Exhibit 10.20
GENZYME CORPORATION DIRECTORS' DEFERRED
COMPENSATION PLAN
ARTICLE I
GENERAL
1.1 ESTABLISHMENT OF PLAN. Genzyme Corporation ("Genzyme") hereby
establishes the Genzyme Directors' Deferred Compensation Plan (the "plan"),
effective as of May 16, 1996, to allow each member of the Genzyme Board of
Directors who is not also an officer or employee of Genzyme to defer receipt of
all or a portion of the cash compensation payable to him or her as a director of
Genzyme until his or her termination of service as a director or, subject to
requirements set forth in Section 3.1, such other date as may be specified by
him or her.
1.2 NO RIGHT TO CORPORATE ASSETS. This plan is unfunded and Genzyme
will not be required to set aside, segregate, or deposit any funds or assets of
any kind to meet its obligations hereunder. Nothing in this plan will give a
participant, a participant's beneficiary or any other person any equity or other
interest in the assets of Genzyme, or create a trust of any kind or a fiduciary
relationship of any kind between Genzyme and any such person. Any rights that a
participant, beneficiary or other person may have under this plan will be solely
those of a general unsecured creditor of Genzyme.
1.3 LIMITATION ON RIGHTS CREATED BY PLAN. Nothing in this plan will
give a participant any right to continue as a director of Genzyme.
1.4 NONALIENATION OF BENEFITS. The rights and benefits of a participant
in this plan are personal to the participant. No interest, right or claim under
this plan and no distribution therefrom will be assignable, transferable or
subject to sale, mortgage, pledge, hypothecation, anticipation, garnishment,
attachment, execution or levy, except by designation of beneficiaries as
provided in Section 3.6.
1.5 BINDING EFFECT OF PLAN. This plan will be binding upon and inure to
the benefit of participants and designated beneficiaries and their heirs,
executors and administrators, and to the benefit of Genzyme and its assigns and
successors in interest.
1.6 ADMINISTRATION. This plan will be administered by the Clerk of
Genzyme who will have sole responsibility for its interpretation.
1.7 INTERPRETATION. This plan will be construed, enforced and
administered according to the laws of the Commonwealth of Massachusetts.
ARTICLE II
DEFERRAL OF COMPENSATION
2.1 DEFERRAL AGREEMENT. Any active member of the Board of Directors of
Genzyme who is not an officer or employee of Genzyme or its subsidiaries (an
"outside director") is eligible to participate in this plan. An outside director
may participate in the plan by executing an agreement before the first day of
any calendar quarter in which such agreement will take effect authorizing
Genzyme to defer all or a portion of his or her compensation as director (the
"deferral agreement"). A deferral agreement will remain in effect for each
succeeding calendar quarter unless the participant files a written revocation or
superseding deferral agreement with the Clerk. A deferral agreement for any
particular quarter is irrevocable after the last day of the immediately
preceding calendar quarter.
2.2 AMOUNT OF DEFERRAL. Each participant may elect in his or her
deferral agreement to defer 25 percent, 50 percent, 75 percent or 100 percent of
the total cash compensation paid to the participant as an outside director of
Genzyme.
2.3 DEFERRAL ACCOUNT. For bookkeeping purposes only, the Clerk will
establish and maintain an account (the "deferral account") for each participant
which documents the compensation deferred by the participant, earnings credited
to the account and payments from the account. The deferral account will consist
of a subaccount for amounts earning interest, which will be denominated on a
dollar basis (the "cash account"), and a subaccount for amounts invested in
hypothetical shares of Genzyme Common Stock, $0.01 par value ("Genzyme Stock")
which will be denominated on a share basis (the "stock account"). Each
participant will indicate in his or her deferral agreement the percentage of
future deferrals to be invested in the cash account and the stock account.
Amounts may not be transferred between the cash account and the stock account.
2.4 CASH ACCOUNT. As of the first day of each calendar quarter, the
Clerk will credit to the participant's cash account an amount equal to the
amount of compensation otherwise payable to the participant in the preceding
calendar quarter which the participant has elected to defer and invest in the
cash account. As of the last day of each calendar quarter, the Clerk will credit
interest on the balance in the cash account on that date at the rate paid on
90-day Treasury bills hypothetically purchased on the first day of such calendar
quarter. For a participant receiving installment payments, interest will be
credited on the balance from time to time remaining in the cash account until
the account has been completely paid.
2.5 STOCK ACCOUNT. As of the first day of each calendar quarter, the
Clerk will credit to the participant's stock account a number of shares of
Genzyme Stock equal to the amount of compensation otherwise payable to the
participant in the preceding calendar quarter which the participant has elected
to defer and invest in Genzyme Stock divided by the stock price for Genzyme
Stock. The stock price shall mean the average of the closing price of Genzyme
Stock for all trading days during the applicable calendar quarter as reported by
the Nasdaq National Market. As of the date of payment of any cash dividend on
Genzyme Stock, the Clerk will credit to the stock account a number of shares of
Genzyme Stock upon which such dividend was declared equal to (i) the cash
dividend per share times the number of shares credited to the stock account as
of the dividend record date divided by (ii) the closing price for Genzyme Stock
on the date of payment of the dividend. As of the date of payment of any stock
dividend on Genzyme Stock, the Clerk will credit to the stock account a number
of shares equal to the stock dividend declared times the number of shares of
Genzyme Stock upon which such dividend was declared credited to the stock
account as of the dividend record date. In the event of any stock dividend,
recapitalization, reorganization, merger, consolidation, split-up, spin-off,
exchange of shares or similar change affecting Genzyme Stock, appropriate
adjustment will be made in the number and/or kind of shares credited to the
stock account. The stock account is maintained for bookkeeping purposes only.
Prior to distribution to a participant under Section 3.3 or 3.4, shares credited
to the stock account are not considered actual shares of common stock of Genzyme
for any purpose and a participant will have no rights as a stockholder with
respect to such shares. Shares will include fractional shares computed to three
decimal places.
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2.6 SHARES SUBJECT TO THE PLAN. The aggregate number of shares of
Common Stock which may be optioned under this plan is 105,962 shares of Genzyme
Stock. In the event of any stock dividend, split-up, combination or
reclassification of shares, recapitalization or similar capital change relating
to the common stock, the maximum aggregate number and kind of shares or
securities of Genzyme that may be issued under the plan shall be appropriately
adjusted by the Genzyme Board of Directors (whose determination shall be
conclusive).
ARTICLE III
PAYMENT OF DEFERRED COMPENSATION
3.1 COMMENCEMENT OF PAYMENT. Each participant will elect in his or her
deferral agreement to have payments commence in the calendar year following his
or her termination of service as a director or such other calendar year as may
be specified; provided, however, that if a participant elects to have payments
commence in a calendar year other than the calendar year following his or her
termination of service as a director, the earliest calendar year that a
participant may elect to have payments commence shall be the second calendar
year following the date of such election. For example, a deferral agreement
executed in 1996 may not specify a payment commencement date earlier than 1998.
Such election will be irrevocable.
3.2 ELECTION OF FORM OF PAYMENT. Each participant will elect in his or
her deferral agreement to have his or her deferral account paid in either a lump
sum or in annual installments for a period specified by the participant, which
period may not exceed five years.
3.3 LUMP SUM PAYMENTS. A participant who elects to have his or her
deferral account paid in a lump sum will receive the lump sum payment on or
before March 1 of the year specified in the deferral agreement for commencement
of payment. The lump sum payment will consist of (a) cash in the amount credited
to his or her cash account, and (b) subject to Section 3.5, the number of shares
of Genzyme Stock credited to his or her stock account; provided, however, that
no fractional shares will be issued under the plan and the number of shares
issued will be rounded down to the nearest full share.
3.4 INSTALLMENT PAYMENTS. A participant who elects to have his or her
deferral account paid in annual installments will receive an installment payment
on or before March 1 of each year that installments are due commencing with the
year specified in his or her deferral agreement. Each installment payment will
consist of (a) cash in the amount credited to his or her cash account on the
date of payment divided by the number of annual installments remaining to be
paid, and (b) subject to Section 3.5, the number of shares of Genzyme Stock
credited to his or her stock account divided by the number of annual
installments remaining to be paid; provided, however, that no fractional shares
will be issued under the plan and the number of shares issued will be rounded
down to the nearest full share.
3.5 LIMITATION ON STOCK DISTRIBUTIONS. If a participant would receive
any payment from his or her stock account before the end of the period during
which his or her transactions in Genzyme's equity securities are subject to
reporting under Section 16 of the Securities Act of 1933, such payments shall be
made in accordance with Section 3.3 or 3.4, as applicable, except that in lieu
of shares, the participant shall receive cash in an amount equal to the number
of shares of Genzyme Stock in his or her stock account times the closing price
for Genzyme Stock as of the trading day preceding the date of distribution.
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3.6 BENEFICIARIES. A participant may designate in his or her deferral
agreement a beneficiary or beneficiaries (which may be an entity other than a
natural person) to receive any payments to be made upon his or her death. A
participant may elect to have payments to beneficiaries paid in a lump sum or in
annual installments for a period not to exceed five years. At any time, and from
time to time, a participant may change or revoke his or her designation of
beneficiary or form of payment without the consent of any beneficiary. Any such
designation, change or revocation must be made in writing and filed with the
Clerk. If the participant designates more than one beneficiary, any payments to
beneficiaries will be made in equal percentages unless the participant
designates otherwise. Any portion of a participant's deferral account that is
not disposed of by designation of beneficiary upon the participant's death will
be paid to his or her estate.
3.7 PAYMENTS ON DEATH. If a participant dies before full payment of his
or her deferral account, Genzyme will make payments to the participant's
designated beneficiary or beneficiaries, or to his or her estate, of the amount
remaining in the deceased participant's deferral account. Such payments will be
in the form designated by the participant and will commence on the first day of
the calendar quarter following the death of the participant (or as soon
thereafter as practicable) and, in the case of annual installments, will be paid
on or before March 1 of each succeeding year.
3.8 HARDSHIP DISTRIBUTIONS FROM ACCOUNTS. The Clerk may, in his
discretion, distribute a portion or all of a participant's cash account in case
of the participant's financial hardship. The Clerk will determine the date of
payment of the distribution. Hardship distributions are not permitted from a
participant's stock account.
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ARTICLE IV
AMENDMENT AND TERMINATION
4.1 AMENDMENT. Genzyme may, without the consent of any participant,
beneficiary or other person, amend the plan at any time and from time to time;
provided, however, that no amendment will reduce the amount credited to the
deferral account of any participant.
4.2 TERMINATION. Genzyme may terminate the plan at any time. Upon
termination of the plan, payments from a participant's deferral account shall be
made in the manner and at the time prescribed in Article III; provided, however,
that Genzyme may, in its discretion, distribute a participant's deferral account
in a lump sum as soon as practicable after the date the plan is terminated.
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