Exhibit 10.32

ACHILLION PHARMACEUTICALS, INC.

2006 EMPLOYEE STOCK PURCHASE PLAN

The purpose of this Plan is to provide eligible employees of Achillion
Pharmaceuticals, Inc. (the “Company”) and certain of its subsidiaries with
opportunities to purchase shares of the Company’s common stock, $.001 par value
(the “Common Stock”). 2,000,000 shares of Common Stock in the aggregate have
been approved for this purpose. This Plan is intended to qualify as an “employee
stock purchase plan” as defined in Section 423 of the Internal Revenue Code of
1986, as amended (the “Code”), and the regulations promulgated thereunder, and
shall be interpreted consistent therewith.

1. Administration. The Plan will be administered by the Company’s Board of
Directors (the “Board”) or by a Committee appointed by the Board (the
“Committee”). The Board or the Committee has authority to make rules and
regulations for the administration of the Plan and its interpretation and
decisions with regard thereto shall be final and conclusive.

2. Eligibility. All employees of the Company, including Directors who are
employees, and all employees of any subsidiary of the Company (as defined in
Section 424(f) of the Code) designated by the Board or the Committee from time
to time (a “Designated Subsidiary”), are eligible to participate in any one or
more of the offerings of Options (as defined in Section 9) to purchase Common
Stock under the Plan provided that:

(a) they are customarily employed by the Company or a Designated Subsidiary for
more than 20 hours a week and for more than five months in a calendar year; and

(b) they have been employed by the Company or a Designated Subsidiary for at
least six months prior to enrolling in the Plan; and

(c) they are employees of the Company or a Designated Subsidiary on the first
day of the applicable Plan Period (as defined below).

No employee may be granted an option hereunder if such employee, immediately
after the option is granted, owns 5% or more of the total combined voting power
or value of the stock of the Company or any subsidiary. For purposes of the
preceding sentence, the attribution rules of Section 424(d) of the Code shall
apply in determining the stock ownership of an employee, and all stock which the
employee has a contractual right to purchase shall be treated as stock owned by
the employee.

3. Offerings. The Company will make one or more offerings (“Offerings”) to
employees to purchase stock under this Plan. Offerings will begin each
September 1 and March 1, or the first business day thereafter (the “Offering
Commencement Dates”). Each Offering Commencement Date will begin a six-month
period (a “Plan Period”) during which payroll deductions will be made and held
for the purchase of Common Stock at the end of the Plan Period. The Board or the
Committee may, at its discretion, choose a different Plan Period of

 

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twelve (12) months or less for subsequent Offerings. Notwithstanding anything to
the contrary, the first Plan Period shall begin on the later of (i) the first
date that the Common Stock is publicly traded following the Company’s initial
public offering (the “IPO Date”) or (ii) September 1, 2006, and shall end on
February 28, 2007.

4. Participation. An employee eligible on the Offering Commencement Date of any
Offering may participate in such Offering by completing and forwarding a payroll
deduction authorization form to the employee’s appropriate payroll office at
least five business days prior to the applicable Offering Commencement Date.
The form will authorize a regular payroll deduction from the Compensation
received by the employee during the Plan Period. Unless an employee files a new
form or withdraws from the Plan, his deductions and purchases will continue at
the same rate for future Offerings under the Plan as long as the Plan remains in
effect. The term “Compensation” means the amount of money reportable on the
employee’s Federal Income Tax Withholding Statement, excluding overtime, shift
premium, incentive or bonus awards, allowances and reimbursements for expenses
such as relocation allowances for travel expenses, income or gains associated
with the grant or vesting of restricted stock, income or gains on the exercise
of Company stock options or stock appreciation rights, and similar items,
whether or not shown on the employee’s Federal Income Tax Withholding Statement,
but including, in the case of salespersons, sales commissions to the extent
determined by the Board or the Committee.

5. Deductions. The Company will maintain payroll deduction accounts for all
participating employees. With respect to any Offering made under this Plan, an
employee may authorize a payroll deduction in any dollar amount up to a maximum
of 15% of the Compensation he or she receives during the Plan Period or such
shorter period during which deductions from payroll are made. The Board or the
Committee may, at its discretion, designate a lower maximum contribution rate.
Payroll deductions may be at the rate of 2%, 4%, 6%, 8%, 10% or 15% of
Compensation with any change in compensation during the Plan Period to result in
an automatic corresponding change in the dollar amount withheld. The minimum
payroll deduction is such percentage of compensation as may be established from
time to time by the Board or the Committee.

6. Deduction Changes. An employee may decrease or discontinue his payroll
deduction once during any Plan Period, by filing a new payroll deduction
authorization form. However, an employee may not increase his payroll deduction
during a Plan Period. If an employee elects to discontinue his payroll
deductions during a Plan Period, but does not elect to withdraw his funds
pursuant to Section 8 hereof, funds deducted prior to his election to
discontinue will be applied to the purchase of Common Stock on the Exercise Date
(as defined below).

7. Interest. Interest will not be paid on any employee accounts, except to the
extent that the Board or the Committee, in its sole discretion, elects to credit
employee accounts with interest at such per annum rate as it may from time to
time determine.

8. Withdrawal of Funds. An employee may at any time prior to the close of
business on the last business day in a Plan Period and for any reason
permanently draw out the balance accumulated in the employee’s account and
thereby withdraw from participation in an Offering.

 

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Partial withdrawals are not permitted. The employee may not begin participation
again during the remainder of the Plan Period. The employee may participate in
any subsequent Offering in accordance with terms and conditions established by
the Board or the Committee.

9. Purchase of Shares.

(a) Number of Shares. On the Offering Commencement Date of each Plan Period, the
Company will grant to each eligible employee who is then a participant in the
Plan an option (an “Option”) to purchase on the last business day of such Plan
Period (the “Exercise Date”) at the applicable purchase price (the “Option
Price”) the largest number of whole shares of Common Stock of the Company as
does not exceed the employee’s accumulated payroll deductions as of the Exercise
Date divided by the Option Price for such Plan Period; provided, however, that
no employee may be granted an Option which permits his rights to purchase Common
Stock under this Plan and any other employee stock purchase plan (as defined in
Section 423(b) of the Code) of the Company and its subsidiaries, to accrue at a
rate which exceeds $25,000 of the fair market value of such Common Stock for
each calendar year in which the Option is outstanding at any time.

(b) Option Price. The Board or the Committee shall determine the Option Price
for each Plan Period, including whether such Option Price shall be determined
based on the lesser of (i) the closing price of the Common Stock on the first
business day of the Plan Period or (ii) the Exercise Date, or shall be based
solely on the closing price of the Common Stock on the Exercise Date; provided,
however, that such Option Price shall be at least 85% of the applicable closing
price. In the absence of a determination by the Board or the Committee, the
Option Price will be 85% of the lesser of the closing price of the Common Stock
on the (i) first business day of the Plan Period or (ii) the Exercise Date. The
closing price shall be (a) the closing price on any national securities exchange
on which the Common Stock is listed, (b) the closing price of the Common Stock
on the Nasdaq National Market or (c) the average of the closing bid and asked
prices in the over-the-counter-market, whichever is applicable, as published in
The Wall Street Journal; provided that, with respect to the first Plan Period,
the closing price on the Offering Commencement Date shall be the initial public
offering price provided for in the underwriting agreement entered into by the
Company in connection with the IPO. If no sales of Common Stock were made on
such a day, the price of the Common Stock for purposes of clauses (a) and
(b) above shall be the reported price for the next preceding day on which sales
were made.

(c) Exercise of Option. Each employee who continues to be a participant in the
Plan on the Exercise Date shall be deemed to have exercised his Option at the
Option Price on such date and shall be deemed to have purchased from the Company
the number of whole shares of Common Stock reserved for the purpose of the Plan
that his accumulated payroll deductions on such date will pay for, but not in
excess of the maximum number determined in the manner set forth above.

(d) Return of Unused Payroll Deductions. Any balance remaining in an employee’s
payroll deduction account at the end of a Plan Period will be automatically
refunded to the employee, except that any balance which is less than the
purchase price of one share of Common Stock will be carried forward into the
employee’s payroll deduction account for the following Offering, unless the
employee elects not to participate in the following Offering under the Plan, in
which case the balance in the employee’s account shall be refunded.

 

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10. Issuance of Certificates. Certificates representing shares of Common Stock
purchased under the Plan may be issued only in the name of the employee, in the
name of the employee and another person of legal age as joint tenants with
rights of survivorship, or (in the Company’s sole discretion) in the name of a
brokerage firm, bank, or other nominee holder designated by the employee. The
Company may, in its sole discretion and in compliance with applicable laws,
authorize the use of book entry registration of shares in lieu of issuing stock
certificates.

11. Rights on Retirement, Death or Termination of Employment. In the event of a
participating employee’s termination of employment prior to the last business
day of a Plan Period, no payroll deduction shall be taken from any pay due and
owing to an employee and the balance in the employee’s account shall be paid to
the employee or, in the event of the employee’s death, (a) to a beneficiary
previously designated in a revocable notice signed by the employee (with any
spousal consent required under state law) or (b) in the absence of such a
designated beneficiary, to the executor or administrator of the employee’s
estate or (c) if no such executor or administrator has been appointed to the
knowledge of the Company, to such other person(s) as the Company may, in its
discretion, designate. If, prior to the last business day of the Plan Period,
the Designated Subsidiary by which an employee is employed shall cease to be a
subsidiary of the Company, or if the employee is transferred to a subsidiary of
the Company that is not a Designated Subsidiary, the employee shall be deemed to
have terminated employment for the purposes of this Plan.

12. Optionees Not Stockholders. Neither the granting of an Option to an employee
nor the deductions from his pay shall constitute such employee a stockholder of
the shares of Common Stock covered by an Option under this Plan until such
shares have been purchased by and issued to him.

13. Rights Not Transferable. Rights under this Plan are not transferable by a
participating employee other than by will or the laws of descent and
distribution, and are exercisable during the employee’s lifetime only by the
employee.

14. Application of Funds. All funds received or held by the Company under this
Plan may be combined with other corporate funds and may be used for any
corporate purpose.

15. Adjustment for Changes in Common Stock and Certain Other Events.

a) Changes in Capitalization. In the event of any stock split, reverse stock
split, stock dividend, recapitalization, combination of shares, reclassification
of shares, spin-off or other similar change in capitalization or event, or any
distribution to holders of Common Stock other than an ordinary cash dividend,
(i) the number and class of securities available under this Plan, (ii) the share
limitations set forth in Section 9, and (iii) the Option Price shall be
appropriately adjusted to the extent determined by the Board or the Committee.

 

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(b) Reorganization Events.

(1) Definition. A “Reorganization Event” shall mean: (a) any merger or
consolidation of the Company with or into another entity as a result of which
all of the Common Stock of the Company is converted into or exchanged for the
right to receive cash, securities or other property or is cancelled, (b) any
exchange of all of the Common Stock of the Company for cash, securities or other
property pursuant to a share exchange transaction or (c) any liquidation or
dissolution of the Company.

(2) Consequences of a Reorganization Event on Options. In connection with a
Reorganization Event, the Board or the Committee shall take any one or more of
the following actions as to outstanding Options on such terms as the Board or
the Committee determines: (i) provide that Options shall be assumed, or
substantially equivalent Options shall be substituted, by the acquiring or
succeeding corporation (or an affiliate thereof), (ii) upon written notice to
employees, provide that all outstanding Options will be terminated as of the
effective date of the Reorganization Event and that all such outstanding Options
will become exercisable to the extent of accumulated payroll deductions as of a
date specified by the Board or the Committee in such notice, which date shall
not be less than ten (10) days preceding the effective date of the
Reorganization Event, (iii) upon written notice to employees, provide that all
outstanding Options will be cancelled as of a date prior to the effective date
of the Reorganization Event and that all accumulated payroll deductions will be
returned to participating employees on such date, (iv) in the event of a
Reorganization Event under the terms of which holders of Common Stock will
receive upon consummation thereof a cash payment for each share surrendered in
the Reorganization Event (the “Acquisition Price”), make or provide for a cash
payment to an employee equal to (A) the Acquisition Price times the number of
shares of Common Stock subject to the employee’s Option (to the extent the
Option Price does not exceed the Acquisition Price) minus (B) the aggregate
Option Price of such Option, in exchange for the termination of such Option,
(v) provide that, in connection with a liquidation or dissolution of the
Company, Options shall convert into the right to receive liquidation proceeds
(net of the Option Price thereof) and (vi) any combination of the foregoing.

For purposes of clause (i) above, an Option shall be considered assumed if,
following consummation of the Reorganization Event, the Option confers the right
to purchase, for each share of Common Stock subject to the Option immediately
prior to the consummation of the Reorganization Event, the consideration
(whether cash, securities or other property) received as a result of the
Reorganization Event by holders of Common Stock for each share of Common Stock
held immediately prior to the consummation of the Reorganization Event (and if
holders were offered a choice of consideration, the type of consideration chosen
by the holders of a majority of the outstanding shares of Common Stock);
provided, however, that if the consideration received as a result of the
Reorganization Event is not solely common stock of the acquiring or succeeding
corporation (or an affiliate thereof), the Company may, with the consent of the
acquiring or succeeding corporation, provide for the consideration to be
received upon the exercise of Options to consist solely of common stock of the
acquiring or succeeding corporation (or an affiliate thereof) equivalent in
value (as determined by the Board) to the per share consideration received by
holders of outstanding shares of Common Stock as a result of the Reorganization
Event.

 

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16. Amendment of the Plan. The Board may at any time, and from time to time,
amend this Plan in any respect, except that (a) if the approval of any such
amendment by the shareholders of the Company is required by Section 423 of the
Code, such amendment shall not be effected without such approval, and (b) in no
event may any amendment be made which would cause the Plan to fail to comply
with Section 423 of the Code.

17. Insufficient Shares. In the event that the total number of shares of Common
Stock specified in elections to be purchased under any Offering plus the number
of shares purchased under previous Offerings under this Plan exceeds the maximum
number of shares issuable under this Plan, the Board or the Committee will allot
the shares then available on a pro-rata basis.

18. Termination of the Plan. This Plan may be terminated at any time by the
Board. Upon termination of this Plan all amounts in the accounts of
participating employees shall be promptly refunded.

19. Governmental Regulations. The Company’s obligation to sell and deliver
Common Stock under this Plan is subject to listing on a national stock exchange
or quotation on the Nasdaq National Market (to the extent the Common Stock is
then so listed or quoted) and the approval of all governmental authorities
required in connection with the authorization, issuance or sale of such stock.

20. Governing Law. The Plan shall be governed by Delaware law except to the
extent that such law is preempted by federal law.

21. Issuance of Shares. Shares may be issued upon exercise of an Option from
authorized but unissued Common Stock, from shares held in the treasury of the
Company, or from any other proper source.

22. Notification upon Sale of Shares. Each employee agrees, by entering the
Plan, to promptly give the Company notice of any disposition of shares purchased
under the Plan where such disposition occurs within two years after the date of
grant of the Option pursuant to which such shares were purchased.

23. Special Provisions for First Plan Period. The following provisions of this
Section 23 shall apply with respect to the first Plan Period notwithstanding any
provision of the Plan to the contrary:

Every eligible employee shall automatically become a participant in the Plan for
the first Plan Period at the highest percentage of Compensation permitted under
Section 5. No payroll deductions shall be required for the first Plan Period;
however, a participant may, at any time after the effectiveness of the Plan’s
Registration Statement on Form S-8, elect to have payroll deductions up to the
aggregate amount which would have been credited to his or her account if a
deduction of ten percent (10%) of the Compensation which he or she received on
each pay day during the first Plan Period had been made (the “Maximum Amount”)
or decline to participate by filing an appropriate subscription agreement.

Upon the automatic exercise of a participant’s option on the Exercise Date for
the first Plan Period, a participant shall be permitted to purchase shares with
(i) the accumulated payroll

 

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deductions in his or her account, if any, (ii) a direct payment from the
participant, or (iii) a combination thereof; provided, however that the total
amount applied to the purchase may not exceed the Maximum Amount.

24. Withholding. Each employee shall, no later than the date of the event
creating the tax liability, make provision satisfactory to the Board for payment
of any taxes required by law to be withheld in connection with any transaction
related to Options granted to or shares acquired by such employee pursuant to
the Plan. The Company may, to the extent permitted by law, deduct any such taxes
from any payment of any kind otherwise due to an employee.

25. Effective Date and Approval of Shareholders. The Plan shall take effect on
the IPO Date, subject to approval by the shareholders of the Company as required
by Section 423 of the Code, which approval must occur within twelve months of
the adoption of the Plan by the Board.

 

Adopted by the Board of Directors on May 15, 2006

Approved by the stockholders on

September 21, 2006

 

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ACHILLION PHARMACEUTICALS, INC.

Amendment No. 1 To

2006 Employee Stock Purchase Plan

Achillion Pharmaceuticals, Inc.’s (the “Company”) Employee Stock Purchase Plan
(the “Plan”), pursuant to Section 16 thereof, is hereby amended as follows:

Section 3 of the Plan is deleted in its entirety and the following is inserted
in lieu thereof:

“3. Offerings. The Company will make one or more offerings (“Offerings”) to
employees to purchase stock under this Plan. Offerings will begin each
December 1 and June 1, or the first business day thereafter (the “Offering
Commencement Dates”). Each Offering Commencement Date will begin a six-month
period (a “Plan Period”) during which payroll deductions will be made and held
for the purchase of Common Stock at the end of the Plan Period. The Board or the
Committee may, at its discretion, choose a different Plan Period of twelve
(12) months or less for subsequent Offerings. Notwithstanding anything to the
contrary, the first Plan Period shall begin on the later of (i) the first date
that the Common Stock is publicly traded following the Company’s initial public
offering (the “IPO Date”) or (ii) December 1, 2006, and shall end on May 31,
2007.”

Section 15(a) of the Plan is deleted in its entirety and the following is
inserted in lieu thereof:

“15. Adjustment for Changes in Common Stock and Certain Other Events.

(a) Changes in Capitalization. In the event of any stock split, reverse stock
split, stock dividend, recapitalization, combination of shares, reclassification
of shares, spin-off or other similar change in capitalization or event, or any
distribution to holders of Common Stock other than an ordinary cash dividend,
(i) the number and class of securities available under this Plan, (ii) the share
limitations set forth in Section 9, and (iii) the Option Price shall be
appropriately and equitably adjusted in the manner determined by the Board or
the Committee.”

 

Adopted by the Board of Directors: September 18, 2006

 

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ACHILLION PHARMACEUTICALS, INC.

Amendment No. 2 To

2006 Employee Stock Purchase Plan

Achillion Pharmaceuticals, Inc.’s (the “Company”) Employee Stock Purchase Plan
(the “Plan”), pursuant to Section 16 thereof, is hereby amended as follows:

Section 3 of the Plan is deleted in its entirety and the following is inserted
in lieu thereof:

“3. Offerings. The Company will make one or more offerings (“Offerings”) to
employees to purchase stock under this Plan. Offerings will begin each
December 1 and June 1, or the first business day thereafter (the “Offering
Commencement Dates”). Each Offering Commencement Date will begin a six-month
period (a “Plan Period”) during which payroll deductions will be made and held
for the purchase of Common Stock at the end of the Plan Period. The Board or the
Committee may, at its discretion, choose a different Plan Period of twelve
(12) months or less for subsequent Offerings. Notwithstanding anything to the
contrary, the first Plan Period shall begin on the later of (i) the first date
that the Common Stock is publicly traded following the Company’s initial public
offering (the “IPO Date”) or (ii) December 1, 2006, and shall end on May 31,
2007.”

Section 15(a) of the Plan is deleted in its entirety and the following is
inserted in lieu thereof:

 

“15. Adjustment for Changes in Common Stock and Certain Other Events.

(a) Changes in Capitalization. In the event of any stock split, reverse stock
split, stock dividend, recapitalization, combination of shares, reclassification
of shares, spin-off or other similar change in capitalization or event, or any
distribution to holders of Common Stock other than an ordinary cash dividend,
(i) the number and class of securities available under this Plan, (ii) the share
limitations set forth in Section 9, and (iii) the Option Price shall be
appropriately and equitably adjusted in the manner determined by the Board or
the Committee.”

Adopted by the Board of Directors: March 9, 2010

 

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