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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) or 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
GENZYME CORPORATION
(Exact name of Registrant as Specified in its Charter)
MASSACHUSETTS 06-1047163
(State of Incorporation or Organization) (I.R.S. Employer Identification No.)
ONE KENDALL SQUARE, CAMBRIDGE, MASSACHUSETTS 02139
(Address of Principal Executive Offices) (Zip Code)
If this Form relates to the If this Form relates to the
registration of a class of registration of a class of
securities pursuant to Section securities pursuant to Section
12(b) of the Exchange Act and is 12(g) of the Exchange Act and
effective upon filing pursuant to is effective pursuant to General
General Instruction A.(c), Instruction A.(d), please check
please check the following box./ / the following box. /X/
Securities Act registration statement file number to which this form
relates:_____________________________________
(If applicable)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
NONE NONE
Securities to be registered pursuant to Section 12(g) of the Act:
GENZYME SURGICAL PRODUCTS DIVISION COMMON STOCK, PAR VALUE $.01 PER SHARE
GSP STOCK PURCHASE RIGHTS
(Title of Class)
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
In this Registration Statement, "we," "us," "our" and "Genzyme" refer to
Genzyme Corporation and all of its business divisions collectively, and "our
board of directors" and "our board" refer to the board of directors of Genzyme.
(a) Description of Genzyme Surgical Products Division Common Stock, par
value $.01 per share.
The following description is qualified in its entirely by reference to the
more complete description of the terms of Genzyme Surgical Products Division
Common Stock, par value $.01 per share ("GZSP Stock"), contained in the
Certificate of Vote of Directors Establishing a Series of a Class of Stock
relating to the GZSP Stock, which is filed as Exhibit 2 to this Registration
Statement and is by this reference incorporated herein.
INTRODUCTION
We are authorized to issue 390,000,000 shares of common stock, of which:
- 60,000,000 shares have been designated GZSP Stock;
- 200,000,000 shares have been designated Genzyme General Division Common
Stock, $.01 par value ("GENZ Stock");
- 40,000,000 shares have been designated Genzyme Molecular Oncology
Common Stock, $.01 par value ("GZMO Stock");
- 40,000,000 shares have been designated Genzyme Tissue Repair Division
Common Stock, $.01 par value ("GZTR Stock"); and
- 50,000,000 shares remain undesignated as to series.
In addition, we are authorized to issue 10,000,000 shares of preferred
stock. Each designated series of common stock has the voting powers,
qualifications and rights described below.
In this description of GZSP Stock, the "fair market value" of shares
of any series of our common stock means the average of the daily closing prices
of such shares for the 20 consecutive trading days commencing on the 30th
trading day prior to the valuation date.
ASSETS INCLUDED IN GENZYME SURGICAL PRODUCTS
We have designed the GZSP Stock to reflect the value and track the
performance of Genzyme Surgical Products, a division of Genzyme. Although
Genzyme continues to own all of the corporation's assets, for financial
statement purposes Genzyme's interest in the following assets are attributed to
Genzyme Surgical Products:
- Surgical device, closure, instrument, biomaterial and biotherapeutic
businesses, products, or development or research programs that existed on
the date the GZSP Stock was created and that are directed toward the
cardiovascular, general and plastic surgery markets. Assets attributable
to the division do not, however, include any such businesses, products,
or development or research programs that were allocated to another
division immediately prior to date the GZSP Stock was created;
- All Genzyme assets and liabilities to the extent they were allocated to
any of the businesses, products, or development or research programs
cited above, in accordance with generally accepted accounting principles
consistently applied for all of our business units; and
- All businesses, products, or development or research programs developed
in, or acquired by us, for Genzyme Surgical Products after the creation
of the GZSP Stock, as determined by our board.
If any business, product, development program, research project, assets or
properties referred to above are transferred from Genzyme Surgical Products to
another of our divisions, Genzyme Surgical Products will no longer include the
business, product, program, project, assets or properties so transferred.
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DIVIDENDS
We have never paid cash dividends on our stock. Currently, we intend to
retain our earnings to finance future growth and, therefore, we do not expect to
pay any cash dividends on our common stock in the foreseeable future.
We can declare and pay dividends on a series of our common stock only in
amounts permitted under our articles of organization (see next paragraph), and
only if we have funds legally available. Under Massachusetts law, we can pay a
dividend as long as we are solvent, would remain solvent after the dividend, and
the payment would not violate our articles of organization. Subject to those
limitations, our board may, in its sole discretion, declare and pay dividends
exclusively on any series of our common stock, in equal or unequal amounts,
notwithstanding the amounts otherwise available for payment of dividends on each
series, the respective voting and liquidation rights of each series, the amounts
of prior dividends declared on each series or any other factor.
Our articles of organization limit the amount available for dividends on a
series of common stock, which we refer to as the "Available Dividend Amount," to
an amount that is the greater of
(a) the excess of
(i) the greater of
(X) the fair value of the net assets allocated to the division
represented by that series of common stock, and
(Y) an amount equal to, in the case of GZSP Stock, $228,466,000
(division equity allocated to Genzyme Surgical Products division at March 31,
1999); in the case of GENZ Stock, $335,378,000 (division equity allocated to
Genzyme General at June 30, 1994); in the case of GZMO Stock, $20,500,000
(division equity allocated to Genzyme Molecular Oncology at September 30, 1996);
and, in the case of GZTR Stock, $28,712,000 (division equity allocated to
Genzyme Tissue Repair at June 30, 1994). In each case, that dollar amount is
increased or decreased, as appropriate, to reflect, after such date
(1) the net income or loss of the division,
(2) any dividends or other distributions (including by
reclassification or exchange) declared or paid with respect to, or repurchases
or issuances of, any shares of capital stock attributed to the division, but
excluding dividends or other distributions paid in shares of capital stock
attributed of that division to holders of that stock, and
(3) any other adjustments to the stockholders' equity of the
division made in accordance with generally accepted accounting principles, over
(ii) the sum of:
(X) the aggregate par value of all outstanding shares of capital
stock attributed to the division, and
(Y) unless our articles of organization permit otherwise, the
aggregate amount needed to satisfy any preferential rights to which preferred
stockholders of that division, if any, would be entitled upon the dissolution of
Genzyme in excess of that preferred stock's aggregate par value, provided,
however, that the excess would be reduced by any amount needed by the division
to pay its debts as they become due, and
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(b) the amount available under Massachusetts law for the payment of
dividends assuming that the division were a separate corporation.
EXCHANGE OF GZSP STOCK, GZMO STOCK AND GZTR STOCK
We may exchange GZSP Stock, GZMO Stock or GZTR Stock for any combination of
cash and/or GENZ Stock upon the terms described below.
OPTIONAL EXCHANGE
Our board may at any time exchange all outstanding shares of GZSP Stock,
GZMO Stock or GZTR Stock for any combination of cash and/or GENZ Stock having a
fair market value equal to 130% of the fair market value of the series to be
exchanged. We will determine the fair market value on the day we first publicly
announce such exchange.
The optional exchange provision allows us to redeem all outstanding shares
of GZSP Stock, GZMO Stock and/or GZTR Stock and leave outstanding one, two or
three series of Genzyme common stock that would, after the exchange,
collectively represent the entire equity interest in all of our businesses. We
could exercise the optional exchange at any future time if our board determines
that considering current facts and circumstances, an equity structure consisting
of four series of common stock is no longer in the best interests of all of our
stockholders. We may complete an exchange, however, at a time that is
disadvantageous to the holders of a particular series of our common stock. The
right of our board to exchange at any time all outstanding shares of GZSP Stock,
GZMO Stock or GZTR Stock for any combination of cash and/or GENZ Stock having a
fair market value equal to 130% of the fair market value of the series to be
exchanged does not preclude our board from making an offer to exchange such
shares on other terms. Although the holders of the shares to be exchanged would
have to approve any alternative offer, we could make such offer on terms less
favorable than those provided in our articles of organization.
If we receive an opinion of tax counsel at any time that an "adverse tax
event" has occurred as a result of a "tax law change," however, we may exchange
the GZSP Stock for GENZ Stock only, and not for cash, at its fair market value.
This means that the holders of the GZSP Stock will not receive any premium in
such exchange.
As used in this description of GZSP Stock, the term "tax law change"
means either:
- any enactment or promulgation of, or amendment to, or change in, the laws
or regulations interpreting the laws of the United States or any
political subdivision or taxing authority, including any announced
proposed change by an applicable legislative committee or its chair in
such laws or by an administrative agency in such regulations; or
- any official or administrative pronouncement, action or judicial decision
interpreting or applying such laws or regulations.
As used in this description of capital stock, the term "adverse tax event"
means that it is more likely than not that for U.S. federal income tax purposes:
- we or our stockholders are, or, at any time in the future will be,
subject to tax upon the issuance of shares of the GZSP Stock; or
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- GZSP Stock is not, or at any time in the future will not be, treated
solely as our common stock.
For purposes of rendering such an opinion, tax counsel will assume that any
legislative or administrative proposals will be adopted or enacted as proposed.
MANDATORY EXCHANGE
If we transfer to a third party in one or more related transactions all or
substantially all of the properties and assets allocated to Genzyme Surgical
Products, Genzyme Molecular Oncology or Genzyme Tissue Repair to any person,
entity or group, we must exchange each outstanding share of GZSP Stock, GZMO
Stock or GZTR Stock as follows:
<TABLE>
<CAPTION>
THE AMOUNT OF CASH AND/OR
IF WE ARE TRANSFERRING GENZ STOCK GIVEN IN
ASSETS OF . . . THEN, WE MUST EXCHANGE . . . EXCHANGE WOULD EQUAL . . .
- ---------------------- ---------------------------- --------------------------
<S> <C> <C>
Genzyme Surgical Products each share of GZSP Stock for the market value of the
cash and/or shares of GENZ GZSP Stock being
Stock. exchanged.
Genzyme Molecular each share of GZMO Stock for a 30% premium over the
Oncology cash and/or shares of GENZ market value of the GZMO
Stock. Stock being exchanged.
Genzyme Tissue Repair each share of GZTR Stock for a 30% premium over the
cash and/or shares of GENZ market value of the GZTR
Stock. Stock being exchanged.
</TABLE>
Fair market value will be determined as of the date the transfer is first
announced publicly. This mandatory exchange does not apply, however, where we
are selling all or substantially all of our assets, or where the disposition is
to a wholly-owned subsidiary or any entity formed at our direction in connection
with obtaining financing for the programs or products of Genzyme Surgical
Products, Genzyme Molecular Oncology or Genzyme Tissue Repair, as the case may
be.
TERMINATION OF CASH EXCHANGE FEATURE
If we receive an opinion of tax counsel at any time that, because of a tax
law change, our right to exchange GZSP Stock for cash would cause an adverse tax
event, then our board may by majority vote elect to terminate our cash exchange
right. If our board elects to terminate this right, then the GZSP Stock will
only be exchangeable for GENZ Stock, and not for cash.
VOTING RIGHTS
Stockholders of all series of our common stock vote together as one class
on all matters that common stockholders generally are entitled to vote,
including the election of directors. The following chart shows the number of
votes per share each series of common stock is entitled to on such matters, as
well as each series' relative voting power based on the number of shares
outstanding on May 31, 1999, except for the relative voting power of
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the GZSP Stock, which is based on the number of shares that are expected to be
outstanding immediately following the distribution of GZSP Stock on June 28,
1999, as a stock dividend to holders of GENZ Stock:
<TABLE>
<CAPTION>
NUMBER OF VOTES PER SHARE APPROXIMATE PERCENTAGE OF
SERIES (UNTIL DECEMBER 31, 2000) TOTAL VOTING POWER
- ------ ------------------------- -------------------------
<S> <C> <C>
GZSP Stock 0.61 9.6%
GENZ Stock 1.00 87.9%
GZMO Stock 0.08 1.1%
GZTR Stock 0.06 1.4%
</TABLE>
The percentage of the total voting power of the company's stockholders
possessed by any one series can be calculated, at any given time, by dividing
the number of votes per share of that series of common stock by the total number
of votes per share that all series of common stock possess. On January 1, 2001
and on January 1st every two years thereafter, the number of votes to which each
share of GZSP Stock, GZMO Stock and GZTR Stock are entitled will be adjusted as
follows:
<TABLE>
<S> <C> <C>
# of votes for one = fair market value of one share of GZSP Stock
share of GZSP Stock --------------------------------------------
fair market value of one share of GENZ Stock
# of votes for one = fair market value of one share of GZMO Stock
share of GZMO Stock --------------------------------------------
fair market value of one share of GENZ Stock
# of votes for one = fair market value of one share of GZTR Stock
share of GZTR Stock --------------------------------------------
fair market value of one share of GENZ Stock
</TABLE>
If no shares of GENZ Stock are outstanding on that date, then of the series
that are outstanding on that date, the series with the highest fair market value
per share will be the "base series" and will have one vote per share. Each other
series of outstanding common stock will have a number of votes determined
according to the above formulas, by replacing GENZ Stock in such formulas with
the new base series.
The voting rights of the GZSP Stock, the GZMO Stock and the GZTR Stock will
be appropriately adjusted to avoid dilution of any series' voting rights in the
event the outstanding shares of any series are subdivided (by stock split,
reclassification or otherwise) or combined (by reverse stock split,
reclassification or otherwise), or in the event shares of any series are issued
as a dividend or a distribution to stockholders of that series. If shares of
only one series are outstanding, or if shares of any series are entitled to vote
separately as a class, each share of that series would have one vote.
The relative voting rights of each series are adjusted from time to time so
that a holder's voting rights may more closely reflect the market value of the
holder's investment in Genzyme. Adjustments in the relative voting rights of
each series of our common stock may influence an investor interested in
acquiring and maintaining a fixed percentage of Genzyme's voting power to
acquire that percentage of all series of our common stock. The adjustments will
limit the ability of investors in one series to acquire for the same
consideration relatively greater or lesser voting power per share than investors
in another series. If the relative market values of each series of common stock
change prior to the first adjustment or in between any adjustments, however, an
investor in one series may acquire relatively more or less voting power for the
same consideration when compared with investors in another series.
While generally all common stockholders vote together as a single class,
our articles of organization require that holders of a series affected by any of
the following proposals
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approve the proposal at a meeting at which both a quorum is present and the
votes in favor of the proposal exceed those against it:
(i) to allow any proceeds from a disposition of the properties or assets
allocated to a division to be used in the business of another
division without fair compensation;
(ii) to allow any properties or assets allocated to a division to be used
in the business of another division or for the declaration or payment
of any dividend or distribution on any series of common stock not
attributed to that division without fair compensation;
(iii) to issue shares of any series of common stock without allocating the
proceeds of the issuance to the division represented by that series
except, however, for specifically "designated" shares as described
below under the heading "-- GZSP Designated Shares, GZMO Designated
Shares and GZTR Designated Shares";
(iv) to change the rights or preferences of any series in a manner that
affects the series adversely; or
(v) to effect any merger or business combination resulting in (a)
stockholders of all series together no longer owning, directly or
indirectly, at least fifty percent (50%) of the voting power of the
surviving corporation, and (b) stockholders of all series not
receiving the same form of consideration, distributed among
stockholders in proportion to the market capitalization of each
series of our common stock as of the date of the first public
announcement of the merger or business combination.
If, however, we receive an opinion of tax counsel at any time that, because
of a tax law change, the special voting rights described above for the GZSP
Stock would cause an adverse tax event, then our board may amend our articles of
incorporation to delete such special voting rights for the GZSP Stock with the
approval of holders of a majority of all series of our outstanding capital stock
voting together as a single class.
Under current Massachusetts law, any amendment to our articles of
organization that would adversely alter or change the powers, preferences or
special rights of any series of common stock, must be approved by a majority of
the outstanding shares of each affected series, voting together as a single
class. Massachusetts law does not currently provide for any other separate
voting rights for a series of common stock. Consequently, because most matters
brought to a stockholder vote will require only the approval of a majority of
all of our outstanding capital stock entitled to vote, voting together as a
single class, and because the GENZ stockholders will initially have more than
the number of votes required to approve any such matter, GENZ stockholders would
be in a position to control the outcome of the vote.
LIQUIDATION RIGHTS
If we voluntarily or involuntarily dissolve, liquidate or wind up our
affairs, common stockholders will be entitled to receive any net assets
remaining for distribution after we have satisfied or made provision for our
debts and obligations and for payment to any stockholders with preferential
rights to receive distributions of our net assets. We will distribute any
remaining assets to common stockholders on a per share basis in proportion to
each series' respective per share liquidation units. Common stockholders will
have no
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direct claim against any particular assets of Genzyme or its subsidiaries. Each
series has the following number of liquidation units:
- each share of GZSP Stock has 61 liquidation units;
- each share of GENZ Stock has 100 liquidation units;
- each share of GZMO Stock has 25 liquidation units; and
- each share of GZTR Stock has 58 liquidation units.
The liquidation units of the GZSP Stock, the GZMO Stock and the GZTR Stock
will be appropriately adjusted to avoid dilution in the aggregate liquidation
rights of any series in the event the outstanding shares of any series are
subdivided (by stock split, reclassification or otherwise) or combined (by
reverse stock split, reclassification or otherwise), or in the event shares of
any series are issued as a dividend or a distribution to stockholders of that
series, but will not otherwise be adjusted. A merger or business combination or
a sale of all or substantially all of our assets will not be treated as a
liquidation. We may not, however, without approval from GZSP stockholders, GZMO
stockholders and GZTR stockholders voting as separate series of stock, effect a
merger or business combination involving Genzyme that results in (i)
stockholders of all series of stock no longer owning, directly or indirectly, at
least fifty percent of the voting power of the surviving corporation, and (ii)
stockholders of each series not receiving the same form of consideration,
distributed among stockholders in proportion to the market capitalization of
each series of common stock as of the date of the first public announcement of
the merger or business combination.
GZSP DESIGNATED SHARES, GZMO DESIGNATED SHARES AND GZTR
DESIGNATED SHARES
Designated shares of GZSP Stock, GZTR Stock or GZMO Stock are authorized
shares of that series that are not issued and outstanding, but which our board
of directors may from time to time issue, sell or otherwise distribute without
allocating the proceeds or other benefits of the issuance, sale or distribution
to the division tracked by the shares. Until issued by our board, designated
shares are not outstanding shares of stock, are not eligible to receive
dividends and cannot be voted by Genzyme.
Following the distribution of GZSP Stock scheduled for June 28, 1999, there
will be approximately 1,200,000 designated shares of GZSP Stock remaining
unissued, representing a potential 7.5% equity interest in Genzyme Surgical
Products. The number of designated shares from time to time will be:
(i) adjusted as appropriate to reflect subdivisions (by stock split or
otherwise) and combinations (by reverse stock split or otherwise) of
the GZSP Stock and dividends or distributions of shares of GZSP Stock
to GZSP stockholders and other reclassifications of GZSP Stock;
(ii) decreased by (a) the number of any designated shares of GZSP Stock we
issue, the proceeds of which are allocated to Genzyme General, (b) the
number of any shares of GZSP Stock issued upon the exercise or
conversion of securities convertible into GZSP Stock that are
attributed to Genzyme General, and (c) the number of any shares of
GZSP Stock we issue as a dividend or distribution or by
reclassification, exchange or otherwise to GENZ stockholders; and
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(iii) increased by
(a) the number of any outstanding shares of GZSP Stock we repurchase,
the consideration for which was allocated to Genzyme General;
(b) the number of shares of GZSP Stock equal to the fair value (as
determined by our board) of assets or properties allocated to
Genzyme General that are reallocated to Genzyme Surgical Products
(other than reallocations that represent sales at fair value between
those divisions) divided by the fair market value of one share of
GZSP Stock as of the date of that reallocation; or
(c) the number of shares of GZSP Stock equal to (i) the aggregate fair
market value of any shares of GENZ Stock issued to the limited
partners of Genzyme Development Partners in connection with our
exercise on behalf of Genzyme Surgical Products of its purchase
option to reacquire all of the limited partnership interests of that
partnership divided by (ii) the fair market value of one share of
GZSP Stock as of the date of such exercise.
Our articles of organization prohibit us from taking any action that would
reduce the number of designated shares of GZSP Stock below zero.
As of May 31, 1999, there were 1,409,902 designated shares of GZMO Stock,
representing a potential 10.0% equity interest in Genzyme Molecular Oncology.
The number of designated shares from time to time will be:
(i) adjusted as appropriate to reflect subdivisions (by stock split or
otherwise) and combinations (by reverse stock split or otherwise) of
the GZMO Stock and dividends or distributions of shares of GZMO Stock
to GZMO stockholders and other reclassifications of GZMO Stock;
(ii) decreased by (a) the number of any designated shares of GZMO Stock we
issue, the proceeds of which are allocated to Genzyme General, (b)
the number of any shares of GZMO Stock issued upon the exercise or
conversion of securities convertible into GZMO Stock that are
attributed to Genzyme General, and (c) the number of any shares of
GZMO Stock we issue as a dividend or distribution or by
reclassification, exchange or otherwise to GENZ stockholders; and
(iii) increased by
(a) the number of any outstanding shares of GZMO Stock we repurchase,
the consideration for which was allocated to Genzyme General;
(b) the number of shares of GZMO Stock equal to the fair value (as
determined by our board) of assets or properties allocated to
Genzyme General that are reallocated to Genzyme Molecular Oncology
(other than reallocations that represent sales at fair value between
those divisions) divided by the fair market value of one share of
GZMO Stock as of the date of that reallocation; or
(c) with respect to amounts drawn under an equity line of credit
approved by our board providing for the allocation of up to $25
million in cash from Genzyme General to Genzyme Molecular Oncology,
a number equal to the sum of the quotients obtained by dividing (A)
the amount of each advance under the equity line by (B) $7.00 plus
or minus a daily proration of the
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difference between the price to the public in the Genzyme Molecular
Oncology initial public offering at $7.00, assuming straight line
appreciation or depreciation in the value of the GZMO Stock over the
period from the closing date of the acquisition of PharmaGenics,
Inc. to the closing date of the IPO; and, thereafter, upon each
advance made under the equity line, a number equal to the quotient
obtained by dividing (X) the amount of each such advance by (Y) the
fair market value of the GZMO Stock on the date of such advance.
Our articles of organization prohibit us from taking any action that would
reduce the number of designated shares of GZMO Stock below zero.
As of May 31, 1999, there were 2,301,481 designated shares of GZTR Stock,
representing a potential 9.0% equity interest in Genzyme Tissue Repair. The
number of designated shares from time to time will be:
(i) adjusted as appropriate to reflect subdivisions (by stock split or
otherwise) and combinations (by reverse stock split or otherwise) of
the GZTR Stock and dividends or distributions of shares of GZTR Stock
to GZTR Stockholders and other reclassifications of GZTR Stock;
(ii) decreased by (a) the number of any designated shares of GZTR Stock we
issue, the proceeds of which are allocated to Genzyme General, (b)
the number of any shares of GZTR Stock issued upon the exercise or
conversion of securities convertible into GZTR Stock that are
attributed to Genzyme General and (c) the number of any shares of
GZTR Stock issue as a dividend or distribution or by
reclassification, exchange or otherwise to GENZ stockholders; and
(iii) increased by (a) the number of any outstanding shares of GZTR Stock
we repurchase, the consideration for which was allocated to Genzyme
General, (b) one for each $10.00 reallocated from Genzyme General to
Genzyme Tissue Repair from time to time in satisfaction of a purchase
option acquired in our acquisition of BioSurface Technology, Inc., up
to a maximum of $30 million, and (c) the number of shares of GZTR
Stock equal to the fair value (as determined by our board) of assets
or properties allocated to Genzyme General that are reallocated to
Genzyme Tissue Repair (other than reallocations that represent sales
at fair value between those divisions or reallocations described in
clause (b) above) divided by the fair market value of one share of
GZTR Stock as of the date of the reallocation.
Our articles of organization prohibit us from taking any action that would
reduce the number of designated shares of GZTR Stock below zero.
Whenever we issue or sell additional shares of any series of common stock,
we will identify (i) the number of shares issued and sold for the account of the
division to which they relate, the proceeds of which will be allocated to and
reflected in the financial statements of that division and (ii) the number of
shares issued and sold from the designated shares of GZSP Stock, GZMO Stock
and/or GZTR Stock, which shall reduce the number of designated shares, and the
proceeds of which may be used for any proper corporate purpose. In the event we
repurchase outstanding shares of GZSP Stock, GZMO Stock or GZTR Stock, we will
identify the number of shares that are repurchased for consideration that was
allocated to Genzyme General and the number of designated shares may increase
accordingly.
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DETERMINATIONS BY OUR BOARD
Any determination made by our board in good faith under any of the
provisions described above will be final and binding on all stockholders.
"ANTI-TAKEOVER" PROVISIONS
CONTRACTUAL MEASURES
Our articles of organization and by-laws contain provisions that could
discourage potential takeover attempts and prevent stockholders from changing
our management. For instance, our board is authorized to issue shares of common
stock and preferred stock in series, enlarge the board's size and fill any
vacancies on the board. Also, stockholders face restrictions on calling a
special meeting of stockholders, bringing business before an annual meeting and
nominating candidates for election as directors. We also have agreements with
certain officers containing change of control provisions.
In addition, we have a stockholder rights plan. Under this plan, each
outstanding share of GZSP Stock, GENZ Stock, GZMO Stock and GZTR Stock also
represents a right that, under certain circumstances, will permit the holder
(other than a holder who, under the rights plan, is considered an acquiror) to
purchase at a favorable price large amounts of GZSP Stock, GENZ Stock, GZMO
Stock and GZTR Stock or securities of a successor to Genzyme, such that an
acquiror's interest in Genzyme would be substantially diluted. Currently, the
rights are not exercisable. Upon the occurrence of certain events, however,
including certain tender or exchange offers and aggregations by one holder of
large amounts of our common stock, the rights will trade separately from the
GZSP Stock, GENZ Stock, GZMO Stock and GZTR Stock and become exercisable. The
rights are described completely in a rights agreement between us and American
Stock Transfer & Trust Company as Rights Agent.
BUSINESS COMBINATION STATUTE
The Massachusetts "Business Combination" statute provides that, if a person
acquires 5% or more of the outstanding voting stock of a Massachusetts
corporation without the approval of its board of directors (an "interested
stockholder"), he or she may not engage in certain transactions with the
corporation for three years. There are exceptions to this prohibition, including
- if the board of directors approves the acquisition of stock or the
transaction prior to the time that the person became an interested
stockholder;
- if the interested stockholder acquires 90% of the outstanding voting
stock of the company (excluding voting stock owned by directors who are
also officers and certain employee stock plans) in one transaction; or
- if the transaction is approved by the board and by two-thirds of the
outstanding voting stock not owned by the interested stockholder.
We are subject to the Massachusetts Business Combination statute unless we
elect not to be. Genzyme has not elected to be exempt and does not currently
intend to do so.
CONTROL SHARE ACQUISITION STATUTE
The Massachusetts "Control Share Acquisition" statute provides that a
person (the "acquiror") who makes a bona fide offer to acquire, or acquires,
shares of stock that would result in his or her controlling at least either 20%,
33 1/3% or a majority of the voting power
10
<PAGE> 12
of the corporation, cannot vote those acquired shares unless he or she obtains
the approval of a majority in interest of the shares held by all stockholders,
excluding shares held by the acquiror, officers of the corporation, and
directors who are also employees of the corporation. The statute does not
require that the acquiror have already purchased the shares before the
stockholder vote.
As permitted under Massachusetts law, we have elected not to be governed by
the Massachusetts Control Share Acquisition statute. However, our board could
decide at a future date that it is in the company's and our stockholders' best
interests that we be governed by the statute. If so, our board may amend the
by-laws accordingly. Any such amendment, however, would apply only to
acquisitions that occur after the effective date of the amendment.
RIGHTS OF CERTAIN HOLDERS
The holders of 3,163,032 shares of our capital stock can, under certain
circumstances, require us to register those shares. Notwithstanding these
rights, all of those shares, if held by nonaffiliates of Genzyme, can be sold
without restriction under the federal securities law.
TRANSFER AGENT AND REGISTRAR
American Stock Transfer & Trust Company is the registrar and transfer agent
for each series of our common stock.
(b) Description of the GSP Stock Purchase Rights.
Pursuant to the Amended and Restated Renewed Rights Agreement dated as
of June 10, 1999 (the "Agreement") between Genzyme Corporation and American
Stock Transfer & Trust Company, as Rights Agent, each outstanding share of GZSP
Stock also represents one preferred stock purchase right (a "GSP Stock Purchase
Right"). Each GSP Stock Purchase Right will, upon becoming exercisable, entitle
the holder to buy one newly-issued share of Genzyme's Series D Junior
Participating Preferred Stock, par value $0.01 per share, for each share of GZSP
Stock, at an exercise price of $150 per share. The description of the GSP Stock
Purchase Rights is contained in Amendment No. 1 to the Registrant's Registration
Statement on Form 8-A filed with the Securities and Exchange Commission (the
"Commission") on June 11, 1999, which is incorporated herein by reference.
ITEM 2. EXHIBITS.
1. Restated Articles of Organization of the Registrant. Filed as
Exhibit 1 to the Registrant's Registration Statement on Form 8-A
filed with the Commission on June 18, 1997, and incorporated
herein by reference.
2. Series Designation for the Genzyme Surgical Products Division
Common Stock. Filed herewith.
3. Series Designation for the Series A, Series B, Series C and Series
D Junior Participating Preferred Stock of the Registrant. Filed as
Exhibit 2 to Amendment No. 1 to the Registrant's Registration
Statement on Form 8-A filed with the Commission on June 11, 1999,
and incorporated herein by reference.
4. By-Laws of the Registrant. Filed as Exhibit 3.2 to the
Registrant's Current Report on Form 8-K dated December 31, 1991
(File No. 0-14680), and incorporated herein by reference.
5. Management and Accounting Policies Governing the Relationship of
Genzyme Divisions. Filed as Exhibit 99.5 to the Registrant's
Current Report on Form 8-K dated June 11, 1999 (File No. 0-14680),
and incorporated herein by reference.
6. Amended and Restated Renewed Rights Agreement dated as of June 10,
1999 between the Registrant and American Stock Transfer & Trust
Company. Filed as Exhibit 4 to Amendment No. 1 to the Registrant's
Registration Statement on Form 8-A filed with the Commission on
June 11, 1999, and incorporated herein by reference.
11
<PAGE> 13
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
GENZYME CORPORATION
Date: June 11, 1999 By: /s/ Michael S. Wyzga
--------------------------
Name: Michael S. Wyzga
Title: Senior Vice President, Finance
and Chief Financial Officer
12
<PAGE> 14
EXHIBIT NO. DESCRIPTION
1. Restated Articles of Organization of the Registrant. Filed as
Exhibit 1 to the Registrant's Registration Statement on Form 8-A
filed with the Commission on June 18, 1997, and incorporated
herein by reference.
2. Series Designation for the Genzyme Surgical Products Division
Common Stock. Filed herewith.
3. Series Designation for the Series A, Series B, Series C and Series
D Junior Participating Preferred Stock of the Registrant. Filed as
Exhibit 2 to Amendment No. 1 to the Registrant's Registration
Statement on Form 8-A filed with the Commission on June 11, 1999,
and incorporated herein by reference.
4. By-Laws of the Registrant. Filed as Exhibit 3.2 to the
Registrant's Current Report on Form 8-K dated December 31, 1991
(File No. 0-14680), and incorporated herein by reference.
5. Management and Accounting Policies Governing the Relationship of
Genzyme Divisions. Filed as Exhibit 99.5 to the Registrant's
Current Report on Form 8-K dated June 11, 1999 (File No. 0-14680),
and incorporated herein by reference.
6. Amended and Restated Renewed Rights Agreement dated as of June 10,
1999 between the Registrant and American Stock Transfer & Trust
Company. Filed as Exhibit 4 to Amendment No. 1 to the Registrant's
Registration Statement on Form 8-A filed with the Commission on
June 11, 1999, and incorporated herein by reference.
13
<PAGE> 1
EXHIBIT 2
The Commonwealth of Massachusetts
William Francis Galvin
Secretary of the Commonwealth
FEDERAL IDENTIFICATION
NO. 06-1047163
ONE ASHBURTON PLACE, BOSTON, MASS. 02108
CERTIFICATE OF VOTE OF DIRECTORS ESTABLISHING
A SERIES OF A CLASS OF STOCK
General Laws, Chapter 156B, Section 26
----------------
We, Michael Wyzga, Senior Vice President and
Peter Wirth, Clerk of
Genzyme Corporation
located at One Kendall Square, Cambridge, MA 02139 do hereby certify that at a
meeting of the directors of the corporation held on May 26, 1999, the following
vote establishing and designating a series of a class of stock and determining
the relative rights and preferences thereof was duly adopted:
See attached continuation sheets.
NOTE: Votes for which the space provided above is not sufficient should be set
out on continuation sheets to be numbered 2A, 2B, etc. Continuation
sheets must have a left-hand margin 1 inch wide for binding and shall be
8-1/2" x 11". Only one side should be used.
Exhibit 2-page 1
<PAGE> 2
TERMS OF THE
GENZYME SURGICAL PRODUCTS DIVISION COMMON STOCK
VOTED, that pursuant to paragraph IV.B. of this Corporation's Articles
of Organization, the Board of Directors hereby establishes a series of Common
Stock of the Corporation with the following designations, preferences, voting
powers, qualifications and special or relative rights or privileges:
1. AUTHORIZED AMOUNTS AND DESIGNATIONS. Sixty million (60,000,000)
shares of Common Stock are designated as a series of Common Stock with the
following designation: Genzyme Surgical Products Division Common Stock (the "GSP
Stock"). To the extent legally permitted, such number of shares may be increased
or decreased by vote of the Board of Directors, provided that no decrease shall
reduce the number of shares of GSP Stock to a number less than the number of
shares of such series then outstanding plus the number of shares of such series
reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into GSP Stock.
2. DIVIDENDS AND DISTRIBUTIONS. Subject to the express terms of any
outstanding series of Preferred Stock, dividends may be declared and paid upon
the GSP Stock, in such amounts and at such times as the Board of Directors may
determine, only out of the lesser of (a) funds of the Corporation legally
available therefor and (b) the Available GSP Dividend Amount.
3. VOTING RIGHTS. The holders of GSP Stock, voting together with the
holders of shares of all other series of Common Stock as a single class of
stock, shall have the exclusive right to vote for the election of directors and
on all other matters requiring action by the stockholders or submitted to the
stockholders for action, except as may be determined by the Board of Directors
in establishing any series of Common or Preferred Stock or as may otherwise be
required by law. Each share of GSP Stock shall entitle the holder thereof to .61
votes through December 31, 2000. On January 1, 2001 and on each January 1 every
two years thereafter, the number of votes to which the holder of each share of
GSP Stock shall be entitled shall be adjusted and fixed for two-year periods to
equal the quotient (expressed as a decimal and rounded to the nearest two
decimal places) obtained by dividing (i) the Fair Market Value of one share of
GSP Stock by (ii) the Fair Market Value of one share of GGD Stock as of such
date. If no shares of GGD Stock are outstanding on such date, then all other
series of voting Common Stock outstanding on such date shall have a number of
votes such that each share of the series of outstanding Common Stock that has
the highest Fair Market Value per share on such date (the "Base Series") shall
have one vote and each share of each other series of outstanding Common Stock
shall have the number of votes determined according to the immediately preceding
sentence, treating, for such purpose, the Base Series as the GGD Stock in such
sentence. If shares of GSP Stock are entitled to vote separately as a class,
each share of GSP Stock shall have one vote.
4. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, the
rights of the holders of GSP Stock shall be as follows:
Exhibit 2-page 2
<PAGE> 3
a. After the Corporation has satisfied or made provision for
its debts and obligations and for the payment to the holders of shares of any
class or series of capital stock having preferential rights to receive
distributions of the net assets of the Corporation (including any accumulated
and unpaid dividends), the holders of GSP Stock shall be entitled to receive the
net assets of the Corporation remaining for distribution, on a per share basis
in proportion to the respective liquidation units per share of all series of
Common Stock. Each share of GSP Stock shall, subject to paragraph IV.E.4. of the
Corporation's Articles of Organization, have 61 liquidation units.
b. For the purposes of paragraph 4.a. any merger or business
combination involving the Corporation or any sale of all or substantially all of
the assets of the Corporation shall not be treated as a liquidation.
5. SPECIAL VOTING RIGHTS. The Corporation shall not, without approval
by the holders of the GSP Stock at a meeting at which a quorum is present and
the votes cast in favor of the proposal exceed those cast against:
(1) allow any proceeds from the Disposition of the properties
or assets allocated to the Genzyme Surgical Products Division to be used in the
business of any other Division without fair compensation being allocated to the
Genzyme Surgical Products Division as determined by the Board of Directors;
(2) allow any properties or assets allocated to the Genzyme
Surgical Products Division to be used in the business of any other Division or
for the declaration or payment of any dividend or distribution on any series of
Common Stock other than the GSP Stock without fair compensation being allocated
to the Genzyme Surgical Products Division as determined by the Board of
Directors;
(3) issue, sell or otherwise distribute shares of GSP Stock
without allocating the proceeds or other benefits of such issuance, sale or
distribution to the Genzyme Surgical Products Division; provided, however, that
the Corporation may without such approval issue GSP Designated Shares;
(4) change the rights or preferences of the GSP Stock so as to
affect the GSP Stock adversely; or
(5) effect any merger or business combination involving the
Corporation as a result of which (a) the holders of all series of Common Stock
of the Corporation shall no longer own, directly or indirectly, at least fifty
percent (50%) of the voting power of the surviving corporation and (b) the
holders of all series of Common Stock of the Corporation do not receive the same
form of consideration, distributed among such holders in proportion to the
Market Capitalization of each series of Common Stock as of the date of the first
public announcement of such merger or business combination.
Notwithstanding the foregoing, if the Corporation receives an opinion
of Qualified Tax Counsel that, by reason of any Tax Law Change, the special
voting rights of the GSP Stock set forth in this Section 5 would cause a Tax
Event absent the termination of such rights, then the Corporation may, by vote
of a majority of the stock outstanding and entitled to vote thereon,
Exhibit 2-page 3
<PAGE> 4
voting together as a single class, authorize an amendment to these Articles of
Organization to effect the termination of such rights in order to avoid the
occurrence of such Tax Event. Any such amendment shall not be deemed to change
the rights or preferences of the GSP Stock so as to affect the GSP Stock
adversely as contemplated by either Section 5(4) hereof or Section 77 of the
Massachusetts Business Corporation Law.
6. EXCHANGE OF GSP STOCK. Shares of GSP Stock are subject to exchange
upon the terms and conditions set forth below:
a. OPTIONAL EXCHANGE OF GSP STOCK.
(1) The Board of Directors may at any time, including without
limitation in the event of the reallocation, in one transaction or a series of
related transactions, by the Corporation of all or substantially all of the
properties and assets allocated to the Genzyme Surgical Products Division to any
other Division of Genzyme (a "Reallocation"), declare that each of the
outstanding shares of GSP Stock shall be exchanged, on an Exchange Date set
forth in a notice to holders of GSP Stock pursuant to paragraph IV.E.1(1) of the
Corporation's Articles of Organization, for (a) a number of fully paid and
nonassessable shares of GGD Stock (calculated to the nearest five decimal
places) equal to (1) 130% of the Fair Market Value of one share of the GSP Stock
(the "Optional Exchange Amount") as of the date of the first public announcement
by the Corporation (the "Announcement Date") of such exchange divided by (2) the
Fair Market Value of one share of GGD Stock as of such Announcement Date or (b)
cash equal to the Optional Exchange Amount, or (c) any combination of GGD Stock
and cash equal to the Optional Exchange Amount as determined by the Board of
Directors.
(2) If the Corporation receives an opinion of Qualified Tax
Counsel that a Tax Event has occurred by reason of any Tax Law Change, then the
Board of Directors may at any time declare that each of the outstanding shares
of GSP Stock shall be exchanged, on an Exchange Date set forth in a notice to
holders of GSP Stock pursuant to paragraph IV.E.1(1) of the Corporation's
Articles of Organization, for a number of fully paid and nonassessable shares of
GGD Stock (calculated to the nearest five decimal places) equal to (1) the Fair
Market Value of one share of the GSP Stock as of the date of the Announcement
Date divided by (2) the Fair Market Value of one share of GGD Stock as of such
Announcement Date.
b. MANDATORY EXCHANGE OF GSP STOCK. In the event of the
Disposition, in one transaction or a series of related transactions, by the
Corporation of all or substantially all of the properties and assets allocated
to the Genzyme Surgical Products Division (other than in connection with the
Disposition by the Corporation of all or substantially all of its properties and
assets in one transaction or a series of related transactions) to any person,
entity or group (other than (x) any entity in which the Corporation, directly or
indirectly, owns all of the equity interest or (y) any entity formed at the
direction of the Corporation in connection with obtaining financing for the
programs or products of the Genzyme Surgical Products Division under an
arrangement which provides the Corporation with an option to reacquire such
properties and assets or retain or obtain substantial manufacturing or marketing
rights with respect to any products developed by such entity, in each case for
the benefit of the Genzyme Surgical Products Division), the Corporation shall,
on or prior to the first Business Day after the 90th day following the
consummation of such Disposition, exchange each outstanding share of GSP Stock
for:
Exhibit 2-page 4
<PAGE> 5
(a) a number of fully paid and nonassessable shares of GGD
Stock (calculated to the nearest five decimal places) equal to (i) the Fair
Market Value of one share of the GSP Stock (the "Mandatory Exchange Amount") as
of the Announcement Date of such Disposition divided by (ii) the Fair Market
Value of one share of GGD Stock as of such Announcement Date, or
(b) cash equal to the Mandatory Exchange Amount; or
(c) any combination of GGD Stock and cash equal to the
Mandatory Exchange Amount as determined by the Board of Directors.
For purposes of this paragraph:
(1) "substantially all of the properties and assets allocated
to the Genzyme Surgical Products Division" shall mean a portion of the
properties and assets allocated to the Genzyme Surgical Products Division (A)
that represents at least 80% of the then-current fair value (as determined by
the Board of Directors) of, or (B) to which is attributable at least 80% of the
aggregate revenues for the immediately preceding twelve fiscal quarterly periods
of the Corporation derived from, the properties and assets allocated to the
Genzyme Surgical Products Division; and
(2) in the case of a Disposition of properties and assets in a
series of related transactions, such Disposition shall not be deemed to have
been consummated until the consummation of the last of such transactions.
c. TERMINATION OF CASH EXCHANGE RIGHT. If the Corporation
receives an opinion of Qualified Tax Counsel that, by reason of any Tax Law
Change, the right of the Corporation to exchange GSP Stock for cash pursuant to
Sections 6.a.(1) or 6.b. (the "Cash Exchange Right") would cause a Tax Event if
not terminated, then the Board of Directors may at any time, by a vote of a
majority of the directors then in office, elect to terminate the Cash Exchange
Right, with the result that the Corporation shall thereafter only have the
right, under Sections 6.a.(1) and 6.b., to cause the exchange of GSP Stock for
GGD Stock and not for cash.
7. DEFINITIONS. As used in this Certificate of Vote of Directors
Establishing a Series of a Class of Stock, the following terms shall have the
following meanings (with terms defined in the singular having comparable meaning
when used in the plural and vice versa), unless another definition is provided
or the context otherwise requires. Capitalized terms used but not defined herein
shall have the meanings given them in paragraph IV.E.7. of the Corporation's
Articles of Organization.
a. "Available GSP Dividend Amount," on any date, shall mean
the greater of:
(a) the excess of
(i) the greater of (x) the fair value on such date of the
net assets of the Genzyme Surgical Products Division and (y) an amount equal to
$228,466,000 (division equity allocated to the Genzyme Surgical Products
Division at March 31, 1999),
Exhibit 2-page 5
<PAGE> 6
such dollar amount to be increased or decreased, as appropriate, to reflect,
after March 31, 1999, (A) the Earnings Attributable to the Genzyme Surgical
Products Division, (B) any dividends or other distributions (including by
reclassification or exchange) declared or paid with respect to, or repurchases
or issuances of, any shares of GSP Stock or any other class of capital stock
attributed to Genzyme Surgical Products Division, but excluding dividends or
other distributions paid in shares of GSP Stock to the holders thereof or in
shares of any other class of capital stock attributed to the Genzyme Surgical
Products Division to the holders thereof, and (C) any other adjustments to the
stockholders' equity of the Genzyme Surgical Products Division made in
accordance with generally accepted accounting principles, over
(ii) the sum of (x) the aggregate par value of all
outstanding shares of GSP Stock and any other class of capital stock attributed
to the Genzyme Surgical Products Division and (y) unless these Articles of
Organization permit otherwise, the aggregate amount that would be needed to
satisfy any preferential rights to which holders of all outstanding Preferred
Stock attributed to the Genzyme Surgical Products Division are entitled upon
dissolution of the Corporation in excess of the aggregate par value of such
Preferred Stock, provided that such excess shall be reduced by any amount
necessary to enable the Genzyme Surgical Products Division to pay its debts as
they become due, and
(b) the amount legally available for the payment of dividends
determined in accordance with Massachusetts law applied as if the Genzyme
Surgical Products Division were a separate corporation.
b. "Earnings Attributable" to the Genzyme Surgical Products
Division for any period shall mean the net income or loss of the Genzyme
Surgical Products Division for such period (or for the fiscal periods of the
Corporation commencing prior to the GSP Effective Date and after March 31, 1999,
pro forma net income or loss of Genzyme Surgical Products Division as if the GSP
Effective Date were March 31, 1999) determined in accordance with generally
accepted accounting principles, with all income and expenses of the Corporation
being allocated between Divisions in a reasonable and consistent manner in
accordance with policies adopted by the Board of Directors; provided, however,
that as of the end of any fiscal quarter of the Corporation, any projected
annual tax benefit attributable to any Division that cannot be utilized by such
Division to offset or reduce its allocated tax liability may be allocated to any
other Division without any compensating payment or allocation.
c. "Exchange Date" shall mean the date, if any, fixed for the
exchange of shares of GSP Stock, as set forth in a notice to holders of GSP
Stock pursuant to paragraph IV.E.1(1) of the Corporation's Articles of
Organization.
d. "GSP Designated Shares" as of any date shall mean a number
of shares of GSP Stock that, as of the GSP Effective Date, shall be 16,000,000,
which number shall be subject to adjustment as provided in the next sentence.
The number of Genzyme Surgical Products Designated Shares shall from time to
time be
(i) adjusted as appropriate to reflect subdivisions (by
stock split or otherwise) and combinations (by reverse stock split or otherwise)
of the GSP Stock and
Exhibit 2-page 6
<PAGE> 7
dividends or distributions of shares of GSP Stock to holders of GSP Stock and
other reclassifications of GSP Stock,
(ii) decreased by (A) the number of any shares of GSP
Stock issued by the Corporation, the proceeds of which are allocated to the
General Division, (B) the number of any shares of GSP Stock issued upon the
exercise or conversion of Convertible Securities attributed to the General
Division, and (C) the number of any shares of GSP Stock issued by the
Corporation as a dividend or distribution or by reclassification, exchange or
otherwise to holders of GGD Stock, and
(iii) increased by (A) the number of any outstanding
shares of GSP Stock repurchased by the Corporation, the consideration for which
was allocated to the General Division, (B) the number equal to the fair value
(as determined by the Board of Directors) of assets or properties allocated to
the General Division that are reallocated to the Genzyme Surgical Products
Division (other than reallocations that represent sales at fair value between
such Divisions) divided by the Fair Market Value of one share of GSP Stock as of
the date of such reallocation and (C) the number equal to (i) the aggregate Fair
Market Value of any shares of GGD Stock issued to the limited partners of
Genzyme Development Partners L.P. ("GDP") in connection with the Corporation's
exercise on behalf of the Genzyme Surgical Products Division of its purchase
option to reacquire all of the limited partnership interests of GDP divided by
(ii) the Fair Market Value of one share of GSP Stock as of the date of such
exercise,
provided, that the Corporation shall take no action which would have the effect
of reducing the GSP Designated Shares to a number which is less than zero.
Within 45 days after the end of each fiscal quarter of the Corporation, the
Corporation shall prepare and file a statement of such change with the transfer
agent for the GSP Stock and with the Clerk of the Corporation.
e. "GSP Effective Date" shall mean the effective date of the
Certificate of Vote of Directors Establishing a Series of a Class of Stock
authorizing the GSP Stock.
f. "Genzyme Surgical Products Division" shall mean, at any
time, the Corporation's interest in (i) surgical device, closure, instrument,
biomaterial and biotherapeutic businesses, products, or development or research
programs which exist as of the GSP Effective Date and are directed toward the
cardiovascular, general and plastic surgery markets (other than such businesses,
products, or development or research programs that were allocated to another
division immediately prior to the GSP Effective Date); (ii) all assets and
liabilities of the Corporation to the extent allocated to any such businesses,
products, or development or research programs in accordance with generally
accepted accounting principles consistently applied for all of the Corporation's
business units; and (iii) such businesses, products, or development or research
programs developed in, or acquired by the Corporation for, the Genzyme Surgical
Products Division after the GSP Effective Date, in each case as determined by
the Board of Directors; provided, however, that, from and after any Disposition
or transfer to another Division of any business, product, development program,
research project, assets or properties, the Genzyme Surgical Products Division
shall no longer include the business, product, development program, research
project, assets or properties so disposed of or transferred. The Genzyme
Surgical Products Division shall be represented by the GSP Stock.
Exhibit 2-page 7
<PAGE> 8
g. "Qualified Tax Counsel" shall mean tax counsel who may be
regular outside counsel to the Corporation but shall not be an officer or
employee of the Corporation or any of its affiliates.
h. "Tax Event" shall mean that it has become (or will become,
as the context may require) more likely than not that for United States Federal
income tax purposes (i) the Corporation or the holders of its stock are, or at
any time in the future will be, subject to tax upon the issuance of shares of
GSP Stock or (ii) GSP Stock is not, or at any time in the future will not be,
treated solely as stock of the Corporation.
i. "Tax Law Change" shall mean (i) any enactment of, amendment
to, or change in the laws of the United States or any political subdivision
thereof (including any announced proposed change by an applicable legislative
committee or the chair in such laws), (ii) any promulgation of, amendment to, or
change in the regulations under the laws of the United States or any political
subdivision or taxing authority thereof or therein (including any announced
proposed change in or promulgation of regulations by an administrative agency)
or (iii) any official or administrative pronouncement or action or judicial
decision interpreting or applying such laws or regulations. For purposes of
rendering an opinion as to a Tax Law Change, tax counsel shall assume that any
legislative or administrative proposals will be adopted or enacted as proposed.
Exhibit 2-page 8
<PAGE> 9
IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto
signed our names this 10th day of June in the year 1999.
/s/ Michael S. Wyzga, Senior Vice President
- ---------------------
/s/ Peter Wirth, Clerk
- ----------------
Exhibit 2-page 9
<PAGE> 10
THE COMMONWEALTH OF MASSACHUSETTS
Certificate of Vote of Directors Establishing
A Series of a Class of Stock
(General Laws, Chapter 156B, Section 26)
I hereby approve the within certificate and, the
Filing fee in the amount of $__________________
having been paid, said certificate is hereby filed this
_____________ day of ________________, 19__.
William Francis Galvin
Secretary of the Commonwealth
TO BE FILLED IN BY CORPORATION
PHOTO COPY OF CERTIFICATE TO BE SENT
TO:
Paul Laurino, Esq.
Palmer & Dodge, LLP
One Beacon Street, Boston, MA 02108
Telephone (617) 573-0510
Exhibit 2-page 10
