year.
Termination Outside of a Change in Control. The employment agreements for Messrs. Termeer and
Wirth provide for the following payments upon termination by us without cause prior to a change in
control:
•
a lump sum payment of two times the sum of his annual salary and annual cash incentive;
•
continued health, life and disability insurance and other benefits for two years from
the date of termination, except to the extent comparable benefits are provided by a new
employer; and
•
full vesting of all non-performance based options or RSUs under our equity incentive
plans.
Assuming the employment of Messrs. Termeer and Wirth had been terminated by us without cause
prior to a change in control on December 31, 2010, they would have been entitled to the following
payments:
Lump Sum
Value of Accelerated
Base + Bonus ($)
Benefits ($)
Equity Awards ($)
Total (1)
Henri A. Termeer
5,249,645
103,885
14,302,400
19,655,930
Peter Wirth
2,114,500
5,909
3,207,627
5,328,036
(1)
Cash payment amounts are based on the following components:
annual cash incentive, calculated by taking the higher of (a) the last cash incentive
paid, or (b) the average of the last two cash incentives paid, times the multiplier;
•
health benefits, based on COBRA rates as of January 1, 2011; and
•
life and disability insurance premiums, based on current formula calculations.
Termination Due to Death or Disability. In the event that a named executive officer’s
employment is terminated due to death, all non-performance based stock options would fully vest
under the terms and conditions of the named executive officers’ equity awards and their
beneficiaries would have one year from the date of termination to exercise their options unless the
options otherwise would expire under their stated terms. The terms of Mr. Termeer’s and Mr.
Wirth’s employment agreements also provide for accelerated vesting of non-performance based equity
upon death.
For termination of employment due to disability for Messrs. Termeer and Wirth, all
non-performance based RSUs would fully vest under the terms and conditions of their employment
agreements and their equity awards. For the other named executive officers, outstanding
non-performance based RSUs would be cancelled at termination for disability under the terms and
conditions of their equity awards.
Assuming the employment of the named executive officers had been terminated due to death or
disability on December 31, 2010, they would have been entitled to accelerated vesting of equity
with the following value:
Termination with Retirement Eligibility. Under the terms and conditions of the named
executive officers’ equity awards, if their employment terminates for any reason other than for
cause after they have reached retirement eligibility (defined as age 60 plus completion of at least
five years of service), they will receive full vesting of their outstanding non-performance based
stock options and will have three years from the date of termination to exercise the options unless
the options would otherwise expire under their stated terms. None of our named executive officers
receive any accelerated vesting for RSUs for termination with retirement eligibility. Messrs.
Termeer and Wirth have met the retirement eligibility definition, and assuming these executive
officers had terminated their employment on December 31, 2010 other than for cause, they would have
been entitled to accelerated vesting of stock options with the following value:
Termination Following a Change in Control. Under the employment agreements with Messrs.
Termeer and Wirth, upon termination following a change in control of the company, by us other than
for cause or disability or by Mr. Termeer or Mr. Wirth for good reason, we must:
•
make a lump sum severance payment of three times the sum of his annual salary and annual
cash incentive;
•
continue life, disability, accident and health insurance coverage for three years,
except to the extent comparable benefits are provided by a new employer; and
•
in certain circumstances, pay legal costs and relocation expenses associated with the
termination.
Under the severance agreements with Messrs. Canute and Wyzga, and Dr. Meeker, upon termination
of employment following a change in control of the company, by us without cause or by the named
executive officer for good reason, we must:
•
make a lump sum severance payment of two times the sum of his annual salary and annual
cash incentive;
•
continue life, disability, accident and health insurance coverage for two years
following the date of termination, except to the extent comparable benefits are provided by
a new employer;
•
provide outplacement services; and
•
in certain circumstances, pay legal costs and relocation expenses associated with such
termination.
In addition, under the terms and conditions of the named executive officers’ equity awards,
upon a change in control they will receive full vesting of their outstanding stock options and
RSUs.
Under the named executive officer’s employment or severance agreements, as applicable, the
amounts payable upon a change in control would be reduced to the extent necessary to maximize the
after-tax value to each named executive officer. Assuming the employment of our named executive
officers had been terminated following a change in control of the company by us without cause or by
the named executive officer for good reason on December 31, 2010, with no such reduction, they
would have been entitled to the following payments:
The value of accelerated equity awards is based on a price of $71.20, which was the closing price of our stock on December 31, 2010.
(2)
Cash payment amounts are based on the following components:
•
base pay using salary as of December 31, 2010 times the applicable multiplier;
•
annual cash incentive, calculated by taking the higher of (a) the last cash incentive
paid, or (b) the average of the last two cash incentives paid, times the applicable
multiplier;
•
health benefits, based on COBRA rates as of January 1, 2011;
•
life, accident and disability insurance premiums, based on current formula calculations;
•
outplacement services, using the maximum provided for in the agreements;
•
relocation services, based on most recent costs paid by us for executive relocation; and
•
legal fees, based on an estimate of average attorney rates and hours of estimated
services needed.
(3)
The amounts in the table above vary from those provided in
Item 3(a) in Amendment No. 25 to our
Solicitation/Recommendation Statement or Schedule 14D-9 filed
with the SEC on March 7, 2011,
which assumed that the employment of our named executive officers
will terminate following a
change in control of Genzyme either by us without cause or by the executive officer for good
reason on April 1, 2011 and did not include the value of
accelerated equity awards because all equity awards will accelerate
upon consummation of the Tender Offer.
Under the employment agreements with Messrs. Termeer and Wirth, and the severance agreements
with Messrs. Canute and Wyzga, and Dr. Meeker, a “change in control” would be deemed to have
occurred if:
•
any person, other than Genzyme or our affiliate, becomes the beneficial owner, directly
or indirectly, of our securities representing 50% or more of the combined voting power of
our then outstanding securities;
•
during any period of 24 consecutive months, the individuals who at the beginning of such
period constituted our board of directors or any individuals who would be continuing
directors cease for any reason to constitute a majority of our board of directors;
•
there is consummated a merger, share exchange or consolidation with any other company or
the sale of all or substantially all of our assets (each, a business combination), other
than (i) a business combination that would result in the Genzyme shareholders prior to the
business combination continuing to hold a majority of the voting power of the surviving
entity or (ii) a business combination effected to implement a recapitalization of the
company where no person becomes the beneficial owner of 50% or more of the voting power of
our then outstanding securities; or
•
our shareholders approve a plan of complete liquidation of the company.
Proposed Acquisition
by Sanofi-Aventis. As described under the heading “— Proposed Acquisition
by Sanofi-Aventis” in
“Management’s Discussion and Analysis of Financial Condition and Results of Operations”in Part II,
Item 7. of the Original Filing, on February 16, 2011, we announced that we had entered into a
definitive merger agreement with Sanofi and a wholly-owned subsidiary of
Sanofi. For additional details regarding the amounts payable to our named executive officers if
the merger transaction is completed, please see our Current Report on Form 8-K, dated February 16,2011, and our Solicitation/Recommendation Statement on Schedule 14D-9 relating to the tender offer,
including amendments on Schedule 14D-9/A, filed with the SEC.
DIRECTOR COMPENSATION
The following table sets forth information concerning the compensation paid to, or earned by,
our non-employee directors for the year ended December 31, 2010. Henri A. Termeer, the Chairman of
our Board of Directors, is not included in the table as he is also our President and Chief
Executive Officer and accordingly receives no compensation for his service as director.
Information about Mr. Termeer’s compensation is provided under the “Summary Compensation Table”
section above.
Fees
Earned
Stock
Option
All Other
or Paid in
Awards
Awards
Compen-
Name
Cash ($)
(2)(3)
($)(2)(3)
sation ($)
Total ($)
Douglas A. Berthiaume
105,167
122,360
141,330
—
368,857
Robert J. Bertolini
142,833
122,360
141,330
—
406,523
Gail K. Boudreaux
123,500
122,360
141,330
—
387,190
Steven J. Burakoff (1)
55,538
122,360
141,330
—
319,228
Robert J. Carpenter
152,750
122,360
141,330
—
416,440
Charles L. Cooney
128,000
122,360
141,330
—
391,690
Victor J. Dzau
100,500
122,360
141,330
—
364,190
Eric J. Ende (1)
65,038
122,360
141,330
—
328,728
Dennis M. Fenton (1)
62,538
122,360
141,330
—
326,228
Sen. Connie Mack
122,500
122,360
141,330
—
386,190
Richard F. Syron
112,000
122,360
141,330
—
375,690
Ralph V. Whitworth (1)(2)
90,577
247,428
293,536
—
631,541
(1)
Drs. Burakoff, Ende and Fenton were appointed to the board of directors on June 16, 2010.
Mr. Whitworth was appointed to the board of directors on April 14, 2010.
The amounts reported for stock and option awards represent the grant date fair value of the
awards. On June 16, 2010, under the automatic grant provisions of our 2007 Director Equity
Plan, each non-employee director was granted RSUs for 2,375 shares, and stock options to
purchase 7,125 shares, of our stock. These RSUs have a
grant date fair value, and stock options have an exercise price, of $51.52 per share, which was
the closing price of our stock on the date of grant. On April 14, 2010, Mr. Whitworth was
granted RSUs for 2,375 shares, and stock options to purchase 7,125 shares, of our stock. Mr.
Whitworth’s RSUs have a grant date fair value, and stock options have an exercise price, of
$52.66 per share, which was the closing price of our stock on April 14, 2010.
The grant date fair value of the stock options granted on April 14, 2010 and June 16, 2010 were
$21.36 and $19.84 per share, respectively, which were based on the Black-Scholes option pricing
model. For a discussion of the relevant assumptions we use to calculate grant date fair value,
see Note A, “Summary of Significant Accounting Policies — Stock-Based Compensation,” and Note
N, “Stockholders’ Equity,” to our consolidated financial statements included in Part II, Item 8.
of the Original Filing.
(3)
Non-employee directors had the following aggregate stock options and RSUs outstanding as of
December 31, 2010:
Stock Options
RSUs
Douglas A. Berthiaume
102,222
2,375
Robert J. Bertolini
14,250
2,375
Gail K. Boudreaux
82,125
2,375
Steven J. Burakoff
7,125
2,375
Robert J. Carpenter
98,630
2,375
Charles L. Cooney
71,630
2,375
Victor J. Dzau
84,039
2,375
Eric J. Ende
7,125
2,375
Dennis M. Fenton
7,125
2,375
Sen. Connie Mack
90,812
2,375
Richard F. Syron
67,125
2,375
Ralph V. Whitworth
14,250
2,375
The outstanding stock options have an average exercise price of $59.24 per share and a remaining
average life of 5.8 years.
Our non-employee directors, receive the following cash compensation for their service on the
board and its committees:
•
an annual retainer of $40,000, paid quarterly;
•
$2,500 for each board meeting they attend;
•
$1,500 for each committee meeting they attend;
•
an annual retainer of $20,000 for service as audit committee chair, paid quarterly;
•
an annual retainer of $10,000 for service as compensation committee chair, paid
quarterly; and
•
an annual retainer of $10,000 for service as nominating and corporate governance
committee chair, paid quarterly.
As part of changes implemented to strengthen the role of our lead director, the compensation
committee requested its compensation consultant prepare an analysis of lead director compensation,
including at our peer companies. Following a review of this analysis, the committee recommended to
the board in February 2010, and the board approved, an annual retainer of $25,000, paid quarterly,
for service as lead director of the company. In addition, the committee also approved an increase
from $10,000 to $20,000 to the annual retainer for service as compensation committee chair. In
August 2010, the committee reviewed the role and responsibilities of the lead
director and
recommended to the board, and the board approved, an increase to the annual retainer for service as
the lead director from $25,000 to $50,000, effective October 1, 2010.
Non-employee directors also receive equity awards for each year (or partial year) that they
serve on our board. Stock options and RSUs are granted automatically under our 2007 Director
Equity Plan on the date of each annual meeting of shareholders or, in the case of directors elected
other than at an annual meeting, upon election to the board. The plan provides for an annual grant
to each non-employee board member of (1) stock options to purchase 7,125 shares of our stock, and
(2) RSUs for 2,375 shares of our stock. Stock options and RSUs become fully vested on the date of
the next annual shareholders meeting following the date of grant, provided the director is an
active member of the board at the opening of business on that date. Each stock option grant has an
exercise price equal to the closing price of the stock on the date of grant and a term of ten
years. RSUs are valued on the date of grant based on the closing price of our stock. The plan
provides for acceleration of all unvested awards in the event of a change in control of the
company.
Under our Directors Deferred Compensation Plan, each director may choose to defer receipt of
all or part of the cash compensation payable to him or her as a director until the year following
the year his or her service as a director ends or until another date specified in advance by the
director. The director can elect to defer compensation in exchange for a future payment of cash,
stock or a combination of cash and stock. At the director’s election, the future payments may be
made in either a lump sum or annual installments for a period specified by the director, up to a
maximum of five years. Amounts deferred in the cash account are credited with interest on the last
day of each calendar quarter at the rate paid on 90-day Treasury bills hypothetically purchased on
the first day of the calendar quarter. Amounts deferred in the stock account are treated as
invested in hypothetical shares of our common stock, and the hypothetical shares are credited to
the director’s account on the first day of each calendar quarter based on the average closing price
of our common stock for all trading days during the preceding quarter. As of December 31, 2010,
five of the twelve eligible directors had accounts under the plan.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
EQUITY PLANS
The following table provides information about shares of our stock that may be issued under
our 2001 Equity Incentive Plan, 2004 Equity Incentive Plan, 2007 Director Equity Plan, Directors’
Deferred Compensation Plan and 2009 Employee Stock Purchase Plan, as of December 31, 2010:
Number of securities
remaining available for
future issuance under
Number of securities to be
Weighted-average
equity compensation
issued upon exercise of
exercise price of
plans (excluding
outstanding options,
outstanding options,
securities reflected in
warrants and rights
warrants and rights
column (a))
Plan Category
(a)
(b)
(c)
Equity compensation plans approved by security holders
31,369,918
(1)
$
47.51
8,254,216
(2)
Equity compensation plans not approved by security
holders
—
—
—
Total
31,369,918
$
47.51
8,254,216
(1)
Includes options outstanding assumed in the following acquisitions:
Weighted-average
Options
exercise
Acquisition Date
Outstanding
price ($)
Ilex
December 2004
9,900
42.84
Focal
June 2001
458
73.61
Novazyme
September 2001
442
1.75
Also includes 22,832 shares in deferred compensation obligations that may be paid out in
shares of our common stock.
(2)
Includes 2,559,273 shares that may be issued under our 2009 Employee Stock Purchase Plan plus
83,129 shares reserved under our Directors’ Deferred Compensation Plan.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following tables set forth
the number of shares of our common stock beneficially owned:
•
as of March 18, 2011, by each of our directors, each of our named executive officers
and our directors and executive officers as a group; and
•
as of the date indicated, by each person know to us to own 5% or more of our
outstanding shares.
Ownership percentages are
based on 263,669,254 shares outstanding as of March 18, 2011.
Unless otherwise noted below, each person has sole voting and investment power for the shares that
they beneficially own.
All current officers and directors as a group (23 people)
6,815,453
(2)
The stock beneficially owned by Dr. Meeker includes 621 shares held by his wife and 495
shares held by his children. Dr. Meeker disclaims beneficial ownership of all shares held by
his wife and children.
(3)
The stock beneficially owned by Mr. Termeer includes 2,371 shares held by his wife and 1,256
shares held in trusts for the benefit of Mr. Termeer’s children. Mr. Termeer disclaims
beneficial ownership of all shares held by his wife and the trusts.
(4)
The stock beneficially owned by Mr. Wirth includes 148 shares held in an IRA account.
(5)
The stock beneficially owned by Mr. Berthiaume includes 4,048 shares held by his wife. Mr.
Berthiaume disclaims beneficial ownership of all shares held by his wife.
(6)
The stock beneficially owned by Dr. Cooney includes 7,164 shares held jointly with his wife,
240 shares held individually by his wife, 1,882 shares held by his son and 600 shares held by
his grandchildren. Dr. Cooney disclaims beneficial ownership of all shares held individually
by his wife, son and grandchildren.
(7)
The stock beneficially owned by Dr. Dzau includes 2,550 shares held by his wife’s trust.
(8)
Mr. Whitworth is one of the principals of Relational Investors, LLC, or RILLC. RILLC is the
record owner of 100 shares and sole general partner, or the sole managing member of the
general partner, of Relational Investors, L.P. , Relational Fund Partners, L.P., Relational
Coast Partners, L.P., RH Fund 1, L.P., RH Fund 6, L.P. Relational Investors III, L.P.,
Relational Investors VIII, L.P., Relational Investors IX, L.P., Relational Investors X, L.P.,
Relational Investors XV, L.P., Relational Investors XVI, L.P., Relational Investors XX, L.P.,
Relational Investors XXII, L.P., Relational Investors XXIII, L.P., and Relational Investors
Alpha Fund I, L.P. These limited partnerships own a total of 7,693,166 shares. An additional
2,234,482 shares are held in accounts managed by RILLC and an additional 408,500 shares are
held through co-investment arrangements with Relational Investors VIII, L.P. Mr. Whitworth
disclaims beneficial ownership of these securities except to the extent of his pecuniary
interest therein. The business address for the entities listed above is c/o Relational
Investors LLC, 12400 High Bluff Drive, Suite 600, San Diego, CA92130.
The information in this table is as of March 18, 2011 and is based on the most recent
filings submitted to the SEC regarding ownership of Genzyme shares and updated information provided
to Genzyme by its shareholders. Unless otherwise noted, each person has
sole voting and investment power for the Genzyme shares listed.
Information is based on a Schedule 13G filed jointly by Carl C. Icahn and certain
other entities affiliated with Mr. Icahn. Mr. Icahn shares voting and dispositive power
for all of the shares listed.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
CERTAIN RELATIONSHIPS AND RELATED PERSONS TRANSACTIONS
We have adopted a written policy for the review and approval or ratification of transactions
involving related persons. The nominating and governance committee is responsible for applying the
policy with the assistance of our company secretary. Related persons can include any of our
directors or executive officers, certain of our shareholders, and any of their immediate family
members. Transactions covered by the policy consist of any transaction, arrangement or relationship
(or any series of similar transactions, arrangements or relationships) in which we were, are or
will be a participant; the amount involved exceeds $120,000; and in which any related person had,
has or will have a direct or indirect material interest. Under the policy, certain transactions
deemed not to give rise to conflicts of interest between Genzyme and a related person have a
standing pre-approval, even if the aggregate amount is greater than $120,000. The chair of the
nominating and governance committee has the authority to approve or ratify any related person
transaction in which he or she is not involved and the aggregate amount of the transaction is
expected to be less than $1 million.
In determining whether to approve or ratify a related person transaction, the nominating and
governance committee or chair of the committee is expected to take into account, among any other
factors deemed appropriate, the proposed terms of the transaction, including the aggregate value
and benefit to the related person; whether the related person transaction is on terms no less
favorable than terms generally available to an unaffiliated third party under the same or similar
circumstances; the benefits to Genzyme of the transaction; any alternative means or transactions
whereby Genzyme could obtain similar benefits; and whether the transaction is consistent with our
other policies or practices that may also govern the proposed transaction. To help identify related
person transactions, each year, we require our directors and officers to complete a questionnaire
identifying any transactions with us in which the officer or director or their family members have
an interest. We had no transactions, nor are there any currently proposed transactions in which the
company was or is to be a participant, in which the amount involved exceeds $120,000 and any
related person had or will have a direct or indirect material interest reportable under SEC rules.
In addition, our Corporate Code of Conduct describes our expectation that all directors,
officers and employees who may have a potential or apparent conflict of interest to notify their
supervisor or our legal department. As described above under the “Code of Conduct” section in Part
III, Item 10. of this Amendment No. 1 to Form 10-K, a copy of our Code of Conduct is posted on our
website at www.genzyme.com in the Investors section under “Corporate Governance.”
DIRECTOR INDEPENDENCE
The Board has reviewed the independence of each director, taking into account potential
conflicts of interest, transactions, and other relationships that would reasonably be expected to
compromise a director’s independence. To determine independence, the board relies on director
responses to an annual questionnaire inquiring about, among other things, their relationships (and
those of their immediate family members) with us, their affiliations, and other potential conflicts
of interest. The Board has determined that Messrs. Berthiaume, Bertolini, Carpenter and Whitworth,
Ms. Boudreaux, Drs. Burakoff, Cooney, Dzau, Ende, Fenton and Syron and Senator Mack are independent
directors as defined by the applicable NASDAQ listing standards. Mr. Termeer is not independent
because of his employment as our chief executive officer.
The firm of PricewaterhouseCoopers LLP, independent registered public accounting firm, audited
our financial statements for the years ending December 31, 2010 and 2009.
The following table presents fees for professional services rendered for the two most recent
fiscal years. The audit-related and tax fees for 2010 and 2009 did not exceed 100% of total audit
fees for the respective years. There are no other fees in 2010 and 2009 other than as set forth
below.
2010
2009
(amounts in thousands)
Audit fees(1)
$
6,877
$
5,365
Audit-related fees(2)
2,602
254
Tax fees
Tax compliance
$
2,100
$
1,149
Other tax(3)
—
294
All Other Fees(4)
$
250
$
—
(1)
Audit fees include fees incurred for professional services rendered by
PricewaterhouseCoopers LLP for the audit of our annual financial statements and of our
internal control over financial reporting, the review of our interim financial statements
included in our Forms 10-Q, the statutory audits of our foreign subsidiaries and accounting
consultations necessary for the rendering of an opinion on our financial statements.
(2)
Audit-related services include services in connection with the SEC registration
statements, due diligence and other acquisition-related services, and statutorily required
audits of the financial statements of various benefit plans.
(3)
Other tax services include acquisition-related tax structuring, worldwide tax
planning and other tax consultation.
(4)
Other fees consisted mainly of consulting services to assist with our assessment and
establishment of an enterprise risk management program.
AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES
Our audit committee has instituted an Outside Auditor Independence Policy, which permits the
utilization of our independent auditors for audit, audit-related, and tax services only, subject to
the audit committee’s approval, and limits the audit-related and tax services to 120% of the total
anticipated audit service fees for each year, without prior approval of the committee. This policy
prohibits the utilization of our independent auditors for services other than audit, audit-related
and tax services, and requires quarterly reports to our audit committee. The policy lists specific
services which the committee allows, as well as specific services which are prohibited, consistent
with the SEC’s release number 33-8183 (“Strengthening the Commission’s Requirements Regarding
Auditor Independence”), effective May 6, 2003. All of the
non-audit services for 2010 and 2009 were pre-approved by the audit
committee in accordance with our Outside Auditor Independence Policy.
The following financial statements (and related notes) of Genzyme
Corporation and Subsidiaries were filed under Part II, Item 8., “Financial
Statements and Supplementary Data,” of the Original Filing:
Page
Report of Independent Registered Public Accounting Firm
109
Consolidated Statements of Operations and Comprehensive Income for the Years Ended December 31,2010, 2009 and 2008
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2010, 2009 and 2008
114
Notes to Consolidated Financial Statements
115
(b). Exhibits
EXHIBIT NO.
DESCRIPTION
2.1
License and Asset Purchase Agreement dated as of March 30, 2009 and related Letter
Agreements between Genzyme Corporation and Bayer Schering Pharma AG, and License Agreement
dated as of May 29, 2009 between Genzyme Corporation and Alcafleu Management GmbH
& Co. KG. Filed as Exhibit 2.1 to Genzyme’s Form 10-Q for the quarter ended June30, 2010.*(†)
2.2
Asset Purchase Agreement, dated September 13, 2010, between Genzyme Corporation and
Laboratory Corporation of America Holdings. Filed as Exhibit 2.1 to Genzyme’s
Form 8-K filed on September 19, 2010.*
2.3
Agreement and Plan of Merger, dated February 16, 2011, by and among Genzyme Corporation,
Sanofi-Aventis and GC Merger Corp. Filed as Exhibit 2.1 to Genzyme’s Form 8-K filed on
February 16, 2011.*
By-laws of Genzyme Corporation, as amended. Filed as Exhibit 3.2 to Genzyme’s Form 8-K
filed June 22, 2010.*
3.3
Certificate of Limited Partnership of Genzyme Therapeutics Products Limited Partnership,
dated December 21, 2005. Filed as Exhibit 3.3 to Genzyme’s Form S-4 filed
September 7, 2010.*
3.4
Limited Partnership Agreement of Genzyme Therapeutics Products Limited Partnership, dated
July 1, 2006. Filed as Exhibit 3.4 to Genzyme’s Form S-4 filed September 7,2010.*
3.5
Amendment No. 1 to Limited Partnership Agreement of Genzyme Therapeutics Products
Limited Partnership, dated June 15, 2010. Filed as Exhibit 3.5 to Genzyme’s Form
S-4 filed September 7, 2010.*
4.1
Indenture dated as of June 17, 2010 by and between Genzyme Corporation and The Bank on New
York Mellon Trust Company, N.A., as Trustee. Filed as Exhibit 4.1(a) to Genzyme’s
Form 8-K filed on June 17, 2010.*
4.1.1
First Supplemental Indenture dated as of June 17, 2010 by and among Genzyme Corporation,
the Subsidiary Guarantor(s) party thereto from time to time and The Bank of New York
Mellon Trust Company, N.A., as Trustee (including forms of 3.625% Senior Note due
2015 and 5.000% Senior Note due 2020). Filed as Exhibit 4.1(b) to Genzyme’s Form 8-K filed
on June 17, 2010.*
4.1.2
Guarantee and Second Supplemental Indenture dated as of December 28, 2010 by and among
Genzyme Europe B.V., Genzyme Corporation and The Bank of New York Mellon Trust Company,
N.A., as Trustee.*
Lease, dated April 30, 1990, for 64 Sidney Street, Cambridge, Massachusetts between
BioSurface Technology, Inc. and Forest City 64 Sidney Street, Inc. Filed as Exhibit 10.22
to BioSurface’s Registration Statement on Form S-1 (File No. 33-55874).*
10.1.1
Amendment to Lease, dated September 11, 1995, to the Lease Agreement dated April 30, 1990
by and between Forest City 64 Sidney Street, Inc. and Genzyme Corporation. Filed
as Exhibit 10.1.1 to Genzyme’s Form 10-K for the year ended December 31, the year
ended December 31, 2003.*
10.1.2
Second Amendment to Lease, dated March 1, 1996, to the Lease Agreement dated April 30,
1990 by and between Forest City 64 Sidney Street, Inc. and Genzyme Corporation.
Filed as Exhibit 10.1.2 to Genzyme’s Form 10-K for the year ended December 31, 2003.*
10.1.3
Letter Amendment, dated December 30, 1999, to the Lease Agreement dated April 30, 1990, by
and between Forest City 64 Sidney Street, Inc. and Genzyme Corporation. Filed as
Exhibit 10.1.3 to Genzyme’s Form 10-K for the year ended December 31, 2003.*
10.1.4
Fourth Amendment to Lease, dated March 23, 2001, to the Lease Agreement dated April 30,
1990, by and between Forest City 64 Sidney Street, Inc. and Genzyme Corporation.
Filed as Exhibit 10.1.4 to Genzyme’s Form 10-K for the year ended December 31, 2003.*
10.1.5
Lease Agreement dated November 30, 2005 by and between Forest City 64 Sidney Street, Inc.
and Genzyme Corporation. Filed as Exhibit 10.1.5 to Genzyme’s Form 10-K for the
year ended December 31, 2006.*
10.1.6
First Amendment to Lease, dated May 21, 2010, to the Lease Agreement dated November 30,2005 by and between FC 64 Sidney, Inc. and Genzyme Corporation. Filed as Exhibit 10.1
to Genzyme’s Form 10-Q for the quarter ended June 30, 2010.*(†)
10.2
Lease, dated June 1, 1992, for land at Allston Landing, Allston, Massachusetts, between
Allston Landing Limited Partnership and the Massachusetts Turnpike Authority. Filed
as Exhibit 10.9 to Genzyme’s Form 10-K for the year ended December 31, 1993.*
10.2.1
First Amendment to Lease, dated July 26, 1995, to Lease dated June 1, 1992, between
Allston Landing Limited Partnership and the Massachusetts Turnpike Authority. Filed
as Exhibit 10.1 to Genzyme’s Form 10-Q for the quarter ended June 30, 2005.*
10.2.2
Second Amendment to Lease, dated December 22, 1997, to Lease dated June 1, 1992, between
Allston Landing Limited Partnership and the Massachusetts Turnpike Authority. Filed
as Exhibit 10.2 to Genzyme’s Form 10-Q for the quarter ended June 30, 2005.*
10.3
Commercial Lease, dated December 24, 1998, by and between Aventis Pasteur SA and
Imtix-SangStat S.A.S. for Building C5 located at Marcy L’Etoile, Lyon, France. Filed as
Exhibit 10.4 to Genzyme’s Form 10-K for the year ended December 31, 2003.*
10.3.1
Amendment to Commercial Lease, dated September 30, 2000, to the Lease dated December 24,1998, by and between Aventis Pasteur SA and Imtix-SangStat S.A.S. Filed as
Exhibit 10.4.1 to Genzyme’s Form 10-K for the year ended December 31, 2003.*
10.4
Lease, dated August 28, 2000, for Building D, Cambridge Research Park, Cambridge,
Massachusetts, between Genzyme Corporation and Kendall Square LLC. Filed as Exhibit 10.4
to Genzyme’s Form 10-K for the year ended December 31, 2005.*
10.4.1
First Amendment to Lease, dated August 1, 2003, to the Lease dated August 28, 2000, by and
between Genzyme Corporation and Kendall Square LLC. Filed as Exhibit 10.5.1 to
Genzyme’s Form 10-K for the year ended December 31, 2004.*
10.5
Lease, dated September 3, 1990, for the land located at the Industrial Development
Authority Industrial Park, County Waterford, Ireland (comprised in folio 4917 & 324IF
County Waterford), by and between the Industrial Development Authority and Bausch & Lomb
Ireland. Filed as Exhibit 10.2 to Genzyme’s Form 10-Q for the quarter ended
September 30, 2001.*
10.6
Contract for Sale, dated June 25, 2001, for the premises located at the Industrial
Development Authority Industrial Park, County Waterford, Ireland, (comprised in folio
4141L County Waterford) by and between Luxottica Ireland Limited and Genzyme
Ireland Limited (f/k/a Gosfend Limited). Filed as Exhibit 10.1 to Genzyme’s Form 10-Q
for the quarter ended September 30, 2001.*
Deed of Transfer, dated July 2, 2001, between Luxottica Ireland Limited and Genzyme
Ireland Limited, related to the Lease dated September 3, 1990 for the premises located at
the Industrial Development Authority Industrial Park, County Waterford, Ireland
(comprised in folio 4141L County Waterford). Filed as Exhibit 10.3 to Genzyme’s Form 10-Q
for the quarter ended September 30, 2001.*
10.8
Contract for Sale, dated August 2, 2001, for the land located at the Industrial
Development Authority Industrial Park, County Waterford, Ireland (comprised in folio 4917
County Waterford), by and between the Industrial Development Authority and
Genzyme Ireland Limited. Filed as Exhibit 10.4 to Genzyme’s Form 10-Q for the
quarter ended September 30, 2001.*
10.9
Lease, dated August 24, 2001, for the land located at the Industrial Development Authority
Industrial Park, County Waterford, Ireland (comprised in folio 4917 County Waterford) by
the Industrial Development Authority and Genzyme Ireland Limited. Filed as
Exhibit 10.5 to Genzyme’s Form 10-Q for the quarter ended September 30, 2001.*
10.10
Transfer of Long Lease and Other Assets, dated November 15, 2001, by and between Pharming
and Genzyme Flanders.*
10.11
Lease, dated November 4, 2002, by and between the Province of Antwerp and Genzyme
Flanders, including amendments to lease transferred pursuant to agreement dated November15, 2001 by and between Pharming and Genzyme Flanders.*
10.12
Lease, dated October 21, 2010, by and between the Province of Antwerp and Genzyme
Flanders.*
10.13
Lease, dated October 29, 2010, by and between Cipal, an inter-municipal service
organization, and Genzyme Flanders.*
10.14
1997 Equity Incentive Plan, as amended. Filed as Exhibit 10.12 to Genzyme’s Form 10-K for
the year ended December 31, 2006.*
10.15
1998 Director Stock Option Plan, as amended. Filed as Exhibit 10.2 to Genzyme’s Form 10-Q
for the quarter ended June 30, 2006.*
10.15.1
Form of Non-Statutory Stock Option for grants under Genzyme’s 1998 Director Stock Option
Plan. Filed as Exhibit 10.5 to Genzyme’s Form 10-Q for the quarter ended June 30,2005.*
10.15.2
2007 Director Equity Plan, as amended. Filed as Exhibit 10.8 to Genzyme’s Form 10-Q for
the quarter ended June 30, 2010.*
10.15.3
Form of Non-Statutory Stock Option Agreement for grants under Genzyme’s 2007 Director
Equity Plan. Filed as Exhibit 10.3 to Genzyme’s Form 10-Q for the quarter ended
June 30, 2008.*
10.15.4
Form of Restricted Stock Unit Award Agreement for grants under Genzyme’s 2007 Director
Equity Plan. Filed as Exhibit 10.4 to Genzyme’s Form 10-Q for the quarter ended
June 30, 2008.*
10.16
2001 Equity Incentive Plan, as amended. Filed as Exhibit 10.14 to Genzyme’s 10-K for 2006.*
10.16.1
Forms of Non-Statutory Stock Option Agreement for grants to executive officers under
Genzyme’s 2001 Equity Incentive Plan. Filed as Exhibit 10.5 to Genzyme’s Form
10-Q for the quarter ended June 30, 2008.*
10.16.2
Forms of Incentive Stock Option Agreement for grants to executive officers under the 2001
Equity Incentive Plan. Filed as Exhibit 10.6 to Genzyme’s Form 10-Q for the
quarter ended June 30, 2008.*
10.17
2004 Equity Incentive Plan, as amended. Filed as Exhibit 10.7 to Genzyme’s Form 10-Q for
the quarter ended June 30, 2010.*
10.18.1
Forms of Incentive Stock Option Agreement for grants to executive officers under the 2004
Equity Incentive Plan. Filed as Exhibit 10.14.1 to Genzyme’s Form 10-K for the
year ended December 31, 2008.*
10.18.2
Forms of Nonstatutory Stock Option Agreement for grants to executive officers under the
2004 Equity Incentive Plan. Filed as Exhibit 10.14.2 to Genzyme’s Form 10-K for the
year ended December 31, 2008.*
Forms of Restricted Stock Unit Award Agreement for grants to executive officers under the
2004 Equity Incentive Plan. Filed as Exhibit 10.3 to Genzyme’s Form 10-Q for the
quarter ended March 31, 2008.*
10.18.4
Forms of Performance Restricted Stock Unit Award Agreement for grants to executive
officers under the 2004 Equity Incentive Plan. Filed as Exhibit 10.3 to Genzyme’s
Form 10-Q for the quarter ended March 31, 2010.*
10.19
Senior Executive Long-Term Incentive Program. Filed as Exhibit 10.2 to Genzyme’s Form
10-Q/A for the quarter ended March 31, 2010.*
10.19.1
Forms of Performance Restricted Stock Unit Award Agreement for grants to executive
officers under the Senior Executive Long-Term Incentive Program. Filed as Exhibit 10.3 to
Genzyme’s Form 10-Q/A for the quarter ended March 31, 2010.*
10.20
1996 Directors’ Deferred Compensation Plan, as amended. Filed as Exhibit 10.16 to
Genzyme’s Form 10-K for the year ended December 31, 2008.*
10.21
Amended and Restated Executive Employment Agreement effective as of December 31, 2008
between Genzyme Corporation and Henri A. Termeer. Filed as Exhibit 10.2 to Genzyme’s
Form 8-K filed December 5, 2008.*
10.22
Amended and Restated Executive Employment Agreement effective as of December 31, 2008
between Genzyme Corporation and Peter Wirth. Filed as Exhibit 10.3 to Genzyme’s
Form 8-K filed December 5, 2008.*
10.23
Form of Indemnification Agreement between Genzyme Corporation and its executive officers.
Filed as Exhibit 10.1 to Genzyme’s Form 10-Q for the quarter ended September 30,2004.*
10.24
Form of Severance Agreement between Genzyme Corporation and its executive officers. Filed
as Exhibit 10.2 to Genzyme’s Form 10-Q for the quarter ended September 30, 2007.*
10.25
Senior Executive Annual Cash Incentive Program. Filed as Exhibit 10.1 to Genzyme’s Form
8-K filed December 5, 2008.*
10.25.1
Senior Executive Annual Incentive Plan. Filed as Exhibit 10.1 to Genzyme’s Form 10-Q/A for
the quarter ended March 31, 2010.*
10.26
Amended and Restated Collaboration Agreement, effective as of January 1, 2008, among
Genzyme Corporation, BioMarin and BioMarin/Genzyme LLC. Filed as Exhibit 10.1 to
Genzyme’s Form 10-Q for the quarter ended March 31, 2008.*(†)
10.27
Manufacturing, Marketing and Sales Agreement among Genzyme Corporation, BioMarin and
BioMarin/Genzyme LLC, effective as of January 1, 2008. Filed as Exhibit 10.2 to
Genzyme’s Form 10-Q for the quarter ended March 31, 2008.*(†)
10.28
Supply Agreement, dated January 24, 2006, by and between Cambrex Charles City, Inc. and
Genzyme Corporation. Filed as Exhibit 10.1 to Genzyme’s Form 10-Q for the quarter
ended September 30, 2006.*(†)
10.29
Contract Manufacturing Agreement dated September 14, 2001, as amended, between GelTex and
The Dow Chemical Company. Filed as Exhibit 10.35 to Genzyme’s Form 10-K for the
year ended December 31, 2002.*(†)
10.29.1
Second Amendment, dated October 9, 2002, to Contract Manufacturing Agreement dated
September 14, 2001, between GelTex and The Dow Chemical Company. Filed as Exhibit 10.34.1
to Genzyme’s Form 10-K for the year ended December 31, 2003.*(†)
10.29.2
Third Amendment, dated December 8, 2003, to Contract Manufacturing Agreement dated
September 14, 2001, between GelTex and The Dow Chemical Company. Filed as Exhibit 10.34.2
to Genzyme’s Form 10-K for the year ended December 31, 2003.*(†)
10.29.3
Fourth Amendment, dated July 1, 2004, to Contract Manufacturing Agreement dated September14, 2001, between GelTex and The Dow Chemical Company. Filed as Exhibit 10.29.3 to
Genzyme’s Form 10-K for the year ended December 31, 2004.*(†)
Amended and Restated Contract Manufacturing Agreement signed as of December 15, 2006,
between Genzyme Corporation (as successor to GelTex) and The Dow Chemical Company. Filed
with Genzyme’s Form 8-K filed on December 21, 2006.*(†)
10.30
North American Termination and Transition Agreement, dated November 3, 2004, by and
between Genzyme Corporation and Wyeth. Filed as Exhibit 10.31 to Genzyme’s Form
10-K for the year ended December 31, 2004.*(†)
10.31
Purchase and Supply Agreement, effective as of January 1, 2005, by and between Genzyme
Corporation and Invitrogen Corporation. Filed as Exhibit 10.3 to Genzyme’s Form
10-Q for the quarter ended June 30, 2005.*(†)
10.31.1
Amendment No. 2 effective as of January 1, 2007 to Purchase and Supply Agreement,
effective as of January 1, 2005, by and between Genzyme Corporation and Invitrogen
Corporation. Filed as Exhibit 10.1 to Genzyme’s Form 10-Q for the quarter ended June30, 2007.*(†)
10.31.2
Amended and Restated Contract Purchase and Supply Agreement between Invitrogen Corporation
and Genzyme Corporation effective December 31, 2007. Filed as Exhibit 10.1 to
Genzyme’s Form 10-Q for the quarter ended September 30, 2007.*(†)
10.32
License and Co-Development Agreement between Genzyme Corporation and Isis Pharmaceuticals,
Inc. dated June 24, 2008. Filed as Exhibit 10.7 to Genzyme’s Form 10-Q for the
quarter ended June 30, 2008.*(†)
10.33
License Agreement dated as of January 1, 1995 and First Amendment thereto, dated as of
October 7, 2003, between Genzyme Corporation and Mount Sinai School of Medicine of the
City University of New York. Filed as Exhibit 10.10 to Genzyme’s Form 10-Q for the
quarter ended June 30, 2010.*(†)
10.34
Technology Transfer and Supply Agreement between Genzyme Corporation and Hospira
Worldwide, Inc. effective December 31, 2009. Filed as Exhibit 10.29 to Genzyme’s
Form 10-K for the year ended December 31, 2009.*
10.35
Master Supply Agreement dated as of June 30, 2010 among Genzyme Corporation, Genzyme
Ireland Limited and Hospira Worldwide, Inc. Filed as Exhibit 10.9 to Genzyme’s
Form 10-Q for the quarter ended June 30, 2010.*(†)
10.36
Credit Agreement, dated July 14, 2006, among Genzyme Corporation and those of its
subsidiaries party thereto, the lenders listed therein, JPMorgan Chase Bank, N.A., as
administrative agent, Bank of America, N.A., as syndication agent, ABN AMRO Bank N.V.,
Citizens Bank of Massachusetts and Wachovia Bank, National Association, as
co-documentation agents. Filed with Genzyme’s Form 8-K filed on July 19, 2006.*
10.36.1
Amendment, dated as of November 30, 2010, to the Credit Agreement, dated as of July 14,2006, among Genzyme Corporation and those of its subsidiaries party thereto, J.P.
Morgan Chase Bank, N.A., as administrative agent, Bank of America, N.A., as syndication
agent, and the co-documentation agents, co-agents and other lenders named therein.*
10.37
Amended and Restated Agreement dated April 14, 2010 between Genzyme Corporation,
Relational Investors LLC, Ralph V. Whitworth and the other parties identified therein.
Filed as Exhibit 99.1 to Genzyme’s Form 8-K filed on April 15, 2010.*
10.38
Agreement dated June 9, 2010 between Genzyme Corporation, Icahn Partners LP, Icahn
Partners Master Fund LP, Icahn Partners Master Fund II L.P., Icahn Partners Master Fund
III L.P. and High River Limited Partnership. Filed as Exhibit 99.1 to Genzyme’s
Form 8-K filed on June 30, 2010.*
10.39
Consent Decree dated May 24, 2010 between Genzyme Corporation and the United States Food
and Drug Administration. Filed as Exhibit 99.1 to Genzyme’s Form 8-K filed on May24, 2010.*
10.40
Registration Rights Agreement dated June 17, 2010 by and among Genzyme Corporation, Credit
Suisse Securities (USA) LLC, Goldman, Sachs & Co. and Banc of America Securities LLC.
Filed as Exhibit 10.1 to Genzyme’s Form 8-K filed on June 17, 2010.*
10.41
Master Confirmation Agreement dated June 17, 2010 between Genzyme Corporation and Goldman,
Sachs & Co. Filed as Exhibit 10.3 to Genzyme’s Form 10-Q for the quarter ended
June 30, 2010.*
Supplemental Confirmation dated June 17, 2010 between Genzyme Corporation and Goldman,
Sachs &Co. Filed as Exhibit 10.3.1 to Genzyme’s Form 10-Q for the quarter ended
June 30, 2010.*(†)
Certification of the Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley
Act of 2002.*
31.2
Certification of the Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley
Act of 2002.*
31.3
Certification of the Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley
Act of 2002.**
31.4
Certification of the Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley
Act of 2002.**
32.1
Certification of the Chief Executive Officer pursuant to section 906 of the Sarbanes-Oxley
Act of 2002. Previously furnished.
32.2
Certification of the Chief Financial Officer pursuant to section 906 of the Sarbanes-Oxley
Act of 2002. Previously furnished.
101
The following materials from Genzyme Corporation’s Form 10-K for the year ended December31, 2010, formatted in eXtensible Business Reporting Language (XBRL):(i)
Consolidated Statements of Operations, (ii) Consolidated Balance Sheets, (iii)
Consolidated Statements of Cash Flows and (iv) Notes Consolidated Financial
Statements. Previously furnished.
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant has duly caused this Amendment No. 1 to be signed on its behalf by the undersigned,
thereunto duly authorized.