rEVO Biologics DEF 14A Definitive proxy

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Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

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GTC Biotherapeutics, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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175 Crossing Boulevard
Framingham, Massachusetts 01702
(508) 620-9700

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 25, 2005

The 2005 Annual Meeting of Stockholders of GTC Biotherapeutics, Inc., or GTC, will be held in the Forefront Center for Meetings & Conferences, 404 Wyman Street, Waltham, Massachusetts 02451, at 2:00 p.m. local time on Wednesday, May 25, 2005 for the following purposes:

To elect three directors to serve until the 2008 Annual Meeting of Stockholders; and

To transact such other business as may properly come before the meeting or any adjournments thereof.

Only stockholders of record at the close of business on March 31, 2005 are entitled to notice of and to vote at the annual meeting or at any adjournment.

It is important that your shares be represented at the meeting.Therefore, whether or not you plan to attend the meeting, please complete your proxy card and return it in the enclosed envelope, which requires no postage if mailed in the United States, or vote by telephone or on the internet. If you attend the meeting and wish to vote in person, your proxy will not be used.

By order of the Board of Directors,

Nathaniel S. Gardiner
Clerk

April 22, 2005

TABLE OF CONTENTS

				Page
GENERAL INFORMATION ABOUT VOTING					1
Who can vote					1
How many votes do you have					1
How to vote your shares in person					1
How to vote your shares by proxy					1
How to vote your shares by telephone or the internet					2
Proposal to be considered at the annual meeting					2
Quorum					2
Number of votes required					2
Abstentions and broker non-votes					2
Discretionary voting by proxies on other matters					2
How you may revoke your proxy					3
Voting results					3
Expenses of solicitation					3
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT					4
Section 16(a) Beneficial Ownership Reporting Compliance					6
PROPOSAL 1 ELECTION OF DIRECTORS					7
COMPENSATION AND OTHER INFORMATION CONCERNING OFFICERS AND DIRECTORS					12
Board of Directors and Committee Matters					12
Independence					12
Board Meetings and Committees					12
Stockholder Communications					12
Audit Committee					12
Compensation Committee					13
Nominating and Corporate Governance Committee					13
Director Compensation					15
Certain Relationships and Transactions with Related Parties					15
Compensation Committee Interlocks and Insider Participation					16
Executive Compensation					17
Summary Compensation Table					17
Option Grants in 2004 Fiscal Year					18
Fiscal Year-End Option Table					19
Securities Authorized for Issuance Under Equity Compensation Plans					19
Executive Employment Agreements					20
Compensation Committee Report on Executive Compensation					21
STOCK PERFORMANCE GRAPH					25
AUDITORS					26
Report of the Audit Committee					26
Independent Registered Public Accountants’ Fees and Other Matters					27
ADDITIONAL INFORMATION					29
Deadline for Stockholder Proposals and Director Nominations					29
Householding of Annual Meeting Materials					29

PROXY STATEMENT

FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 25, 2005

Our Board of Directors is soliciting the enclosed proxy card for use at the 2005 Annual Meeting of Stockholders to be held in the Forefront Center for Meetings & Conferences, 404 Wyman Street, Waltham, Massachusetts 02451, at 2:00 p.m. local time on Wednesday, May 25, 2005, and at any adjournment thereof. This proxy statement and the accompanying proxy card are first being provided to stockholders of GTC on or about April 22, 2005.

GENERAL INFORMATION ABOUT VOTING

Who can vote. You may vote your shares of GTC common stock at the annual meeting if you were a stockholder of record at the close of business on March 31, 2005. On that date, there were 46,658,728 shares of common stock outstanding.

How many votes do you have. You have one vote for each share of common stock that you owned at the close of business on March 31, 2005, which is shown on your proxy card or other voting instruction form.

How to vote your shares in person. If you attend the annual meeting and wish to vote in person, we will give you a ballot when you arrive. If your shares are held in “street name” (that is, in the name of a brokerage firm or bank that holds your securities account), you must bring an account statement or letter from the brokerage firm or bank showing that you were the beneficial owner of the shares on March 31, 2005 in order to be admitted to the meeting. To be able to vote, you will need to obtain a “legal proxy” from the holder of record.

How to vote your shares by proxy. If you choose to vote by proxy, please complete, date, sign and return the proxy card in the enclosed postage prepaid envelope. The proxies named in the proxy card will vote your shares as you have instructed. If you sign and return the proxy card without indicating how your vote should be cast, the proxies will vote your shares in favor of the proposal contained in this proxy statement, as recommended by our Board of Directors. Even if you plan to attend the meeting, please complete and mail your proxy card to ensure that your shares are

represented at the meeting. If you attend the meeting, you can still revoke your proxy by voting in person.

How to vote your shares by telephone or the internet. Instead of submitting your vote by mail on the enclosed proxy card, you may vote by telephone or the Internet. Please note that there may be separate telephone and Internet arrangements depending on whether you are a registered stockholder (that is, if you hold your stock in your own name) or you hold your shares in street name. In either case, you must follow the procedures described on your proxy card.

In order to vote online or via telephone, have the enclosed proxy card in hand, and call the number or go to the website listed on the proxy card and follow the instructions. The telephone and Internet voting procedures are designed to authenticate stockholders’ identities, to allow stockholders to give their voting instructions and to confirm that stockholders’ instructions have been recorded properly.

We encourage you to vote via the Internet. If you do so, please authorize us to deliver future annual reports and proxy statements to you by e-mail. This lowers costs and speeds delivery.

Proposal to be considered at the annual meeting. The principal business expected to be transacted at the meeting, as more fully described below, will be the election of three directors.

Quorum. A quorum of stockholders is required to transact business at the meeting. A majority in interest of the outstanding shares of common stock entitled to vote, represented at the meeting in person or by proxy, constitutes a quorum for the transaction of business.

Number of votes required. The number of votes required to approve the proposal scheduled to be presented at the meeting is as follows:

Proposal				Required Vote for Approval
•Election of a nominee as director.				•Affirmative votes representing a plurality of the votes cast for or against the nominee.

Abstentions and broker non-votes. Abstentions and broker non-votes will be counted in determining a quorum for the transaction of business at the annual meeting. A broker non-vote on a proposal results from a proxy submitted by a broker that does not indicate a vote for one or more proposals because the broker does not have discretionary voting authority and the customer did not send the broker instructions on how to vote on the proposal. If the broker does not have instructions on certain matters, and the broker is barred by law or NASDAQ regulations from exercising its discretionary voting authority in the particular matter, then the shares will not be voted on the matter. In voting on the proposal to elect three directors, abstentions, any votes withheld and broker non-votes will be disregarded and not treated as votes cast and, therefore, will not affect the outcome of the election.

Discretionary voting by proxies on other matters. Aside from the proposal for the election of three directors, we do not know of any other proposals that may be presented at the annual

meeting. If another matter is properly presented for consideration at the annual meeting, the persons named in the accompanying proxy card will exercise their discretion in voting on the matter.

How you may revoke your proxy. You may revoke the authority granted by your executed proxy card at any time before its exercise by filing with GTC, Attention: Nathaniel S. Gardiner, our corporate clerk, a written revocation or a duly executed proxy card bearing a later date, or voting in person at the meeting. If your shares are held in a brokerage account, you must make arrangements with your broker or bank to vote your shares in person or to revoke your proxy.

Voting results. We will publish the voting results in our Form 10-Q for the second quarter of fiscal year 2005, which we will file with the Securities and Exchange Commission in August 2005.

Expenses of solicitation. We will bear all costs of soliciting proxies. We will, upon request, reimburse brokers, custodians and fiduciaries for out-of-pocket expenses incurred in forwarding proxy solicitation materials to the beneficial owners of our common stock held in their names. In addition to solicitations by mail, our directors, officers and employees may solicit proxies from stockholders in person or by other means of communication, including telephone, facsimile and e-mail, without additional remuneration.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table and footnotes show the amount of our common stock beneficially owned as of March 31, 2005 by (i) persons known by us to be beneficial owners of more than 5% of our common stock, (ii) the Chief Executive Officer and the four other most highly compensated executive officers who were serving as executive officers as of the end of fiscal year 2004, whom we refer to collectively as the “Named Executive Officers,” (iii) our directors and each nominee seeking re-election as a director and (iv) all of our current executive officers and directors as a group.

The number of shares beneficially owned by each person listed below includes any shares over which the person has sole or shared voting or investment power as well as shares which the person has the right to acquire on or before May 30, 2005 by exercising a stock option or other right to acquire shares. Unless otherwise noted, each person has sole investment and voting power (or shares that power with his or her spouse) over the shares listed in the table. The percentage ownership of each person listed in the table below under the heading “Percent of Class” was calculated using the total number of shares of common stock outstanding on March 31, 2005, which was 46,658,728, plus any shares that person could acquire upon the exercise of any options or other rights exercisable on or before May 30, 2005.

Name and Address of Beneficial Owners
Geoffrey F. Cox (1)	555,849	1.18	%
Robert W. Baldridge(2)	57,575	*
Kenneth A. Bauer(3)	15,000	*
Francis J. Bullock(4)	72,500	*
James A. Geraghty(5)	230,277	*
Michael J. Landine(6)	15,000	*
Pamela W. McNamara(7)	33,800	*
Marvin L. Miller(8)	32,000	*
Alan W. Tuck(9)	55,000	*
John B. Green (10)	298,336	*
Gregory F. Liposky (11)	169,606	*
Harry M. Meade (12)	252,495	*
Daniel S. Woloshen (13)	171,905	*
All executive officers and directors as a group (13 persons)	1,959,343	4.06	%

Five Percent Stockholders:
Genzyme Corporation (14) 500 Kendall Street, Cambridge, Massachusetts 02142	5,443,243	11.54	%

Less than 1%.

(1)

Includes 85,300 shares owned directly by Dr. Cox, 1,000 shares owned jointly with grandson, 9,349 shares beneficially owned by Dr. Cox and held in GTC’s 401(k) plan and 460,200 shares issuable to Dr. Cox upon the exercise of outstanding options exercisable on or before May 30, 2005.

(2)

Includes 5,075 shares owned directly by Mr. Baldridge and 52,500 shares of Common Stock issuable to Mr. Baldridge upon the exercise of outstanding options exercisable on or before May 30, 2005.

(3)

Includes 15,000 shares of Common Stock issuable to Dr. Bauer upon the exercise of outstanding options exercisable on or before May 30, 2005.

(4)

Includes 1,000 shares owned directly by Dr. Bullock and 71,500 shares of Common Stock issuable to Dr. Bullock upon the exercise of outstanding options exercisable on or before May 30, 2005.

(5)

Includes 56,791 shares owned directly by Mr. Geraghty, 1,383 shares beneficially owned by Mr. Geraghty and held in GTC’s 401(k) plan and 172,103 shares of Common Stock issuable to Mr. Geraghty upon the exercise of outstanding options exercisable on or before May 30, 2005.

(6)

Includes 15,000 shares of Common Stock issuable to Mr. Landine upon the exercise of outstanding options exercisable on or before May 30, 2005.

(7)

Includes 3,800 shares owned directly by Ms. McNamara and 30,000 shares of Common Stock issuable to Ms. McNamara upon the exercise of outstanding options exercisable on or before May 30, 2005.

(8)

Includes 2,000 shares owned directly by Mr. Miller and 30,000 shares of Common Stock issuable to Mr. Miller upon the exercise of outstanding options exercisable on or before May 30, 2005.

(9)

Includes 1,000 shares owned directly by Mr. Tuck, 5,000 shares owned in Mr. Tuck’s Individual Retirement Account and 49,000 shares of Common Stock issuable to Mr. Tuck upon the exercise of outstanding options exercisable on or before May 30, 2005.

(10)

Includes 41,879 shares owned directly by Mr. Green, 19,136 shares beneficially owned by Mr. Green and held in GTC’s 401(k) plan, and 237,321 shares issuable to Mr. Green upon the exercise of outstanding options exercisable on or before May 30, 2005.

(11)

Includes 13,447 shares owned directly by Mr. Liposky, 12,959 shares beneficially owned by Mr. Liposky and held in GTC’s 401(k) plan, and 143,200 shares issuable to Mr. Liposky upon the exercise of outstanding options exercisable on or before May 30, 2005.

(12)

Includes 47,562 shares owned directly by Dr. Meade, 13,937 shares beneficially owned by Dr. Meade and held in GTC’s 401(k) plan, and 190,996 shares issuable to Dr. Meade upon the exercise of outstanding options exercisable on or before May 30, 2005.

(13)

Includes 35,919 shares owned directly by Mr. Woloshen, 12,786 shares beneficially owned by Mr. Woloshen and held in GTC’s 401(k) plan, and 123,200 shares issuable to Mr. Woloshen upon the exercise of outstanding options exercisable on or before May 30, 2005.

(14)

Includes four common stock purchase warrants exercisable for 145,000, 288,000, 55,833 and 29,491 shares of GTC common stock at prices of $2.84, $4.88, $6.30 and $6.30 per share, respectively.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors, executive officers and persons owning more than 10% of our registered equity securities, to file with the Securities and Exchange Commission reports of their initial ownership and of changes in their ownership of our common stock and to provide us with copies of those reports.

On February 18, 2004, each of Drs. Cox and Meade and Messrs. Green, Woloshen and Liposky filed a Form 4 with the SEC to report options received on February 13, 2004. On March 19, 2004, each of Drs. Cox and Meade and Messrs. Green, Woloshen and Liposky filed a Form 4/A with the SEC amending their direct ownership to include shares omitted from the Form 4s they filed on February 18, 2004.

PROPOSAL 1
ELECTION OF DIRECTORS

Our Board of Directors has currently fixed the number of directors at nine. Under our Articles of Organization, as amended, our Board is divided into three classes with staggered three year terms, with each class being as nearly equal in number of directors as possible. The directors in each class serve a term of three years each until their successors are elected at the next annual stockholders meeting. At the upcoming annual meeting, three directors, Francis J. Bullock, Geoffrey F. Cox and Alan W. Tuck, have each been nominated to serve a term of office of three years and until a successor is elected and qualified. Each has consented to such nomination and is expected to stand for election. However, if any nominee is unable to serve, proxies will be voted for any replacement candidate nominated by our Board.

Votes Required

Under our by-laws, directors must be elected by a plurality of votes cast. Abstentions, votes withheld and broker non-votes will not be treated as votes cast and, therefore, will not affect the outcome of the election.

The following table contains biographical information about the nominees for director whose terms expire at the 2005 annual meeting and the two other classes of our current directors whose term of office will continue after the meeting.

Name and Age	Business Experience and Other Directorships
	(Directors whose present term expires in 2005)
Francis J. Bullock* Age: 68	Dr. Bullock has served as a director since 1994. Dr. Bullock is an independent consultant. Prior to that he was a senior consultant with Arthur D. Little, Inc. and with Strategic Decisions Group from September 1993 to March 2003, and a Senior Vice President, Research Operations at Schering-Plough Research Institute from 1981 until August 1993. Dr. Bullock is also a director of Array Biopharma, Inc., a chemical drug discovery services company.	2005
*Indicates a nominee for election as director.

Name and Age	Business Experience and Other Directorships
Geoffrey F. Cox* Age: 61	Dr. Cox has served as Chairman of the Board, Chief Executive Officer and President of GTC since July 2001, after being elected a director in May 2001. From 1997 to June 2001, Dr. Cox was Chairman and Chief Executive Officer of Aronex Pharmaceuticals, Inc., a biotechnology company. In 1984, Dr. Cox joined Genzyme Corporation in the U.K. and, in 1988, became Senior Vice President of Operations in the United States. Subsequently, Dr. Cox was promoted to Executive Vice President of Operations of Genzyme, and was also responsible for the pharmaceutical, diagnostic and genetics business units until 1997. Prior to joining Genzyme, Dr. Cox was General Manager of U.K. manufacturing operations for Gist-Brocades. Dr. Cox also serves as a director of Nabi Biopharmaceuticals and is a member of the Emerging Companies Section Governing Body of the Biotechnology Industry Organization.	2005
Alan W. Tuck* Age: 56	Mr. Tuck has served as a director since 1993. Mr. Tuck is a partner of The Bridgespan Group, a nonprofit consulting organization where he has worked since April 2001. Mr. Tuck retired in June 2000 as Chief Strategic Officer of Organogenesis Inc., a tissue engineering firm where he had been since July 1997. From September 1996 until July 1997, Mr. Tuck was Executive Vice President and Chief Strategic Officer of Biocode, Inc., a privately-held biotechnology company focused on brand protection technology and, from September 1996 until March 1997, was Chief Strategic Officer of Immulogic Pharmaceutical Corporation, a biotechnology company focused on diseases of the immune system. From February 1992 through May 1996, Mr. Tuck was President and Chief Executive Officer of T Cell Sciences, Inc. Mr. Tuck is also a director of Apogee Technology, Inc., a developer of digital amplifier chip sets.	2005
*Indicates a nominee for election as director.

Name and Age	Business Experience and Other Directorships
	(Directors whose present term expires in 2006)
Kenneth A. Bauer Age: 55	Dr. Bauer has served as a director since December 2004. He has been a Director of Thrombosis Clinical Research at Beth Israel Deaconess Medical Center since 1997 and has been a Professor of Medicine at Harvard Medical School since 2004, where he has been on the faculty since 1982. Dr. Bauer’s research interests include development of novel laboratory techniques for the detection of prothrombotic states and clinical evaluation of new antithrombotic drugs. Dr. Bauer is the current Chairman of Council for the International Society on Thrombosis and Haemostasis. Dr. Bauer received his Bachelor and Master of Science degrees from the Massachusetts Institute of Technology, and obtained his medical education at Stanford University School of Medicine. He completed subspecialty training in medical oncology and hematology at Dana Farber Cancer Institute and Beth Israel Hospital in Boston.	2006
Pamela W. McNamara Age: 47	Ms. McNamara has served as a director since July 2002. Since October 2003, Ms. McNamara has been Chief Executive Officer of CRF, Inc., a clinical trial data management and mobile technology company. Prior to that, Ms. McNamara was a private consultant. Ms. McNamara was appointed Chief Executive Officer of Arthur D. Little, Inc., a global management and technology firm, from 2001 to February 2002, to develop plans to restructure, reorganize or divest the firm’s viable business units. In February 2002, Arthur D. Little filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code to provide a framework under which these plans could be executed. Ms. McNamara served as Managing Director of Arthur D. Little from 1997 to 2001, and had been a partner since 1992, focusing on the pharmaceutical and biotechnology industries.	2006

Name and Age	Business Experience and Other Directorships	Present Term Expires
Marvin L. Miller Age: 68	Mr. Miller has served as a director since October 2002. Mr. Miller has been Executive Chairman of Onconova Therapeutics, Inc. since 2002. Mr. Miller retired in 2002 as President and Chief Executive Officer of Nextran, a subsidiary of Baxter Healthcare Corporation. Before joining Nextran in 1995, Mr. Miller served as Vice President of Biotechnology Licensing for the Pharmaceutical and Agricultural Divisions of American Cyanamid Company since 1987. Previously, Mr. Miller was a Vice President of Johnson & Johnson International from 1983 to 1986. Mr. Miller is a director of Unigene Laboratories, Inc. and the National Center for Genome Resources.		2006

	(Directors whose present term expires in 2007)	��
Robert W. Baldridge Age: 70	Mr. Baldridge has served as a director since 1994. Mr. Baldridge provided consulting services to GTC from October 1994 to October 2000 and has served as an independent business consultant since June 1988.		2007
James A. Geraghty Age: 50	Mr. Geraghty has served as a director since February 1993, and held the role of Chairman of the Board of Directors of GTC from January 1998 to July 2001. Mr. Geraghty has served as Senior Vice President of Genzyme Corporation since January 2001 and, prior to that served as President of Genzyme Europe from July 1998 to December 2000. Mr. Geraghty was the President and Chief Executive Officer of GTC from its incorporation in February 1993 until July 1998.		2007

Name and Age				Business Experience and Other Directorships				Present Term Expires
Michael J. Landine Age: 51				Mr. Landine has served as a director since December 2004. Mr. Landine currently guides all areas of corporate development at Alkermes, having been appointed Vice President, Corporate Development in 1999. Mr. Landine joined Alkermes in 1988 as Vice President and Chief Financial Officer, a position he held for ten years. Previously, he was the Chief Financial Officer of The Walker Magnetics Group, Inc., an international manufacturer of industrial equipment. Mr. Landine serves on the Board of Directors of a private life sciences company, Expressive Constructs, Inc., and on the Board of Kopin Corporation, Inc., a manufacturer of high definition imaging products. He is also an advisor to the Board of Directors of The Walker Magnetics Group, Inc. Mr. Landine received a B.S. in Accounting from Bentley College and is a Certified Public Accountant.					2007

COMPENSATION AND OTHER INFORMATION CONCERNING
OFFICERS AND DIRECTORS

Board of Directors and Committee Matters

The Board of Directors has responsibility for establishing broad corporate policies and reviewing our overall performance rather than day-to-day operations. The Board’s primary responsibility is to oversee the management of GTC and, in so doing, to serve the best interests of GTC and our stockholders. The Board reviews and approves corporate objectives and strategies, and evaluates significant policies and proposed major commitments of corporate resources. It participates in decisions that have a potential major economic impact on GTC. Management keeps the directors informed of company activities through regular written reports and presentations at Board and committee meetings.

Independence

Our Board of Directors has determined that Messrs. Baldridge, Bauer, Bullock, Geraghty, Landine, Miller, Tuck, and Ms. McNamara are “independent directors” under the applicable listing standards of the NASDAQ National Market governing the independence of directors.

Board Meetings and Committees

Our Board of Directors held seven meetings during 2004, five of which included executive sessions at which no members of management were present. Each of the directors then in office attended at least 75% of the aggregate of all meetings of the Board and all meetings of the committees of the Board on which such director then served. Directors are asked to attend each annual meeting of stockholders, barring significant commitments or special circumstances. All directors attended our 2004 Annual Meeting.

Stockholder Communications

Any stockholder wishing to communicate with our Board of Directors, a particular director or any committee of the Board may do so by sending written correspondence to our principal executive offices, c/o Vice President, Corporate Communications. All such communications will be delivered to the Board or the applicable director or committee chair.

Our Board has three standing committees: the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee. The members of all of our standing committees are non-employee directors.

Audit Committee

The Audit Committee has authority to select and engage our independent registered public accountants and is responsible for reviewing our audited financial statements, accounting processes and reporting systems and discussing the adequacy of our internal financial controls with our

management and our independent registered public accountants. The Audit Committee also reviews the performance of the independent registered public accountants in the annual audit and in assignments unrelated to the audit, assesses the independence of the independent registered public accountants, and reviews their fees. The current members of this committee are Messrs. Tuck (Chair) and Baldridge and Ms. McNamara. Our Board of Directors has considered and determined that each of the members of the Audit Committee satisfies the independence and financial literacy requirements under the applicable listing standards of the NASDAQ National Market governing the qualifications of Audit Committee members. The Board has also determined that Mr. Tuck, who has an M.B.A. degree and has served as the chief executive officer of a biotechnology company, qualifies as an “audit committee financial expert” as defined under the rules of the Securities and Exchange Commission. The Board also noted that Mr. Baldridge has substantial experience in investment banking and consulting and has served as the chief executive officer of a biotechnology company, and Ms. McNamara has served as the chief executive officer of an international consulting firm and currently serves as the chief executive officer of a clinical trial data management and mobile technology company.

The Audit Committee held ten meetings during fiscal year 2004. The Audit Committee operates under a written charter adopted by the Board, which is available on our web site at www.gtc-bio.com/investorinfo/corporategovernance.html. For more information about the Audit Committee, see “Report of the Audit Committee” in this proxy statement.

Compensation Committee

Our Compensation Committee is responsible for establishing cash compensation policies with respect to our executive officers, employees, directors and consultants, determining the compensation to be paid to our executive officers and administering our equity incentive and stock purchase plans. The current members of the Compensation Committee are Messrs. Bullock (Chair), Miller and Tuck. The Compensation Committee held four meetings during fiscal year 2004. This committee operates under a written charter, which is available on our website at www.gtc-bio.com/investorinfo/corporategovernance.html. Our Board has determined that all of the Compensation Committee members meet the independence requirements under the listing standards of the NASDAQ National Market governing the independence of directors.

Nominating and Corporate Governance Committee

Our Nominating and Corporate Governance Committee identifies individuals qualified to become Board members and recommends to the Board the director nominees for the next annual meeting of stockholders and candidates to fill vacancies on the Board. Additionally, the committee recommends to the Board the directors to be appointed to Board committees. The Nominating and Corporate Governance Committee also develops and recommends to the Board a set of corporate governance guidelines applicable to the Board and to GTC and oversees the effectiveness of our corporate governance in accordance with those guidelines. This committee currently consists of the eight non-management directors, each of whom the Board has determined meets the independence requirements

under the applicable listing standards of the NASDAQ National Market governing the independence of directors. This committee held two meetings during fiscal year 2004, in addition to three executive sessions conducted in conjunction with regular meetings of the Board. The Nominating and Corporate Governance Committee operates pursuant to a written charter, which is available on our website at www.gtc-bio.com/investorinfo/corporategovernance.html.

The Nominating and Corporate Governance Committee considers candidates for Board membership suggested by its members and other Board members. Additionally, in selecting nominees for directors, the Nominating and Corporate Governance Committee will review candidates recommended by stockholders in the same manner and using the same general criteria as candidates recruited by the committee and/or recommended by the Board. The Nominating and Corporate Governance Committee will also consider whether to nominate any person nominated by a stockholder in accordance with the provisions of GTC’s by-laws relating to stockholder nominations as described in “Deadline for Stockholder Proposals and Director Nominations” below.

Once the Nominating and Corporate Governance Committee has identified a prospective nominee, a subcommittee of the Nominating and Corporate Governance Committee makes an initial determination as to whether to conduct a full evaluation of the candidate. This initial determination is based on the information provided to the subcommittee with the recommendation of the prospective candidate, as well as the subcommittee’s own knowledge of the prospective candidate, which may be supplemented by inquiries of the person making the recommendation or others. The preliminary determination is based primarily on the need for additional Board members to fill vacancies or expand the size of the Board and the likelihood that the prospective nominee can satisfy the evaluation factors described below. Based on the recommendation of the subcommittee, the full committee then evaluates the prospective nominee against the standards and qualifications set out in our Corporate Governance Guidelines, which include among others:

•

whether the prospective nominee meets the independence requirements defined under the applicable listing standards of the NASDAQ National Market and audit committee financial expert requirements defined under applicable Securities and Exchange Commission rules and regulations;

•

the extent to which the prospective nominee’s skills, experience and perspective add to the range of talent appropriate for the Board and whether such attributes are relevant to our industry;

•

the prospective nominee’s ability to dedicate the time and resources sufficient for the diligent performance of Board duties; and

•

the extent to which the prospective nominee holds any position that would conflict with responsibilities to GTC.

If the Nominating and Corporate Governance Committee’s internal evaluation is positive, the subcommittee and possibly others will interview the candidate. Upon completion of this evaluation and interview process, the Nominating and Corporate Governance Committee makes a

recommendation and report to the full Board as to whether the candidate should be nominated by the Board and the Board determines whether to approve the nominee after considering this recommendation and report.

Director Compensation

Director Fees. Our directors who are not employees of GTC receive compensation for their services as directors in the form of an annual retainer of $12,000, payable in quarterly installments. Directors who are GTC employees do not receive compensation for their service as directors. Members of the Compensation and Nominating and Corporate Governance Committees also receive an annual retainer of $2,000, payable quarterly, and the Chair of each of those committees receives an annual retainer of $3,000, payable quarterly. Members of the Audit Committee receive an annual retainer of $4,000, payable quarterly, and the Chair receives an annual retainer of $6,000, payable quarterly. In addition, each non-employee director receives $1,000 for attendance in person (or $500 for participation by conference call) for each Board meeting and each standing committee meeting other than a standing committee meeting held in conjunction with a Board meeting, plus reimbursement of reasonable expenses incurred in attending or otherwise participating in such meetings.

Stock Options. All non-employee directors of GTC are currently eligible to participate in our 2002 Equity Incentive Plan, as Amended and Restated. The Board of Directors has discretion as to the size, type, and exercisability of awards granted to non-employee directors under the 2002 Equity Incentive Plan, as Amended and Restated.

Certain Relationships and Transactions with Related Parties

Since our initial public offering in 1993, we have entered into several agreements with Genzyme Corporation which are summarized below. In fiscal year 2004, we paid Genzyme an aggregate of approximately $2,919,077 under the research and development agreement, the services agreement and the lease agreement described below. In addition, Mr. Geraghty is an executive employed by Genzyme.

Equity Position. Genzyme is our largest single stockholder, holding 4,924,919 shares of common stock as of March 31, 2005, which represents approximately 10.56% of our then outstanding common stock. Genzyme also holds four common stock purchase warrants exercisable for 145,000, 288,000, 55,833 and 29,491 shares of common stock at prices of $2.84, $4.88, $6.30 and $6.30 per share, respectively, which were the market prices of the common stock at the time the respective Genzyme warrants were issued. The expiration dates of these warrants range from July 2005 through November 2009. All of the shares held by Genzyme (including shares issuable on exercise of Genzyme warrants) are entitled to registration rights. Genzyme owns approximately 11.54% of our common stock on a fully diluted basis.

Stock Buyback. On April 4, 2002, we repurchased 2.82 million shares of our common stock directly from Genzyme which was recorded as treasury stock. We bought the shares for an aggregate

consideration of approximately $9.6 million, consisting of approximately $4.8 million in cash and a promissory note to Genzyme for the remaining $4.8 million. Our common stock was valued at $3.385 per share in this transaction, using the simple average of the high and low transaction prices quoted on the NASDAQ National Market on the previous trading day. Genzyme agreed to a 24-month lock-up provision on their remaining 4.92 million shares of common stock, which was released on April 4, 2004. The $4.8 million promissory note bears interest at the LIBOR plus 1% (LIBOR was at 2.51% at January 2, 2005). The principal is payable in two installments: $2.4 million which was due and paid on April 4, 2005 and the remaining $2.4 million which is due on April 4, 2006. This note is collateralized by a subordinated lien on all our assets except intellectual property. In February 2005, we expanded our term loan with GE Capital to allow us to draw down an additional $2.4 million, which was used to refinance the note payment due to Genzyme on April 4, 2005.

Research and Development Agreement. Under our Research and Development Agreement dated May 1, 1993, we and Genzyme each agreed to provide to the other research and development services relating, in the case of GTC, to transgenic production of recombinant proteins and, in the case of Genzyme, to the purification of such proteins. Each company receives payments from the other equal to the performing party’s fully allocated cost of such services, which can be no less than 80% of the annual budgets established by the parties under the agreement on a month-to-month basis, plus, in most cases, a fee equal to 10% of such costs. The agreement expired on December 31, 1998 and the parties are continuing under this agreement on a month-to-month basis. On July 31, 2001, we entered into a services agreement with Genzyme under which Genzyme may perform manufacturing, research and development and regulatory services for our ATryn^® program on a cost plus 5% basis. In fiscal year 2004, we purchased $2,390,000 under this arrangement. In June of 2003, we entered into a services agreement under which we provide certain services to Genzyme for which Genzyme paid us a monthly amount based upon a rate we agreed upon with Genzyme. Services to be performed under this June 2003 agreement continued until December 31, 2004.

Lease. Under the Sublease Agreement, we lease certain laboratory, research and office space from Genzyme in exchange for fixed monthly rent payments which approximate the estimated current rental value for such space. In addition, we reimburse Genzyme for our pro rata share of appropriate facilities’ operating costs such as maintenance, cleaning, utilities and real estate taxes. The sublease is automatically renewed each year and renewals are subject to earlier termination of the sublease by either party after the initial five-year term. Under the Sublease Agreement, we made payments for the fiscal year 2004 of $352,000.

Compensation Committee Interlocks and Insider Participation

No person serving on the Compensation Committee at any time during fiscal year 2004 was a present or former officer or employee of GTC or any of our subsidiaries during that year. During 2004, no executive officer of GTC served as a member of the board of directors or compensation committee (or other board committee performing equivalent functions) of any other entity that had an executive officer serving on our Board of Directors or Compensation Committee.

Executive Compensation

The following tables contain information regarding our Named Executive Officers’ compensation during fiscal year 2004:

Summary Compensation Table

								Long-Term Compensation Awards
			Annual Compensation
Name and Position	Year		Salary			Bonus		Securities Underlying Options		All Other Compensation (1)
Geoffrey F. Cox		2004	$	428,134	(2)	$	94,100		76,000	$	6,150
Chairman, Chief Executive		2003		420,056			110,000		125,000		6,000
Officer and President		2002		420,055			112,420		140,000		152,434	(3)

John B. Green		2004		275,197	(2)		46,170		26,000		6,150
Senior Vice President, Chief		2003		267,255			48,519		50,000		6,000
Financial Officer and Treasurer		2002		257,005			50,321		50,000		6,000

Gregory F. Liposky(4)		2004		253,662	(5)		44,370		36,000		6,150
Senior Vice President, Operations		2003		227,894			44,643		45,000		6,000
		2002		220,022			41,976		50,000		6,000

Harry M. Meade		2004		268,053	(2)		44,184		26,000		5,125
Senior Vice President, Research		2003		260,784			44,105		45,000		6,000
and Development		2002		249,482			47,068		50,000		6,000

Daniel S. Woloshen(4)		2004		233,412	(2)		35,724		26,000		6,150
Senior Vice President and General		2003		229,000			42,800		45,000		6,000
Counsel		2002		219,023			41,347		35,000		6,000

(1)

Unless otherwise noted, the amounts in this column represent our contributions to GTC’s 401(k) plan on behalf of the Named Executive Officer.

(2)

Reflects salary paid over a 53-week fiscal year. The annual salary for the Named Executive Officer did not increase from 2003 to 2004.

(3)

Includes reimbursement of $149,434 for relocation expenses.

(4)

First became an executive officer during 2002. Information provided includes compensation received during the entire year 2002.

(5)

Reflects increase in salary of $19,200 and salary paid over a 53-week fiscal year.

Option Grants in 2004 Fiscal Year

	Individual Grants
										Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Option Term (1)
Name	Number of Securities Underlying Options Granted			Percent of Total Options Granted to Employees in Fiscal Year		Exercise Price per Share		Expiration Date		5%		10%
Geoffrey F. Cox		75,000	(2)		9.42	$	3.96		2/13/2014	$	186,782	$	473,342
		1,000	(3)		0.13		2.25		12/9/2014		1,415		3,586
John B. Green		25,000	(2)		3.14		3.96		2/13/2014		62,261		157,781
		1,000	(3)		0.13		2.25		12/9/2014		1,415		3,586
Gregory F. Liposky		35,000	(2)		4.40		3.96		2/13/2014		87,165		220,893
		1,000	(3)		0.13		2.25		12/9/2014		1,415		3,586
Harry M. Meade		25,000	(2)		3.14		3.96		2/13/2014		62,261		157,781
		1,000	(3)		0.13		2.25		12/9/2014		1,415		3,586
Daniel S. Woloshen		25,000	(2)		3.14		3.96		2/13/2014		62,261		157,781
		1,000	(3)		0.13		2.25		12/9/2014		1,415		3,586

(1)

The values in this column are given for illustrative purposes only. They do not reflect our estimate or projection of our future stock price. The values are based on an assumption that our common stock’s market price will appreciate at the stated rate, compounded annually, from the date of the option grant until the end of the option’s term. Actual gains, if any, on stock option exercises will depend upon future performance of our common stock’s price, which will benefit all stockholders proportionately. In order to realize the potential values set forth in the 5% and 10% columns of this table at the end of a typical ten-year option term, the per share price of our common stock would have to be approximately 63% and 159%, respectively, above the total weighted average exercise price of all options described above ($3.92). The potential value to all our stockholders if our price appreciates at rates of 5% and 10% over ten years would be $95,530,288 and $242,092,505, respectively, assuming a purchase of common stock in 2003 at $3.92 per share and 38,799,974 shares outstanding.

(2)

These options were granted on February 13, 2004 under our 2002 Equity Incentive Plan, as Amended and Restated, and became exercisable with respect to 20% of the shares on the grant date. The remaining 80% of the underlying shares will vest in four equal installments on the first four anniversaries of the grant date.

(3)

These options were granted on December 9, 2004 under our 2002 Equity Incentive Plan, as Amended and Restated, and became exercisable with respect to 20% of the shares on the grant date. The remaining 80% of the underlying shares will vest in four equal installments on the first four anniversaries of the grant date.

Fiscal Year-End Option Table

The following table provides information on the total number of exercisable and unexercisable stock options held at January 2, 2005 by the Named Executive Officers. None of the Named Executive Officers exercised any options during fiscal year 2004.

	Number of Securities Underlying Unexercised Options at Fiscal Year-End					Value of Unexercised In-the-Money Options at Fiscal Year-End(1)
Name	Exercisable		Unexercisable		Exercisable		Unexercisable
Geoffrey F. Cox		392,200		248,800	$	3,500	$	5,250
John B. Green		205,321		77,800		0		195,472
Gregory F. Liposky		112,200		80,800		1,260		84,816
Harry M. Meade		162,996		71,800		1,260		1,890
Daniel S. Woloshen		98,600		65,400		1,260		1,890

(1)

Based on the difference between the option’s exercise price and a closing price of $1.52 for the underlying common stock on December 31, 2004 (our last business day of fiscal year 2004) as reported by the NASDAQ National Market.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table sets out the status of securities authorized for issuance under our equity compensation plans at January 2, 2005:

Equity Compensation Plan Information

Plan Category			(b) Weighted-average exercise price of outstanding options, warrants and rights
Equity compensation plans/arrangements approved by the stockholders (1)	4,025,798	(2)	$	5.22	3,005,358
Equity compensation plans/arrangements not approved by the stockholders	0			—	0
Total	4,025,798		$	5.22	3,005,358

(1)

Includes the 1993 Equity Incentive Plan, the 2002 Equity Incentive Plan, as Amended and Restated, and the 2003 Employee Stock Purchase Plan.

(2)

Does not include purchase rights accruing under the 2003 Employee Stock Purchase Plan because the purchase price (and therefore the number of shares to be purchased) will not be determined until the end of the purchase period.

(3)

Includes 554,030 shares issuable under the 2003 Employee Stock Purchase Plan and 2,451,328 shares issuable under the 2002 Equity Incentive Plan, as Amended and Restated.

(4)

Up to 10% of the awards under the 2002 Equity Incentive Plan, as Amended and Restated, may be issued as restricted or unrestricted stock awards. For purposes of this limitation, awards subject to performance vesting and awards granted in lieu of cash bonuses are disregarded.

Executive Employment Agreements

Geoffrey F. Cox. Under the terms of Dr. Cox’s employment agreement entered into in July 2001, Dr. Cox is entitled to a minimum base salary of $31,667 per month ($380,000 on an annualized basis), and is eligible to receive performance and incentive bonuses of not less than 40% of his then current base salary, based on the achievement of certain individual and corporate objectives established jointly by Dr. Cox and the Compensation Committee. In calendar year 2004, which was a 53-week fiscal year, Dr. Cox received a base salary of $428,134.

John B. Green. Under Mr. Green’s employment agreement entered into in August 1997, Mr. Green is entitled to a minimum base salary of $150,000 per year, plus performance and incentive bonuses as determined by the Compensation Committee. In calendar year 2004, which was a 53-week fiscal year, Mr. Green received a base salary of $275,197.

Harry M Meade. Under Dr. Meade’s employment agreement, he is entitled to a minimum base salary of $126,000 per year, plus performance and incentive bonuses as determined by the Compensation Committee. In calendar year 2004, which was a 53-week fiscal year, Dr. Meade received a base salary of $268,053.

Each of these agreements will remain in effect until terminated according to its terms. In the event that we terminate any of these executive officers without cause, the executive officer will immediately be paid the maximum annual bonus for the year he is terminated, prorated for the portion of the year completed, and his then current base salary for a specified severance period, together in one lump sum. Dr. Cox is also entitled to such payments if he terminates his agreement for “good reason” after a “change of control” of GTC and Mr. Green and Dr. Meade are entitled to such payments if either of them terminates his agreement after a “change of control” of GTC, as such terms are defined in their respective employment agreements. In the case of Dr. Cox, the severance period is two years. In the case of Mr. Green, the severance period in the event of a “change of control” is two years and in the event of termination without cause is one year. In the case of Dr. Meade, the severance period is one year. If Dr. Meade terminates his agreement upon a change of control, his severance payments will be reduced by any income that he derives from a subsequent employer during the severance period. In addition, upon a change of control of GTC, any unvested stock options held by these executive officers would become immediately exercisable in full. In the case of Dr. Cox, such options will remain exercisable for a period of two years and in the case of

Mr. Green and Dr. Meade, such options will remain exercisable for the duration of the term of such options as if the termination had not occurred.

Messrs. Liposky and Woloshen. Messrs. Liposky and Woloshen entered into Management Agreements in June 2000 and May 1999, respectively. The Management Agreements provide that the executive will receive benefits and severance payments for a one year period at his then current base salary if GTC terminates the executive’s employment without cause. In Mr. Woloshen’s case, without cause includes a change in control.

Compensation Committee Report on Executive Compensation

The Compensation Committee of the Board of Directors determines the compensation to be paid to GTC’s executive officers, including its Chief Executive Officer. The Committee also administers GTC’s employee stock purchase and equity incentive plans, including grants of stock options and other awards. The Committee is currently composed of Messrs. Bullock (Chairman), Miller and Tuck. This report is submitted by the Committee and addresses the compensation policies for fiscal year 2004 as they affected Dr. Cox, as Chairman, President and Chief Executive Officer, and GTC’s four other executive officers who are named in this year’s Summary Compensation Table.

Compensation Philosophy

GTC’s executive compensation policy is designed to attract, retain and reward executive officers who contribute to GTC’s long-term success by maintaining a competitive salary structure as compared with other biotechnology companies. The compensation program seeks to align compensation with the achievement of business objectives and individual and corporate performance. Bonuses are included to encourage effective individual performance relative to GTC’s current plans and objectives. Stock option grants are key components of the executive compensation program and are intended to provide executives with an equity interest in GTC to link a meaningful portion of the executive’s compensation with the performance of GTC’s common stock.

In executing its compensation policy, the Committee seeks to relate compensation with GTC’s financial performance and business objectives as well as to reward each executive’s achievement of designated targets relating to GTC’s annual and long-term performance and individual fulfillment of responsibilities. While compensation survey data are useful guides for comparative purposes, GTC believes that a successful compensation program also requires the application of judgment and subjective determinations of individual performance. To that extent, the Committee applies its judgment in reconciling the program’s objectives with the realities of retaining valued employees.

Executive Compensation Program

The Company’s executive compensation package for the Chief Executive Officer and the other executive officers is composed of three elements:

•

base salary;

•

annual incentive bonuses based on corporate and individual performance; and

•

initial, annual and other periodic grants of stock options under the equity plans.

Executive Officers other than CEO

Base Salary. Our executive officers (other than the Chief Executive Officer whose compensation is addressed separately below) have employment agreements with GTC which set a minimum annual base salary based upon the executive’s salary history and internal and external equity considerations. At the beginning of fiscal year 2004, the Compensation Committee reviewed the base salaries actually paid to all executive officers during the prior year. With the exception of one executive officer, the annual base salaries for these executive officers remained at their 2003 levels for fiscal year 2004. In the case of Mr. Liposky, the Committee increased his salary in recognition of his increased responsibilities.

Incentive Bonus. For fiscal year 2004, the Committee established a target bonus opportunity for each executive officer. The target bonus opportunity could be exceeded by up to 20% of the target for exceptional corporate and individual performance. Two thirds of the 2004 bonus potential was tied to company-wide goals and one third was tied to the Committee’s judgment of each individual’s performance measured against goals determined by the Chief Executive Officer. In February 2005, the Compensation Committee reviewed with the Chief Executive Officer the performance of each executive officer and determined the bonus to be paid to each of them based on company performance measured against the company-wide goals and the achievement of the individual’s performance goals for 2004. The portion of bonuses based on company-wide goals included assessment of performance measured against a number of goals in the areas of GTC’s clinical development, transgenic production capabilities, external programs, business development and financial performance, and other performance goals agreed upon between the Committee and the Chief Executive Officer. In 2004, the incentive bonuses awarded to executive officers ranged from 52% to 58% of their target bonuses, which resulted in bonus payments to the executive officers ranging from approximately 16% to 22% of their base salaries. The Committee determined that approximately 25% of executive bonuses would be paid in GTC common stock, with the remainder paid in cash.

Stock Options. Executive officer compensation also includes long-term incentives through GTC’s stock option program, the purpose of which is to:

•

highlight and reinforce the mutual, long-term interests between employees and the stockholders; and

•

to assist in the attraction and retention of important key executives, managers and individual contributors who are essential to GTC’s growth and development.

In February 2004, the Committee approved annual stock option grants to each of GTC’s executive officers. The size of stock option awards is generally intended to reflect the significance of the executive’s current and anticipated contributions to GTC’s overall performance. For each stock

option grant, 20% vested immediately and the balance vests 20% annually over four years. The exercise price per share of the stock options is equal to the fair market value of a share of GTC common stock on the date of grant. Awards to the Named Executive Officers are detailed in the “Summary Compensation Table” in this proxy statement.

In December 2004, the Committee approved option awards to each GTC employee to purchase 1,000 shares of GTC common stock in recognition of the company-wide effort to respond to the regulatory requirements of our European Medicines Agency submission for ATryn^®. As employees, each of GTC’s executive officers received such an award. The options have an exercise price of $2.25 per share, which is 150% of the price of GTC common stock when the options were granted.

Chief Executive Officer

The Compensation Committee determines the compensation of Dr. Cox as GTC’s Chairman, President and Chief Executive Officer, based upon the same factors as those employed by the Committee for executive officers generally. In addition, the Committee weighs Dr. Cox’s leadership, industry prominence and GTC’s overall performance as important criteria upon which his compensation is based. His performance goals for 2004 had comparable components to those for the other executive officers. Two thirds of his 2004 bonus potential was tied to company-wide goals and one third was tied to the Committee’s judgment of his individual performance measured against previously agreed upon goals determined by the Committee and Dr. Cox.

At the request of Dr. Cox, there was no increase to his salary in either 2003 or 2004 and, therefore, Dr. Cox’s salary remained at its 2002 level. During fiscal year 2004, Dr. Cox received a base salary of $428,134, which reflects a 53-week fiscal year. As a result of GTC’s performance measured against company-wide goals and Dr. Cox’s achievements compared to his individual goals during 2004, the Committee in February 2005 awarded him a bonus of $94,100, which is equal to approximately 22% of his base salary in 2004. The Committee determined that approximately 25% of his bonus would be paid in GTC common stock, with the remainder paid in cash. In February 2004, the Committee granted Dr. Cox an option to purchase 75,000 shares of GTC common stock, of which 20% vested immediately and the balance vests 20% annually over four years. The exercise price per share of the stock options is equal to the fair market value of a share of GTC’s common stock on the date of grant. In addition, in December 2004, the Committee awarded Dr. Cox an option to purchase 1,000 shares of Common Stock as part of the one-time company-wide grant of options described above.

Compensation Deductibility

Section 162(m) of the Internal Revenue Code denies a tax deduction to a public corporation for annual compensation in excess of one million dollars paid to its Chief Executive Officer and its four other highest compensated officers. This provision excludes certain types of “performance based compensation” from the compensation subject to the limit. The Committee does not expect to pay any one covered employee salary and bonus for 2005 that could exceed one million dollars. In addition, GTC’s 2002 Equity Incentive Plan, as Amended and Restated, contains an individual annual

limit on the number of stock options and stock appreciation rights that may be granted under the plan so that such awards will qualify for the exclusion from the limitation on deductibility for performance-based compensation. In light of pending changes by the Financial Accounting Standards Board to the accounting standards governing the treatment of equity-based compensation, GTC is also expected to seek stockholder approval next year of general business criteria upon which other types of cash and equity incentive awards may be made in the future on a fully-deductible basis. The Committee believes, however, that in some circumstances factors other than tax deductibility are more important in determining the forms and levels of executive compensation most appropriate and in the best interests of GTC and its stockholders. Given our industry and business, as well as the competitive market for outstanding executives, we believe that it is important for the Committee to retain the flexibility to design compensation programs consistent with its executive compensation philosophy for GTC, even if some executive compensation is not fully deductible. Accordingly, the Committee may from time to time approve elements of compensation for certain executives that are not fully deductible.

By the Compensation Committee,

Francis J. Bullock, Chair
Marvin L. Miller
Alan W. Tuck

STOCK PERFORMANCE GRAPH

The following graph compares the cumulative total stockholder return on our common stock with the cumulative total stockholder return of the S&P 500 Composite Index and the NASDAQ Pharmaceutical Index during the period from January 2, 2000 to January 2, 2005. The NASDAQ Pharmaceutical Index is comprised of pharmaceutical and biotechnology companies with the SIC Code 283 (Division/Manufacturing, Major Group/Chemical and Allied Products, Industry Group/Drugs) whose securities are traded on the NASDAQ National Market. We believe the NASDAQ Pharmaceutical Index is representative of our peer biotechnology companies.

This graph assumes an initial investment of $100 on January 2, 2000 in our common stock, the S&P 500 Composite Index and the NASDAQ Pharmaceutical Index, with all dividends, if any, being reinvested. The total stockholder return is measured by dividing the share price change of the respective securities plus dividends, if any, for each fiscal year shown by the share price at the end of the particular fiscal year.

Comparison of the Cumulative Total Return
Among GTC Biotherapeutics, Inc.
the S&P 500 Index and the NASDAQ Pharmaceutical Index


GTC Biotherapeutics, Inc.	100.00	113.37	46.81	8.87	23.76	12.04
NASDAQ Pharmaceutical Index	100.00	123.92	105.27	64.88	93.59	101.16
S&P 500 Composite Index	100.00	90.89	80.09	62.39	80.29	89.02

AUDITORS

Report of the Audit Committee

The following is the report of the Audit Committee with respect to GTC’s audited financial statements for the year ended January 2, 2005.

The purpose of the Audit Committee is to assist the Board in fulfilling its responsibility to oversee GTC’s accounting and financial reporting, internal control and audit functions. The Audit Committee is comprised entirely of independent directors as defined by applicable NASDAQ Stock Market standards.

Management is responsible for our internal controls and the financial reporting process. The independent registered public accounting firm is responsible for performing independent audits of our consolidated financial statements and management’s assessment of the effectiveness of internal controls over financial reporting in accordance with the standards established by the Public Company Accounting Oversight Board (United States) and issuing a report thereon. The Committee’s responsibility is to monitor these processes. The Audit Committee has reviewed and discussed the consolidated financial statements with management and PricewaterhouseCoopers LLP, our independent registered public accounting firm.

In the course of its oversight of GTC’s financial reporting process, the Audit Committee of the Board of Directors has:

•

reviewed and discussed with management and PricewaterhouseCoopers LLP, GTC’s audited financial statements for the fiscal year ended January 2, 2005;

•

discussed with the independent registered public accountant the matters required to be discussed by Statement on Auditing Standards No. 61,Communication with Audit Committees;

•

received the written disclosures and the letter from the independent registered public accountant required by Independence Standards Board Standard No. 1,Independence Discussions with Audit Committees;

•

reviewed with management and the independent registered public accountant GTC’s critical accounting policies;

•

discussed with management the quality and adequacy of GTC’s internal controls over financial reporting;

•

discussed with PricewaterhouseCoopers LLP any relationships that may impact their objectivity and independence; and

•

considered whether the provision of non-audit services by the independent registered public accountant is compatible with maintaining the registered public accountant’s independence.

Based on the foregoing review and discussions, the Committee recommended to the Board of Directors that the audited financial statements be included in GTC’s Annual Report on Form 10-K for the year ended January 2, 2005 for filing with the Securities and Exchange Commission.

By the Audit Committee,

Alan W. Tuck, Chair
Robert W. Baldridge
Pamela W. McNamara

Independent Registered Public Accountants’ Fees and Other Matters

The firm of PricewaterhouseCoopers LLP, an independent registered public accounting firm, has audited our consolidated financial statements for the year ended January 2, 2005 and management’s assessment of the effectiveness of internal controls over financial reporting at January 2, 2005. The Audit Committee appointed PricewaterhouseCoopers LLP to serve as our independent registered public accountant for the 2004 year-end audit and to review our quarterly financial reports for filing with the Securities and Exchange Commission during fiscal year 2005. Representatives of PricewaterhouseCoopers LLP are expected to attend the annual meeting and will be available to respond to appropriate questions. They will also have the opportunity to make a statement if they desire.

The following table shows the fees paid or accrued by us for professional services performed by PricewaterhouseCoopers LLP for fiscal years 2004 and 2003:

	2004		2003
Audit Fees(1)	$	440,200	$	231,000
Audit-Related Fees(2)		—		27,000
Tax Fees(3)		35,142		48,286
All Other Fees(4)		1,500		—
Total	$	476,842	$	306,286

(1)

Audit fees represent fees for professional services provided in connection with the audits of our annual consolidated financial statements and management’s assessment of the effectiveness of internal controls over financial reporting and review of our quarterly financial statements and audit services provided in connection with other statutory or regulatory filings.

(2)

Audit-related fees are for assurance and related services and consisted primarily of audits of employee benefit plans and consultations regarding accounting, regulatory and financial reporting matters. All audit-related services were pre-approved by the Audit Committee.

(3)

For fiscal 2004 and 2003, tax fees principally included tax compliance fees of $35,142 and $25,000, respectively, and tax advice and tax planning fees of $0 and $23,286, respectively.

(4)

All other fees include technical research materials.

Pre-Approval Policy

In accordance with the Audit Committee’s Charter, the Audit Committee pre-approves the proposed services, including the scope of services contemplated and the related fees, associated with the current year audit. The Audit Committee has adopted policies and procedures for the pre-approval of non-audit services for the purpose of maintaining the independence of our independent registered public accountant. Management must obtain the specific prior approval of the Audit Committee for each engagement of the independent registered public accountant to perform any non-audit services that exceed the pre-approved amounts. In 2004, the Audit Committee pre-approved specific non-audit services subject to cost limits to be performed by PricewaterhouseCoopers LLP in order to assure that these services do not impair the independent registered public accountant’s independence. All of the non-audit services rendered by PricewaterhouseCoopers LLP in the 2004 fiscal year were pre-approved by the Audit Committee in accordance with these limits.

ADDITIONAL INFORMATION

Deadline for Stockholder Proposals and Director Nominations

Assuming the 2006 Annual Meeting of Stockholders is not held before April 25, 2006 or after June 24, 2006, if you wish to bring business before or propose director nominations at the 2006 Annual Meeting, you must give written notice to GTC by March 11, 2006 (the date 75 days before the anniversary of the 2005 Annual Meeting).

If you intend to bring such a proposal or nomination at the 2006 Annual Meeting, and you would like us to consider the inclusion of your proposal or nomination in our proxy statement for the meeting, you must provide written notice to GTC of such proposal or nomination prior to December 23, 2005.

Any stockholder wishing to recommend a director candidate for consideration by the Nominating and Corporate Governance Committee should provide the following information to Vice President, Corporate Communications, c/o GTC Biotherapeutics, Inc., 175 Crossing Boulevard, Framingham, Massachusetts 01702: (a) a brief statement outlining the reasons the nominee would be an effective director for GTC; (b)(i) the name, age and business and residence addresses of the candidate, (ii) the principal occupation or employment of the candidate for the past five years, as well as information about any other board of directors and board committee on which the candidate has served during that period, (iii) the number of shares of our common stock, if any, beneficially owned by the candidate and (iv) details of any business or other significant relationship the candidate has ever had with GTC; and (c)(i) the stockholder’s name and record address and the name and address of the beneficial owner of shares of our common stock, if any, on whose behalf the proposal is made and (ii) the number of shares of our common stock that the stockholder and any such other beneficial owner beneficially own. The Nominating and Corporate Governance Committee may seek further information from or about the stockholder making the recommendation, the candidate, or any such other beneficial owner, including information about all business and other relationships between the candidate and the stockholder and between the candidate and any such other beneficial owner.

Householding of Annual Meeting Materials

Some banks, brokers and other nominee record holders may be participating in the practice of “householding” proxy statements and annual reports. This means that only one copy of our proxy statement or annual report may have been sent to multiple stockholders in your household. We will promptly deliver a separate copy of either document to you if you write or call us at the following address or phone number: GTC Biotherapeutics, Inc., 175 Crossing Boulevard, Framingham, Massachusetts 01702, Attention: Vice President, Corporate Communications (508-620-9700 x5374). If you wish to receive separate copies of the annual report and proxy statement in the future, or if you are receiving multiple copies and would like to receive only one copy for your household, you should contact your bank, broker, or other nominee record holder, or you may contact us at the above address and phone number.

FORM OF PROXY CARD

GTC BIOTHERAPEUTICS, INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS ON MAY 25, 2005

The undersigned stockholder of GTC Biotherapeutics, Inc. (the “Company”) hereby appoints Geoffrey F. Cox, John B. Green and Nathaniel S. Gardiner, or any of them acting singly, the attorneys and proxies of the undersigned, with full power of substitution, to vote on behalf of the undersigned all of the shares of capital stock of the Company that the undersigned is entitled to vote at the Annual Meeting of Stockholders of the Company to be held at 2:00 p.m. local time on Wednesday, May 25, 2005 at the Forefront Center for Meetings and Conferences, 404 Wyman Street, Waltham, Massachusetts, and at all adjournments thereof, hereby revoking any proxy heretofore given with respect to such shares.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY THE UNDERSIGNED STOCKHOLDER(S). IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED “FOR” THE ELECTION OF THE NOMINEES LISTED IN PROPOSAL 1. AND IN ACCORDANCE WITH THE DETERMINATION OF A MAJORITY OF THE BOARD OF DIRECTORS AS TO ANY OTHER MATTERS.

THE UNDERSIGNED STOCKHOLDER MAY REVOKE THIS PROXY AT ANY TIME BEFORE IT IS VOTED BY DELIVERING EITHER A WRITTEN NOTICE OF REVOCATION OF THE PROXY OR A DULY EXECUTED PROXY BEARING A LATER DATE TO THE SECRETARY, OR BY ATTENDING THE 2005 ANNUAL MEETING AND VOTING IN PERSON. THE UNDERSIGNED STOCKHOLDER HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING AND PROXY STATEMENT FOR THE 2005 ANNUAL MEETING.

PLEASE SIGN, DATE AND RETURN THIS PROXY CARD AS SOON AS
POSSIBLE USING THE ENCLOSED REPLY ENVELOPE

(CONTINUED AND TO BE SIGNED AND DATED ON REVERSE SIDE.)

(REVERSE SIDE OF PROXY CARD)

2005 ANNUAL MEETING OF STOCKHOLDERS OF

GTC BIOTHERAPEUTICS, INC.

MAY 25, 2005

VOTE BY INTERNET – www.proxyvote.com

Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and then follow the instructions to submit an electronic voting instruction form.

ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS

If you would like to reduce the costs incurred by GTC Biotherapeutics in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access shareholder communications electronically in future years.

VOTE BY PHONE - 1-800-690-6903

Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.

VOTE BY MAIL

Mark, sign, and date your proxy card and return it in the postage-paid envelope we have provided.

PLEASE DATE, SIGN AND RETURN YOUR
PROXY CARD IN THE ENVELOPE PROVIDED AS SOON AS POSSIBLE.


Please mark your vote in blue or black ink as shown here x
		FOR all nominees	FOR ALL EXCEPT (see instructions below)	WITHHELD AUTHORITY for all nominees

1.	Proposal to elect three directors	¨	¨	¨

	Nominees:	Francis J. Bullock	¡
		Geoffrey F. Cox	¡
		Alan W. Tuck	¡

INSTRUCTION: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here: =


To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method		¨

Please indicate if you plan to attend the meeting	¨	¨
	Yes	No



Signature of Stockholder or Authorized Representative	Date	Signature of Stockholder or Authorized Representative (joint owners)	Date

Note: Please sign exactly as your name or names appear on this proxy. When shares are held jointly, each joint holder should personally sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.

rEVO Biologics (GTCB) Inactive DEF 14ADefinitive proxy