Exhibit 10.2
EXECUTIVE SEVERANCE AGREEMENT
This Executive Severance Agreement (the "AGREEMENT"), is entered into
effective as of ___________ between Genzyme Corporation (the "COMPANY"), a
Massachusetts corporation with its principal executive offices at One Kendall
Square, Cambridge, Massachusetts 02139, and ________________ (the "EXECUTIVE")
residing at ______________________________________.
The Compensation Committee (the "COMMITTEE") of the Board of Directors
of the Company (the "BOARD") has determined that it is in the best interests of
the Company and its stockholders to assure that the Company will have the
continued dedication of the Executive, notwithstanding the possibility, threat
or occurrence of a Change in Control (as defined in Section 3(i) hereof) of the
Company. The Committee believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change in Control, to encourage the
Executive's full attention and dedication to the Company currently and in the
event of any threatened or pending Change in Control, and to provide the
Executive with compensation arrangements upon a Change in Control which provide
the Executive with individual financial security and which are competitive with
those of other corporations and, in order to accomplish these objectives the
Committee, pursuant to the authority delegated to it by the Board, has caused
the Company to enter into this Agreement.
Accordingly, the parties agree as follows:
1. SEVERANCE BENEFITS. In order to induce the Executive to remain in
the employ of the Company and in consideration of (i) the Executive's agreement
set forth in Subsection 3(iv) hereof and (ii) the Executive's execution and
delivery of the Non-Compete Agreement referred to in Subsection 6(i) hereof, the
Company agrees that the Executive shall receive the severance benefits set forth
in this Agreement in the event his or her employment with the Company is
terminated subsequent to a Change in Control (as defined in Subsection 3(i)
hereof) under the circumstances described below.
2. TERM OF AGREEMENT. This Agreement shall commence on the date hereof
and shall continue in effect through December 31, 2002; provided, however, that
commencing on December 31, 2002 and each December 31 thereafter, the term of
this Agreement shall automatically be extended for one additional year unless,
not later than September 30 of such year, the Company shall have given notice
that it does not wish to extend this Agreement (provided that no such notice may
be given during the pendency of a Potential Change in Control, as defined in
Section 3(ii) hereof). If a Change in Control shall have occurred during the
original or extended term of this Agreement, this Agreement shall continue in
effect for a period of thirty-six (36) months beyond the month in which the
Change in Control occurred. Notwithstanding anything provided herein to the
contrary, the term of this Agreement shall not extend beyond the end of the
month in which the Executive attains "normal retirement age" under the
provisions of the Company's benefit plans (the "BENEFIT PLANS") or, if the
Benefit Plans do not so provide, the Executive reaches age sixty-five (65).
3. CHANGE IN CONTROL; POTENTIAL CHANGE IN CONTROL.
(i) No benefits shall be payable hereunder unless there shall have been
a Change in Control. For purposes of this Agreement, a "CHANGE IN CONTROL" shall
be deemed to have occurred if:
(A) any "person" (as defined below), other than the Company,
any trustee or other fiduciary holding securities under an employee
benefit plan of the Company or a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company, is or
becomes the "beneficial owner" (as defined below), directly or
indirectly, of securities of the Company representing 50% or more of
the combined voting power of the Company's then outstanding securities;
(B) during any period of twenty-four (24) consecutive months
(not including any period prior to the date of this Agreement),
individuals who at the beginning of such period constitute the Board
and any new director (other than a director designated by a person who
has entered into an agreement with the Company to effect a transaction
described in paragraphs (A), (C) or (D) of this Section 3(i)) whose
election by the Board or nomination for election by the Board or by the
stockholders of the Company was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of such period or whose election or
nomination for election was previously so approved (such directors in
office from time to time, the "CONTINUING DIRECTORS"), cease for any
reason to constitute a majority thereof;
(C) there is consummated a merger, share exchange or
consolidation of the Company with any other corporation or business
entity or the sale or other disposition of all or substantially all of
the Company's assets (each, a "BUSINESS COMBINATION"), other than (1) a
Business Combination that would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of another entity) beneficial ownership, directly or
indirectly, of a majority of the combined voting power of the Company
or the surviving entity (including any person that, as a result of such
transaction, owns all or substantially all of the Company's assets
either directly or through one or more subsidiaries) outstanding
immediately after such Business Combination or (2) a merger, share
exchange or consolidation effected to implement a recapitalization of
the Company (or similar transaction) following which no person is or
becomes the beneficial owner of 50% or more of the combined voting
power of the Company's then outstanding securities; or
(D) the stockholders of the Company approve a plan of complete
liquidation of the Company.
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(ii) For purposes of this Agreement, a "POTENTIAL CHANGE IN CONTROL"
shall be deemed to have occurred if:
(A) the Company enters into an agreement with any person, the
consummation of which would result in the occurrence of a Change in
Control;
(B) any person, including the Company, publicly announces an
intention to take or consider taking actions which if consummated would
constitute a Change in Control, unless the Board adopts a resolution in
good faith setting forth its determination that such announcement is
not sufficiently creditable to constitute a Potential Change in Control
for purposes of this Agreement;
(C) any person, other than the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of the
Company or a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company (1) is or becomes the
beneficial owner, (2) discloses directly or indirectly to the Company
or publicly a plan or intention to become the beneficial owner, or (3)
makes a filing under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, with respect to securities to become the
beneficial owner, directly or indirectly, of securities representing
50% or more of the combined voting power of the outstanding voting
securities of the Company; or
(D) the Board adopts a resolution to the effect that, for
purposes of this Agreement, a Potential Change in Control of the
Company has occurred.
(iii) For purposes of this Section 3, "PERSON" shall have the same
meaning as when used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended (the "EXCHANGE ACT"), and "BENEFICIAL OWNER" shall have the
same meaning as when used in Rule 13d-3 under the Exchange Act.
(iv) The Executive agrees that, subject to the terms and conditions of
this Agreement, in the event of a Potential Change in Control, he or she will
remain in the employ of the Company until the earliest of (A) a date which is
one (1) year from the occurrence of such Potential Change in Control, (B) the
termination by the Executive of his or her employment after he or she attains
"normal retirement age" or by reason of death or Disability as defined in
Section 4(ii), (C) the date of the occurrence of a Change in Control, or (D) the
determination in good faith by the Board that the event creating such Potential
Change in Control has ceased to exist.
4. TERMINATION FOLLOWING CHANGE IN CONTROL.
(i) If any of the events described in Subsection 3(i) hereof
constituting a Change in Control shall have occurred, the Executive shall be
entitled to the benefits provided in Subsection 5(iii) hereof upon the
subsequent termination of his or her employment during the term of this
Agreement unless such termination is (A) because of the Executive's death or
Disability, (B) by the Company for Cause, or (C) by the Executive other than for
Good Reason.
(ii) DISABILITY. If, as a result of the Executive's incapacity due to
physical or mental illness, he or she shall have been absent from the full-time
performance of his or her duties with the Company for nine (9) consecutive
months, and within thirty (30) days after written notice of
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termination is given he or she shall not have returned to the full-time
performance of his or her duties, the Executive's employment may be terminated
for "Disability."
(iii) CAUSE. Termination by the Company of the Executive's employment
for "CAUSE" shall mean termination upon (A) the willful and continued failure by
him or her to substantially perform his or her duties with the Company (other
than any such failure resulting from his or her incapacity due to physical or
mental illness or any such actual or anticipated failure after the issuance of a
Notice of Termination by him or her for Good Reason (as defined in Subsection
(iv) below)) after a written demand for substantial performance is delivered to
the Executive by the Board, which demand specifically identifies the manner in
which the Board believes that he or she has not substantially performed his or
her duties, or (B) the willful engaging by the Executive in conduct which is
demonstrably and materially injurious to the Company, monetarily or otherwise.
For purposes of this Subsection, no act, or failure to act, on the Executive'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. Notwithstanding the foregoing,
the Executive shall not be deemed to have been terminated for Cause unless and
until there shall have been delivered to him or her a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters (3/4) of the
entire membership of the Board at a meeting of the Board called and held for
such purpose (after reasonable notice to the Executive and an opportunity for
him, together with his or her counsel, to be heard before the Board), finding
that in the good faith opinion of the Board the Executive was guilty of conduct
set forth above in this Subsection and specifying the particulars thereof in
detail.
(iv) GOOD REASON. The Executive shall be entitled to terminate his or
her employment for Good Reason. For purposes of this Agreement, "GOOD REASON"
shall mean (A) during the nine (9) month period following a Change in Control, a
good faith determination by the Executive that as a result of such Change in
Control, he or she is not able to discharge his or her duties effectively or (B)
without the Executive's express written consent, the occurrence after a Change
in Control of any of the following circumstances:
(1) the assignment to the Executive of any duties inconsistent
(except in the nature of a promotion) with the position in the Company
that he or she held immediately prior to the Change in Control or a
substantial adverse alteration in the nature or status of his or her
position or responsibilities or the conditions of his or her employment
from those in effect immediately prior to the Change in Control;
(2) a reduction by the Company in the Executive's annual base
salary as in effect on the date hereof or as the same may be increased
from time to time;
(3) the Company's requiring the Executive to be based more
than twenty-five (25) miles from the Company's offices at which he or
she was principally employed immediately prior to the date of the
Change in Control except for required travel on the Company's business
to an extent substantially consistent with his or her present business
travel obligations;
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(4) the failure by the Company to pay to the Executive any
portion of his or her current compensation or compensation under any
deferred compensation program of the Company, within seven (7) days of
the date such compensation is due;
(5) the failure by the Company to continue in effect any
material compensation or benefit plan in which the Executive
participates immediately prior to the Change in Control unless an
equitable arrangement (embodied in an ongoing substitute or alternative
plan) has been made with respect to such plan, or the failure by the
Company to continue the Executive's participation therein (or in such
substitute or alternative plan) on a basis not materially less
favorable, both in terms of the amount of benefits provided and the
level of his or her participation relative to other participants, than
existed at the time of the Change in Control;
(6) the failure by the Company to continue to provide the
Executive with benefits substantially similar to those enjoyed by him
or her under any of the Company's pension, life insurance, medical,
health and accident, or disability plans in which he or she was
participating at the time of the Change in Control, the taking of any
action by the Company which would directly or indirectly materially
reduce any of such benefits or deprive the Executive of any material
fringe benefit enjoyed by him or her at the time of the Change in
Control, or the failure by the Company to provide the Executive with
the number of paid vacation days to which he or she is entitled on the
basis of his or her years of service with the Company in accordance
with the Company's normal vacation policy in effect at the time of the
Change in Control;
(7) the failure of the Company to obtain a satisfactory
agreement from any successor to assume and agree to perform this
Agreement, as contemplated in Section 5 hereof; or
(8) any purported termination of the Executive's employment
which is not effected pursuant to a Notice of Termination satisfying
the requirements of Subsections (v) and (vi) below (and, if applicable,
the requirements of Subsection (iii) above), which purported
termination shall not be effective for purposes of this Agreement.
The Executive's right to terminate his or her employment pursuant to
this Subsection shall not be affected by his or her incapacity due to physical
or mental illness. The Executive's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any circumstance constituting
Good Reason hereunder.
(v) NOTICE OF TERMINATION. Any purported termination of the Executive's
employment by the Company or by the Executive following a Change in Control or
while a Potential Change in Control is pending, shall be communicated by written
Notice of Termination to the other party hereto in accordance with Section 8
hereof. For purposes of this Agreement, a "NOTICE OF TERMINATION" shall mean a
notice which shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated.
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(vi) DATE OF TERMINATION, ETC. "DATE OF TERMINATION" shall mean (A) if
the Executive's employment is terminated for Disability, thirty (30) days after
Notice of Termination is given (provided that the Executive shall not have
returned to the full-time performance of his or her duties during such thirty
(30) day period), and (B) if the Executive's employment is terminated pursuant
to Subsection (iii) or (iv) above or for any other reason (other than
Disability), the date specified in the Notice of Termination (which, in the case
of a termination pursuant to Subsection (iii) above shall not be less than
thirty (30) days, and in the case of a termination pursuant to Subsection (iv)
above shall not be less than fifteen (15) nor more than sixty (60) days,
respectively, from the date such Notice of Termination is given); provided that
if within fifteen (15) days after any Notice of Termination is given, or, if
later, prior to the Date of Termination (as determined without regard to this
proviso), the party receiving such Notice of Termination notifies the other
party that a dispute exists concerning the termination, the Date of Termination
shall be the date on which the dispute is finally determined, either by mutual
written agreement of the parties or by a binding arbitration award; and provided
further that the Date of Termination shall be extended by a notice of dispute
only if such notice is given in good faith and the party giving such notice
pursues the resolution of such dispute with reasonable diligence. During the
pendency of any such dispute, (1) the Executive shall not be required to report
for work or otherwise continue to perform his or her duties with the Company and
(2) the Company will continue to pay to the Executive his or her full
compensation in effect when the notice giving rise to the dispute was given
(including, but not limited to, base salary) and, to the extent permissible by
law, continue the Executive and his or her dependents as a participant in all
compensation, benefit and insurance plans in which he or she or they were
participating when the notice giving rise to the dispute was given, until the
dispute is finally resolved in accordance with this Subsection. Amounts paid
under this Subsection are in addition to all other amounts due under this
Agreement and shall not reduce any other amounts due under this Agreement.
5. COMPENSATION UPON TERMINATION OR DURING DISABILITY FOLLOWING A
CHANGE IN CONTROL. Following a Change in Control, upon either termination of the
Executive's employment, or during a period of Disability, he or she shall be
entitled to the following benefits:
(i) During any period that the Executive fails to perform his or her
full-time duties with the Company as a result of incapacity due to physical or
mental illness, he or she shall continue to receive his or her base salary at
the rate in effect at the commencement of any such period, together with all
compensation payable to him or her under the Company's disability plan or
program or other similar plan during such period, until this Agreement is
terminated pursuant to Section 4(ii) hereof. Thereafter, or in the event the
Executive's employment shall be terminated by reason of his or her death, the
Executive's benefits shall be determined under the Company's retirement,
insurance and other compensation programs then in effect in accordance with the
terms of such programs.
(ii) If the Executive's employment shall be terminated by the Company
for Cause or by the Executive other than for Good Reason, the Company shall pay
him or her his or her full base salary through the Date of Termination at the
rate in effect at the time Notice of Termination is given, plus all other
amounts to which he or she is entitled under any compensation or benefit plan of
the Company at the time such payments are due, and the Company shall have no
further obligations to the Executive under this Agreement.
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(iii) If the Executive's employment by the Company shall be terminated
(a) by the Company other than for Cause or Disability, or (b) by the Executive
for Good Reason, then he or she shall be entitled to the benefits provided
below:
(A) the Company shall pay the Executive his or her full base
salary through the Date of Termination at the rate in effect at the
time Notice of Termination is given, plus all other amounts to which he
or she is entitled under any compensation or benefit plan of the
Company, at the time such payments are due, except as otherwise
provided below;
(B) in lieu of any further salary payments to the Executive
for periods subsequent to the Date of Termination, the Company shall
pay as severance pay to the Executive a lump sum severance payment
(together with the payments provided in paragraphs (D), (E), (F) and
(G) below, the "SEVERANCE Payments") equal to two (2) times the sum of
(1) the greater of (a) his or her annual rate of base salary in effect
on the Date of Termination or (b) his or her annual rate of base salary
in effect immediately prior to the Change in Control and (2) the
greatest of (a) the average of the last two annual bonuses (annualized
in the case of any bonus paid with respect to a partial year) paid to
him or her preceding the Date of Termination, (b) the average of the
last two annual bonuses (annualized in the case of any bonus paid with
respect to a partial year) paid to him or her preceding the Change in
Control, (c) the most recent annual bonus (annualized in the case of
any bonus paid with respect to a partial year) paid to him or her
preceding the Date of Termination, or (d) the most recent annual bonus
(annualized in the case of any bonus paid with respect to a partial
year) paid to him or her preceding the Change in Control;
(C) the Company shall also pay to the Executive, within five
(5) days after any such fees or expenses are incurred, all legal fees
and expenses incurred by him or her as a result of or in connection
with such termination, including all such fees and expenses, if any,
incurred in contesting or disputing any such termination or in seeking
to obtain or enforce any right or benefit provided by this Agreement
(other than any such fees or expenses incurred in connection with any
such claim which is determined by arbitration, in accordance with
Section 12 of this Agreement, to be frivolous) or in connection with
any tax audit or proceeding to the extent attributable to the
application of Section 4999 of the Internal Revenue Code of 1986, as
amended (the "CODE"), to any payment or benefit provided hereunder;
(D) for a twenty-four (24) month period after such
termination, the Company shall arrange to provide, at its cost, the
Executive and his or her dependents with life, disability, accident and
health insurance benefits substantially similar to those which he or
she and they are receiving immediately prior to the Notice of
Termination. Benefits otherwise receivable by the Executive pursuant to
this Subsection 5(iii)(D) shall be reduced to the extent comparable
benefits are actually received by him or her from a subsequent employer
during the twenty-four (24) month period following his or her
termination, and any such benefits actually received by him or her
shall be reported to the Company;
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(E) in addition to the retirement benefits to which the
Executive is entitled under the Benefit Plans, any supplemental
retirement or excess benefit plan maintained by the Company or any of
its subsidiaries or any successor plans thereto (hereinafter
collectively referred to as the "PENSION Plans"), the Company shall pay
the Executive in cash a lump sum equal to the excess of (a) the
actuarial equivalent of the retirement pension (taking into account any
early retirement subsidies associated therewith and determined as a
straight life annuity commencing at age sixty-five (65) or any earlier
date, but in no event earlier than the second anniversary of the Date
of Termination, whichever annuity the actuarial equivalent of which is
greatest) which the Executive would have accrued under the terms of the
Pension Plans (without regard to the limitations imposed by Section
401(a)(17) of the Code, any temporary freeze on benefit accruals under
the Pension Plans pursuant to Internal Revenue Service Notice 88-131 or
any amendment to the Pension Plans made subsequent to a Change in
Control and on or prior to the Date of Termination, which amendment
adversely affects in any manner the computation of retirement benefits
thereunder), determined as if the Executive was fully vested thereunder
and had continued to be employed by the Company (after the Date of
Termination) for twenty-four (24) additional months and as if he or she
had accumulated twenty-four (24) additional months of compensation (for
purposes of determining his or her pension benefits thereunder), each
in an amount equal to the sum of the amounts determined under clauses
(1) and (2) of Section 5(iii)(B) hereof (but in no event shall the
Executive be deemed to have continued to be employed by the Company
after his or her normal retirement age) over (b) the actuarial
equivalent of the vested retirement pension (taking into account any
early retirement subsidies associated therewith and determined as a
straight life annuity commencing at age sixty-five (65) or any earlier
date, but in no event earlier than the Date of Termination, whichever
annuity the actuarial equivalent of which is greatest) which the
Executive had then accrued pursuant to the provisions of the Pension
Plans. For purposes of this Subsection, "actuarial equivalent" shall be
determined using the same actuarial assumptions utilized in determining
the amount of alternate forms of benefits under the Benefit Plans
immediately prior to the Change in Control;
(F) should the Executive move his or her residence in order to
pursue other business opportunities within one (1) year of the Date of
Termination, the Company shall pay him or her, within five (5) days
after any such expenses are incurred, an amount equal to the expenses
incurred by him or her in connection with such relocation (including
expenses incurred in selling his or her home to the extent such
expenses were customarily reimbursed by the Company to transferred
executives prior to the Change in Control) and which are not reimbursed
by another employer; and
(G) the Company shall pay, within five (5) days after such
fees and expenses are incurred, all fees and expenses of any executive
recruiting, counseling or placement firm selected by the Executive for
the purpose of seeking new employment within one (1) year of the Date
of Termination, provided that such cost shall not exceed $30,000.00.
(iv) Amounts payable to the Executive shall be reduced as set forth
below.
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(A) For purposes of this Subsection (iv), (1) "PAYMENT" shall
mean any Payment or distribution in the nature of compensation to or for the
benefit of the Executive, whether paid or payable pursuant to this Agreement or
otherwise; (2) "AGREEMENT PAYMENT" shall mean a Payment paid or payable pursuant
to this Agreement (disregarding this Subsection (iv)); (3) "NET AFTER TAX
RECEIPT" shall mean the Present Value of a Payment net of all taxes imposed on
the Executive with respect thereto under Sections 1 and 4999 of the Code,
determined by applying the highest marginal rate under Section 1 of the Code
which applied to the Executive's taxable income for the immediately preceding
taxable year; (4) "PRESENT VALUE" shall mean such value determined in accordance
with Section 280G(d)(4) of the Code; and (5) "REDUCED AMOUNT" shall mean the
smallest aggregate amount of Payments which (a) is less than the sum of all
Payments and (b) results in aggregate Net After Tax Receipts which are equal to
or greater than the Net After Tax Receipts which would result if the aggregate
Payments were any other amount less than the sum of all Payments.
(B) Anything in this Agreement to the contrary
notwithstanding, in the event PricewaterhouseCoopers LLP or a successor
accounting firm of national reputation (the "ACCOUNTING FIRM") shall determine
the receipt of all Payments would subject the Executive to tax under Section
4999 of the Code, it shall determine whether some amount of Payments would meet
the definition of a "Reduced Amount." If the Accounting Firm determines that
there is a Reduced Amount, the aggregate Agreement Payments shall be reduced to
such Reduced Amount; provided, however, that if the Reduced Amount exceeds the
aggregate Agreement Payments, the aggregate Payments shall, after the reduction
of all Agreement Payments, be reduced (but not below zero) in the amount of such
excess.
(C) If the Accounting Firm determines that aggregate Agreement
Payments or Payments, as the case may be, should be reduced to the Reduced
Amount, the Company shall promptly give the Executive notice to that effect and
a copy of the detailed calculation thereof, and the Executive may then elect, in
his or her sole discretion, which and how much of the Payments shall be
eliminated or reduced (as long as after such election the present value of the
aggregate Payments equals the Reduced Amount), and shall advise the Company in
writing of his or her election within ten days of his or her receipt of notice.
If no such election is made by the Executive within such ten-day period, the
Company may elect which and how much of the Agreement Payments or Payments, as
the case may be, shall be eliminated or reduced (as long as after such election
the present value of the aggregate Agreement Payments or Payments, as the case
may be, equals the Reduced Amount) and shall notify the Executive promptly of
such election. All determinations made by the Accounting Firm under this
Subsection shall be binding upon the Company and the Executive, and shall be
made within sixty (60) days of a termination of employment of the Executive. As
promptly as practicable following such determination, the Company shall pay to
or distribute for the benefit of the Executive such Payments as are then due to
the Executive under this Agreement and shall promptly pay to or distribute for
the benefit of the Executive in the future such Payments as become due to the
Executive under this Agreement.
(D) While it is the intention of the Company and the Executive
to reduce the amounts payable or distributable to the Executive hereunder only
if the aggregate Net After Tax
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Receipts to the Executive would thereby be increased, as a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
amounts will have been paid or distributed by the Company to or for the benefit
of the Executive pursuant to this Agreement which should not have been so paid
or distributed ("OVERPAYMENT") or that additional amounts which will have not
been paid or distributed by the Company to or for the benefit of the Executive
pursuant to this Agreement could have been so paid or distributed
("UNDERPAYMENT"), in each case, consistent with the calculation of the Reduced
Amount hereunder. In the event that the Accounting Firm, based either upon the
assertion of a deficiency by the Internal Revenue Service against the Company or
the Executive which the Accounting Firm believes has a high probability of
success or controlling precedent or other substantial authority, determines that
an OverPayment has been made, any such OverPayment paid or distributed by the
Company to or for the benefit of the Executive shall be treated for all purposes
as a loan AB INITIO to the Executive which the Executive shall repay to the
Company (together with interest at the rate provided for in Section
1274(b)(2)(B) of the Code); provided, however, that no such loan shall be deemed
to have been made and no amount shall be payable by the Executive to the Company
if and to the extent such deemed loan and Payment would not either reduce the
amount on which the Executive is subject to tax under Section 1 and Section 4999
of the Code or generate a refund of such taxes. In the event that the Accounting
Firm, based upon controlling precedent or other substantial authority,
determines that an UnderPayment has occurred, any such UnderPayment shall be
promptly paid by the Company to or for the benefit of the Executive (together
with interest at the rate provided for in Section 1274(b)(2)(B) of the Code).
(v) Except as otherwise specifically provided in paragraph (C), (F) and
(G) thereof, the payments provided for in Subsection (iii) shall be made not
later than the fifth day following the Date of Termination; provided, however,
that if the amounts of such payments cannot be finally determined on or before
such day, the Company shall pay to the Executive on such day an estimate, as
determined in good faith by the Company, of the minimum amount of such payments
and shall pay the remainder of such payments (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can
be determined but in no event later than the thirtieth day after the Date of
Termination. In the event that the amount of the estimated payments exceeds the
amount subsequently determined to have been due, such excess shall constitute a
loan by the Company to the Executive payable on the fifth day after demand
therefor by the Company (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code).
(vi) The Executive shall not be required to mitigate the amount of any
payment provided for in this Section 5 by seeking other employment or otherwise,
nor shall the amount of any payment or benefit provided for in this Section 5 be
reduced by any compensation earned by the Executive as the result of employment
by another employer, by retirement benefits or otherwise, except to the extent
expressly so provided.
6. NON-COMPETE AND NON-SOLICITATION.
(i) This Agreement shall not take effect and shall be null and void
unless the Executive executes (or has executed) a non-compete and
non-solicitation agreement substantially in the form attached hereto as Exhibit
A (the "NON-COMPETE AGREEMENT").
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(ii) By accepting this Agreement, the Executive consents to a deduction
from any amounts the Company or any of its affiliates owes the Executive from
time to time (including amounts owed to the Executive under this Agreement and
any amounts owed to Executive as wages or other compensation, fringe benefits,
or vacation pay) any amounts the Executive owes the Company as a result of a
monetary award or settlement in favor of the Company arising out of Executive's
breach of the Non-Compete Agreement. Whether or not the Company elects to make a
deduction in whole or in part, if the Company does not recover by means of
deduction the full amount the Executive owes it, the Executive agrees to pay
immediately the unpaid balance to the Company.
7. SUCCESSORS; BINDING AGREEMENT.
(i) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company to expressly assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had taken
place. Failure of the Company to obtain such assumption and agreement prior to
the effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Executive to compensation from the Company or its successor in
the same amount and on the same terms as he or she would be entitled to
hereunder if he or she terminates his or her employment for Good Reason
following a Change in Control, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination. As used in this Agreement, "COMPANY" shall mean
the Company as hereinbefore defined and any successor to its business or assets
as aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
(ii) This Agreement shall inure to the benefit of and be enforceable by
the Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should
die while any amount would still be payable to him or her hereunder if he or she
had continued to live, all such amounts, unless otherwise provided herein, shall
be paid in accordance with the terms of this Agreement to his or her devisee,
legatee or other designee or, if there is no such designee, to his or her
estate.
8. NOTICE. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Agreement, provided
that all notices to the Company shall be directed to the attention of the Board
with a copy to the Secretary of the Company, or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon receipt.
9. MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by
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the Executive and such officer as may be specifically designated by the Board or
the Committee. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the Commonwealth of Massachusetts, without giving effect to the
conflicts of law principles thereof. All references to sections of the Exchange
Act or the Code shall be deemed also to refer to any successor provisions to
such sections. Any payments provided for hereunder shall be paid net of any
applicable withholding required under federal, state or local law. The
obligations of the Company under Section 5 shall survive the expiration of the
term of this Agreement.
10. VALIDITY. The invalidity or unenforceability or any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
11. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
12. ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration
conducted before a panel of three arbitrators in the Commonwealth of
Massachusetts in accordance with the Employment Dispute Resolution rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. Notwithstanding the
foregoing, the Executive shall be entitled to seek specific performance of his
or her right to be paid until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection with this Agreement.
13. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement of
the parties hereto in respect of the subject matter contained herein and
supersedes the provisions of all prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto with
respect to the subject matter hereof.
14. EFFECTIVE DATE. This Agreement shall become effective as of the
date first set forth above.
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IN WITNESS WHEREOF, the Company, pursuant to due authorization by its
Board of Directors, and the Executive have caused this Agreement to be duly
executed under seal as of the date first written above.
GENZYME CORPORATION
By: ________________________________
Print Name: ________________________
Title: _____________________________
EXECUTIVE
By: ________________________________
Print Name: ________________________
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Schedule to Executive Severance Agreement
The following is a list of our executive officers who are party to an Executive
Severance Agreement, the form of which is filed herewith:
Mara G. Aspinall
Mark R. Bamforth
Earl M. Collier, Jr.
Zoltan A. Csimma
Thomas J. DesRosier
Richard H. Douglas
David D. Fleming
James A. Geraghty
John V. Heffernan
Elliott D. Hillback, Jr.
Alison F. Lawton
Gail J. Maderis
David J. McLachlan
John M. McPherson
Ann C. Merrifield
Richard A. Moscicki
Donald E. Pogorzelski
Alan E. Smith
Sandford D. Smith
Christine M. van Heek
G. Jan van Heek
Michael S. Wyzga
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