Exhibit 10.1


 


GENZYME CORPORATION


(the “Company”)


 


Senior Executive Annual Incentive Plan


 


I.                                         Purpose


 


The
Genzyme Corporation Senior Executive Annual Incentive Plan (the “Plan”) has
been established to attract, motivate and retain executives and other senior
officers and key employees by rewarding both corporate and division-based and
individual performance.  Cash-based
annual performance awards (each, an “Award”) will be granted and earned
pursuant to the Plan.


 


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 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 (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.                                Weighting
of Performance Components, Establishment of Performance Measures and
Participant’s Target Awards


 


All
Awards under the Plan shall be comprised of a corporate component and an
individual component, and for Participants with responsibilities for a
division, a divisional component.  For
Participants without a divisional component, the relative weight assigned to
the corporate and individual components is 80% and 20%, respectively.  For Participants with a divisional component,
the relative component weights are 65% corporate, 15% divisional and 20%
individual.


 


A
“Performance Year” under the plan shall be the period from January 1
through December 31.  For each
Performance Year, the Committee shall specify a Participant’s target Award
expressed as either a dollar amount or as a percentage of the Participant’s
annualized base salary in effect on the date the Award is granted.   The Committee
shall also specify the performance goals that must be met during such
Performance Year in order for the Participant to earn payment with respect to
the corporate or divisional component of an Award (“Performance Measures”) and,
if applicable, the levels of performance and payout opportunities associated
with the Performance Measures.


 


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; implementation of key projects, processes or other business
objectives; and/or any other goals or objectives the Committee deems relevant
in connection with accomplishing the purposes of the Plan.


 


The
Performance Measures and relative weightings of these measures established by
the Committee may be different each Performance Year and different measures may
be applicable to different Participants. 
Unless otherwise specified in a written resolution adopted by the
Committee, (i) the Performance Measures for the corporate component will be
comprised of revenue, cash flow return on invested capital (“CFROI”) and key
business objectives designated by the Committee, and (ii) the Performance
Measures for the divisional component will be based on division operating
income as set forth in the annual budget approved by the Board of Directors.


 


For
each Performance Year, the targets associated with the Performance Measures 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.


 


V.                                Conditions
to Earning Awards and Payment of Final Earned Awards


 


After
the completion of a Performance Year and no later than March 15th of the year following the end of the
Performance Year, the Committee will determine any amounts potentially earned
under Awards that had been granted to Participants for such Performance
Year.  The corporate component and
divisional component of an Award shall be potentially 


 

















 


earned
only if the Performance Measures for the Performance Year 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.


 


Determination
of whether the individual component has been potentially earned will be made in
the Committee’s sole discretion based on its review of the Participant’s
performance during the Performance Year.


 


Except
as provided in Section VI, actual earning of a potentially earned Award
shall not occur unless a Participant remains employed by the Company or its
Affiliates through the date that actual earned Awards are paid.  Actual earned Awards will be paid in cash as
soon as practicable after the amount potentially earned and payable under the
Award, if any, is determined, but in no event later than March 15th of the year following the end of the
Performance Year.


 


VI.                                Change
in Employee Status


 


A.                                   Retirement or
Death


 


If
a Participant terminates employment with the Company or its Affiliates by
reason of Retirement or death before payment of an Award is made, the
Participant’s Award shall be pro-rated on the basis of the ratio of (x) the
number of completed months (rounded to the nearest whole number) of
participation during the applicable Performance Year to (y) to twelve
months.  Payment of such pro-rated Award
shall occur only if the Committee determines that the applicable Performance
Measure(s) are achieved at the threshold level of performance set by the
Committee and shall occur on the date that all other Participants receive
payment of their respective earned 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.


 


B.                                     Other Changes
in Status


 


For
any other changes in employment status (e.g., new hire; termination for any
reason other than Retirement or death; demotion; change in hours; or leave of
absence), the Committee in its sole discretion will make determinations for the
application of the Plan to Participants or eligible persons who have such a
change in employee status.


 


VII.                            Section 409A


 


Each
Award is intended to qualify for the “short-term deferral” exemption from Section 409A
and shall be construed by the accordingly. 
Notwithstanding the preceding sentence, neither the Committee nor the
Company or its Affiliates, nor any person acting on behalf of any of them,
shall be liable to a Participant by reason of any acceleration of income, or
any tax or additional tax, asserted by reason of any failure of an Award or any
portion thereof to satisfy the requirements for exemption from, or compliance
with, Section 409A of the Code.


 


VIII.                        Amendment
and Termination


 


The
Committee may at any time or times amend the Plan or any outstanding Award 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 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 an Award so as to affect
adversely the Participant’s rights under the Award, unless the Committee
expressly reserved the right to do so when the Award was granted.


 


IX.                                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.  In no event shall the Plan, or any Award made
under the Plan, form a part of an employee’s contract of employment, if
any.  The loss of existing or potential
profit in any 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 Award will not in any way affect the
Company’s right to provide any employee bonuses or other compensation in
addition to 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 earned Awards under the Plan.


 


(d)                                 Unfunded Status
of Awards.  All earned
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.