SC 14D9/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14D-9

SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934

(Amendment No. 18)

GENZYME CORPORATION

(Name of Subject Company)

GENZYME CORPORATION

(Name of Person(s) Filing Statement)

Common Stock, par value $0.01 per share
(Title of Class of Securities)

372917104
(CUSIP Number of Common Stock)

Peter Wirth
Executive Vice President
Genzyme Corporation
500 Kendall Street
Cambridge, Massachusetts 02142
(617) 252-7500

(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of the Person(s) Filing Statement)

With copies to:

Paul M. Kinsella	Andrew R. Brownstein
Ropes & Gray LLP	Wachtell, Lipton, Rosen & Katz
Prudential Tower	51 West 52nd St
800 Boylston Street	New York, New York 10019
Boston, Massachusetts 02199	(212) 403-1000
(617) 951-7000

o     Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

TABLE OF CONTENTS

	Item 8. Additional Information
	Item 9. Exhibits
SIGNATURE
Ex-(a)(35)
Ex-(e)(1)

This Amendment No. 18 amends and supplements the Solicitation/Recommendation Statement on Schedule 14D-9 originally filed by Genzyme Corporation, a Massachusetts corporation (the “Company” or “Genzyme”), with the Securities and Exchange Commission (the “SEC”) on October 7, 2010 (as previously amended, the “Schedule 14D-9”), relating to the unsolicited tender offer by GC Merger Corp., a Massachusetts corporation (“Offeror”) and wholly-owned subsidiary of Sanofi-Aventis, a French société anonyme (“Sanofi”), to purchase all of the outstanding shares of the Company’s common stock, par value $.01 per share (the “Shares”), at a purchase price of $69.00 per Share (the “Offer Price”), net to the selling shareholders in cash, without interest thereon and less any required withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated October 4, 2010 (the “Offer to Purchase”), and in the related Letter of Transmittal (which, together with the Offer to Purchase, constitutes the “Offer”), included as Exhibits (a)(1)(A) and (a)(1)(B) to the Tender Offer Statement on Schedule TO (as amended or supplemented from time to time, the “Schedule TO”) filed by Sanofi and Offeror with the SEC on October 4, 2010.

Item 8. Additional Information

Item 8 of the Schedule 14D-9 is hereby amended and supplemented by replacing the final paragraph under the heading “(d) Litigation — Federal Cases” with the following:

     “The plaintiff in the Pinchuck Action has voluntarily dismissed his action.

     On December 17, 2010, plaintiffs in the Morelos Action, Malina Action, Resendes Action, and Field Action filed an unopposed motion to consolidate the federal cases. The Court signed an order approving consolidation of these cases on December 29, 2010. On January 18, 2011, those plaintiffs filed a consolidated amended compliant on behalf of a putative class of shareholders in the U.S. District Court for the District of Massachusetts against the Company, the Company’s executive officers and the Company directors (the “Consolidated Federal Action”). The consolidated complaint alleges that the defendants violated Section 14(e) of the Exchange Act by issuing a false and misleading Schedule 14D-9 statement and breached their fiduciary duties by, among other things, refusing to negotiate in good faith with Sanofi and by failing to allow due diligence to be performed to facilitate a higher offer being made by Sanofi or others. The suit seeks, among other relief (i) class action status, (ii) an order appointing an independent special committed of the Company with authority to negotiate with Sanofi and to pursue other opportunities to obtain the highest value available to shareholders, (iii) an order requiring defendants to disclose to Company shareholders omitted or misrepresented information, (iv) compensatory damages and (v) an award to plaintiffs of the costs of the action, including reasonable attorneys’ and experts’ fees and expenses.

     A copy of the petition in the Consolidated Federal Action is attached hereto as Exhibit (a)(35). The foregoing description of the Consolidated Federal Action is qualified in its entirety by reference to Exhibit (a)(35) hereto.”

Item 9. Exhibits

Item 9 of the Schedule 14D-9 is hereby amended and supplemented by deleting Exhibit No. (e)(1) in its entirety and replacing it with Exhibit No. (e)(1) attached hereto.

Item 9 is further amended and supplemented by adding the following thereto:

Exhibit No.	Description
(a)(35)	Amended Shareholder Class Action Complaint filed by Jerry L. & Mena M. Morelos Revocable Trust, Bernard Malina, Emanuel Resendes, and William S. Field, III, Trustee U/A Dated October 12, 1991 by William S. Field Jr. in the United States District Court for the District of Massachusetts on January 18, 2011.

SIGNATURE

     After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: January 20, 2011	GENZYME CORPORATION
	By:	/s/ Thomas J. DesRosier
		Name:	Thomas J. DesRosier
		Title:	Senior Vice President, General Counsel and Chief Legal Officer

EX-99.A.35

Exhibit (a)(35)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

	Master Docket No. 1:10-CV-11356
IN RE GENZYME COPRORATION SHAREHOLDER LITIGATION	AMENDED SHAREHOLDER CLASS ACTION COMPLAINT
	JURY TRIAL DEMANDED

     Plaintiffs, Jerry L. & Mena M. Morelos Revocable Trust, Bernard Malina, Emanuel Resendes, William S. Field, III, Trustee U/A Dated October 12, 1991 By William S. Field Jr., and Warren Pinchuck (“Plaintiffs”), individually and on behalf of all other persons similarly situated, allege the following based upon the investigation by Plaintiffs’ counsel, which included, inter alia, a review of the U.S. Securities and Exchange Commission (“SEC”) filings, wire and press releases, securities analysts’ reports, advisories, news articles and information readily obtainable on the Internet.

NATURE OF THE ACTION

     1. Plaintiffs bring this action individually and as a class action on behalf of all persons, other than defendants and their affiliates, who own Genzyme Corporation (“Genzyme” or the “Company”) common stock and are similarly situated (the “Class”) against Genzyme and certain of its officers and directors for compensatory damages and equitable relief because the Individual Defendants¹ have put their own self-interests ahead and to the detriment of those of the public shareholders in responding to the proposal to acquire the Company by Sanofi-Aventis (“Sanofi”), publicly announced on August 29, 2010 (the “Sanofi Offer”).

     2. Genzyme, a Massachusetts corporation located in Cambridge, Massachusetts, is a global biotechnology company that is focused on rare genetic disease disorders, renal disease,

¹ As defined infra.

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orthopedics, cancer, transplant and immune disease, and diagnostic and predictive testing. Genzyme is protected from generic competition because its products and pipeline focus on extremely rare genetic diseases.

     3. While the Company has an enviable product pipeline and current valuable products, under the direction of Genzyme Chief Executive Officer (“CEO”) defendant Henri A. Termeer (“Termeer”), the Company has experienced continuous problems with its manufacturing facilities resulting in a series of regulatory actions taken by the federal Food and Drug Administration (“FDA”). On February 27, 2009, the FDA sent the Company a warning letter in which federal regulators notified the Company about “significant objectionable conditions” at its Boston manufacturing plant. A few months later, the Company shut down its Boston plant because of a viral contamination. Unsurprisingly, the market reacted negatively to these significant problems even though they were curable.

     4. The Company’s manufacturing problems pushed the Company’s stock from a high of $83.06 on August 15, 2008 to $47.81 in June 2010 which was its lowest point in five years. Moreover, a federal securities fraud class action was filed against the Company and multiple shareholders filed shareholder derivative actions against the Company’s directors and certain of its officers relating to the manufacturing problems and the FDA warning letters.

     5. Despite the troubles that have plagued the Company as a result of its mismanagement, beginning in June 2010, Sanofi approached Genzyme about acquiring the Company. Instead of engaging with Sanofi in constructive discussions designed to maximize shareholder value, defendants have thwarted every move taken by Sanofi in its pursuit of Genzyme. First, defendants tried to stall Sanofi, insisting that its internal troubles and a pending proxy contest initiated by investor Carl Icahn (“Icahn”) made discussions concerning a potential

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transaction impractical. Then, even after those issues were resolved, defendants still would not engage in a dialogue with Sanofi and instead have followed a concerted path to keep Sanofi at bay and protect their own positions at Genzyme. Most recently, Genzyme has continued its strategy of entrenchment which it camouflages through the pretext of apathy from Sanofi in an attempt to diffuse shareholder frustration.

     6. Defendants’ tactics forced Sanofi in August 2010 to go public with its proposal for an acquisition at $69 per share; however, Sanofi indicated that if it were given access to due diligence, it might increase its offer to as high as $80 per share (the “Proposal”). When even that did not bring Genzyme to the table, Sanofi was forced to take its offer directly to Genzyme shareholders by initiating a hostile tender offer at $69 per share. Since that time, Sanofi has extended its offer to January 21, 2011, but defendants have steadfastly avoided meaningful discussions with Sanofi which could maximize shareholder value thereby breaching fiduciary duties owed to Genzyme’s public shareholders.

     7. To compound matters, defendants have not been truthful and forthcoming in their communications with Genzyme shareholders concerning the Sanofi Offer. On October 7, 2010, in response to the Sanofi Offer, Defendants filed with the SEC, and disseminated to Genzyme shareholders, a Form 14D-9 (the “14D-9”) urging that they not tender their shares to Sanofi. The 14D-9 is rife with material omissions and/or misstatements in contravention of §§14(e) and 20(a) of the Securities Exchange Act of 1934 (“1934 Act”) and/or Defendants’ fiduciary duty of disclosure under state law. Specifically, defendants, in the 14D-9 and the subsequent amendments thereto, omit and/or misrepresent material information concerning: (a) the basis for Genzyme’s decision not to engage in discussions with Sanofi or permit Sanofi to conduct due diligence; (b) the opinion of Credit Suisse Securities (USA) LLC (“Credit Suisse”) dated

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October 7, 2010 that the Sanofi Offer was inadequate; (c) the opinion of Goldman Sachs & Co. (“Goldman Sachs”) dated October 7, 2010 that the Sanofi Offer was inadequate; and (d) the Company’s financial forecasts. Without this material information, Genzyme shareholders are prevented from making a fully-informed decision as to the adequacy of the Sanofi Offer and whether to tender their shares.

     8. The arbitrary rejection by defendants of the Sanofi Offer is improper and unlawful. To remedy and prevent further breaches of fiduciary duties and other misconduct, Plaintiffs seek, inter alia, an Order from the Court appointing an independent special committee of the Company with full authority to: (a) evaluate, negotiate and if in the best interests of all of the shareholders accept the Sanofi Offer or, if possible, a higher bid; and (b) pursue other opportunities to obtain the highest value available for the shares in the Company. Plaintiffs also seek an Order from the Court requiring defendants to disclose publically all material information concerning the Sanofi Offer to Genzyme’s public shareholders.

     9. Plaintiffs also seek compensatory damages on behalf of themselves and on behalf of the class for the diminution of the value of their stock in the Company resulting from the conduct of the Individual Defendants, together with interest and costs including reasonable attorneys’ fees.

PARTIES

     10. Plaintiffs, at all relevant times, have been continuous owners of common stock shares of Genzyme.

     11. Defendant Termeer (“Termeer”) since December 1985 has been Genzyme’s CEO; Chairman of the Board of Directors (“Board”) since May 1988; and President and a director since October 1983. Termeer is a citizen of Massachusetts.

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     12. Defendant Michael S. Wyzga (“Wyzga”) since May 2003 has been Genzyme’s Executive Vice President, Financeand its Chief Financial Officer since July 1999. Wyzga was also Genzyme’s Chief Accounting Officer from January 1999 to November 2008; Senior Vice President, Finance from July 1999 to May 2003; Senior Vice President, Corporate Controller from January 1999 to July 1999; and Vice President and Corporate Controller from February 1998 to January 1999. Wyzga is a citizen of Massachusetts.

     13. Defendant Robert J. Carpenter (“Carpenter”) has been a Genzyme director since 1994. Carpenter is a citizen of Massachusetts.

     14. Defendant Charles L. Cooney (“Cooney”) has been a Genzyme director since 1983. Cooney is a citizen of Massachusetts.

     15. Defendant Douglas A. Berthiaume (“Berthiaume”) has been a Genzyme director since 1988. Berthiaume is a citizen of Massachusetts.

     16. Defendant Gail K. Boudreaux (“Boudreaux”) has been a Genzyme director since 2004. Boudreaux is a citizen of Illinois.

     17. Defendant Robert J. Bertolini (“Bertolini”) has been a Genzyme director since December 2009. Bertolini is a citizen of New Jersey.

     18. Defendant Victor J. Dzau (“Dzau”) has been a Genzyme director since 2000. Dzau is a citizen of North Carolina.

     19. Defendant Connie Mack III (“Mack”) has been a Genzyme director since 2001. Mack is a citizen of Florida.

     20. Defendant Richard F. Syron (“Syron”) has been a Genzyme director since 2006. Syron is a citizen of Massachusetts.

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     21. Defendant Ralph V. Whitworth (“Whitworth”) has been a Genzyme director since April 2010. Whitworth is a citizen of California.

     22. Defendant Steven Burakoff (“Burakoff”) has been a Genzyme director since June 2010. Burakoff is a citizen of New York.

     23. Defendant Eric Ende (“Ende”) has been a Genzyme director since June 2010. Ende is a citizen of Florida.

     24. Defendant Dennis M. Fenton (“Fenton”) has been a Genzyme director since June 2010. Fenton is a citizen of California.

     25. The defendants named in paragraphs 11 through 24 above are hereinafter referred to as the “Individual Defendants.”

     26. Defendant Genzyme is a Massachusetts biotechnology company with a broad product and service portfolio focused on rare genetic disease disorders, renal disease, orthopedics, cancer, transplant and immune disease, and diagnostic and predictive testing. Defendant Genzyme is a citizen of Massachusetts with a principal place of business in Cambridge, Massachusetts.

     27. The Individual Defendants, by reason of their corporate directorship and/or executive positions, are fiduciaries to and for the Company’s shareholders, and as such are required to: (a) exercise their best judgment; (b) use their ability to control and manage Genzyme in a fair, just and equitable manner; (c) to act prudently and in the best interests of the Company’s shareholders; and (d) avoid all conflicts of interest or abstain from voting.

JURISDICTION AND VENUE

     28. This Court has jurisdiction over claims asserted herein pursuant to §27 of the 1934 Act for violation of §§14(e) and 20(a) of the 1934 Act.

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     29. This Court also has jurisdiction over all causes of action asserted herein pursuant to 28 U.S.C. §1332(a)(2) in that Plaintiffs and defendants are citizens of different states and the amount in controversy exceeds $75,000, exclusive of interest and costs. This action is not a collusive action designed to confer jurisdiction on a court of the United States that it would not otherwise have.

     30. This Court has jurisdiction over each defendant named herein because each defendant is either a corporation that conducts business in and maintains operations in this District, or is an individual who has sufficient minimum contacts with this District so as to render the exercise of jurisdiction by the District courts permissible under traditional notions of fair play and substantial justice.

     31. Venue is proper in this Court pursuant to 28 U.S.C. §1391(a) because: (a) Genzyme maintains its principal place of business in this District; (b) one or more of the defendants either resides in or maintains executive offices in this District; (c) a substantial portion of the transactions and wrongs complained of herein, including the Defendants’ primary participation in the wrongful acts detailed herein, and aiding and abetting and conspiracy in violation of fiduciary duties owed to Genzyme, occurred in this District; and (d) Defendants have received substantial compensation in this District by doing business here and engaging in numerous activities that had an effect in this District.

CLASS ACTION ALLEGATIONS

     32. Plaintiffs bring this action individually, and as a class action, on behalf of all stockholders of the Company (except the defendants herein and any person, firm, trust, corporation, or other entity related to or affiliated with any of the defendants) and their

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successors in interest, who are or will be threatened with injury arising from defendants’ actions as is described more fully below.

     33. The claims asserted herein are properly maintainable as class action counts because:

          (a) The Class is so numerous that joinder of all members is impractical. As of June 30, 2010, the Company had 254.84 million outstanding shares of its common stock, held by individuals and entities too numerous to bring separate actions. It is reasonable to assume that holders of the common stock are geographically dispersed throughout the United States;

          (b) There are questions of law and fact which are common to the Class, and which predominate over questions affecting any individual Class member(s). The common questions include, inter alia, the following:

          (c) Whether the defendants have breached their fiduciary duties owed by them to Plaintiffs and the other members of the Class;

          (d) Whether the defendants are unlawfully entrenching themselves in a controlling position and preventing the Company’s shareholders from maximizing the value of their holdings;

          (e) Whether the defendants have violated §§14(e) and 20(a) of the 1934 Act; and

          (f) Whether the Class is entitled to compensatory damages and/or equitable relief as a result of the wrongful conduct committed by defendants.

     34. Plaintiffs are members of the Class and are committed to prosecuting this action. Plaintiffs have retained competent counsel experienced in litigation of this nature. Plaintiffs’ claims are typical of the claims of the other members of the Class and Plaintiffs have the same

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interests as the other members of the Class. Accordingly, Plaintiffs are adequate representatives of the Class and will fairly and adequately protect the interests of the Class.

     35. Defendants have acted or refused to act on grounds generally applicable to the Class, thereby making appropriate the relief sought herein with respect to the Class as a whole.

     36. The likelihood of individual Class members prosecuting separate individual actions is remote due to the relatively small loss suffered by each Class member as compared to the burden and expense of prosecuting litigation of this nature and magnitude. Absent a class action, defendants are likely to avoid liability for their wrongdoing, and Class members are unlikely to obtain redress for their wrongs alleged herein. There are no difficulties likely to be encountered in the management of the Class claims. This Court is an appropriate forum for this dispute.

THE INDIVIDUAL DEFENDANTS’ FIDUCIARY DUTIES

     37. Under Massachusetts law, in any situation where the directors of a publicly traded corporation undertake a transaction that will result in either: (a) a change in corporate control; or (b) a breakup of the corporation’s assets, the directors have an affirmative fiduciary obligation to obtain the highest value reasonably available for the corporation’s shareholders, including a significant premium at the highest price attainable in the market.

     38. To adequately comply with these duties, neither the directors nor the officers may take any action that:

          (a) would adversely affect the value provided to the corporation’s shareholders;

          (b) would discourage, inhibit or deter alternative offers to purchase control of the corporation or its assets;

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          (c) would contractually or de facto prohibit themselves from complying with their fiduciary duties;

          (d) would otherwise adversely affect their duty to secure the highest value reasonably available under the circumstances for the corporation’s shareholders; and/or

          (e) would provide the directors and/or officers with preferential treatment at the expense of, or separate from, the public shareholders.

     39. In accordance with their duty of loyalty, the Individual Defendants, as directors and/or officers of Genzyme, are obligated under Massachusetts law to refrain from:

          (a) participating in any transaction where the directors’ or officers’ loyalties are divided;

          (b) participating in any transaction where the directors or officers receive, or are entitled to receive, a personal financial benefit not equally shared by the public shareholders of the corporation; and/or

          (c) unjustly enriching themselves at the expense of or detriment to the public shareholders.

     40. The Individual Defendants, separately and together, in connection with the Proposal, are negligently, recklessly or knowingly violating their fiduciary duties and aiding and abetting such breaches, including their duties of loyalty, good faith and independence owed to Plaintiffs and other public shareholders of Genzyme.

     41. Because the Individual Defendants are negligently, recklessly or knowingly breaching their duties of loyalty, good faith, and independence in connection with the Proposal, the burden of proving the inherent or entire fairness of the Proposal, including all aspects of its negotiation, structure, price and terms, is placed upon Defendants as a matter of law.

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BACKGROUND TO SANOFI’S OFFER

     42. On February 27, 2009, the FDA sent the Company a warning letter describing the Company’s Allston manufacturing plant as having “significant objectionable conditions.” A few months later, the Company shut down its Allston manufacturing facility after it was found to be contaminated by a virus.

     43. The Company’s failed attempts to clean-up the manufacturing plant resulted in additional FDA citations. On or about March 24, 2010, defendant Termeer and other Genzyme executives entered into a consent decree with the FDA, which requires Genzyme to pay a $175 million fine, to limit its distribution of certain products, to move certain of its operations out of its Allston plant, and to implement a comprehensive remediation plan to improve quality and compliance at the Allston plant (which will take between two and three years to complete).

     44. The FDA further required Genzyme to comply with a series of manufacturing milestones, which, if not met, will result in additional fines to the Company of up to $15,000 per day for a period of seven to eight years. These regulatory proceedings caused the Company’s stock price to plummet from a high of more than $83 per share in mid-2008 and a price of $73 as recently as mid-February 2009 to a low of $47 per share in June 2010. The Company’s conduct prompted the filing of a federal securities class action and several shareholder derivative actions by enraged Genzyme shareholders.

     45. In the midst of Genzyme’s turmoil, Sanofi in February 2010 began assessing a potential acquisition of Genzyme. On May 23, 2010, Sanofi CEO Christopher Viehbacher (“Viehbacher”) contacted Tremeer to convey Sanofi’s interest in acquiring Genzyme. Tremeer responded that the Company could not engage in discussions until Genzyme shareholder Carl Ichan’s (“Ichan”) proxy contest was resolved. In response to the troubling events at Genzyme,

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Icahn initiated a proxy contest proposing a new slate of directors. The proxy contest ultimately resulted in a settlement on June 9, 2010, pursuant to which the Genzyme Board agreed to appoint two directors designated by Icahn.

     46. After resolution of the Icahn proxy contest, however, on July 10, 2010 Tremeer informed Viehbacher without explanation that the Genzyme Board had determined that the timing to explore a Genzyme-Sanofi transaction was not right.

     47. Sanofi’s interest in Genzyme began to be covered by the media. On July 23, 2010, The New York Times published an article titled “Sanofi Said to Have Offered to Make a Bid for Genzyme.” The article stated:

Sanofi-Aventis has made an informal takeover approach to Genzyme, a person briefed on the matter said on Friday, as the French drug maker seeks to bolster its biotechnology offerings.

* * *

Genzyme would bring Sanofi an attractive portfolio of drugs that treat rare conditions like Fabry disease. Because of their relative complexity, Genzyme’s products fetch high prices. Cerezyme, a treatment for Gaucher’s disease and one of the company’s main products, has garnered more than $1 billion in annual sales, though it is used to treat fewer than 6,000 patients.

     48. In a July 26, 2010 article on Bloomberg.com, Sven Borho, an analyst with OrbiMed Advisors stated that “if two or three companies get involved in bidding, the $80s are achieved really easily. There are so few good assets out there, and this is one of the more promising assets.” The Bloomberg.com article reported that GlaxoSmithKline plc recently had also made an overture to Genzyme. Other reports claimed that Johnson & Johnson was interested in pursuing an acquisition of Genzyme as well.

     49. On July 29, 2010, Sanofi, in a letter to the Genzyme Board, proposed an acquisition price of $69 per share as a starting point for negotiations. Rather than exploit Sanofi’s interest in order to initiate a competitive sales process for maximizing shareholder

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value, Defendants dismissed the proposal out of hand without even entertaining any negotiations over an adequate price or agreeing to provide Sanofi with any confidential information necessary for Sanofi to increase its offer.

     50. Because of defendants’ improper and unreasonable stonewalling, on August 29, 2010, Sanofi was forced to make public its offer to buy Genzyme for $69 per share. In a letter to Termeer, Viehbacher stated in part:

We are disappointed that you rejected our proposal on August 11 without discussing its substance with us. After our repeated requests, you agreed only to let our respective financial advisors hold a meeting of limited scope. Our financial advisors finally met briefly on August 24, but the meeting simply served as further confirmation that as throughout you remain unwilling to have constructive discussions. As I have mentioned to you, we are committed to a transaction with Genzyme, and, therefore, we feel we are left with no choice but to take our compelling proposal directly to your shareholders by making its terms public.

Sanofi-Aventis’ fully-financed, all-cash offer to acquire all of the issued and outstanding shares of Genzyme’s common stock for $69.00 per share represents a very significant premium of 38% over Genzyme’s unaffected share price of $49.86 on July 1, 2010. Our offer also represents a premium of almost 31% over the one-month historical average share price through July 22, 2010, the day prior to press speculation that Sanofi-Aventis had made an approach to acquire Genzyme. Based on the analysts’ consensus estimates, this represents a multiple of 36 times 2010 EPS and 20 times 2011 EPS, which takes into account the expected recovery of Genzyme’s performance in 2011.

     51. The following day, Monday, August 30, 2010, Genzyme rejected the Proposal. In a letter to Sanofi, Genzyme’s CEO, Termeer, said that the Board had unanimously rejected the offer and was “not prepared to engage” in negotiations with an “unrealistic” starting price. Notably, Termeer failed to provide any basis for his statements.

     52. The following day, it was reported that Matrix Asset Advisors (“Matrix”), a Genzyme investor group, sent a letter to the Company’s Board urging it to sit down at the table with Sanofi. The letter read in part:

The Board must weigh the present values of Sanofi’s near-term, certain, cash proposal (or others that might emerge) against the longer and riskier stay-the-

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course approach. Based on Sanofi’s letter and conference call, it is clear that the $69/share bid is simply a starting point for negotiations, and that their appraisal can move meaningfully higher as Genzyme demonstrates why it should.

     53. Matrix Chief Investment Officer David Katz (“Katz”) said in an interview at the time that if Genzyme began negotiations at $69 per share, a consensus would likely be reached at a price in the mid $70s per share. If there were another bidder involved, Katz said, Genzyme would likely fetch a price in the low $80s per share. According to Katz, “[t]here is a very substantial bid on the table. It is sufficient to start discussions, rather than waiting for a higher opening bid.” Matrix had sent a letter to the Genzyme Board in April 2010 urging the company to oust Termeer and to consider a sale of the company to a global pharmaceutical company.

     54. On August 31, 2010, The Wall Street Journal reported that Genzyme may be taking a serious risk by not engaging in talks with Sanofi. In particular, it was reported that:

... taken too far, Genzyme’s strategy could backfire. By keeping Sanofi from doing due diligence, the U.S. firm risks limiting any bid price. Regulators forced Genzyme to slow production of key drugs, leaving the company at risk until inventories are restored, likely at the end of 2011. That worry is largely responsible for the decline in Genzyme shares from a high topping $83 in 2008 to around $54 just before Sanofi’s approach last month.

Without confidence the problems are resolved, even the current offer looks rich. Genzyme trades at 19.5 times next year’s consensus earnings, compared with a peer average around 10.3 times, says Jim Birchenough of Barclays Capital.

Sanofi looks likely to raise its bid above $70 to get conversations flowing. But it also has a strong negotiating position. If it walks, Genzyme’s shares would likely return to about $50, wiping out paper gains for activist investors. Merrill Lynch estimates Carl Icahn bought his Genzyme shares in the low-to-mid $50s, while Relational Investors acquired it in the low-to-mid $60s.

With no sign of other bidders, Genzyme should beware overplaying its hand.

     55. As further evidence of the defendants’ efforts to entrench themselves improperly, on September 14, 2010, The Wall Street Journal reported that Genzyme agreed to sell its genetic-testing business to Laboratory Corp. of America Holdings for $925 million. The sale is

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part of defendants’ plan to also divest itself of two additional divisions, including its diagnostics business which sells tests and testing supplies, and its pharmaceuticals intermediates unit which sells pharmaceutical materials and technologies to other drug companies. According to the Company, it plans to “use the total sale proceeds [from the three units] to finance the second half of a $2 billion stock buyback slated for completion by May 2011.”

     56. On September 20, 2010, Termeer and Viehbacher met to discuss Sanofi’s interest in acquiring Genzyme. At the meeting, Viehbacher requested that Genzyme agree to a price range of between $69 and $80 per share to facilitate negotiations. Again, Termeer dismissed Sanofi’s proposal out of hand and refused to suggest an alternative range which Viehbacher had requested in order to jumpstart the negotiations.

     57. On September 28, 2010, The Wall Street Journal reported that Genzyme’s continued refusal to engage Sanofi was risky. In particular, the article stated:

Termeer should beware taking his nonengagement strategy too far. Even if all goes smoothly, Genzyme is unlikely to trade near $69 a share as an independent company in the near term. If Sanofi gets fed up and walks away, Mr. Termeer might wind up with more time on his hands than he expected.

     58. Faced with the Board’s stonewalling, on October 4, 2010, Sanofi took its offer directly to Genzyme’s shareholders, initiating a hostile tender offer at $69 per share. In the letter to Termeer explaining the offer, Viebacher stated in relevant part:

We are disappointed that you remain unwilling to have constructive discussions with us regarding our offer to acquire Genzyme Corporation. We continue to believe that our proposal is compelling for you shareholders and would provide them with immediate and substantial value that reflects the potential of Genzyme’s business and pipeline.

Subsequent to making our offer public on August 29, 2010, we met with your largest shareholders owning collectively over 50% of Genzyme’s outstanding shares. It was clear from our meetings that your shareholders are supportive of our initiative and, like us, are frustrated with your refusal to have meaningful discussions with us regarding our proposal. Your continued refusal to engage with us in a constructive manner is denying your shareholders an opportunity

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to receive a substantial premium, to realize immediate liquidity, and to protect against the risks associated with Genzyme’s business and operations. (Emphasis supplied.)

After several months of our repeated requests for a meeting with you, we finally met on September 20, 2010. Unfortunately, this meeting was not productive. In an effort to advance our discussions, I shared a very narrow information request focused on confirming your anticipated manufacturing recovery. Even though we and the market have analyzed and assessed the prospects for alemtuzumab, I proposed a meeting with your commercial team to understand their perspectives on the role alemtuzumab could play in the evolving multiple sclerosis market. You were unwilling to pursue either of these or any other path forward. You were also unwilling to provide us with your perspective on an appropriate valuation for Genzyme.

You have, therefore, left us no alternative but to commence a tender offer and take our offer directly to your shareholders. We strongly believe that our offer price of $69.00 per share in cash is compelling and represents substantial value for Genzyme’s shareholders.

     59. In an article on the Sanofi Offer published in the Dow Jones Newswires on October 4, 2010 entitled, “Sanofi Hostile Bid Gives Genzyme Investors Comfort, Frustration,” it was reported that Matt Loucks, a portfolio manager with Sit Investment Associates, which owns about 252,000 Genzyme shares, was growing frustrated with Genzyme’s obstinacy:

Sanofi’s move to “go hostile” highlights the lack of progress toward a deal and the potential multimonth timeline that may only add a few dollars to Genzyme’s current stock price. For that reason, Loucks is leaning toward trimming his firm’s position in Genzyme because the money might be better used elsewhere.

Shareholders would have preferred the tender offer to begin at a higher price but ultimately understand Sanofi’s contention that it was bidding against itself. With no access to Genzyme’s financial details and a lack of other bidders, there was no reason for a higher offer. (Emphasis supplied.)

Shareholders seem to have more frustration with Genzyme’s unwillingness to talk with Sanofi, although they understand that the process likely involves some gamesmanship.

“Hopefully this will move the [Genzyme] board toward something more constructive,” said David Katz, president and chief investment officer of Matrix Assets Advisors, a New York investment manager that owns about 261,000 Genzyme shares.

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Katz wrote a letter to Genzyme’s board in August urging directors to “aggressively pursue” selling the company and, during a proxy battle led by Carl Icahn earlier this year, pushed for the resignation of Genzyme’s Chief Executive Henri Termeer.

In demonstrating Genzyme’s refusal to talk, Sanofi said Termeer refused to provide any additional value-related information in a Sept. 20 meeting with Sanofi Chief Executive Christopher Viehbacher, according to a Monday regulatory filing.

Termeer stated that he was in no hurry to reach a deal, the timing wasn’t right, and he suggested to Viehbacher that Sanofi drop its offer and consider reinitiating contact in 2011, according to Sanofi.

“It is disappointing,” Loucks said. “The fact that you aren’t even sitting down with them and discussing things to me is not right.” (Emphasis supplied.)

     60. On October 7, 2010, defendants’ filed with the SEC the 14D-9 advising shareholders not to tender their shares on the grounds that the $69 price offered by Sanofi allegedly was inadequate. Specifically, the 14D-9 listed the following reasons for its recommendation: (a) Sanofi’s $69 per share offer fails to compensate the Company’s shareholders for the value of the Company’s unique and industry-leading franchise; (b) Sanofi’s opportunistic offer fails to recognize the substantial value creation potential of the Company’s five-point plan—which rightfully belongs to Genzyme’s shareholders; (c) the offer does not reflect Genzyme’s valuable pipeline; (d) the offer price does not adequately compensate Genzyme shareholders for the strategic importance and financial benefit to Sanofi of the transaction; and (e) the offer is financially inadequate based upon the opinions of Credit Suisse and Goldman Sachs. As set forth below, the 14D-9 and the subsequent amendments thereto omit and/or misrepresent material information concerning Sanofi’s Offer in contravention of §§14(e) and 20(a) of the 1934 Act.

     61. Instead of providing Genzyme shareholders with the information they needed to make a fully-informed decision concerning the Sanofi Offer, however, the 14D-9 threatened that

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the Company would employ defensive measures to ward off Sanofi. Specifically, the 14D-9 reminded shareholders (and Sanofi) that: (a) the Company “reserved the right to amend the Company’s by-laws, prior to the closing of the Offer, to elect to have the Company covered by Chapter 110D,” which would deprive a hostile acquirer of control shares the right to vote those shares; (b) the Board could adopt a “poison pill;” and (c) the Board could stagger the terms of its members to prevent Genzyme from putting forth a competing slate of directors.

     62. Meanwhile, on October 20, 2010, on Bloomberg.com, Genzyme reported its third quarter results indicating sales earnings of $1 billion, missing the average $1.1 billion estimate of analysts surveyed by Bloomberg. While net income rose to $69 million from $16 million a year earlier, the comparison was during a period when Genzyme was forced to close down production of certain medicines due to contamination in one of its plants.

     63. Nonetheless, on November 8, 2010, Viehbacher once again reached out to Genzyme in a letter that read:

Mr. Henri Termeer
Chairman, President and Chief Executive Officer
Genzyme Corporation
500 Kendall Street
Cambridge, Massachusetts 02147
USA

Dear Henri,

Now that Genzyme’s third-quarter earnings have been released, you have had the opportunity to speak to shareholders regarding Genzyme’s business and prospects (including the detailed presentation to analysts and investors on October 22) and the market has had a chance to digest and react to all of this information, we would again like to request that you meet with us to discuss our proposal to acquire Genzyme. We continue to believe that our proposal is compelling for your shareholders and would provide them with immediate and substantial value that reflects the potential of Genzyme’s business and pipeline.

You have publicly disclosed that Genzyme’s Board has authorized management and the company’s advisors to “probe and evaluate alternatives” for Genzyme and its assets, including contacting third parties. We were encouraged to hear this, but

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to date, we have not been contacted or included in this process. We are prepared to meet with you and, if you prefer, with your advisors, at any time to discuss our respective views as to the appropriate value of Genzyme’s business and prospects and how to move this transaction process forward in a cooperative manner. As you will recall, at our meeting in September, I proposed several pathways to advance our discussions, such as providing us with some limited due diligence regarding manufacturing or arranging a meeting with your commercial team to discuss the prospects for alemtuzumab. We remain ready and willing to participate in any such meetings.

You have expressed publicly (and, we understand, directly during your conversations with Genzyme shareholders) that you are committed to maximizing shareholder returns and that you value shareholders’ voices. However, we note certain comments in your Schedule 14D-9 that appear to be inconsistent with that objective. (Emphasis supplied.)

First, you indicated that you believe that the Genzyme Board can, at any time, opt to immediately stagger the terms of its members, extending the terms of two-thirds of Genzyme’s current directors for an additional one to three years. This action would deprive shareholders of the opportunity to elect the full Genzyme Board at the 2011 annual meeting of shareholders, a right they expressly demanded. As you know, in 2006, holders of more than 85% of the outstanding shares of Genzyme common stock voted to approve an amendment to Genzyme’s Articles of Organization to provide that all directors would be elected annually. Given this, we do not believe that it would be appropriate for the Genzyme Board to disenfranchise shareholders by unilaterally staggering the terms of directors.

Second, you stated that the Genzyme Board retains the ability to adopt a “poison pill”. As you are well aware, if adopted, the poison pill would prevent Sanofi-Aventis from acquiring Genzyme, regardless of your shareholders’ support for a transaction.

Third, you indicated that the Genzyme Board may wield the Massachusetts anti-takeover statutes in a manner that would, as a practical matter, prevent Sanofi-Aventis from acquiring Genzyme without the cooperation of Genzyme’s Board, notwithstanding your shareholders’ support of a transaction.

We believe it would be inappropriate for the Board to take these defensive actions. If we are unable to have a direct dialog with you, in all fairness you should allow your shareholders the opportunity to decide for themselves whether or not to accept our proposal.

Your shareholders should know with certainty that you will not interfere with their right to benefit from our offer by taking any of the actions described above. Therefore, we ask that you take action to make the Massachusetts anti-takeover statute inapplicable to our offer and confirm that Genzyme’s 2011 annual meeting

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of shareholders, including the election of all directors, will be held on schedule on the fourth Thursday of May (May 26, 2011), as provided in your Bylaws.

It remains our preference to work together with you to reach a mutually agreeable transaction. We continue to believe that a transaction is in the best interests of the shareholders of both Genzyme and Sanofi-Aventis, and we look forward to hearing from you.

Yours sincerely,
Sanofi-Aventis

By:	/ s/ Christopher A. Viehbacher
	Christopher A. Viehbacher
	Chief Executive Officer

     cc: Genzyme Board of Directors

     64. In response, Genzyme once again gave Sanofi the cold shoulder in a letter dated November 8, 2010 in which Termeer demanded an increased price but refused to provide Sanofi with any meaningful confidential information Sanofi would need in order to increase its offer.

     65. Genzyme’s approach to the Sanofi Offer is not surprising since the Company’s stated purpose has been to fend off the Sanofi Offer and avoid a sale of the Company completely. Termeer spent most of 2010 telling people that his company “is determined to remain independent.”

     66. As observed by The Boston Globe, Termeer is “fond of reminding people that Genzyme shares traded for as much as $83 each two years ago, and he believes his company’s stock can get back to those levels again.” This has led to speculation that “Genzyme would try to hold out for a minimum sale price in that range.”

     67. There is little to indicate that such a quick recovery is likely, however, even if the Company could erase the past manufacturing problems and right the ship. Boston Globe business columnist Steven Syre indicated that this would take an “a steady stream of good news ... probably a few years-to see Genzyme shares climb back near their old highs again.”

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     68. The Company itself believes a three-year recovery period is optimistic. In fact, a Company spokesman recently estimated that it will take “3 or 4 years to complete all the work in our remediation plan” for the Company’s manufacturing problems. In addition, according to the Wall Street Journal, “the three-to four-year process won’t actually begin until the plan is submitted to the FDA in the fourth quarter [of 2010].”

     69. Industry sources have recently acknowledged the risk Sanofi would be taking on in acquiring Genzyme “since it’s not clear whether Genzyme’s manufacturing problems have been resolved.” As recently as August 9, 2010, in a Form 10-Q filed with the SEC, the Company indicated that it had “identified additional inventories that did not meet our quality specifications. Our decision to discard these inventories has resulted in a second quarter write off of $6.5 million in addition to the $21.9 million write off previously reported” which resulted in a loss for the Company during this period.

     70. Industry observers are skeptical as well. Drug marketing analyst Jim Edwards stated that Sanofi’s $69 per share offer is “a lot more money than any Genzyme shareholder is ever going to get from Genzyme” and that Termeer “can’t make a case that he can deliver greater value to his investors than that.” Referring to defendant Termeer’s claims that Sanofi’s proposal fails to value “the significant progress underway to rectify our manufacturing challenges or the potential for our new-product pipeline,” Edwards notes “[t]hat’s a bit like a schoolchild protesting a low homework grade by saying, “this C+ doesn’t value the fact that last week’s homework got a D, and that next week’s might-might!-earn an A.”

     71. Marc Booty, asset manager at Pictet Asset Management has noted “if Genzyme says ‘no’ [to Sanofi], they have to show investors how they will get the share price back to the price of the offer.” With ongoing manufacturing problems, a prolonged and perhaps indefinite

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recovery period, and potential instability in its management structure moving forward, the Company has not adequately explained to its shareholders how it plans to remain independent and raise its share value to the reported range of the Sanofi Offer. More importantly, the Company has not adequately explained to its shareholders why it is failing to negotiate in good faith with Sanofi and, further, failing to engage in an open and honest process of evaluating a possible sale of the Company.

     72. Defendants’ refusals to negotiate with Sanofi, far from aiding Genzyme and its shareholders by securing rival bidders, have materially and potentially irreparably damaged Genzyme’s opportunity to negotiate for increased consideration. The Wall Street Journal reported on its blog “The Source” on December 13, 2010 that defendants’ refusal to engage Sanofi for so long has backfired if in fact the goal was to negotiate a higher sale price: “given the time that has elapsed since news of Sanofi’s interest in the U.S. biotech first broke this summer, it seems increasingly unlikely that Genzyme will now be able to count on the emergence of a new bidder as an alternative suitor which would put immediate pressure on Sanofi to raise its price.” The Wall Street Journal, “Genzyme and Sanofi: Time For a Compromise?” December 13, 2010.

     73. The following day, on December 14, 2010, Sanofi announced that it would extend the tender offer’s expiration date to January 21, 2011. As of December 10, 2010, only 2,211,989 shares had been tendered in Sanofi’s Offer. Moreover, still thwarted by its attempt to conduct meaningful due diligence, Sanofi did not raise its offer price.

     74. Beginning in mid-December 2010, the respective financial advisors for Genzyme (Credit Suisse and Goldman Sachs) and Sanofi (Evercore Partners and J.P. Morgan) began discussing a transaction structure that would include a contingent value right relating to

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alemtuzumab, one of Genzyme’s promising products. However, even as part of these discussions, “[n]o confidential information regarding the Company has been provided to Sanofi in the course of these discussions.”

     75. On December 22, 2010, The Wall Street Journal, in an article entitled “Is Genzyme Ready to Cave to Sanofi?,” reported that Genzyme, faced with a hostile takeover bid and the reality that it had scared off all other potential bidders, began to “soften its stance” towards the Sanofi offer: “it is amazing how much an attitude can change when your printout of suitors lists exactly one name. . . . It’s still unclear whether the parties can reach an agreement. But, after Genzyme refused for months to talk to France’s Sanofi about its $18.5 billion hostile offer, there appears to be hope that the two sides can overcome their differences [because] . . . analysts aren’t holding their breaths for a better offer.” However, the article remained silent on whether Genzyme’s directors had made any good-faith efforts to negotiate with Sanofi:

On January 8, 2011, Sanofi announced a modified deal structure that, according to The Wall Street Journal, “would eventually value [Genzyme] at about $80 per share”:

The $80 figure includes a structure known as a contingent value rights, or CVR, which is often used when buyers and sellers can’t agree on a purchase price and usually kicks in after an acquired company meets sales or regulatory targets.

There is still no final agreement and a deal may not happen . . . . But the differences between the two sides have begun to narrow . . . .

Sanofi has been pursuing Genzyme since last summer and made a hostile bid at $69 a share, or $18.5 billion, which Genzyme said grossly undervalued the company. Genzyme had refused to engage with Sanofi, but has since softened its stance as other suitors failed to materialize.

The Wall Street Journal, “Sanofi, Genzyme Discuss New Deal Idea,” January 8, 2011.

     76. The article also noted, however, that, despite the potential size and complexity of such a deal, “Genzyme hasn’t invited Sanofi to conduct due diligence.” With the offer set to

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expire on January 21, 2011, this failure to allow due diligence impedes Sanofi’s ability to increase its offer.

     77. Now that Sanofi has offered contingent value rights that increase the potential for Genzyme shareholders to receive as much as $80 per share and perhaps even more, the Board must exercise its fiduciary duty to, at a minimum, engage Sanofi in direct, good-faith negotiations to maximize the value of Genzyme’s shareholder’s investment in the Company. Defendants should also allow Sanofi and other bidders, if any, to perform due diligence.

     78. As recently as January 12, 2011, a Bloomberg.com story indicated that while some progress was being made in the CVR, Viehbacher said “that he doesn’t know ‘how far we’ll get’ with the takeover attempt.”

     79. On January 13, 2011, Sanofi announced that the European Commission had cleared Sanofi’s proposed acquisition of Genzyme unconditionally pursuant to European Union merger control rules.

     80. In order to meet their fiduciary duties, the Individual Defendants are obligated to pursue in good faith transactions to maximize shareholder value, instead of protecting their self-interests. Due to their refusal to pursue in good faith the Sanofi Offer, the Individual Defendants are failing to obtain the highest value reasonably available for the benefit of Genzyme’s shareholders.

THE MATERIALLY MISLEADING 14D-9

     81. In connection with the Sanofi Offer and in order to dissuade Genzyme shareholders from tendering their shares via the Sanofi Offer, defendants on October 7, 2010, filed with the SEC and disseminated to Genzyme shareholders the 14D-9, which contained the Board’s recommendation those shareholders not tender their shares. This shareholder

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communication, along with subsequent amendments to the 14D-9, violated federal law and constituted breaches of the fiduciary duty of candor to the public shareholders of Genzyme by misrepresenting and failing to disclose material information. Specifically, the 14D-9 omits/or misrepresents the material information set forth below in contravention of §§14(e) and 20(a) of the 1934 Act.

     82. The Basis for Genzyme’s Decision Not to Engage in Discussions with Sanofi and Not to Provide Sanofi with Due Diligence. The Schedule 14D-9 on pages 30-32 lists five factors that the Genzyme Board considered in determining not to recommend the Sanofi Offer to Genzyme shareholders: (a) Sanofi’s $69 per share offer fails to compensate the Company’s shareholders for the value of the Company’s unique and industry-leading franchise; (b) Sanofi’s opportunistic offer fails to recognize the substantial value creation potential of the Company’s five-point plan—which rightfully belongs to Genzyme’s shareholders; (c) the offer does not reflect Genzyme’s valuable pipeline; (d) the offer price does not adequately compensate Genzyme shareholders for the strategic importance and financial benefit to Sanofi of the transaction; and (e) the offer is financially inadequate based upon the opinions of Credit Suisse and Goldman Sachs. These statements are materially misleading and omit material information because even if these factors supported the position taken by the Board that the $69 per share Sanofi Offer was inadequate, they do not adequately explain the decision made by defendants not to engage with Sanofi in constructive negotiations, including complete due diligence, as a means to induce Sanofi to increase its offer. Nowhere in the 14D-9 do defendants explain adequately why they did not engage in constructive discussions with Sanofi nor why they did not consider conducting a market check to determine whether other parties might be willing to offer more than Sanofi to acquire the Company. Without this information, Genzyme shareholders are

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unable to properly evaluate the Company’s value in the marketplace and the adequacy of the Sanofi Offer.

     83. The Opinion of Credit Suisse Securities (USA) LLC Dated October 7, 2010. In connection with its consideration of the Sanofi Offer, the Company engaged Credit Suisse to render an opinion on the fairness of the Sanofi Offer. The 14D-9 on page 29 describes presentations made by Credit Suisse to the Genzyme Board on October 5, 2010 in connection with its rendering of the opinion that the price offered in the Sanofi Offer was inadequate. The text of the opinion letter is also attached as Exhibit A(3) to the 14D-9. The description of the presentation and the opinion itself is materially misleading and omits material information. The opinion states that in connection with rendering the opinion, Credit Suisse:

have also considered certain financial and stock market data of the Company, and we have compared that data with similar data for other publicly held companies in businesses we deemed similar to that of the Company and we have considered, to the extent publicly available, the financial terms of certain other business combinations and other transactions which have recently been effected. We also considered such other information, financial studies, analyses and investigations and financial, economic and market criteria which we deemed relevant.

The 14D-9, however, provides no disclosures about what information Credit Suisse considered, what analyses it performed with that information, the data and inputs underlying those analyses, the manner in which the analyses were performed, and the value ranges for Genzyme that resulted from the analyses. Without this information, Genzyme shareholders are unable to independently assess the basis for Credit Suisse’s conclusion that the Sanofi Offer is inadequate and what weight, if any, to place on the Credit Suisse opinion in determining whether to tender their shares in connection with the Sanofi Offer.

     84. The Opinion of Goldman Sachs & Co. Dated October 7, 2010. In connection with its consideration of the Sanofi Offer, the Company also engaged Goldman Sachs to render an opinion on the fairness of the Sanofi Offer. The 14D-9 on page 29 describes presentations

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made by Goldman Sachs to the Genzyme Board on October 5, 2010 in connection with its rendering of the opinion that the price offered in the Sanofi Offer was inadequate. The text of that opinion letter is also attached to the 14D-9 as Exhibit A(4). The description of the presentation and the opinion itself is materially misleading and omits material information. The opinion states that in connection with rendering the opinion, Goldman Sachs:

compared certain financial and stock market information for the Company and Parent with similar information for certain other companies the securities of which are publicly traded; reviewed the financial terms of certain recent business combinations in the biotechnology industry and in other industries; and performed such other studies and analyses, and considered such other factors, as we deemed appropriate.

The 14D-9, however, provides no disclosures about what information Goldman Sachs considered, what analyses it performed with that information, the data and inputs underlying those analyses, the manner in which the analyses were performed, and the value ranges for Genzyme that resulted from the analyses. Without this information, Genzyme shareholders are unable to independently assess the basis for Goldman Sachs’ conclusion that the Sanofi Offer is inadequate and what weight, if any, to place on the Goldman Sachs opinion in determining whether to tender their shares in connection with the Sanofi Offer.

     85. The Company’s Financial Forecasts. On page 29, the 14D-9 states that during meetings of Genzyme’s Board on October 5-7, 2010, the Board “reviewed the Company’s Financial Forecast[s].” In addition, in connection with the rendering of its opinions, the Credit Suisse opinion on page A-1 states that it reviewed “Company management’s financial forecasts for the Company (the ‘Forecasts’),” and the Goldman Sachs opinion on page B-2 states that it reviewed “certain financial analyses and forecasts for the Company including, management’s forecasts (the ‘Forecasts’) approved for our use by the Company, and certain adjustments thereto as reviewed and discussed by the Board of the Directors of the Company.” These statements are

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materially misleading and omit material information because the Forecasts themselves are not disclosed. Without this information, Genzyme shareholders are unable to understand Genzyme management’s view of the Company’s prospects moving forward and in turn, how that compares with the Sanofi Offer. Accordingly, Genzyme shareholders are unable to determine whether to tender their shares in the Sanofi Offer.

     86. The Individual Defendants were aware of their duty to disclose the foregoing material information in the 14D-9, and were at least negligent in failing to ensure that this material information was disclosed in the 14D-9. Absent disclosure of this material information, Genzyme shareholders are unable to make an informed decision about whether to tender their shares in the Sanofi Offer, and therefore, are threatened with irreparable harm.

     87. As a result of defendants’ conduct, Genzyme’s public stockholders have been and will continue to be denied: (a) a fair and adequate process for obtaining, negotiating and obtaining the highest value reasonably available to which the shareholders are legally entitled in a sale of their Company; and (b) access to all material information necessary to make a fully-informed decision as to whether to tender their shares via the Sanofi Offer.

     88. The continued failure of defendants to engage Sanofi in meaningful, good-faith negotiations and their other conduct specified herein constitutes breaches of Defendants’ fiduciary duties to Genzyme’s shareholders. This action seeks to enjoin Defendants from continuing such wrongful behavior and irreparably harming Plaintiffs and the members of the Class.

     89. Plaintiffs request that this Court grant the declaratory and injunctive relief necessary to remedy defendants’ breaches of fiduciary duties to shareholders, including duties of loyalty, due care, good faith and fair dealing, and defendants’ violations of federal law.

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COUNT I

Against the Individual Defendants and Genzyme for Violations of
§14(e) of the 1934 Act

     90. Plaintiffs repeat and reallege each and every allegation contained above as if fully set forth herein.

     91. During the relevant period, the Individual Defendants and Genzyme disseminated the false and misleading 14D-9 specified above, which failed to disclose or misrepresented material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.

     92. The 14D-9 was prepared, reviewed, and/or disseminated by the Individual Defendants and Genzyme. They misrepresented and/or omitted material facts, including material information about the consideration offered in the Sanofi Offer, and the actual intrinsic value of the Company’s assets.

     93. In so doing, the Individual Defendants and Genzyme made untrue statements of material facts and omitted to state material facts necessary to make the statements that were made not misleading in violation of §14(e) of the 1934 Act. The Individual Defendants and Genzyme were aware of this information and of their duty to disclose this information in the 14D-9.

     94. The Individual Defendants and Genzyme were at least negligent in filing the 14D-9 with these omissions and materially false and misleading statements.

     95. The omissions and false and misleading statements in the 14D-9 are material in that a reasonable shareholder would consider them important in deciding whether to tender their shares in the Sanofi Offer. In addition, a reasonable investor would view a full and accurate

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disclosure as significantly altering the “total mix” of information made available in the 14D-9 and in other information reasonably available to shareholders.

     96. By reason of the foregoing, the Individual Defendants and Genzyme have violated §14(e) of the 1934 Act.

     97. Because of the false and misleading statements in the 14D-9, Plaintiffs are threatened with irreparable harm, rendering money damages inadequate. Therefore, injunctive relief is appropriate to ensure Defendants’ misconduct is prevented.

COUNT II

Against the Individual Defendants for Violation of §20(a) of the 1934 Act

     98. Plaintiffs repeat and reallege each and every allegation contained above as if fully set forth herein.

     99. The Individual Defendants acted as controlling persons of Genzyme within the meaning of §20(a) of the 1934 Act as alleged herein. By virtue of their positions as officers and/or directors of Genzyme, and participation in and/or awareness of the Company’s operations and/or intimate knowledge of the omissions and false statements contained in the 14D-9 filed with the SEC, they had the power to influence and control and did influence and control, directly or indirectly, the decision-making of the Company, including the content and dissemination of the various statements which Plaintiffs contend are false and misleading.

     100. Each of the Individual Defendants were provided with or had unlimited access to copies of the 14D-9 and other statements alleged by Plaintiffs to be misleading prior to and/or shortly after these statements were issued and had the ability to prevent the issuance of the statements or cause the statements to be corrected.

     101. In particular, each of the Individual Defendants had direct and supervisory involvement in the day-to-day operations of the Company, and therefore, are presumed to have

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had the power to control or influence the particular transactions giving rise to the securities violations as alleged herein and in fact exercised such control. The 14D-9 at issue contains the unanimous recommendation of each of the Individual Defendants for shareholders not to tender their stock. They were thus directly involved in the making of this document.

     102. By virtue of the foregoing, the Individual Defendants have violated §20(a) of the 1934 Act.

     103. As set forth above, the Individual Defendants had the ability to exercise control over and did control a person or persons who have each violated §14(e) and SEC Rule 14a-9 by their acts and omissions as alleged herein. By virtue of their positions as controlling persons, these defendants are liable pursuant to §20(a) of the 1934 Act. As a direct and proximate result of defendants’ conduct, Plaintiffs and the Class will be irreparably harmed.

COUNT III

Breach of Fiduciary Duties of Loyalty, Due Care,
Good Faith and Fair Dealing Against the Individual Defendants

     104. Plaintiffs incorporate by reference and re-allege each and every allegation set forth above, as though fully set forth herein.

     105. The Individual Defendants were and are under a duty to: (a) act in the interests of the equity owners; (b) maximize shareholder value; (c) undertake appropriate evaluation(s) of the proposed merger/acquisition offer(s); (d) act in accordance with their fundamental duties of due care, loyalty, good faith and fair dealing; and refrain from acting where their interests conflict with those of the other Genzyme shareholders.

     106. By the acts and courses of conduct alleged herein, the Individual Defendants, in breach of their fiduciary duties to Plaintiffs and the other members of the Class, failed to pursue

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the Sanofi Offer or other bids in order to obtain the highest value reasonably available Plaintiffs and other members of the Class for their stock in Genzyme.

     107. The Individual Defendants have refused to fairly and adequately evaluate or negotiate the premium offer from Sanofi for the Company’s common stock because they have put ahead of the Plaintiffs’ and other shareholders’ interests their own self-interests in an attempt to entrench themselves for the purpose of maintaining control of the Company. Defendants’ conduct is in direct violation of their fiduciary duties.

     108. As a result of the actions of the Individual Defendants, Plaintiffs and the other members of the Class are, and will be, prevented from obtaining the highest value reasonably available for their shares of Genzyme common stock.

     109. The conduct of the Individual Defendants as described above can only be prevented if this Court enters an Order appointing an independent special committee of the Company with full authority to (a) evaluate, negotiate and, if in the best interests of all of the shareholders equally, accept the Sanofi bid or, if possible, a higher bid; and (b) pursue other opportunities to obtain the highest value reasonably available for the shares in the Company. Plaintiffs also seek an order from the Court requiring defendants to disclose all material information concerning the Sanofi Offer to Genzyme’s public shareholders.

     110. Plaintiffs and the Class are also entitled to compensatory damages together with interest and costs for any diminution of the value of their shares as a result of the Individual Defendants’ conduct described above.

COUNT IV

Breach of Fiduciary Duty of Disclosure Against All Defendants

     111. Plaintiffs incorporate by reference and re-allege each and every allegation set forth above, as though fully set forth herein.

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     112. The defendants owe the duty of full and fair disclosure to the Company’s shareholders. The Individual Defendants have breached that duty as alleged in detail herein.

     113. The Defendants’ breaches have and will damage Plaintiffs and the Class who have no means by which to protect their interests absent the Court’s appointment of an independent special committee as described above.

PRAYER FOR RELIEF

     WHEREFORE, Plaintiffs pray for relief,in favor of the Class and against defendants as follows:

1.	Entry of an Order certifying that the above-captioned action is properly maintainable as a class action;
2.	Entry of an Order appointing an independent special committee of the Company with full authority to:

a.	Evaluate, negotiate and, if in the best interests of all of the shareholders equally, accept the Sanofi bid or, if possible, a higher bid; and
b.	Pursue other opportunities to obtain the highest value reasonably available to the shares in the Company;

3.	Entry of an Order requiring Defendants to disclose to Genzyme shareholders the omitted or misrepresented information described herein;
4.	Entry of a judgment in favor of the Class against the defendants for compensatory damages in an amount to be determined at trial, together with interest and costs, including reasonable attorneys’, accountants’, and experts’ fees; and
5.	Such other relief as this Court may deem just and proper under the circumstances.

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JURY TRIAL DEMANDED

     Plaintiffs hereby demand a trial by jury.

DATED: January 18, 2011

By:	/s/ Daniel K. Gelb
	Richard M. Gelb, BBO# 188240
	Daniel K. Gelb, BBO# 659703 Stamenia (Stephanie) Tzouganatos, BBO# 661509 GELB & GELB LLP 84 State Street, 4th Floor Boston, MA 02109 Telephone: (617) 345-0010 Facsimile: (617) 345-0009 rgelb@gelbgelb.com dgelb@gelbgelb.com stzouganatos@gelbgelb.com Theodore M. Hess-Mahan, BBO #557109 HUTCHINGS, BARSAMIAN, MANDELCORN & ZEYTOONIAN, LLP 110 Cedar Street, Suite 250 Wellesley Hills, MA 02481 Telephone: (781) 431-2231 Facsimile: (781) 431-8726 thess-mahan@hutchingsbarsamian.com Interim Co-Liaison Counsel for Plaintiffs and the Proposed Class Robert I. Harwood Jeffrey M.Norton HARWOOD FEFFER LLP 488 Madison Ave. New York, NY 10022 Telephone: (212) 935-7400 Facsimile: (212) 753-3630 rharwood@hfesq.com jnorton@hfesq.com Marc M. Umeda Stephen J. Oddo

- 34 -

Arshan Amiri
Justin D. Rieger
ROBBINS UMEDA LLP
600 B Street, Suite 1900
San Diego, CA 92101
Telephone: (619) 525-3990
Facsimile : (619) 525-3991
mumeda@robbinsumeda.com
soddo@robbinsumeda.com
rpeterson@robbinsumeda.com
aamiri@robbinsumeda.com

Interim Co-Lead Counsel for the Plaintiffs and the
Proposed Class
 

Of Counsel

Frank J. Johnson
Frank A. Bottini, Jr.
Shawn E. Fields
JOHNSON BOTTINI, LLP
501 West Broadway, Suite 1720
San Diego, CA 92101
Telephone: (619) 230-0063
Facsimile: (619) 238-0622
frankj@johnsonbottini.com
frankb@johnsonbottini.com
shawnf@johnsonbottini.com

Gregory M. Nespole
Gustavo Bruckner
Martin E. Restituyo
270 Madison Avenue
WOLF HALDENSTEIN ADLER FREEMAN HERZ LLP
New York, NY 10016
Telephone: (212) 545-4600
Facsimile: (212) 545-4653
nespole@whafh.com
bruckner@whafh.com
restituyo@whafh.com

- 35 -

Marc I. Gross H.
Adam Prussin
POMERANTZ HAUDEK GROSSMAN & GROSS LLP
100 Park Avenue
New York, NY 10017
Telephone: (212) 661-1100
Facsimile: (212) 661-8665
migross@pomlaw.com
haprussin@pomlaw.com

- 36 -

CERTIFICATE OF SERVICE

     I hereby certify that this document(s) filed through the ECF system will be sent electronically to the registered participants as identified on the Notice of Electronic Filing (NEF) and paper copies will be sent to those indicated as non-registered participants on January 18, 2011.

/s/Daniel K. Gelb  

Daniel K. Gelb 

- 37 -

EX-99.E.1

Exhibit (e)(1)

Excerpt from Genzyme Corporation’s Definitive Proxy Statement on Schedule 14A related to the 2010 Annual Meeting of Shareholders as filed with the Securities and Exchange Commission on April 26, 2010.

DIRECTOR COMPENSATION
for the year ended December 31, 2009

	Fees
	Earned or		Stock		Option		All Other
	Paid in		Awards		Awards		Compensation
Name	Cash ($)		($)(2)(3)		($)(2)(3)		($)		Total ($)
Douglas A. Berthiaume		104,000		146,650		194,292		—		444,942
Robert J. Bertolini(1)		3,333		117,373		144,129		—		264,835
Gail K. Boudreaux		76,500		146,650		194,292		—		417,442
Robert J. Carpenter		75,000		146,650		194,292		—		415,942
Charles L. Cooney		83,500		146,650		194,292		—		424,442
Victor J. Dzau		72,000		146,650		194,292		—		412,942
Sen. Connie Mack		81,000		146,650		194,292		—		421,942
Richard F. Syron		76,500		146,650		194,292		—		417,442

(1)	Mr. Bertolini was appointed to the board of directors on December 8, 2009. Mr. Whitworth was appointed to the board of directors on April 14, 2010.
(2)	The amounts reported for stock and option awards represent the grant date fair value of the awards. On May 21, 2009, under the automatic grant provisions of our 2007 Director Equity Plan, each non-employee director, except for Mr. Bertolini, was granted RSUs for 2,500 shares, and stock options to purchase 7,500 shares, of our stock. The RSUs have a grant date fair value, and stock options have an exercise price, of $58.66 per share, which was the closing price of our stock on the date of grant. On December 8, 2009, Mr. Bertolini was granted RSUs for 2,375 shares, and stock options to purchase 7,125 shares of our stock. Mr. Bertolini’s RSUs have a grant date fair value, and stock options have an exercise price, of $49.42 per share, which was the closing price of our stock on December 8, 2009.
	The grant date fair value of the stock options granted on May 21, 2009 was $25.91 per share and the grant date fair value of the stock options granted on December 8, 2009 was $20.23 per share, which was based on the Black-Scholes option pricing model. For a discussion of the relevant assumptions we use to calculate grant date fair value, see the sections “Accounting for Stock Based Compensation” in “Note A. Summary of Significant Accounting Policies” and “Note M. Stockholders’ Equity” of the “Notes to Consolidated Financial Statements” in our 2009 Annual Report on Form 10-K.
(3)	Non-employee directors had the following aggregate stock options and RSUs outstanding as of December 31, 2009:

	Stock Options		RSUs
Douglas A. Berthiaume		95,097		2,500
Robert J. Bertolini		7,125		2,375
Gail K. Boudreaux		75,000		2,500
Robert J. Carpenter		91,505		2,500
Charles L. Cooney		64,505		2,500
Victor J. Dzau		77,587		2,500
Sen. Connie Mack		83,687		2,500
Richard F. Syron		60,000		2,500

     The outstanding stock options have an average exercise price of $58.67 per share and a remaining average life of 5.8 years.

     Henri Termeer, our only employee director, does not receive any additional compensation for his service on the board of directors. Until February 2010, non-employee directors received the following cash compensation for their service on the board and its committees:

• an annual retainer of $40,000, paid quarterly;

• $2,500 for each board meeting they attend;

• $1,500 for each committee meeting they attend;

• an annual retainer of $20,000 for service as audit committee chair, paid quarterly;

• an annual retainer of $10,000 for service as compensation committee chair, paid quarterly; and

• an annual retainer of $10,000 for service as nominating and corporate governance committee chair, paid quarterly.

     As part of the changes implemented to strengthen the role of our lead director, the compensation committee requested its compensation consultant prepare an analysis of lead director compensation, including at our peer companies. Following a review of this analysis, the committee recommended to the board in February 2010, and the board approved, an annual retainer of $25,000, paid quarterly, for service as lead director of the company. In addition, the committee also approved an increase from $10,000 to $20,000 to the annual retainer for service as compensation committee chair.

     Non-employee directors also receive equity awards for each year (or partial year) that they serve on our board. Stock options and RSUs are granted automatically under our 2007 Director Equity Plan on the date of each annual meeting of shareholders or, in the case of directors elected other than at an annual meeting, upon election to the board. Stock options and RSUs become fully vested on the date of the next annual shareholders meeting following the date of grant, provided the director is an active member of the board at the opening of business on that date. Each stock option grant has an exercise price equal to the closing price of the stock on the date of grant and a term of ten years. RSUs are valued on the date of grant based on the closing price of our stock. The plan provides for acceleration of all unvested awards in the event of a change in control of the company.

     For 2009, the plan provided for an annual grant to each non-employee board member of (1) stock options to purchase 7,500 shares of our stock, and (2) RSUs for 2,500 shares of our stock. In August 2009, our board of directors reduced the equity portion of director compensation to 95% of existing levels, to be consistent with similar reductions made in 2009 for the company’s senior management. Accordingly, the plan was amended to provide for an annual grant to each non-employee board member of (1) stock options to purchase 7,125 shares of our stock, and (2) RSUs for 2,375 shares of our stock.

     Under our Directors Deferred Compensation Plan, each director may choose to defer receipt of all or part of the cash compensation payable to him or her as a director until the year following the year his or her service as a director ends or until another date specified in advance by the director. The director can elect to defer compensation in exchange for a future payment of cash, stock or a combination of cash and stock. At the director’s election, the future payments may be made in either a lump sum or annual installments for a period specified by the director, up to a maximum of five years. Amounts deferred in a cash account are credited with interest on the last day of each calendar quarter at the rate paid on 90-day Treasury bills hypothetically purchased on the first day of the calendar quarter. Amounts deferred in a stock account are treated as invested in hypothetical shares of our common stock, and the hypothetical shares are credited to the director’s account on the first day of each calendar quarter based on the average closing price of our common stock for all trading days during the preceding quarter. As of December 31, 2009, five directors had accounts under the plan.

COMPENSATION DISCUSSION AND ANALYSIS

     In considering our executive compensation policies and practices, we have an obligation to balance our interest in conserving cash and minimizing shareholder dilution, with our interest in using compensation to attract, retain and motivate employees. In reconciling these competing concerns, we strive to act in the long-term best interests of the company and our shareholders. The compensation committee works directly with independent compensation consultants, and also may consult with academics and other experts from time to time to support the board’s commitment to be knowledgeable and current regarding executive compensation trends and best practices. The committee has hosted, and plans in the future to host, special meetings with the full board to educate board members on key issues in the business environment and the role those issues play in executive compensation. In 2009, the committee undertook a complete review of our executive compensation program, and determined to implement specific changes which are outlined below under “Changes to 2010 Compensation Program.” The review included design recommendations from the committee’s compensation consultant, members of senior management as well as information and feedback from investors. As part of the process, the committee also received general information and feedback from additional independent individuals with compensation expertise (Charles Tharp of the Center on Executive Compensation and Frederic Cook of Frederic W. Cook & Co., Inc.) and hosted a joint meeting with the nominating and corporate governance committee in August 2009 to review compensation trends and practices.

     Review of 2009. Our financial results did not meet our expectations for 2009 primarily because of a viral contamination in our Allston manufacturing facility in June 2009 that resulted in a temporary interruption of production of Cerezyme and Fabrazyme in the second half of 2009 and inventory shortages for these products. The production interruption, and resulting shortages of Cerezyme and Fabrazyme, had a significant impact on our results for 2009. We reported 2009 revenue of $4.5 billion, compared with $4.6 billion in 2008. Sales of Cerezyme were $793 million, compared with $1.2 billion in 2008. Sales of Fabrazyme were $431 million compared with $494 million in the previous year. However, excluding our Genetic Disease business, total revenue grew 15% for 2009. This growth reflects progress across all of our other business segments, including the successful launches of Synvisc-One and Mozobil, and the integration of oncology products we acquired from Bayer. GAAP net income in 2009 was $422.3 million, or $1.54 per diluted share, compared with $421.1 million, or $1.50 per diluted share, in 2008. We generated approximately $1.2 billion in cash from operations in 2009, and utilized this cash to invest in our global infrastructure and share repurchase program. We were able to continue to generate cash and maintain a solid balance sheet in 2009 despite the manufacturing challenges and resulting product supply interruption. The manufacturing challenges in 2009 also resulted in a 26% decline in our stock price, from $66.37 at December 31, 2008 to $49.01 at December 31, 2009.

     Our financial and stock performance in 2009 directly impacted our named executive officers’ compensation. We did not meet the operating income goal under our 2009 annual incentive program and, accordingly, no payouts were made to our named executive officers with respect to the corporate performance component under this program. Mr. Termeer requested that he not be awarded the individual component of his annual incentive bonus and, after discussing this request, the compensation committee determined not to award to Mr. Termeer any annual incentive bonus for 2009. The decline in our stock price also affected our named executive officers by lowering the value of RSUs granted to them in 2009 and prior years and also resulted in a significant number of outstanding stock options being “under water”, or having no market value, at the end of 2009. In addition, given our current business challenges and the results for 2009, Mr. Termeer requested that he not receive an increase in his base salary or cash incentive targets for 2010 and, after discussing this request, the committee determined not to increase base salary or cash incentive targets for Mr. Termeer or the other named executive officers for 2010. However, the committee adjusted Dr. Meeker’s compensation to reflect the expanded scope of his responsibilities.

     Changes to 2010 Compensation Program. In 2009, the compensation committee undertook a comprehensive review of our executive compensation program with the objective of identifying and implementing changes to ensure that our incentives reflect an appropriate balance with company performance and do not incent business practices that are reasonably likely to have a material adverse effect on the company. The committee considered input from Towers Watson, senior management, investors and others. The committee asked Towers Watson to prepare a competitive analysis and make design recommendations. Towers Watson reviewed with the committee the compensation programs of our peer group looking specifically at:

• components of compensation;

• performance/payout ranges;

• financial metrics; and

• performance measurement.

At the committee’s request, we also formed a senior management committee that included our chief financial officer, executive vice president for corporate development, chief human resources officer and senior vice president of compensation and benefits to develop compensation design alternatives, identify appropriate company performance metrics, and make recommendations to the compensation committee for our 2010 annual and long-term incentive programs. The compensation committee asked Towers Watson to evaluate the senior management committee recommendations and information provided by others and to present their independent assessment to the committee. After evaluating Towers Watson’s findings, the compensation committee decided to implement certain changes to our executive compensation program in 2010 that seek to:

• align incentive compensation with a broader set of measures of company performance that we believe appropriately reflect the factors most important to the creation of shareholder value: revenue growth, capital efficiency/profitability, and key business objectives; and

• provide greater transparency to our shareholders regarding executive compensation decisions.

     The details of these changes are discussed in the “2010 annual incentive program” and “2010 long-term incentive program” sections below.

     Objectives and Overview of Executive Compensation. Our objective is to make executive compensation decisions that are thoughtful, transparent and consistent with the overall goals of the organization. It is integral to our executive compensation philosophy that our compensation program aligns with shareholder interests. We pay our executives using three components: base salary, annual incentive cash awards and long-term incentive awards. We have avoided other long-term obligations such as defined benefit programs, supplemental employee retirement plans, nonqualified deferred compensation plans and retiree health benefits.

     Our perspective is long-term and our goal is to create sustained shareholder value. We operate in a complex, dynamic environment and it often takes years to achieve our goals. For example, developing a therapeutic product from concept to market can take in excess of 10 years, and many product candidates never make it to market. Acquisitions, whether of products, companies or intellectual property rights, are opportunistic in nature and need to balance short-term financial objectives with long-term opportunities to earn risk-adjusted returns in excess of our cost of capital. Building an infrastructure to accommodate future products and growth requires early investment with no guarantee of return. Our compensation program balances these growth and return on capital objectives and reflects the long product development business cycle in the healthcare industry. This approach aligns our compensation decisions with our shareholders’ interests in our achievement of sustainable business objectives and corporate performance goals.

     We also maintain a philosophy of inclusiveness by expanding our long-term equity program to include all of our employees, to encourage them to become stakeholders and invest in achieving success for the company, which helps align employee interests with our shareholders’ interests.

     Process and Philosophy for Setting Executive Compensation. We look to our named executive officer group to focus on building and creating the future of the company and expect them to make strategic decisions that move the company forward. We apply deliberate, thoughtful processes throughout the year in a continuing assessment of company and individual executive performance to guide the committee in making compensation decisions. By making compensation decisions considering both competitive market practice and our unique organization and culture, we strive to create an appropriate compensation program for our executives while recognizing shareholder interests in limiting company expenditures.

     Our expectations for our chief executive officer and other executive officers are focused on a sustainable business strategy that includes:

• financial performance, with an emphasis on return on capital financial metrics;

• company growth and internal product development;

• strategic management of the complexities of a global business with a diverse and growing product portfolio and expanding the business into a number of new markets; and

• operational business management, including development of a diverse and complex global manufacturing infrastructure, investment in strong science and research capabilities, integration of acquisitions, and development of a strong executive management team.

     Risk Considerations. The compensation committee, with the assistance of its independent compensation consultant, also has considered whether our executive compensation program creates risks that are reasonably likely to have a material adverse effect on the company and concluded that it does not. In doing so, the committee considered the company’s strategic goals and operational practices and evaluated our incentive program design to assess whether these programs foster a business environment that might drive inappropriate decision-making or behavior. While a significant portion of our executives’ compensation is performance-based, we believe several features of our program mitigate inappropriate or excessive risk-taking that could harm shareholder value: we set performance goals that we believe are reasonable and set targets with payouts at multiple levels of performance, rather than an “all or nothing” approach; we cap payout levels under our new short- and long-term incentive plans, which is consistent with market prevalent practice and does not provide disproportionate leverage for achievement of short- or long-term results; we use a mix of performance goals in our new annual and long-term incentive programs to align incentive compensation with a broad set of measures important to the creation of shareholder value; the majority of compensation is provided in long-term awards that are intended to align executives’ interests with those of our shareholders; for our new long-term incentive program, we use both time vesting stock options and performance vesting restricted stock units that have staggered vesting schedules; and as described above, the committee undertakes a continuing assessment of company and individual executive performance.

     Peer Group and Market Analysis. The compensation committee analyzes the compensation practices of a group of peer companies for comparison purposes and to gain an external perspective in preparation for setting executive salaries and short- and long-term incentive compensation. The committee looks at the data from our peer group to evaluate the appropriateness and competitiveness of our pay positioning, but does not target a certain level of compensation relative to the group. The committee reviews the compensation of our peer group regularly, which includes an analysis by Towers Watson of potential peer companies considering factors that include:

• revenue size and growth rate;

• research and development expense;

• number of employees;

• market capitalization;

• one- and three-year total shareholder return;

• net income;

• similarity of core businesses to ours;

• international presence; and

• labor market competition.

      Following the compensation committee’s review of the Towers Watson analysis and discussions with Towers Watson and senior management personnel, the committee decides which companies are the most appropriate for our peer group. For 2009, our peer group was comprised of seven biopharmaceutical companies: Allergan, Inc., Amgen Inc., Biogen Idec Inc., Celgene Corp., Cephalon, Inc., Genentech, Inc. (acquired by F. Hoffman-La Roche, Ltd. in March 2009) and Gilead Sciences, Inc.

     For 2010, the compensation committee expanded our peer group to include three pharmaceutical companies and one medical instruments company. We note that these four companies are larger than us. We believe, however, that the inclusion of these four companies along with our traditional biotechnology peer companies is appropriate because these are the companies we consider to be our primary competitors for recruiting and retaining executive talent for similarly positioned executive positions. Our peer group for 2010 compensation analysis is comprised of ten companies: Allergan, Inc., Amgen Inc., Baxter International Inc., Biogen Idec, Inc., Bristol-Myers Squibb Company, Celgene Corp., Cephalon, Inc., Eli Lilly and Company, Gilead Sciences, Inc., and Medtronic, Inc.

     In addition to peer group analysis, each year the compensation committee considers published survey data for biotechnology, pharmaceutical and general industry companies to ensure that our executive positions are paid appropriately relative to the broader market. These surveys help the committee to match our incumbent executives to comparable market positions, when data is available, by looking at scope of responsibilities for various positions as well as internal comparisons. Specifically, for each executive officer position, the committee reviews competitive levels of base salary, annual incentive awards and equity incentive grants to supplement the data gathered from our peer companies listed above.

     Annual Incentive Program. The compensation committee establishes annual cash incentive opportunities for our executive officers. The incentives include a corporate component, an individual component and for executive officers who have responsibility for a business division, a division component. The corporate component is intended to link compensation to the company’s performance relative to financial targets established by the committee. The individual component allows the committee to reward an executive officer based on an assessment of how well the officer performed his or her role during the applicable year.

     2009 annual incentive program. For 2009, the corporate component was based on the achievement of an operating income goal of approximately $1.4 billion and was payable based on achievement of at least 86% of this operating income goal. Because this threshold was not met, the corporate component was not paid to our executive officers, or to any employee, for 2009. The division component was based on division operating income and was awarded for those business units that met their respective division operating income targets. The individual component of the bonus was paid at the discretion of the committee. In 2009, the relative weight assigned to the corporate component for our chief executive officer was 60% and the weight assigned to the individual component was 40%. The relative weight assigned to the corporate component for our other named executive officers was 80% and the weight assigned to the individual component was 20%.

     2010 annual incentive program. The re-design of our short-term incentive program is intended to:

• encourage behavior measured in the short-term that will contribute to growth and return on capital objectives over the next three to five years, focusing on both short-term financial metrics and key business objectives;

• create incentives for building sustainable growth and return on capital without inappropriate risk taking;

• utilize metrics that are transparent to both shareholders and participants; and

• align performance and payment ranges with competitive positioning.

     For 2010, the compensation committee has changed the metrics used for the corporate component of the annual incentive program and the relative weighting of corporate and individual performance. These metrics are:

• corporate revenue;

• cash flow return on invested capital; and

• key business objectives:

• to materially recover from the manufacturing issues that affected our Genetic Diseases business and implement measures for sustaining operations for this business,

• advance our product pipeline, and

• renew the organization through new hires for certain senior positions and progressing our “business excellence initiatives.”

     These metrics were chosen because we believe they provide a balance of short-term performance with strategic long-term focus on building shareholder value. Revenue is a common measure used by many companies to align pay and performance. Cash flow return on invested capital provides balance as it encourages our executives to concentrate on achieving profitable growth while paying appropriate attention to expense management and capital investment, important for both the short- and long-term. The business objectives are important for achieving long-term sustainable and profitable growth. For executive officers who have responsibilities for a business division, their goals will be comprised of the corporate component plus a separate division component based on division operating income.

     For all executive officers, the relative weight assigned to individual performance is 20% under our new program and is awarded based on the committee’s subjective review of an officer’s performance during the applicable year. For our executive officers who do not have a business division component, the corporate component is 80% of the bonus target and is comprised of the following:

• 40% corporate revenue;

• 20% cash flow return on invested capital; and

• 20% key business objectives.

     For executive officers who have a division component, the corporate component is 65% of the total bonus target and the division component is 15% and is weighted as follows:

• 35% corporate revenue;

• 15% cash flow return on invested capital;

• 15% key business objectives; and

• 15% division operating income.

The performance and payout ranges for our 2010 metrics are:

	Performance range	Payout range
Revenue	90% — 115%	30% — 200%
Cash flow return on invested capital	90% — 115%	50% — 200%
Division operating income	set on a division by division basis	50% — 180%

     The achievement of performance and payout for the key business objectives will be determined by the committee based on its review of the company’s performance in 2010.

     Cash flow return on invested capital will be calculated by dividing “adjusted cash profits” by the two-year average “adjusted invested capital.”

     Adjusted cash profits equals GAAP net income excluding (i) acquisition-related one time events (net of tax) and (ii) non-operating income or expense (net of tax), with the following added back: (a) R&D expense, (b) lease expense, (c) depreciation expense, (d) amortization expense (net of tax) and (e) investment income (net of tax).

     Adjusted invested capital equals total assets less (i) non-interest-bearing liabilities and (ii) non-operating items (such as deferred taxes), with the following added back: (a) capitalized R&D (net of amortization), (b) capitalized operating leases, (c) accumulated depreciation and (d) accumulated intangible amortization.

     Long-Term Incentive Program. From 2007 through 2009, our long-term incentive program for executive officers was comprised of equity awards in the form of time vesting stock options and time vesting RSUs. Beginning with 2010, the equity vehicles for our long-term incentive program for executive officers will be a combination of (1) time vesting stock options and (2) performance vesting awards, comprised of RSUs and cash, as described below.

     Use of Equity. Our shareholders expect us to create value, and that value is ultimately reflected in our stock price. Our equity compensation awards are designed to address shareholder interests by providing our executive officers (and other employees) appropriate long-term incentives to motivate and retain them in a future-oriented, research and development-based environment such as ours. Equity awards are the most significant components of our named executive officers’ compensation packages. To utilize equity compensation responsibly and maintain competitiveness, the compensation committee establishes guidelines to limit the total number of equity awards that may be granted in a program year to a stated percentage of shares outstanding. The objective of this philosophy is to manage the potential dilutive impact of the program to shareholders while continuing to provide broad-based equity awards. Each year we evaluate and adapt our program to address the challenges of an increasing employee population and the limited availability of equity reserves. Since 2007, we have used a combination of time vesting stock option and time vesting RSU awards. This approach helps manage dilution and allows us to deliver an equity component of total compensation that both continues to hold value and rewards for increased market value.

     Equity guidelines and timing. We award equity under four programs: a new hire grant program, a general grant program, an executive grant program and a recognition grant program. Each year, the compensation committee establishes guidelines and reviews our philosophy for granting equity under each program to determine appropriate and competitive grant levels. We have established processes in place for approving, dating and pricing awards for each of our equity programs to ensure that awards are not back-dated. Each year the committee evaluates the use of equity as a compensation tool, considering employee eligibility and past award practice, and sets a budget to manage its use.

     Our general grant program is our largest equity program and is comprised of broad-based equity grants to executive officers and employees. Such grants have covered approximately 89% of the shares granted during the calendar year for the past five years. The compensation committee has historically planned these grants to occur on the date of the annual shareholders meeting. Our bylaws call for the annual meeting to be held on the fourth Thursday of May or as otherwise determined by the board. The date of these annual meetings is set months in advance as part of the normal scheduling process for the board and its committees. This grant is not timed to coincide with the release of any material non-public information. The exercise price of the stock option grant is pre-approved by the committee and set as the closing price of our stock on the date of the grant.

     For our general grant in 2009, awards were comprised of either a combination of time vesting stock options and time vesting RSUs or just time vesting RSUs. Combination awards were granted 50% in time vesting stock options and 50% in time vesting RSUs, applying a 3:1 ratio such that one RSU was awarded for every three stock options. RSU awards were determined under the same formula as the combination awards.

     Without sustained growth and positive stock price performance, our executives carry the risk that they will not be able to realize gains from the stock option component of their equity-based awards. The compensation committee does not consider realized gains from prior stock option or RSU awards in its compensation decisions for either cash or equity, as such awards recognize past achievement. While we encourage share ownership through this program, we do not have a formal share ownership policy. Historically, on average, our named executive officers wait more than six years before exercising stock options. In addition, we do not have a specific policy regarding hedging the economic risk of share ownership, but advise our executive officers about the potential for violations under the short-sale rules of the Exchange Act.

     2010 long-term incentive program. Beginning in 2010, our long-term incentive program for executive officers will include a combination of (1) performance vesting awards, tied to the achievement of pre-established performance goals over a three-year performance period, and (2) time vesting stock options. Approximately half the grant will be made in time vesting stock options with the remainder in performance vesting RSUs. The number of RSUs is determined by applying a 3:1 ratio such that one RSU is awarded for every three stock options.

     For the 2010-2012 performance period, the performance metrics are:

• relative total shareholder return (TSR) measured against the performance of a subset of biotechnology peer companies (currently 28 companies) in the S&P 500 Health Care Index; and

• cash flow return on invested capital.

     Each metric is weighted equally. For both metrics, performance between the threshold level and the target level will be awarded in performance vesting RSUs. The RSUs will be paid out in shares of our stock at the end of the three-year period if performance between the threshold level and target level is achieved. If performance above the target level is achieved, the portion of the award above the target level will be paid out in cash up to a predetermined maximum cash award. Since it is possible that performance-based RSUs may not pay out at all, it is completely “at risk” compensation.

     In January 2010, the compensation committee approved a range for the three-year cash flow return on invested capital metric of 85% to 115%. For performance between 85% and 100% of the cash flow return on invested capital target, the payout range is 50% to 100% of the senior executive’s target RSU award. Performance between 101% and 115% of the cash flow return on invested capital target will result in a cash payment that will be awarded based on performance achieved between target and maximum levels, up to a predetermined maximum. The committee also approved the following performance levels for relative TSR:

Performance Level	Percentile Rank
Threshold	40th
Target	65th
Maximum	75th

     For performance between the relative TSR threshold and target levels, the payout range is 35% to 100% of the senior executive’s target RSU award. Relative TSR performance between the target and maximum levels will result in a cash payment that will be awarded based on performance achieved between target and maximum levels, up to a predetermined maximum.

     If a participating senior executive’s employment is terminated before the end of the performance period because of death, disability or retirement, payment of the performance vesting award will be pro-rated to the date of termination based upon the company’s actual achievement of performance levels at the end of the performance period. Upon a change in control, payment of a performance vesting award will be paid out at the target performance level and pro-rated to the date of the change of control.

     Mr. Termeer’s 2009 compensation. At its meeting in December 2008, the compensation committee set base salary and target incentive cash compensation levels for 2009 for Mr. Termeer, our president and chief executive officer. In setting compensation for Mr. Termeer, the committee considered cash compensation levels of CEOs in our peer group, survey data provided by Towers Watson, and the company’s performance over the past year. The committee also considered secondary factors, including our financial performance prior to 2009 and Mr. Termeer’s cash and equity compensation during the past 10 years. In setting his salary and target cash incentive for 2009, the committee increased Mr. Termeer’s overall cash compensation for 2009, both salary and target incentive compensation, by 8.7% to $3,779,960.

     In setting Mr. Termeer’s cash compensation for 2009, the committee considered our strong 2008 financial performance and the following aspects of our performance in 2008:

Product Growth

• The approval of Mozobil in the United States for stem cell mobilization and continued progress of multiple products in clinical trials;

• Entry into a collaboration with Isis Pharmaceuticals, Inc. under which we acquired the exclusive, worldwide rights to develop mipomersen, potentially responding to the unmet medical need for treatments for severe hypercholesterolemia;

• Management of the integration of prior transactions such as the acquisition of Bioenvision;

• Formation of a partnership with PTC Therapeutics to provide the company with international rights to PTC124, a promising potential treatment for cystic fibrosis; and

• Formation of a partnership with Osiris Therapeutics to provide the company with rights outside the United States and Canada to Prochymal and Chondrogen, late-stage adult stem cell treatments with potential to address treatment of a wide range of diseases such as Crohn’s disease, type 1 diabetes, acute myocardial infarction, and osteoarthritis of the knee.

Operational Management

• Reorganization of key commercial businesses in an effort to strengthen the long-term sustainability of the company;

• Expansion of the scope and responsibilities of the portfolio management committee to prioritize R&D initiatives; and

• Recognition of Genzyme by Science Magazine as the third best science organization in the world at which to work.

     The compensation committee believes that an emphasis on cash incentive compensation tied to corporate performance is appropriate for a chief executive officer. The committee discussed the alignment of a pay-for-performance philosophy whereby the total annual cash increase is weighted more heavily toward pay considered to be “at risk”. Accordingly, Mr. Termeer’s level of short-term incentive compensation reflects our pay-for-performance philosophy under which his target annual incentive cash compensation makes up more than half of his potential total cash compensation. The committee set Mr. Termeer’s base salary at $1,643,460 and his cash incentive target at $2,136,500. Of this amount, approximately 60%, or $1,281,900 was tied to corporate financial performance and 40%, or $854,600 was tied to Mr. Termeer’s individual performance. As described above, we did not meet the operating income goal established under the 2009 annual incentive program. Accordingly, no amounts were payable to Mr. Termeer based on corporate financial performance. In February 2010, Mr. Termeer requested that he not be awarded the individual component of his annual incentive bonus for 2009 in recognition of the manufacturing challenges we faced in 2009. The committee discussed Mr. Termeer’s request and concluded that no annual incentive bonus would be awarded to Mr. Termeer for 2009.

     In May 2009, the compensation committee awarded an equity grant to Mr. Termeer comprised of stock options and RSUs. The committee believes it is appropriate for equity awards to comprise a significant portion of Mr. Termeer’s total compensation. The committee referenced CEO equity data from the company’s peer group provided by Towers Watson to guide its decisions. The committee reviewed Mr. Termeer’s performance and the long-range performance and growth of the company, noting the key performance measures from 2008 considered in setting Mr. Termeer’s cash compensation discussed above.

As a result of its analysis, the compensation committee decided, given the economic recession and to better align value with changed economic conditions, to reduce the number of shares in Mr. Termeer’s 2009 award to 95% of his 2008 award, notwithstanding Mr. Termeer’s contributions to the company’s financial and business achievements in 2008. Accordingly, the committee granted Mr. Termeer stock options to purchase 190,000 shares of our common stock and RSUs for 63,650 shares. This resulted in a decrease in value, at the time of grant, of 11% from his 2008 award.

     The following table summarizes the components of 2009 compensation decisions approved by the committee as a percentage of total compensation for Mr. Termeer:

	2009 ($)		% of Total
	(approved)		Compensation
Base salary		1,643,460		14	%
Target annual cash incentive
corporate performance		1,281,900
individual performance		854,600
Total target annual cash incentive(1)		2,136,500		19	%
Total target cash compensation		3,779,960		33	%
Value of equity awards(2)
stock options		3,944,780		34	%
RSUs		3,733,709		33	%
Total equity value		7,678,489		67	%
Total compensation		11,458,449		100	%

(1)	None of the target annual cash incentive was paid to Mr. Termeer for 2009. Total compensation paid to Mr. Termeer for 2009 is discussed on pages 37-38 of this proxy statement.
(2)	Based on grant date fair value, discussed on pages 38-39 of this proxy statement.

     2009 compensation for named executive officers, other than Mr. Termeer. To determine compensation for our other named executive officers in 2009, the compensation committee reviewed the compensation data of our peer group, as well as survey data provided by the committee’s compensation consultant. The committee’s objective is to ensure that total compensation for our named executive officers is appropriate and reflects the individual performance of each executive.

     The approach to compensation for our named executive officers also reflects our non-hierarchical management structure. We employ a relatively flat management structure compared with the more traditional multi-tiered management structures employed by many other companies. Our executive officers make up an operating committee that includes business, legal, medical and scientific officers. This operating committee meets regularly to discuss the ongoing management of the company as well as strategic planning for the company’s development and future growth. They have an integral role in helping Mr. Termeer chart the future of the company. Cash and equity compensation for members of the operating committee falls within relatively narrow ranges, reflecting the flat management layer directly below the CEO. Due to the way the operating committee operates, the differential between the compensation levels for our named executive officers and the compensation for Mr. Termeer is greater than that seen in the more traditional hierarchical compensation structures employed by many other companies.

     For the named executive officers other than himself, Mr. Termeer discusses with the compensation committee each officer’s individual performance and his recommendation for base salary increases and target annual cash incentive compensation amounts. Because the named executive officers are responsible for implementing our strategic direction, Mr. Termeer’s recommendations focus on sustainable, strategic decision-making capabilities for each individual relative to the company as a whole and each individual’s areas of responsibility. Mr. Termeer’s recommendations for 2009 included an emphasis on target incentive compensation to reflect our pay-for-performance structure. The committee also reviews a two-year history of cash compensation for each named executive officer. The committee reviews Mr. Termeer’s recommendations and makes its cash compensation decisions based on each officer’s performance, its assessment of that individual’s performance relative to the group and each officer’s compensation in light of competitive market information. At its December 2008 meeting, the committee approved 2009 base salary increases ranging from 3.0 — 4.3%, excluding Dr. Meeker, for the named executive officers other than Mr. Termeer. The committee approved an increase of 11.8% for Dr. Meeker, to recognize his additional responsibilities as a key leader in managing business operations since becoming an executive officer in May 2008.

     A significant portion of executive compensation consists of annual cash incentive awards. The annual cash incentive targets for 2009 were tied to both corporate performance and performance in individual areas of responsibility. To reflect an emphasis on pay-for-performance, 80% of the annual cash incentive target for the named executive officers, other than Mr. Termeer, was tied to corporate financial performance. As described above, we did not meet the operating income goal established under the 2009 annual incentive program. Accordingly, no

amounts were payable to our named executive officers based on corporate financial performance. In February 2010, Mr. Termeer made recommendations to the committee for the individual performance component of each named executive officer’s annual incentive, except for Mr. Collier, based on his evaluation of each officer’s performance during 2009. Consideration was given to the individual’s leadership, their management of their respective complex and dynamic areas, and their individual contributions to the company during a very challenging year. Dr. Meeker was awarded 97%, and Messrs. Wyzga and Smith were each awarded 100%, of his individual performance component. Mr. Wirth was awarded 105% of his individual component to recognize his strong leadership on corporate governance matters. Mr. Collier had resigned as an officer effective October 1, 2009, and therefore was no longer a participant in our senior executive annual incentive program when award decisions were made in February 2010.

     In May 2009, to determine the number of options and RSUs to grant to each named executive officer, the committee considered:

• Mr. Termeer’s recommendations regarding each named executive officer’s performance in 2008 and assessment of the officer’s long-term potential at Genzyme;

• equity grant data from our peer group;

• survey data of long-term incentive practices prepared by Towers Watson; and

• our equity granting history for the last three years.

The committee approved equity awards of 42,750 stock options and 14,250 RSUs for each of our named executive officers, other than Mr. Termeer. The committee concluded that providing a grant at 95% of the number of stock options and restricted stock units as was granted in 2008 would be both appropriate and competitive with our peer group. Consistent with the adjustment made to Mr. Termeer’s awards, these awards had a decrease in value of 11% from 2008 awards.

     The following table summarizes the components of 2009 compensation decisions approved by the committee as a percentage of total compensation for the named executive officers other than Mr. Termeer listed in the “Summary Compensation Table” on page 37 of this proxy statement:

	Mr. Wyzga				Mr. Collier				Dr. Meeker				Mr. Smith				Mr. Wirth
Base salary		532,000	19	%		575,000	21	%		475,000	18	%		511,000	19	%		760,000	25	%
Target annual cash incentive
corporate performance		405,000				405,000				405,000				405,000				405,000
individual performance		100,000				100,000				100,000				100,000				100,000
Total target cash incentive(1)		505,000	18	%		505,000	18	%		505,000	19	%		505,000	18	%		505,000	17	%
Total target cash compensation		1,037,000	37	%		1,080,000	39	%		980,000	37	%		1,016,000	37	%		1,265,000	42	%
Value of equity awards(2)		1,723,481	63	%		1,723,481	61	%		1,723,481	63	%		1,723,481	63	%		1,723,481	58	%
Total compensation		2,760,481	100	%		2,803,481	100	%		2,703,481	100	%		2,739,481	100	%		2,988,481	100	%

(1)	None of the target corporate performance component listed above was paid for 2009. Total compensation paid to the named executive officers for 2009 is discussed on page 37 of this proxy statement.
(2)	Based on grant date fair value, discussed on pages 38-39 of this proxy statement.

     Executive Employment Agreements. Messrs. Termeer and Wirth each have an initial three-year employment agreement that automatically extends by one year each December 31 unless written notice of non-renewal is given. Each agreement provides that the board, or a duly appointed committee of the board, shall set salary annually, and that such base salary shall not be lower than the base salary for the preceding calendar year. Both agreements provide:

• certain life and disability insurance benefits;

• eligibility to participate in the company’s annual cash incentive plan;

• eligibility to participate in the company’s equity incentive plans;

• certain payments and benefits for termination without cause, with or without a change in control event, or termination by the executive for good reason following a change in control;

• accelerated vesting of equity awards in the event of termination without a change in control event without cause, or due to death or disability; and

• confidentiality, non-competition and ownership of inventions provisions.

     Executive Severance Agreements. The committee believes that it is in the best interests of the company and its shareholders to ensure the continued dedication of our executive officers should the company be in the situation of facing a change in control. Such a situation would require our executive officers to remain highly focused and attentive to managing the operations of the company. The financial security provided by severance benefits can mitigate the inevitable distractions created by the personal uncertainties and risks created by a pending or threatened change in control.

     Other than Messrs. Termeer and Wirth, whose severance arrangements are included in their employment agreements and described above, we have severance agreements with all of our executive officers, including our named executive officers. These agreements have an initial one-year term and renew automatically each December 31 for an additional one-year period, unless written notice of non-renewal is given. Under these agreements, payments will be made following a change in control upon the involuntary termination of the named executive officer’s employment by us without cause or by the named executive officer for good reason.

     For a more complete description and quantification of benefits payable to our named executive officers upon and following termination of employment see “Potential Payments Upon Termination or Change in Control” on pages 44-46.

     None of the employment or severance agreements provide for tax gross-up payments, which allows us to avoid the often significant costs that could be involved in gross-up payments related to a change in control. None of the employment or severance agreements contain any clawback provisions.

     Tax deduction limits on executive compensation. Section 162(m) of the Code generally does not permit Genzyme a federal income tax deduction for taxable year compensation in excess of $1,000,000 paid to each of our chief executive officer and our three other highest paid executive officers excluding the chief financial officer. Certain performance-based compensation that is awarded under a plan, the material terms of which have been approved by shareholders, is exempt from the deduction limit. Although the 2009 salary and annual cash incentive awards paid to our named executive officers do not qualify for the performance-based compensation exemption, our shareholders have approved the 2001 and 2004 Equity Incentive Plans, which are designed to allow us to deduct the compensation expense related to stock options granted to our named executive officers under those plans. We have in the past and may in the future award compensation that is not fully deductible under Section 162(m).

     This compensation discussion and analysis is intended to provide an overview and analysis of the policies and decisions made for executive compensation. We believe the decisions of the compensation committee and the company follow a deliberate and thoughtful process and are aligned with both the short- and long-term objectives of the corporation and its shareholders. The following tables and disclosures are intended to support and augment this discussion.

SUMMARY COMPENSATION TABLE
for the year ended December 31, 2009

									Non-Equity
									Incentive
					Stock		Option		Plan		All Other
			Salary		Awards		Awards		Compensation		Compensation		Total
Name and Principal Position	Year		($)(1)		($)(2)		($)(2)		($)		($)(3)(4)(6)		($)
Henri A. Termeer		2009		1,704,725		3,733,709		3,944,780		0		124,189		9,507,403
Chief Executive		2008		1,578,514		4,588,160		4,454,400		1,962,725		115,502		12,699,301
Officer		2007		1,503,620		4,164,720		4,640,360		2,142,000		105,773		12,556,473
Michael S. Wyzga		2009		551,785		835,905		887,576		100,000		14,256		2,389,522
Executive Vice		2008		509,538		1,027,200		1,002,240		489,500		13,347		3,041,825
President; Chief Financial		2007		489,577		932,400		1,044,081		560,000		11,230		3,037,288
Officer
Earl M. Collier, Jr.		2009		507,688		835,905		887,576		80,750		14,700		2,326,619
Senior Advisor(5)		2008		557,515		1,027,200		1,002,240		489,500		13,800		3,090,255
		2007		536,577		932,400		1,044,081		555,000		11,250		3,079,308
David P. Meeker, M.D.		2009		491,731		835,905		887,576		96,880		9,985		2,322,077
Executive Vice		2008		424,308		1,027,200		1,002,240		450,803		9,643		2,914,194
President		2007		394,327		502,439		562,644		456,750		7,938		1,924,098
Sandford D. Smith		2009		530,008		835,905		887,576		100,000		14,700		2,368,189
Executive Vice		2008		489,538		1,027,200		1,002,240		489,500		13,800		3,022,278
President		2007		469,654		932,400		1,044,081		555,000		11,250		3,012,385
Peter Wirth		2009		788,462		835,905		887,576		105,000		16,611		2,633,554
Executive Vice		2008		734,331		1,027,200		1,002,240		489,500		15,711		3,268,982
President		2007		705,423		932,400		1,044,081		560,000		13,161		3,255,065

(1)	Salaries paid for 2009 reflect one extra pay period that was not determined until the end of 2009.
(2)	We are required to account for equity awards at fair value. The RSUs granted on May 21, 2009 had a grant date fair market value of $58.66 per share which was the closing price of our stock on that date. The value of option awards was determined using the Black-Scholes option valuation model, which estimates the value of an equity award using subjective assumptions which can vary over time. Valuation information regarding the 2009 option awards can be found following the “Grants of Plan-Based Awards” table on pages 38-39. For a more complete discussion of the relevant assumptions we use to calculate the grant date fair value of option awards, see the section “Accounting for Stock-Based Compensation” in “Note A. Summary of Significant Accounting Policies” and “Note M. Stockholders’ Equity” of the “Notes To Consolidated Financial Statements” in our 2009 Annual Report on Form 10-K.
(3)	All other compensation above includes company contributions made under our retirement savings plan, a 401(k) plan.
(4)	For security purposes we provide a driver to Mr. Termeer for commuting to and from work and work-related events. The cost to the company of providing this benefit to Mr. Termeer was $81,386 for 2009, $73,599 for 2008 and $66,420 for 2007 and is included in “All Other Compensation” for Mr. Termeer. This cost is based on the driver’s salary plus vehicle expenses, including gas, mileage, and vehicle lease expense.
(5)	Mr. Collier resigned as executive vice president as of October 1, 2009. He received an individual bonus for 2009 based on his inclusion in the general corporate bonus program.

(6) All other compensation for Mr. Termeer for 2009, 2008 and 2007 includes insurance premiums totaling $28,103 in each year that we paid for life and disability insurance benefits. For Mr. Wirth, all other compensation includes insurance premiums of $1,911 for 2009, 2008 and 2007 that we paid for life insurance benefits. We have provided these insurance policies to ensure Messrs. Termeer and Wirth receive a similar level of benefit as is provided in our group plans, as their calculated benefits under our group plans exceed the maximum limits.

GRANTS OF PLAN-BASED AWARDS
for the year ended December 31, 2009

											All Other		All Other
											Stock		Option				Grant
											Awards:		Awards:		Exercise		Date Fair
											Number of		Number of		or Base		Value of
					Estimated Future Payouts Under						Shares of		Securities		Price of		Stock and
	Approval		Grant		Non-Equity Incentive Plan Awards(1)						Stock or		Underlying		Option		Option
Name	Date		Date		Threshhold ($)		Target ($)		Maximum ($)		Units (#)		Options (#)		Awards ($/Sh)		Awards ($)
Henri A. Termeer				N/A		0		2,136,500		3,204,750
		5/20/09		5/21/09								63,650						3,733,709
		5/20/09		5/21/09										190,000	$	58.66		3,944,780
Michael S. Wyzga				N/A		0		505,000		757,500
		5/20/09		5/21/09								14,250						835,905
		5/20,09		5/21/09										42,750	$	58.66		887,576
Earl M. Collier, Jr.				N/A		0		505,000		757,500
		5/20/09		5/21/09								14,250						835,905
		5/20/09		5/21/09										42,750	$	58.66		887,576
David P. Meeker				N/A		0		505,000		757,500
		5/20/09		5/21/09								14,250						835,905
		5/20/09		5/21/09										42,750	$	58.66		887,576
Sandford D. Smith				N/A		0		505,000		757,500
		5/20/09		5/21/09								14,250						835,905
		5/20/09		5/21/09										42,750	$	58.66		887,576
Peter Wirth				N/A		0		505,000		757,500
		5/20/09		5/21/09								14,250						835,905
		5/20/09		5/21/09										42,750	$	58.66		887,576

(1) Represents target payout under our annual cash incentive plan for 2009. Actual amounts paid in February 2010 are included in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table on page 37. The maximum amounts assume a payout of 150% of the corporate component of the named executive officer’s annual cash incentive. The annual cash incentive program is described in the “Compensation Discussion and Analysis” on page 28.

     On May 21, 2009, stock options and RSUs were granted to the named executive officers at the same time that stock options and RSUs were granted to all qualified, eligible employees of the company. Stock option awards to Mr. Wyzga were made under the 2001 Equity Incentive Plan. All other awards were made under the 2004 Equity Incentive Plan. The awards were approved by our compensation committee at a meeting held on May 20, 2009. The stock options have an exercise price of $58.66 per share, which was the closing price of our stock on May 21, 2009, the date of grant. The options have a ten-year term and vest 20% on the date of grant with an additional 20% vesting annually over the next four years on the anniversary of the date of grant. For Messrs. Wyzga, Wirth and Dr. Meeker, RSUs vest 100% on the third anniversary of the date of grant. RSUs for Messrs. Termeer, Collier and Smith vest in one-third increments annually on each of the next three anniversaries of the date of grant because these officers have reached “retirement eligibility” under our long-term compensation program. Retirement eligibility is defined as reaching age 60 and having completed five years of service with the company.

     The grant date fair value of the stock options granted in 2009 was $20.76 per share, which was based on the Black-Scholes option pricing model. The grant date fair value of the RSUs granted in 2009 was $58.66 per share,

which was the closing price of our stock on the date of grant. We incorporate our discussion of the relevant assumptions we use to calculate the grant date fair value of equity awards into this section by reference from the section “Accounting for Stock-Based Compensation” in “Note A. Summary of Significant Accounting Policies” and “Note M. Stockholders’ Equity” of the “Notes To Consolidated Financial Statements” in our 2009 Annual Report on Form 10-K.

     The stock option awards for the named executive officers include vesting acceleration in the event of termination as a result of disability or death, or upon a change in control of the company. The RSU awards for Messrs. Termeer and Wirth include vesting acceleration in the event of termination as a result of disability or death, or upon a change in control of the company. The RSU awards for the other named executive officers, however, include vesting acceleration in the event of termination as a result of death or upon a change in control of the company, but not for disability. Stock options and RSUs for Messrs. Termeer and Wirth also will automatically vest if employment is terminated by the company without cause prior to a change in control.

     For stock option awards, in the event of termination as a result of disability or death, the named executive officers, or their beneficiaries, will have one year to exercise vested options unless the options otherwise would expire under their stated terms. In addition, if the named executive officer has reached retirement eligibility (as defined above) with the company, at termination of employment for any reason other than cause, vesting of stock options will be accelerated and the executive officer will have three years to exercise the options unless they otherwise would expire under their stated terms. This retirement eligibility provision does not apply to options granted before December 1, 2003. The named executive officers do not have any acceleration of vesting provision relating to retirement eligibility for RSU awards. Nonstatutory options for the named executive officers are transferable to defined family members.

     If a named executive officer leaves his employment with us for any reason other than death, disability, retirement (as described above), following a change in control, or for cause, he may exercise vested options for a period of 90 days from the date of termination. Unvested options will be cancelled as of the date of termination.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
for the year ended December 31, 2009

	Option Awards								Stock Awards
	Number of		Number of						Number		Market Value
	Securities		Securities						of Shares		of Shares or
	Underlying		Underlying						or Units		Units of
	Unexercised		Unexercised		Option		Option		of Stock		Stock
	Options (#)		Options (#)		Exercise		Expiration		That Have		That Have
Name	Exercisable(1)		Unexercisable(1)(2)		Price ($)		Date		Not Vested(#)(3)		Not Vested($)(4)
Henri A. Termeer		200,000				26.50		5/25/2010		175,317		8,592,286
		8,421				226.83		5/25/2010
		12,362				126.59		5/31/2011
		5,614				274.31		5/31/2011
		500,000				53.47		5/31/2011
		600,000				32.52		5/30/2012
		6,181				85.74		5/30/2012
		7,017				41.50		5/30/2012
		475,000				46.24		5/29/2013
		460,000				43.90		5/27/2014
		425,000				62.98		5/26/2015
		320,000		80,000		58.50		5/25/2016
		120,000		80,000		62.16		5/24/2017
		80,000		120,000		68.48		5/22/2018
		38,000		152,000		58.66		5/21/2019

Option Awards

Stock Awards

Number of

Number of

Number

Market Value

Securities

Securities

of Shares

of Shares

Underlying

Underlying

or Units

or Units

Unexercised

Unexercised

Option

Option

of Stock

of Stock

Options (#)

Options (#)

Exercise

Expiration

That Have

That Have

Name

Exercisable(1)

Unexercisable(1)(2)

Price ($)

Date

Not Vested(#)(3)

Not Vested($)(4)

Michael S. Wyzga

343

226.75

5/25/2010

44,250

2,168,693

592

135.25

2/9/2011

791

126.59

5/31/2011

505

274.31

5/31/2011

954

85.74

5/30/2012

90,000

46.24

5/29/2013

81,000

43.90

5/27/2014

69,000

62.98

5/26/2015

55,200

13,800

58.50

5/25/2016

27,000

18,000

62.16

5/24/2017

18,000

27,000

68.48

5/22/2018

8,550

34,200

58.66

5/21/2019

	Option Awards								Stock Awards
	Number of		Number of						Number		Market Value
	Securities		Securities						of Shares		of Shares or
	Underlying		Underlying						or Units		Units of
	Unexercised		Unexercised		Option		Option		of Stock		Stock
	Options (#)		Options (#)		Exercise		Expiration		That Have		That Have
Name	Exercisable(1)		Unexercisable(1)(2)		Price ($)		Date		Not Vested(#)(3)		Not Vested($)(4)
Earl M. Collier, Jr.		4,373				26.50		5/25/2010		39,250		1,923,643
		479				226.75		5/25/2010
		4,945				135.25		2/9/2011
		21,000				53.47		5/31/2011
		505				274.31		5/31/2011
		3,115				126.59		5/31/2011
		651				41.50		5/30/2012
		3,708				85.74		5/30/2012
		36,820				32.52		5/30/2012
		69,000				62.98		5/26/2015
		55,200		13,800		58.50		5/25/2016
		27,000		18,000		62.16		5/24/2017
		18,000		27,000		68.48		5/22/2018
		8,550		34,200		58.66		5/21/2019

	Option Awards								Stock Awards
	Number of		Number of						Number		Market Value
	Securities		Securities						of Shares		of Shares or
	Underlying		Underlying						or Units		Units of
	Unexercised		Unexercised		Option		Option		of Stock		Stock
	Options (#)		Options (#)		Exercise		Expiration		That Have		That Have
Name	Exercisable(1)		Unexercisable(1)(2)		Price ($)		Date		Not Vested(#)(3)		Not Vested($)(4)
David P. Meeker		16,488				26.50		5/25/2010		37,333		1,829,690
		169				135.25		2/9/2011
		20,000				50.02		4/16/2011
		29,080				53.47		5/31/2011
		20,630				32.52		5/30/2012
		4,000				27.46		6/12/2012
		15,000				30.57		3/6/2013
		22,500				46.24		5/29/2013
		41,000				43.90		5/27/2014
		35,000				62.98		5/26/2015
		38,800		9,700		58.50		5/25/2016
		14,550		9,700		62.16		5/24/2017
		18,000		27,000		68.48		5/22/2018
		8,550		34,200		58.66		5/21/2019

	Option Awards								Stock Awards
	Number of		Number of						Number		Market Value
	Securities		Securities						of Shares		of Shares or
	Underlying		Underlying						or Units		Units of
	Unexercised		Unexercised		Option		Option		of Stock		Stock
	Options (#)		Options (#)		Exercise		Expiration		That Have		That Have
Name	Exercisable(1)		Unexercisable(1)(2)		Price ($)		Date		Not Vested(#)(3)		Not Vested($)(4)
Sandford D. Smith		407				226.75		5/25/2010		39,250		1,923,643
		351				135.25		2/9/2011
		14,700				53.47		5/31/2011
		308				274.31		5/31/2011
		370				126.59		5/31/2011
		241				41.50		5/30/2012
		791				85.74		5/30/2012
		9,000				46.24		5/29/2013
		22,800				43.90		5/27/2014
		48,500				62.98		5/26/2015
		55,200		13,800		58.50		5/25/2016
		27,000		18,000		62.16		5/24/2017
		18,000		27,000		68.46		5/22/2018
		8,550		34,200		58.66		5/21/2019

	Option Awards								Stock Awards
	Number of		Number of						Number		Market Value
	Securities		Securities						of Shares		of Shares or
	Underlying		Underlying						or Units		Units of
	Unexercised		Unexercised		Option		Option		of Stock		Stock
	Options (#)		Options (#)		Exercise		Expiration		That Have		That Have
Name	Exercisable(1)		Unexercisable(1)(2)		Price ($)		Date		Not Vested(#)(3)		Not Vested ($)(4)
Peter Wirth		48,216				26.50		5/25/2010		44,250		2,168,693
		1,208				226.75		5/25/2010
		520				135.25		2/9/2011
		1,571				274.31		5/31/2011
		642				126.59		5/31/2011
		62,000				53.47		5/31/2011
		2,245				41.50		5/30/2012
		185,300				32.52		5/30/2012
		1,468				85.74		5/30/2012
		90,000				46.24		5/29/2013
		81,000				43.90		5/27/2014
		69,000				62.98		2/26/2015
		55,200		13,800		58.50		5/25/2016
		27,000		18,000		62.16		5/24/2017
		18,000		27,000		68.48		5/22/2018
		8,550		34,200		58.66		5/21/2019

(1)	Includes stock options originally granted in our Biosurgery and Molecular Oncology tracking stocks which were converted into stock options for Genzyme Stock on June 30, 2003. A total of 65,006 of these converted options are exercisable with exercise prices from $41.50 to $274.31.
(2)	Stock options vest 20% on the date of grant and 20% per year over the next four years on the anniversary of the date of grant. The grant date of the stock options is ten years prior to the option expiration date.
(3)	The following table provides information with respect to the vesting of each outstanding RSU held by the named executive officers as of December 31, 2009:

RSU Vesting Date	H. Termeer		M. Wyzga		E. Collier		D. Meeker		S. Smith		P. Wirth
May 21, 2010		21,216				4,750				4,750
May 22, 2010		22,333				5,000				5,000
May 24, 2010		67,000		15,000		15,000		8,083		15,000		15,000
May 22, 2011		22,334		15,000		5,000		15,000		5,000		15,000
May 21, 2011		21,217				4,750				4,750
May 21, 2012		21,217		14,250		4,750		14,250		4,750		14,250
Totals		175,317		44,250		39,250		37,333		39,250		44,250

(4) The market value of RSUs is based on a price of $49.01, which was the closing price of our stock on December 31, 2009.

OPTION EXERCISES AND STOCK VESTED
for the year ended December 31, 2009

	Option Awards				Stock Awards
	Number of				Number of
	Shares		Value		Shares		Value
	Acquired On		Realized on		Acquired on		Realized On
Name	Exercise (#)		Exercise ($)		Vesting (#)(1)		Vesting ($)
Henri A. Termeer		200,000		4,794,120		22,333		1,303,577
Michael S. Wyzga		0		0		0		0
Earl M. Collier, Jr.		0		0		5,000		291,850
David P. Meeker		0		0		0		0
Sandford D. Smith		0		0		5,000		291,850
Peter Wirth		232,180		8,605,264		0		0

(1) In May 2009, Messrs. Termeer, Collier and Smith were each issued shares that vested under time vesting RSUs that were granted in 2008 under the retirement eligibility provisions of those awards.

     On February 23, 2009, Mr. Termeer entered into a Rule 10b5-1 trading plan to exercise 400,000 stock options due to expire in May 2010 and sell the exercised shares at specified prices. Mr. Termeer’s trading plan includes provisions to exercise and sell the shares at certain pre-determined dates if his limit prices are not met, in order to ensure that all of the shares are exercised and sold prior to the expiration date of the stock options. As a result of not meeting a limit order sale price, in November 2009, 200,000 shares were exercised and sold under the plan. In February 2010, an additional 100,000 shares were exercised and sold under the plan. A final transaction, to exercise and sell an additional 100,000 shares, is expected to occur before May 25, 2010.

     In December 2007, Mr. Wirth entered into a Rule 10b5-1 trading plan to exercise 232,180 stock options due to expire in January 2009 and sell the exercised shares under a limit order. Mr. Wirth’s trading plan included a provision to exercise and sell the shares at a certain, pre-determined date if his limit order price was not met, in order

to ensure that all of the shares were exercised and sold prior to the expiration date of the stock options. As a result of not meeting his limit order sale price, in January 2009, all of the shares were exercised and sold under the plan.

     Mr. Wirth has entered into a Rule 10b5-1 trading plan to exercise 48,216 stock options due to expire in May 2010 and to sell the exercised shares. Dr. Meeker has entered into a Rule 10b5-1 trading plan to exercise 16,488 stock options due to expire in May 2010 and to sell the exercised shares. We expect the transactions for Mr. Wirth and Dr. Meeker to occur before May 25, 2010.

     We encourage our officers to establish Rule 10b5-1 trading plans. Given the limited times during the year when our officers are allowed to trade, transactions under a Rule 10b5-1 trading plan allow our officers to trade in our stock without becoming subject to the presumption that they are basing their trades on non-public information.

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

     Due to factors such as the timing during the year of an event, the company’s stock price and the executive’s age, any of which can affect the nature and amount of benefits provided upon the events discussed below, actual amounts paid or distributed may vary. All equity calculations in this discussion assume a stock price of $49.01, which was the closing price of our stock on December 31, 2009, the last trading day of the year.

     Termination outside of a change in control. The employment agreements for Messrs. Termeer and Wirth provide for the following payments upon termination by us without cause prior to a change in control:

• a lump sum payment of two times the sum of his annual salary and annual cash incentive;

• continued health, life and disability insurance and other benefits for two years from the date of termination, except to the extent comparable benefits are provided by a new employer; and

• full vesting of all non-performance based options or RSUs under our equity incentive plans.

Assuming the employment of Messrs. Termeer and Wirth had been terminated by us without cause prior to a change in control on December 31, 2009, they would have been entitled to the following payments:

					Value of
					Accelerated
	Lump Sum				Equity Awards
	Base + Bonus ($)		Benefits ($)		($)		Total(1)
Henri A. Termeer		7,391,645		99,005		8,592,286		16,082,936
Peter Wirth		2,569,500		9,509		2,168,693		4,747,702

(1) Cash payment amounts are based on the following components:

• base pay using salary as of December 31, 2009 times the multiplier;

• annual cash incentive, calculated by taking the higher of (a) the last cash incentive paid, or (b) the average of the last two cash incentives paid, times the multiplier;

• health benefits, based on COBRA rates as of January 1, 2010; and

• life and disability insurance premiums, based on current formula calculations.

     Termination due to death or disability. In the event that a named executive officer’s employment is terminated due to death, all non-performance based stock options would fully vest under the terms and conditions of the named executive officers’ equity awards and they would have one year from the date of termination to exercise their options unless the options otherwise would expire under their stated terms. The terms of Mr. Termeer’s and Mr. Wirth’s employment agreements also provide for accelerated vesting of non-performance based equity upon death.

     For termination of employment due to disability for Messrs. Termeer and Wirth, all non-performance based RSUs would fully vest under the terms and conditions of their employment agreements and their equity awards. For the other named executive officers, RSUs granted in 2007 would vest upon termination of employment for disability under the terms and conditions of their equity awards, but RSUs granted in 2008 and 2009 would not.

     Assuming the employment of the named executive officers had been terminated due to death or disability on December 31, 2009, they would have been entitled to accelerated vesting of equity with the following value:

			Value of
	Value of		Accelerated
	Accelerated		Equity Awards
	Equity Awards		Due to
	Due to Death		Disability
	($)		($)
Henri A. Termeer		8,592,286		8,592,286
Michael S. Wyzga		2,168,693		735,150
Earl M. Collier, Jr.		1,923,643		735,150
David P. Meeker		1,829,690		396,148
Sandford D. Smith		1,923,643		735,150
Peter Wirth		2,168,693		2,168,693

     Termination with retirement eligibility. Under the terms and conditions of the named executive officers’ equity awards, if their employment terminates for any reason other than for cause after they have reached retirement eligibility (defined as age 60 plus completion of at least five years of service), they will receive full vesting of their outstanding non-performance based stock options and will have three years from the date of termination to exercise the options unless the options would otherwise expire under their stated terms. None of our named executive officers receive any accelerated vesting for RSUs for termination with retirement eligibility. Messrs. Termeer, Collier and Smith have met the retirement eligibility definition, and assuming these executive officers had terminated their employment on December 31, 2009 other than for cause, they would have been entitled to accelerated vesting of stock options. Those accelerated stock options had no intrinsic value at December 31, 2009.

     Termination following a change in control. Under the employment agreements with Messrs. Termeer and Wirth, upon termination following a change in control of the company, by us other than for cause or disability or by Mr. Termeer or Mr. Wirth for good reason, we must:

• make a lump sum severance payment of three times the sum of his annual salary and annual cash incentive;

• continue life, disability, accident and health insurance coverage for three years, except to the extent comparable benefits are provided by a new employer; and

• in certain circumstances, pay legal costs and relocation expenses associated with the termination.

     Under the severance agreements with Messrs. Collier, Smith, Wyzga and Dr. Meeker, upon termination of employment following a change in control of the company, by us without cause or by the named executive officer for good reason, we must:

• make a lump sum severance payment of two times the sum of his annual salary and annual cash incentive;

• continue life, disability, accident and health insurance coverage for two years following the date of termination, except to the extent comparable benefits are provided by a new employer;

• provide outplacement services; and

• in certain circumstances, pay legal costs and relocation expenses associated with such termination.

     In addition, under the terms and conditions of the named executive officers’ equity awards, upon a change in control they will receive full vesting of their outstanding stock options and RSUs.

     Under the named executive officer’s employment or severance agreements, as applicable, the amounts payable upon a change in control would be reduced to the extent necessary to prevent payments to each named executive officer from exceeding the limit of Section 4999 of the Code applicable to “excess parachute payments” as defined in Section 280G of the Code. Assuming the employment of our named executive officers had been terminated following a change in control of the company by us without cause or by the named executive officer for good reason on December 31, 2009, with no such reduction, they would have been entitled to the following payments:

					Value of
					Accelerated
	Lump Sum				Equity Awards
	Base+Bonus ($)		Benefits ($)		($)		Total(1)
Henri A. Termeer		11,087,468		356,008		8,592,286		20,035,762
Michael S. Wyzga		2,113,500		279,692		2,168,693		4,561,885
Earl M. Collier, Jr.		1,504,500		276,979		1,923,643		3,705,122
David P. Meeker		1,857,553		279,468		1,829,690		3,966,711
Sandford D. Smith		2,066,500		279,700		1,923,643		4,269,843
Peter Wirth		3,854,250		221,764		2,168,693		6,244,707

(1) Cash payment amounts are based on the following components:

• base pay using salary as of December 31, 2009 times the applicable multiplier;

• annual cash incentive, calculated by taking the higher of (a) the last cash incentive paid, or (b) the average of the last two cash incentives paid, times the applicable multiplier;

• health benefits, based on COBRA rates as of January 1, 2010;

• life, accident and disability insurance premiums, based on current formula calculations;

• outplacement services, using the maximum provided for in the agreements;

• relocation services, based on most recent costs paid by us for executive relocation; and

• legal fees, based on an estimate of average attorney rates and hours of estimated services needed.

Under the employment agreements with Messrs. Termeer and Wirth, and the severance agreements with Messrs. Wyzga, Collier, Smith and Dr. Meeker, a “change in control” would be deemed to have occurred if:

     (A) any person, other than Genzyme or our affiliate, becomes the beneficial owner, directly or indirectly, of our securities representing 50% or more of the combined voting power of our then outstanding securities;

     (B) during any period of 24 consecutive months, the individuals who at the beginning of such period constituted our board of directors or any individuals who would be continuing directors cease for any reason to constitute a majority of our board of directors;

     (C) there is consummated a merger, share exchange or consolidation with any other company or the sale of all or substantially all of our assets (each, a business combination), other than (i) a business combination that would result in the Genzyme shareholders prior to the business combination continuing to hold a majority of the voting power of the surviving entity or (ii) a business combination effected to implement a recapitalization of the company where no person becomes the beneficial owner of 50% or more of the voting power of our then outstanding securities; or

     (D) our shareholders approve a plan of complete liquidation of the company.

RISK CONSIDERATIONS IN OUR COMPENSATION PROGRAMS

     We believe that risks arising from our compensation policies and practices for our employees are not reasonably likely to have a material adverse effect on the company. As discussed above in the Compensation

Discussion and Analysis, our compensation committee reviewed our policies and practices for executive officers with the help of its independent compensation consultant and the Compensation Discussion and Analysis identifies the features of our executive compensation program that mitigate the potential for inappropriate or excessive risk-taking by executive officers. The committee also reviewed an internal assessment conducted by our compensation staff and reviewed by our independent consultant regarding our compensation policies and practices for employees other than our executive officers and noted several features of our compensation program for employees that reduce the likelihood of excessive risk-taking: pay is structured to include both fixed (salary) and variable compensation (cash incentives and equity), with an emphasis on fixed compensation; bonuses under our corporate annual incentive plan have minimum payout levels and maximum payout levels are capped, all bonus eligible employees have a corporate target that is at least equal to or greater than any specific business unit target, and individual performance is a significant component of the plan; long-term incentives are granted as equity that vests over multiple years; compensation decisions for employees are subject to review at multiple levels in the company, including individual managers, business unit management, human resources, and corporate finance; and the existence of our corporate-wide ethics and compliance program.

EQUITY PLANS

     The following table provides information about shares of our stock that may be issued under our 2001 Equity Incentive Plan, 2004 Equity Incentive Plan, 2007 Director Equity Plan, Directors’ Deferred Compensation Plan and 2009 Employee Stock Purchase Plan, as of December 31, 2009:

Equity Compensation Plan Information

						Number of securities
						remaining available for
						future issuance under
	Number of securities to be			Weighted-average		equity compensation
	issued upon exercise of			exercise price of		plans (excluding
	outstanding options,			outstanding options,		securities reflected in
	warrants and rights			warrants and rights		column (a))
Plan Category	(a)			(b)		(c)
Equity compensation plans approved by security holders		37,230,306	(1)	$	48.38		8,007,563	(2)
Equity compensation plans not approved by security holders		—			—		—
Total		37,230,306		$	48.38		8,007,563

(1) Includes options outstanding assumed in the following acquisitions:

				Weighted-average
		Options		exercise
	Acquisition Date	Outstanding		price ($)
Ilex	December 2004		63,863		63.54
Focal	June 2001		1,100		245.17
Novazyme	September 2001		899		1.75
Biomatrix	December 2000		759		379.08
GelTex	December 2000		11,158		18.63

	Also includes 19,354 shares in deferred compensation obligations that may be paid out in shares of our common stock.
(2)	Includes 2,452,403 shares that may be issued under our 2009 Employee Stock Purchase Plan plus 86,608 shares reserved under our Directors’ Deferred Compensation Plan.