VERTEX PHARMACEUTICALS INCORPORATED
2013 STOCK AND OPTION PLAN
1.
DEFINITIONS

Unless otherwise specified or unless the context otherwise requires, the
following terms, as used in this Vertex Pharmaceuticals Incorporated 2013 Stock
and Option Plan, have the following meanings:
Accrued Dividends means any dividends (whether paid in cash, stock or property)
declared and paid by the Company with respect to Shares subject to a Stock Grant
during any period in which such Shares are subject to restrictions on
transferability or forfeitability under this Plan or the applicable Stock
Agreement.
Administrator means the Board of Directors and/or a committee of the Board of
Directors to which the Board of Directors has delegated power to act on its
behalf in administering this Plan in whole or in part.
Affiliate means a corporation that, for purposes of Section 424 of the Code, is
a parent or subsidiary of the Company, direct or indirect.
Board of Directors means the Board of Directors of the Company.
Code means the United States Internal Revenue Code of 1986, as amended.
Common Stock means shares of the Company’s common stock, $.01 par value.
Company means Vertex Pharmaceuticals Incorporated, a Massachusetts corporation.
Employee means an employee of the Company or of an Affiliate (including, without
limitation, an employee who is also serving as an officer or director of the
Company or of an Affiliate), designated by the Administrator to be eligible to
be granted one or more Stock Rights under the Plan.
Exchange Act means the Securities Exchange Act of 1934, as amended.
Fair Market Value of a share of Common Stock on a particular date shall be the
mean between the highest and lowest quoted selling prices on such date (the
“valuation date”) on the securities market where the Common Stock is traded, or
if there were no sales on the valuation date, on the next preceding date within
a reasonable period (as determined in the sole discretion of the Administrator)
on which there were sales. If there were no sales in such a market within a
reasonable period, the Fair Market Value shall be as determined in good faith by
the Administrator in its sole discretion. The Fair Market Value as determined in
this paragraph shall be rounded down to the next lower whole cent if the
foregoing calculation results in fractional cents.
Full Value Award means any Stock Grant or Stock-Based Award with a purchase
price per Share that is less than the Fair Market Value of a share of Common
Stock on the date of grant.
ISO means an option intended to qualify as an incentive stock option under Code
Section 422.
Non-Employee Director means a member of the Board of Directors who is not an
employee of the Company or any Affiliate.
Non-Qualified Option means an option that is not intended to qualify as an ISO.
Option means an ISO or Non-Qualified Option granted under the Plan.

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Participant means an Employee, Non-Employee Director, consultant or advisor of
the Company or an Affiliate to whom one or more Stock Rights are granted under
the Plan. As used herein, “Participant” shall include “Participant’s Survivors”
and a Participant’s permitted transferees where the context requires.
Participant’s Survivors means a deceased Participant’s legal representatives
and/or any person or persons who acquires the Participant’s rights to a Stock
Right by will or by the laws of descent and distribution.
Plan means this Vertex Pharmaceuticals Incorporated 2013 Stock and Option Plan,
as amended from time to time.
Shares means shares of the Common Stock as to which Stock Rights have been or
may be granted under the Plan or any shares of capital stock into which the
Shares are changed or for which they are exchanged within the provisions of
Section 3 of the Plan.
Stock Agreement means an agreement between the Company and a Participant
delivered pursuant to the Plan with respect to a Stock Right, in such form as
the Administrator shall approve.
Stock-Based Award means a grant by the Company under the Plan of an equity award
or equity-based award that is not an Option or Stock Grant.
Stock Grant means a grant by the Company of Shares under the Plan.
Stock Right means a right to Shares or the value of Shares of the Company
granted pursuant to the Plan as an ISO, a Non-Qualified Option, a Stock Grant or
a Stock-Based Award.
Termination of Service means that a Participant ceases to be an Employee,
Non-Employee Director, consultant or advisor with the Company and its Affiliates
(for any reason other than death). A change in a Participant’s form of service
(e.g., from Employee to Non-Employee Director, consultant or advisor) shall not
be a Termination of Service hereunder.
2.
PURPOSES OF THE PLAN

The Plan is intended to encourage ownership of Shares by Employees, Non-Employee
Directors and certain consultants and advisors to the Company in order to
attract such persons, to induce them to work for the benefit of the Company or
of an Affiliate and to provide additional incentive for them to promote the
success of the Company or of an Affiliate. The Plan provides for the granting of
Stock Rights to Employees, Non-Employee Directors, consultants and advisors of
the Company.
3.
SHARES SUBJECT TO THE PLAN

The number of Shares subject to this Plan as to which Stock Rights may be
granted from time to time shall be 3,300,000 or the equivalent of such number of
Shares after the Administrator, in its sole discretion, has interpreted the
effect of any stock split, stock dividend, combination, recapitalization or
similar transaction in accordance with Section 17 of this Plan. Subject to
Section 17 of this Plan, and the provisions of the second paragraph of this
Section 3, the number of Shares remaining subject to this Plan shall be reduced
by (i) one Share for each Share subject to a Stock Right granted under this Plan
that is not a Full Value Award and (ii) 1.66 Shares for each Share (each, a
“Full-Value Award Share”) subject to a Stock Right granted under this Plan that
is a Full Value Award.

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If an Option granted hereunder ceases to be outstanding, in whole or in part
(other than by exercise), or if the Company shall reacquire (at no more than its
original issuance price) any Shares issued pursuant to a Stock Grant, or if any
Stock Right expires or is forfeited, cancelled or otherwise terminated or
results in any Shares not being issued, the unissued Shares that were subject to
such Stock Right shall again be available for issuance from time to time
pursuant to this Plan; provided that, the following Shares may not again be made
available for issuance under the Plan: (i) Shares that are not issued or
delivered as a result of the net settlement of an outstanding Stock-Based Award
or Option and (ii) Shares that the Company acquires from a Participant for a
price that is more than the original issuance price of the Share, including any
Share acquired by the Company to fund employee payroll tax withholding
obligations on a Stock Grant, or Shares applied to payment of the exercise price
for an Option. To the extent that a Full Value Award Share is returned to the
Plan pursuant to this Section 3, 1.66 Shares of Common Stock shall again be
available for issuance from time to time pursuant to this Plan.
4.
ADMINISTRATION OF THE PLAN

The Administrator shall administer the Plan. Subject to the provisions of the
Plan, the Administrator is authorized to:
a.
Interpret the provisions of the Plan and of any Stock Right or Stock Agreement
and to make all rules and determinations that it deems necessary or advisable
for the administration of the Plan;

b.
Determine which Employees, Non-Employee Directors, consultants and advisors of
the Company and its Affiliates shall be granted Stock Rights;

c.
Determine the number of Shares and exercise price for which a Stock Right shall
be granted;

d.
Specify the terms and conditions upon which a Stock Right or Stock Rights may be
granted;

e.
In its discretion, accelerate:

(i)    the date of exercise of any installment of any Option; provided that,
other than as provided in Section 17 of the Plan, the Administrator shall not,
without the consent of the Option holder accelerate the exercise date of any
installment of any Option granted to any Employee as an ISO (and not previously
converted into a Non-Qualified Option pursuant to Section 20) if such
acceleration would violate the annual vesting limitation contained in
Section 422(d) of the Code, as described in Section 6.2.3; or
(ii)    the date or dates of vesting of Shares, or lapsing of Company repurchase
rights with respect to any Shares, under any Stock Rights; and
f.
In its discretion, extend the exercise date for any Option (subject to all term
limits for Options set forth in this Plan);

provided, however, that all such interpretations, rules, determinations, terms
and conditions shall be made and prescribed in the context of preserving the tax
status under Code Section 422 of those Options which are designated as ISOs
(unless the holder of any such Option otherwise agrees). Subject to the
foregoing, the interpretation and construction by the Administrator of any
provisions of the Plan or of any Stock Right granted under it shall be final.

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The Administrator may employ attorneys, consultants, accountants or other
persons, and the Administrator, the Company and its officers and directors shall
be entitled to rely upon the advice, opinions or valuations of such persons. All
actions taken and all interpretations and determinations made by the
Administrator in good faith shall be final and binding upon the Company, all
Participants, and all other interested persons. No member or agent of the
Administrator shall be personally liable for any action, determination, or
interpretation made in good faith with respect to this Plan or grants hereunder.
Each member of the Administrator shall be indemnified and held harmless by the
Company against any cost or expense (including counsel fees) reasonably incurred
by him or her or any liability (including any sum paid in settlement of a claim
with the approval of the Company) arising out of any act or omission to act in
connection with this Plan unless arising out of such member’s own fraud or bad
faith. Such indemnification shall be in addition to any rights of
indemnification the members of the Administrator may have as directors or
otherwise under the by-laws of the Company, or any agreement, vote of
shareholders or disinterested directors, or otherwise.
5.
ELIGIBILITY FOR PARTICIPATION

The Administrator shall, in its sole discretion, name the Participants in the
Plan, provided, however, that each Participant must be a Employee, Non-Employee
Director, consultant or advisor of the Company or of an Affiliate at the time a
Stock Right is granted. Notwithstanding the foregoing, the Administrator may
authorize the grant of a Stock Right to a person not then an Employee,
Non-Employee Director, consultant or advisor of the Company or of an Affiliate;
provided, however, that the actual grant of such Stock Right shall be
conditioned upon such person becoming eligible to become a Participant at or
prior to the time of execution of the Stock Agreement evidencing such Stock
Right. ISOs may be granted only to Employees. The granting of any Stock Right to
any individual shall neither entitle that individual to, nor disqualify him or
her from, participation in other grants of Stock Rights.
6.
TERMS AND CONDITIONS OF OPTIONS

6.1 General. Each Option shall be set forth in writing in a Stock Agreement,
duly executed by the Company and, to the extent required by law or requested by
the Company, by the Participant. The Administrator may provide that Options be
granted subject to such terms and conditions, consistent with the terms and
conditions specifically required under this Plan, as the Administrator may deem
appropriate including, without limitation, subsequent approval by the
shareholders of the Company of this Plan or any amendments thereto. Each Stock
Agreement shall state the option price (per share) of the Shares covered by each
Option, the number of Shares to which it pertains, the date or dates on which it
first is exercisable and the date after which it may no longer be exercised
(subject to Sections 11 and 12 of this Plan). Option rights may accrue or become
exercisable in installments over a period of time, or upon the achievement of
certain conditions or the attainment of stated goals or events. The Option Price
per share of Shares covered by an Option (including both ISOs and Non-Qualified
Options) shall not be less than one hundred percent (100%) of the Fair Market
Value per share of the Common Stock on the date of grant.
6.2 ISOs. Each Option intended to be an ISO shall be issued only to an Employee.
In addition to the minimum standards set forth in Section 6.1, ISOs shall be
subject to the following terms and conditions, with such additional restrictions
or changes as the Administrator determines are

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appropriate but not in conflict with Code Section 422 and relevant regulations
and rulings of the Internal Revenue Service:
6.2.1 ISO Option Price. In addition to the limitation set forth in Section 6.1,
the Option price per share of the Shares covered by each ISO granted to a
Participant who owns, directly or by reason of the applicable attribution
rules in Code Section 424(d), more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or an Affiliate shall not be
less than one hundred ten percent (110%) of the Fair Market Value on the date of
grant.
6.2.2 Term of ISO. Each ISO shall expire not more than ten (10) years from the
date of grant; provided, however, that an ISO granted to a Participant who owns,
directly or by reason of the applicable attribution rules in Code
Section 424(d), more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or an Affiliate shall expire not more
than five (5) years from the date of grant.
6.2.3 Annual Limit on Incentive Stock Options. To the extent required for
“incentive stock option” treatment under Section 422 of the Code, the aggregate
Fair Market Value (determined as of the time of grant) of the Shares with
respect to which ISOs granted under this Plan and any other plan of the Company
or its Affiliate become exercisable for the first time by a Participant during
any calendar year shall not exceed the aggregate threshold for ISOs established
by the Code ($100,000 as of January 1, 2013). To the extent that any Option
exceeds this limit, it shall constitute a Non-Qualified Option.
6.3 Non-Employee Directors’ Options. Each Non-Employee Director, upon first
being elected or appointed to the Board of Directors, shall be granted a
Non-Qualified Option to purchase that number of Shares as shall be established
for such Option grants from time to time by the Board of Directors. Each such
Option shall (i) have an exercise price equal to the Fair Market Value (per
share) on the date of grant of the Option, (ii) have a term of ten (10) years,
and (iii) shall become cumulatively exercisable in sixteen (16) equal quarterly
installments, upon completion of each full quarter of service on the Board of
Directors after the date of grant. In addition, on June 1 of each year, each
Non-Employee Director shall be granted a Non-Qualified Option to purchase that
number of Shares as shall be established for such Option grants from time to
time by the Board of Directors. Each such Option shall (i) have an exercise
price equal to the Fair Market Value (per share) on the date of grant of such
Option, (ii) have a term of ten (10) years, and (iii) be exercisable in full
immediately on the date of grant. Any director entitled to receive an Option
grant under this Section may elect to decline the Option. If a Non-Employee
Director ceases to be any of an Employee, Non-Employee Director, consultant or
advisor of the Company, Options granted under this Section 6.3 shall remain
exercisable to the extent such Options are exercisable on the date of such
Termination of Service, for their full term, and the provisions of Sections 11
and 12 below shall not apply to any such Options.
7.
TERMS AND CONDITIONS OF STOCK GRANTS

Each Stock Grant shall be set forth in a Stock Agreement, duly executed by the
Company and, to the extent required by law or requested by the Company, by the
Participant. The Stock Agreement shall be in the form approved by the
Administrator, with such changes and modifications to such form as the
Administrator, in its discretion, shall approve with respect to any particular
Participant

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or Participants. The Stock Agreement shall contain terms and conditions that the
Administrator determines to be appropriate and in the best interest of the
Company; provided, however, that the purchase price per share of the Shares
covered by each Stock Grant shall not be less than the par value per Share. Each
Stock Agreement shall state the number of Shares to which the Stock Grant
pertains and the terms of any right of the Company to reacquire the Shares
subject to the Stock Grant, including the time and events upon which such rights
shall accrue and the purchase price therefor, and any restrictions on the
transferability of such Shares.
Unless otherwise provided in the applicable Stock Agreement, any Accrued
Dividends shall be paid to the Participant only if and when such Shares become
free from the restrictions on transferability and forfeitability that apply to
such Shares. Upon the lapse of such restrictions, the payment of Accrued
Dividends shall be made promptly.
8.
TERMS AND CONDITIONS OF STOCK-BASED AWARDS

The Administrator shall have the right to grant Stock-Based Awards having such
terms and conditions as the Administrator may determine, including, without
limitation, the grant of Shares based upon certain conditions, the grant of
securities convertible into Shares and the grant of stock appreciation rights,
phantom stock awards or restricted stock units. The principal terms of each
Stock-Based Award shall be set forth in a Stock Agreement, duly executed by the
Company and, to the extent required by law or requested by the Company, by the
Participant. The Stock Agreement shall be in a form approved by the
Administrator and shall contain terms and conditions that the Administrator
determines to be appropriate.
9.
EXERCISE OF OPTIONS AND ISSUANCE OF SHARES

An Option (or any part or installment thereof) shall be exercised by delivery to
the Company, or its designee, of a notice of exercise in any form (which may be
electronic) approved by the Company, together with provision for payment of the
full purchase price in accordance with this Section for the Shares as to which
the Option is being exercised, and upon compliance with any other
condition(s) set forth in the Stock Agreement.
Payment of the purchase price for the Shares as to which such Option is being
exercised shall be made (a)  in cash or by check acceptable to the
Administrator, or (b) at the discretion of the Administrator, (i) through
delivery of shares of Common Stock not subject to any restriction under any plan
and having a Fair Market Value equal as of the date of exercise to the cash
exercise price of the Option, (ii) in accordance with a cashless exercise
program established with a securities brokerage firm, and approved by the
Company, (iii) by any other means (excluding, however, delivery of a promissory
note of the Participant) that the Administrator determines to be consistent with
the purpose of this Plan and applicable law, or (iv) by any combination of the
foregoing. Notwithstanding the foregoing, the Administrator shall accept only
such payment on exercise of an ISO as is permitted by Section 422 of the Code.
The Company shall then as soon as is reasonably practicable deliver the Shares
as to which such Option was exercised to the Participant (or to the
Participant’s Survivors, as the case may be). It is expressly understood that
the Company may delay the delivery of the Shares in order to comply with any law
or regulation that requires the Company to take any action with respect to the
Shares prior to their issuance. The Shares shall, upon delivery, be fully paid,
non-assessable Shares.

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10.
ASSIGNABILITY AND TRANSFERABILITY OF STOCK RIGHTS

By its terms, a Stock Right granted to a Participant shall not be transferable
by the Participant other than by will or by the laws of descent and distribution
or pursuant to a qualified domestic relations order as defined by the Code or
Title I of the Employee Retirement Income Security Act or the rules thereunder
or as approved by the Administrator in its discretion and set forth in the
applicable Stock Agreement, provided, however, that the Administrator shall not
approve any transfer of a Stock Right for consideration. Except as provided in
the preceding sentence or as otherwise permitted under a Stock Agreement, a
Stock Right shall be exercisable, during the Participant’s lifetime only by such
Participant (or by his or her legal representative) and shall not be assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment or similar process. Any
attempted transfer, assignment, pledge, hypothecation or other disposition of
any Stock Right or of any rights granted thereunder contrary to the provisions
of this Plan, or the levy of any attachment or similar process upon a Stock
Right, shall be null and void.
11.
EFFECT ON STOCK RIGHTS OF TERMINATION OF SERVICE

11.1    Except as otherwise provided in the applicable Stock Agreement or as
otherwise provided in Section 12, if a Participant experiences a Termination of
Service before the Participant has exercised all Stock Rights, the Participant
may exercise any Stock Right granted to him or her to the extent that the Stock
Right is exercisable on the date of such Termination of Service. Any such Stock
Right must be exercised within ninety (90) days after the date of the
Participant’s Termination of Service, unless otherwise provided in the
applicable Stock Agreement, but in no event after the expiration of the term of
the Stock Right.
11.2    The provisions of this Section, and not the provisions of Section 12,
shall apply to a Participant who subsequently dies after the Termination of
Service; provided, however, that in the case of a Participant’s death within
ninety (90) days after the Termination of Service, the Participant’s Survivors
may exercise the Stock Right within one (1) year after the date of the
Participant’s death, but in no event after the date of expiration of the term of
the Stock Right.
11.3    Absence from work with the Company or an Affiliate because of temporary
disability or a leave of absence for any purpose, shall not, during the period
of any such absence in accordance with Company policies, be deemed, by virtue of
such absence alone, a Termination of Service, except as the Administrator may
otherwise expressly provide.
11.4    Except as required by law or as set forth in a Participant’s Stock
Agreement, Stock Rights granted under the Plan shall not be affected by any
change of a Participant’s status within or among the Company and any Affiliates,
so long as the Participant continues to be an Employee, Non-Employee Director,
consultant or advisor of the Company or any Affiliate.
12.
EFFECT ON STOCK RIGHTS OF DEATH WHILE AN EMPLOYEE, DIRECTOR, CONSULTANT OR
ADVISOR

Except as otherwise provided in a Participant’s Stock Agreement, in the event of
death of a Participant while the Participant is an Employee, Non-Employee
Director, consultant or advisor of the Company or of an Affiliate, any Stock
Rights granted to such Participant may be exercised by the Participant’s
Survivors to the extent exercisable but not exercised on the date of death.
Except

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as set forth in Section 6.3, any such Stock Right must be exercised within one
(1) year after the date of death of the Participant but in no event after the
date of expiration of the term of the Stock Right, notwithstanding that the
decedent might have been able to exercise the Stock Right as to some or all of
the Shares on a later date if he or she had not died and had continued to be an
Employee, Non-Employee Director, consultant or advisor.
13.
ANNUAL LIMITS ON AWARDS; PERFORMANCE AWARDS

13.1 Annual Limits. Notwithstanding anything in this Plan to the contrary, no
Participant shall be granted Stock Rights under this Plan in any calendar year
for more than an aggregate of 1,000,000 Shares (subject to adjustment pursuant
to Section 17 to the extent consistent with Section 162(m) of the Code). For
purposes of the foregoing limitation, each Share subject to a Stock Right shall
be counted as one Share of Common Stock (including each Share subject to a
Full-Value Award).
13.2 Performance Awards. Stock Grants and Stock-Based Awards may be made subject
to the achievement of performance goals pursuant to this Section 13.2
(“Performance Awards”). Grants of Performance Awards intended to qualify as
“performance-based compensation” under Section 162(m) of the Code
(“Performance-Based Compensation”) shall be made only by a “Committee” comprised
solely of two or more directors eligible to serve on a committee making awards
qualifying as “performance-based compensation” under Section 162(m) of the Code.
For any Performance Award that is intended to qualify as Performance-Based
Compensation, the Committee shall specify that the degree of granting, vesting
and/or payout of the Performance Award shall be based on the relative or
absolute attainment of one or any combination of the following objective
performance measures: (i) revenue targets or revenue growth targets,
(ii) achievement of specified milestones in the discovery, development or
regulatory approval of one or more of the Company’s drug candidates,
(iii) achievement of specified milestones in the commercialization of one or
more of the Company’s products, (iv) achievement of specified milestones in the
manufacturing of one or more of the Company’s products, (v) cost reduction or
other expense control targets, (vi) personal management objectives, (vii) stock
price targets (including, but not limited to, growth measures), (viii) total
shareholder return, (ix) income per share, (x) operating efficiency measures,
(xi) operating margin, (xii) gross margin, (xiii) return measures (including,
but not limited to, return on assets, capital, equity or sales), (xiv) net or
total revenue levels, (xv) productivity ratios, (xvi) operating income,
(xvii) net operating profit, (xviii) net earnings or net income (before or after
taxes), (xix) cash flow (including, but not limited to, operating cash flow,
free cash flow and cash flow return on capital), (xx) earnings or operating
income before interest, taxes, depreciation, amortization and/or stock-based
compensation expense, (xxi) mergers, acquisitions or divestitures objectives,
(xxii) market share, (xxiii) customer satisfaction, (xxiv) working capital
targets, (xxv) budget objectives and (xxvi) achievement of other balance sheet
or statement of operations objectives.
Each financial measure may be determined pursuant to generally accepted
accounting principles (“GAAP”) or on a non-GAAP basis, as determined by the
Committee. Such goals may reflect absolute entity or business unit performance
or a relative comparison to the performance of a peer group of entities or other
external measure of the selected performance criteria and may be absolute in
their terms or measured against or in relationship to other companies
comparably, similarly or otherwise situated.

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The Committee may specify that such performance measures shall be adjusted to
exclude or provide for appropriate adjustment for one or more of the following
items: (A) asset impairments or write-downs; (B) litigation and governmental
investigation expenses and judgments, verdicts or claim settlements; (C) the
effect of changes in tax law, accounting principles or other laws, regulations
or provisions affecting reported results; (D) the effect of exchange rates for
non-U.S. dollar denominated net sales or goals based on operating profit,
earnings or income; (E) accruals for reorganization and restructuring programs;
(F) any non-GAAP adjustments as described in the Company’s earnings releases or
in the management’s discussion and analysis of financial condition and results
of operations appearing in the Company’s periodic reports; (G) items of income,
gain, loss or expense attributable to the operations of any business acquired by
the Company or any parent or subsidiary or of any joint venture established by
the Company or any parent or subsidiary; (H) costs and expenses incurred in
connection with mergers and acquisitions; (I) items of income, gain, loss or
expense attributable to one or more business operations divested by the Company
or any parent or subsidiary or the gain or loss realized upon the sale of any
such divested business or the assets thereof ; or (J) the effect of any change
in the outstanding shares of Common Stock effected by reason of a stock split,
stock dividend, stock repurchase, reorganization, recapitalization, merger,
consolidation, spin-off, combination or exchange of shares or other similar
corporate change or any distributions to the Company’s shareholders other than
regular cash dividends.
Such performance measures: (1) may vary by Participant and may be different for
different awards; (2) may be particular to a Participant or the department,
branch, line of business, subsidiary or other unit in which the Participant
works and may cover such period as may be specified by the Committee; and (3)
shall be set by the Committee within the time period prescribed by, and shall
otherwise comply with the requirements of, Section 162(m) of the Code.
Notwithstanding any provision of the Plan, with respect to any Performance Award
that is intended to qualify as Performance-Based Compensation, the Committee may
adjust downwards, but not upwards, the number of shares payable pursuant to such
Performance Award, and the Committee may not waive the achievement of the
applicable performance measures except in the case of the death or disability of
the Participant or a change in control of the Company.
The Committee shall have the power to impose such other restrictions on
Performance Awards as it may deem necessary or appropriate to ensure that such
Performance Awards satisfy all requirements for Performance-Based Compensation.
14.
RIGHTS AS A SHAREHOLDER

No Participant to whom a Stock Right (other than a Stock Grant) has been granted
shall have rights as a shareholder with respect to any Shares covered by such
Stock Right, except after due exercise thereof and/or tender of the full
purchase price for the Shares being purchased pursuant to such exercise. The
provisions of this Section 14 shall not be applicable to Shares issued pursuant
to Stock Grants, provided that the Participant shall have tendered the purchase
price therefore, notwithstanding the existence of stock transfer restrictions on
or a Company repurchase right with respect to such Shares.

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15.
EMPLOYMENT OR OTHER RELATIONSHIP

Nothing in this Plan or any Stock Agreement shall be deemed to prevent the
Company or an Affiliate from terminating the employment, consultancy or director
status of a Participant, or to prevent a Participant from terminating his or her
own employment, consultancy or director status or to give any Participant a
right to be retained in employment or other service by the Company or any
Affiliate for any period of time.
16.
DISSOLUTION OR LIQUIDATION OF THE COMPANY

Upon the dissolution or liquidation of the Company (other than in connection
with a transaction subject to the provisions of Section 17.2), all Stock Rights
granted under this Plan which as of such date shall not have been exercised will
terminate and become null and void; provided, however, that if the rights of a
Participant or a Participant’s Survivors have not otherwise terminated and
expired, the Participant or Participant’s Survivors will have the right
immediately prior to such dissolution or liquidation to exercise any Stock Right
to the extent that such Stock Right is exercisable as of the date immediately
prior to such dissolution or liquidation. Upon the dissolution or liquidation of
the Company, any outstanding Stock-Based Awards shall immediately terminate
unless otherwise determined by the Administrator or specifically provided in the
applicable Stock Agreement.
17.
ADJUSTMENTS

Upon the occurrence of any of the following events, a Participant’s rights with
respect to any Stock Right granted to him or her hereunder that have not
previously been exercised in full shall be adjusted as hereinafter provided,
unless otherwise specifically provided in the Stock Agreement or in any
employment agreement between a Participant and the Company or an Affiliate:
17.1 Stock Dividends and Stock Splits. If the shares of Common Stock shall be
subdivided or combined into a greater or smaller number of shares or if the
Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock subject to or
deliverable upon the exercise of a Stock Right shall be appropriately increased
or decreased, and appropriate adjustments shall be made in the purchase price
per Share to reflect such event. The number of Shares subject to the limitation
in Section 13.1 shall also be adjusted upon the occurrence of such events.
17.2 Consolidations or Mergers. In the event of a consolidation or merger in
which the Company is not the surviving corporation or which results in the
acquisition of substantially all the Company’s outstanding stock by a single
person or entity or by a group of persons and/or entities acting in concert, or
in the event of the sale or transfer of substantially all the Company’s assets
(any of the foregoing, an “Acquisition”), all then outstanding Stock Rights
(excluding any Shares subject to Stock Grants as to which all Company repurchase
rights shall have lapsed) shall terminate unless assumed pursuant to clause
(i) below; provided that either (i) the Administrator shall provide for the
surviving or acquiring entity or an affiliate thereof to assume the outstanding
Stock Rights or grant replacement stock rights in lieu thereof, any such
replacement to be upon an equitable basis as determined by the Administrator, or
(ii) if there is no such assumption or substitution, all outstanding Stock
Rights shall become immediately and fully exercisable and all Company repurchase
rights with respect to Stock

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Rights shall lapse, in each case immediately prior to the Acquisition,
notwithstanding any restrictions or vesting conditions set forth therein.
17.3 Recapitalization or Reorganization. In the event of a recapitalization or
reorganization of the Company (other than a transaction described in
Section 17.2 above) pursuant to which securities of the Company or of another
corporation are issued with respect to the outstanding shares of Common Stock, a
Participant upon exercising a Stock Right shall be entitled to receive for the
purchase price paid upon such exercise the securities he or she would have
received if he or she had exercised such Stock Right immediately prior to such
recapitalization or reorganization.
17.4 Adjustments to Stock Grants and Stock-Based Awards. Upon the happening of
any of the events described in Sections 17.1, 17.2 or 17.3, any outstanding
Stock-Based Award and the Shares subject to any Stock Grant, vested or unvested,
shall be appropriately adjusted to reflect the events described in such
Sections. The Administrator shall determine the specific adjustments to be made
under this Section 17.4.
17.5 Modification of ISOs. Notwithstanding the foregoing, any adjustments made
pursuant to Section 17.1, 17.2 or 17.3 with respect to ISOs shall be made only
after the Administrator determines whether such adjustments would constitute a
“modification” of such ISOs (as that term is defined in Section 424(h) of the
Code) or would cause any adverse tax consequences for the holders of such ISOs.
If the Administrator determines that such adjustments made with respect to ISOs
would constitute a modification of such ISOs, it may refrain from making such
adjustments, unless the holder of an ISO specifically requests in writing that
such adjustment be made and such writing indicates that the holder has full
knowledge of the consequences of such “modification” on his or her income tax
treatment with respect to the ISO.
18.
ISSUANCES OF SECURITIES

Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of Shares subject to Stock Rights. Except as expressly
provided herein, no adjustments shall be made for dividends paid in cash or in
property (including without limitation, securities) of the Company.
19.
FRACTIONAL SHARES

No fractional share shall be issued under the Plan and the person exercising any
Stock Right shall receive from the Company cash in lieu of any such fractional
share equal to the Fair Market Value thereof.
20.
CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS; TERMINATION OF ISOs

Any Options granted under this Plan that do not meet the requirements of the
Code for ISOs shall automatically be deemed to be Non-Qualified Options without
further action on the part of the Administrator. The Administrator, at the
written request of any Participant, may in its discretion take such actions as
may be necessary to convert such Participant’s ISOs (or any portion thereof)

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that have not been exercised on the date of conversion into Non-Qualified
Options at any time prior to the expiration of such ISOs, regardless of whether
the Participant is an employee of the Company or an Affiliate at the time of
such conversion. At the time of such conversion, the Administrator (with the
consent of the Participant) may impose such conditions on the exercise of the
resulting Non-Qualified Options as the Administrator in its discretion may
determine, provided that such conditions shall not be inconsistent with this
Plan. Nothing in the Plan shall be deemed to give any Participant the right to
have such Participant’s ISOs converted into Non-Qualified Options, and no such
conversion shall occur until and unless the Administrator takes appropriate
action. The Administrator, with the consent of the Participant, may also
terminate any portion of any ISO that has not been exercised at the time of such
termination.
21.
WITHHOLDING

If any federal, state, or local income taxes, employment taxes, Federal
Insurance Contributions Act (“FICA”) withholdings or other amounts are required
by applicable law or governmental regulation to be withheld from the
Participant’s salary, wages or other remuneration in connection with the
exercise of a Stock Right, the lapsing of a Company repurchase right or a
Disqualifying Disposition (as defined in Section 22), the Company may withhold
from the Participant’s compensation, if any, or may require that the Participant
advance in cash to the Company, or to any Affiliate of the Company which employs
or employed the Participant, the amount of such withholdings unless a different
withholding arrangement, including the use of shares of the Company’s Common
Stock, is authorized by the Administrator (and permitted by law). For purposes
hereof, the Fair Market Value of any shares withheld for purposes of payroll
withholding shall be determined in the manner provided in Section 1 above, as of
the most recent practicable date prior to the date of exercise. If the Fair
Market Value of the shares withheld is less than the amount of payroll
withholdings required, the Participant may be required to advance the difference
in cash to the Company or the Affiliate employer. The Administrator in its
discretion may condition the exercise of an Option for less than the then Fair
Market Value on the Participant’s payment of such additional withholding. In no
event shall shares be withheld from any award in satisfaction of tax withholding
requirements in an amount that exceeds the statutory minimum amount of tax
withholding required.
22.
NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION

Each Employee who receives an ISO must agree to notify the Company in writing
immediately after the Employee makes a “Disqualifying Disposition” of any Shares
acquired pursuant to the exercise of an ISO. A Disqualifying Disposition is any
disposition (as defined in Section 424(c) of the Code) of such Shares before the
later of (a) two years from the date the Employee was granted the ISO, or
(b) one year after the date the Employee acquired Shares by exercising the ISO.
If the Employee has died before such Shares are sold, the notice provisions of
this Section 22 shall not apply.
23.
EFFECTIVE DATE; TERMINATION OF THE PLAN

This Plan shall be effective on May 8, 2013, the date of its approval by the
shareholders of the Company. The Plan will terminate on May 7, 2023. The Plan
also may be terminated at an earlier

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date by vote of the Board of Directors. Termination of this Plan will not affect
any Stock Rights granted or Stock Agreements executed prior to the effective
date of such termination.
24.
AMENDMENT OF THE PLAN; AMENDMENT OF STOCK RIGHTS

The Plan may be amended by the shareholders of the Company, with the approval of
the Board of Directors, by affirmative vote of a majority of the votes cast at a
meeting of the shareholders at which a quorum is present. The Plan also may be
amended by the Board of Directors or the Administrator, including, without
limitation, to the extent necessary to qualify any or all outstanding Stock
Rights granted under the Plan or Stock Rights to be granted under the Plan for
favorable federal income tax treatment (including deferral of taxation upon
exercise) as may be afforded incentive stock options under Section 422 of the
Code, and to the extent necessary to qualify the shares issuable upon exercise
of any outstanding Stock Rights granted, or Stock Rights to be granted, under
the Plan for listing on any national securities exchange or quotation in any
national automated quotation system of securities dealers. Any amendment
approved by the Administrator that the Administrator determines is of a scope
that requires shareholder approval shall be subject to shareholder approval. No
modification or amendment of the Plan shall adversely affect a Participant’s
rights under a Stock Right previously granted to the Participant, without such
Participant’s consent.
In its discretion, the Administrator may amend any term or condition of any
outstanding Stock Right, provided: (i) such term or condition is not prohibited
by the Plan; (ii) if the amendment is adverse to the Participant, such amendment
shall be made only with the consent of the Participant or the Participant’s
Survivors, as the case may be; and (iii) any such amendment of any ISO shall be
made only after the Administrator determines whether such amendment would
constitute a “modification” of any Stock Right which is an ISO (as that term is
defined in Section 424(h) of the Code) or would cause any adverse tax
consequences for the holder of such ISO (in which case, the Participant’s or
Participant’s Survivors’ consent to such amendment shall be required).
Notwithstanding the foregoing, unless such action is approved by the Company’s
shareholders, the Company may not (except for adjustments permitted under
Section 17 of this Plan) (1) amend any outstanding Option or stock appreciation
right granted under the Plan to provide an exercise price per share that is
lower than the then-current exercise price per share of such outstanding Option
or stock appreciation right; (2) cancel any outstanding option or stock
appreciation right (whether or not granted under the Plan) and grant in
substitution therefor new Stock Rights under the Plan covering the same or a
different number of shares of Common Stock and having an exercise price per
share lower than the then-current exercise price per share of the cancelled
option or stock appreciation right; or (3) cancel in exchange for a cash payment
any outstanding Option or stock appreciation right with an exercise price per
share above the then-current Fair Market Value.
25. COMPLIANCE WITH SECTION 409A OF THE CODE
Except as provided in individual Stock Agreements initially or by amendment, if
and to the extent (i) any portion of any payment, compensation or other benefit
provided to a Participant pursuant to the Plan in connection with his or her
employment termination constitutes “nonqualified deferred compensation” within
the meaning of Section 409A of the Code and (ii) the Participant is a specified
employee as defined in Section 409A(a)(2)(B)(i) of the Code, in each case as
determined by the Company in accordance with its procedures, by which
determinations the Participant (through accepting the Stock Right) agrees that
he or she is bound, such portion of the payment, compensation

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or other benefit shall not be paid before the day that is six months plus one
day after the date of “separation from service” (as determined under Section
409A of the Code) (the “New Payment Date”), except as Section 409A of the Code
may then permit. The aggregate of any payments that otherwise would have been
paid to the Participant during the period between the date of separation from
service and the New Payment Date shall be paid to the Participant in a lump sum
on such New Payment Date, and any remaining payments will be paid on their
original schedule.
26. AUTHORIZATION OF SUB-PLANS
The Board of Directors may from time to time establish one or more sub-plans
under the Plan for purposes of satisfying applicable securities, tax or other
laws of various jurisdictions. The Board of Directors shall establish such
sub-plans by adopting supplements to the Plan containing (i) such limitations on
the Board of Director’s discretion under the Plan as the Board of Directors
deems necessary or desirable or (ii) such additional terms and conditions not
otherwise inconsistent with the Plan as the Board of Directors shall deem
necessary or desirable. All supplements adopted by the Board of Directors shall
be deemed to be part of the Plan, but each supplement shall apply only to
Participants within the affected jurisdiction and the Company shall not be
required to provide copies of any supplement to Participants in any jurisdiction
that is not the subject of such supplement.
27. GOVERNING LAW
This Plan shall be construed and enforced in accordance with the law of The
Commonwealth of Massachusetts.

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