Exhibit 10.2


 


GENZYME CORPORATION


(the “Company”)


 


Senior Executive Long -Term Incentive Plan


 


I.                                         Purpose


 


The
Genzyme Corporation Senior Executive Long-Term Incentive Plan (the “Plan”) has
been established to attract, motivate and retain executives and other senior
officers and key employees by providing appropriate performance-based long-term
incentive awards and to align executive and shareholder interests.


 


II.                                     Administration


 


The Plan will be administered by the Compensation Committee
of the Company’s Board of Directors (the “Committee”).  The Committee has
discretionary authority, subject only to the express provisions of the Plan, to
interpret the Plan; determine eligibility for and grant Awards; determine,
modify or waive the terms and conditions of any Performance Award; prescribe
forms, rules and procedures; and otherwise do all things necessary to
carry out the purposes of the Plan. 
Determinations made by the Committee shall be final and binding upon
Participants (defined in Section III below), the Company, and all other
interested parties.


 


The
Committee may delegate to (i) one or more of its members such of its
duties, powers and responsibilities as it may determine; and (ii) such
employees of the Company or its Affiliates (as defined in Section III
below) or other persons as it determines such ministerial tasks as the
Committee deems appropriate.


 


III.                                 Eligibility


 


The
Company’s chief executive officer, and those executive and senior officers of
the Company and key employees of the Company or its Affiliates recommended by
the Company’s chief executive officer and approved by the Committee, are
eligible to participate in the Plan.


 


For
purposes of the Plan, “Affiliate” means any corporation or other entity that
stands in a relationship to the Company that would result in the Company and
such corporation or other entity being treated as one employer under Section 414(b) or
Section 414(c) of the U.S. Internal Revenue Code of 1986, as amended
(the “Code”).  A “Participant” means an
eligible person who is granted an Award under the Plan.


 


IV.                                Awards
and Performance Periods


 


Long-term
incentive awards (“Awards”) granted under this Plan will consist of (i) time
vesting stock options (“Option Awards”); and (ii) performance vesting
awards (“Performance Awards”) tied to the achievement of pre-established
performance goals (“Performance Measures”) over a three-year performance period
(each, a “Performance Period”). 
Performance


 

















 


Awards
may be comprised of performance vesting restricted stock or restricted stock
units (“RSU Awards”), performance cash (“Cash Awards”), or a combination of the
two.  Option Awards and RSU Awards will
be granted pursuant to the Company’s 2004 Equity Incentive Plan and the terms
and conditions set forth in the agreement to be entered into by the Participant
for each Option Award (“Option Award Agreement”) and each RSU Award (“RSU Award
Agreement”), as applicable.  The
Committee shall determine annually the proportion of Option Awards and
Performance Awards that will be granted to Participants.


 


Unless
otherwise established by the Committee, a Performance Period shall begin on January 1
of a calendar year.  The Committee may
establish a Performance Period that begins prior to the termination of one or
more other Performance Periods.


 


V.                                    Grants
of Performance Awards and Establishment of Performance Measures


 


For
each Performance Period, the Committee shall set a target Performance Award for
each Participant.  The Committee also
shall specify the Performance Measure(s) for the Performance Period, the
target for each Performance Measure, and the levels or ranges of performance
and payout opportunities associated with the Performance Measures.  An eligible person who is designated to be a
Participant in the Plan after the beginning of a Performance Period shall
participate on terms and conditions to be decided by the Committee.


 


Performance
Measures shall be expressed in terms of one or more criteria such as the
following (measured either absolutely or by reference to an index or indices
and determined either on a consolidated basis or, as the context permits, on a
divisional, subsidiary, line of business, project or geographical basis or in
combinations thereof):   return on
equity, investments, capital or assets; sales or revenues; assets; expenses;
earnings before or after deduction for all or any portion of interest, taxes,
depreciation, or amortization, whether or not on a continuing operations or an
aggregate or per share basis; one or more operating ratios; stock price, total
shareholder return; or any other objectively determinable criteria set by the
Committee that is not capable of being determined before the end of the
Performance Period.


 


The
Performance Measures established by the Committee may be different each
Performance Period and different Performance Measures may be applicable to
different Participants.  Unless otherwise
specified in a written resolution adopted by the Committee for the applicable
Performance Period, the performance measures shall be (i) relative total
shareholder return measured against a relevant subset of biotechnology, medical
devices and pharmaceutical companies in the S&P 500 Health Care Index as
approved by the Committee and (ii) cash flow return on invested capital.


 


For
each Performance Period, the composition of Performance Awards, the Performance
Measures and targets, and the performance levels/ranges and payout
opportunities approved by the Committee shall be set forth in a summary that
will be maintained with a copy of this Plan.


 

















 


VI.                            Conditions
to Earning Awards and Payment of Actual Earned Awards


 


After
the completion of a Performance Period, the Committee will determine for each
Participant the number of RSU Awards that have potentially vested and any
amounts potentially earned under Cash Awards no later than March 15th of the year following the end of such
Performance Period.  Performance Awards
shall be potentially earned for a particular Performance Period only if the
Performance Measure(s) with respect to such Performance Period are
achieved at the threshold level of performance set by the Committee in the
Committee’s sole determination.  Where
applicable, the attainment of the Performance Measures shall be determined in
accordance with generally accepted accounting principles (“GAAP”) or, with
respect to non-GAAP measures, in accordance with how the Company reports such
non-GAAP measures to investors.  Except
as the Committee may otherwise provide at the time of granting an Award,
objectively determinable adjustments shall be made to any Performance Measure
for one or more items of gain, loss, profit or expense (A) determined to
be extraordinary or unusual in nature or infrequent in occurrence, (B) related
to the disposal of a business segment, (C) related to a change in
accounting principle under GAAP, (D) related to discontinued operations
that do not qualify as a segment of a business under GAAP, or (E) attributable
to the business operations of any entity acquired by the Company during the
fiscal year.  Such adjustments shall be
determined in accordance with GAAP, where applicable, or if such adjustments
relate to a non-GAAP measure, in accordance with how the Company reports non-GAAP
measures to investors.


 


Except
as provided in Sections VII and VIII below, actual vesting of potentially vested
RSU Awards and actual earning of potentially earned Cash Awards shall not occur
unless a Participant remains employed by the Company or its Affiliates through
the date that actual earned RSU Awards are settled and actual earned Cash
Awards are paid.  Delivery of shares of
Genzyme common stock underlying actual vested RSU Awards shall be made in
accordance with the terms of the 2004 Equity Incentive Plan and the RSU Award
Agreement provided to Participants. 
Actual earned Cash Awards will be paid as soon as practicable after the
potentially earned Award is determined, but in no event later than March 15th of the year following the end of the
Performance Period.


 


VII.                            Termination
of Service for Certain Reasons; Other Change in Employee Status


 


If
a Participant terminates employment with the Company or its Affiliates before
the settlement and payment of potentially earned Performance Awards by reason
of death, disability (in accordance with the Company’s Long Term Disability
Policy or any other applicable Human Resources policy in effect at the time of
the Participant’s employment termination) or Retirement, the Participant’s
Awards for all Performance Periods in effect at the time of such termination of
service shall be deemed actually earned on a prorated basis with the ratio of (x) the
number of completed months (rounded to the nearest whole number) of employment
during each such Performance Period to (y) the number of months in each
such Performance Period.  Payment of such
pro-rated actually earned Performance Awards shall occur only if they are
potentially earned such that the Performance Measures(s) for the
applicable Performance Period are achieved at the threshold level of
performance set by the Committee and shall occur after the end of the
applicable Performance Periods on the dates that all other Participants receive
settlement or payment of their respective actual earned Performance
Awards.  For purposes of the Plan, “Retirement”
means a Participant’s termination of employment with the Company or an 


 

















 


Affiliate
for any reason except Cause after attaining 60 years of age and five years of
combined service with the Company or any Affiliate.  For purposes of the Plan, “Cause” shall mean (A) the
willful and continued failure by a Participant to substantially perform his or
her duties with the Company or any Affiliate (other than any such failure
resulting from his or her incapacity due to physical or mental illness) after a
written demand for substantial performance is delivered to the Participant by the
Company or Affiliate, which demand specifically identifies the manner in which
the Company or Affiliate believes that he or she has not substantially
performed his or her duties, or (B) the willful engaging by the
Participant in conduct which is demonstrably and materially injurious to the
Company or its Affiliates, monetarily or otherwise.  No act, or failure to act, on the Participant’s
part shall be deemed “willful” unless done, or omitted to be done, by him or
her not in good faith and without reasonable belief that his or her action or
omission was in the best interest of the Company or its Affiliates.


 


The
Committee in its sole discretion will make determinations for the application
of the Plan to eligible persons or Participants who have a change in employee
status, such as demotion, change in hours or leave of absence.


 


VIII.                        Change
in Control


 


If
the effective date of a Change in Control (as defined in a Participant’s RSU
Award Agreement) occurs during a Participant’s employment with the Company, then
as of such date:  all Performance Periods
for any RSU Awards in effect shall be deemed to have been completed, the target
levels of performance set for the respective Performance Measures for such RSU
Awards shall be deemed to have been attained, and such RSU Awards shall be
deemed to be actually earned at the target level on a prorated basis with the
ratio of  (x) the number of
completed months (rounded to the nearest whole number) from the beginning of
each such Performance Period to the effective date of the Change in Control to (y) the
number of months in each such Performance Period.  Notwithstanding the foregoing and Section VII,
for a Participant whose employment terminated during any Performance Period by
reason of death, disability or Retirement prior to the effective date of a
Change in Control, the target levels of performance set for the respective
Performance Measures for all of such Participant’s outstanding RSU Awards shall
be deemed to have been attained, and such RSU Awards shall be deemed to be
actually earned at the target level on a pro-rated basis with the ratio of (x) the
number of completed months (rounded to the nearest whole number) of employment
during each such Performance Period to (y) the number of months in each
such Performance Period.  Delivery of
shares of Genzyme common stock underlying actual pro-rated vested RSU Awards
shall be made in accordance with the terms of the 2004 Equity Incentive Plan
and the RSU Award Agreement provided to Participants.


 


IX.                                Section 409A


 


Each
Performance Award will contain such terms as the Committee determines in
accordance with this Plan, and shall be construed and administered, such that
the Performance Award either (i) qualifies for an exemption from the
requirements of Section 409A of the Code or (ii) satisfies such
requirements.


 

















 


X.                                    Amendment
and Termination


 


The
Committee may at any time or times amend the Plan or any outstanding
Performance Awards for any purpose that may at the time be permitted by law,
and may at any time terminate the Plan as to future grants of Performance
Awards; provided, however, that except as otherwise expressly provided in the
Plan, the Committee may not, without a Participant’s consent, alter the terms
of a Performance Award so as to affect adversely the Participant’s rights under
the Performance Award, unless the Committee expressly reserved the right to do
so when the Performance Award was granted.


 


XI.                                Miscellaneous


 


(a)                                  Rights Limited.  Nothing in the Plan will be construed as
giving any person the right to continued employment or employment for a
specific period of time with the Company or its Affiliates, or any rights as a
shareholder except to shares of the Company’s common stock issued under the
2004 Equity Incentive Plan in connection with the settlement of actual earned
RSU Awards.  In no event shall the Plan,
or any Performance Award under the Plan, form a part of an employee’s contract
of employment, if any.  The loss of
existing or potential profit in any Performance Award will not constitute an element
of damages in the event of termination of employment for any reason, even if
the termination is in violation of an obligation of the Company or Affiliate to
the Participant.


 


(b)                                 Other
Compensation Arrangements.  The
existence of the Plan or the grant of any Performance Award will not in any way
affect the Company’s right to provide any employee bonuses or other
compensation in addition to Performance Awards granted under the Plan.


 


(c)                                  Withholding
Taxes.  Any taxes required to be
withheld by federal, state or local governments will be deducted from all
payments of actual earned Cash Awards under the Plan and, for actual earned RSU
Awards, will be handled in accordance with the terms of the Participant’s RSU
Award Agreement for each such RSU Award.


 


(d)                                 Unfunded Status
of Cash Awards.  All actual
earned Cash Awards will be paid from the Company’s general assets.  Nothing contained in this Plan will require
the Company to set aside or hold in trust any funds for the benefit of any
Participant.


 


(e)                                  Effective Date.  The Plan is effective as of January 22,
2010.