Exhibit 10.3

EMPLOYMENT AGREEMENT

AGREEMENT, made and entered into as of the 29th day of June, 2007, by and
between Vertex Pharmaceuticals Incorporated, a Massachusetts corporation
(together with its successors and assigns, the “Company”), and Kurt Graves (the
“Executive”).

W IT N E S S E T H

WHEREAS, the Company has offered to employ the Executive as the Executive Vice
President, Chief Commercial Officer and Head, Strategic Development of the
Company;

WHEREAS, the Company and the Executive desire to enter into an employment
agreement, which shall set forth the terms of such employment (this
“Agreement”); and

WHEREAS, the Executive desires to enter into this Agreement and to accept such
employment, subject to the terms and provisions of this Agreement.

NOW, THEREFORE, in consideration of the promises and mutual covenants contained
herein and for other good and valuable consideration, the receipt of which is
mutually acknowledged, the Company and the Executive (each individually a
“Party”, and together the “Parties”) agree as follows:

1. DEFINITIONS.

(a) “Base Salary” shall mean the Executive’s base salary in accordance with
Section 4 below.

(b) “Board” shall mean the Board of Directors of the Company.

(c) “Cause” shall mean (i) the Executive is convicted of a crime involving moral
turpitude, or (ii) the Executive commits a material breach of any provision of
this Agreement not involving the performance or nonperformance of duties, or
(iii) the Executive, in carrying out his duties, acts or fails to act in a
manner which is determined, in the sole discretion of the Board, after written
notice of any such act or failure to act and a reasonable opportunity to cure
the deficiency has been provided to the Executive, to be (A) willful gross
neglect or (B) willful gross misconduct resulting, in either case, in material
harm to the Company unless such act, or failure to act, was believed by the
Executive, in good faith, to be in the best interests of the Company.

(d) a “Change of Control” shall be deemed to have occurred if either:

(i)                            any “person” or “group” as such terms are used in
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934 (the “Act”),
becomes a beneficial owner, as such term is used in Rule 13d-3 promulgated under
the Act, of securities of the Company representing more than 50% of the combined
voting power of the outstanding securities of the Company having the right to
vote in the election of directors (any such owner being herein referred to as an
“Acquiring Person”);

(ii)                         a majority of the Company’s Board at any time
during the term of this Agreement consists of individuals other than individuals
nominated or approved by a majority of the Disinterested Directors; or

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(iii)                      all or substantially all the business or assets of
the Company are sold or disposed of, or the Company or a Subsidiary of the
Company combines with another company pursuant to a merger, consolidation, or
other similar transaction, other than (1) a transaction solely for the purpose
of reincorporating the company in a different jurisdiction or recapitalizing or
reclassifying the Company’s stock, or (2) a merger or consolidation in which the
shareholders of the Company immediately prior to such merger or consolidation
continue to own at least a majority of the outstanding voting securities of the
Company or the surviving entity immediately after the merger or consolidation.

(e) “Common Stock” shall mean the common stock of the Company.

(f) “Competitive Activity” shall mean engagement directly or indirectly,
individually or through any corporation, partnership, joint venture, trust,
limited liability company or person, as an officer, director, employee, agent,
consultant, partner, proprietor, shareholder or otherwise, in any business
associated with the biopharmaceutical or pharmaceutical industry which
materially competes with the products then under development by, or being
marketed, distributed or licensed by, the Company, or any of its affiliates, at
any place in which it, or any such affiliate, is then conducting its business,
or at any place where products manufactured or sold by it, or any such
affiliate, are offered for sale, or any place in the United States or any
possessions or protectorates thereof, provided, however, that ownership of five
percent (5%) or less of the outstanding voting securities or equity interests of
any company shall not in itself be deemed to be competition with the Company.

(g) “Disability” or “Disabled” shall mean a disability as determined under the
Company’s long-term disability plan or program in effect at the time the
disability first occurs, or if no such plan or program exists at the time of
disability, then a “disability” as defined under Internal Revenue Code (“Code”)
Section 22(e)(3); provided that, solely for purposes of determining whether any
amount that is payable other than upon termination of employment can be made as
a result of disability consistent with the provisions of Code Section 409A, the
following definition of “Disability” or “Disabled” shall apply:  an individual
is “Disabled”  or has a “Disability” if he is unable to engage in any
substantial gainful activity because of any medically determinable physical or
mental impairment that can be expected to result in death or last for a
continuous period of no less than 12 months. Alternatively, an individual is
considered disabled if he is, because of any medically determinable physical or
mental impairment that can be expected to result in death or last for a
continuous period of at least 12 months, receiving income replacement benefits
for a period of not less than three months under the Company’s long-term
disability plan.

(h) “Disinterested Director” shall mean any member of the Company’s Board (i)
who is not an officer or employee of the Company or any of their subsidiaries,
(ii) who is not an Acquiring Person or an affiliate or associate of an Acquiring
Person or of any such affiliate or associate and (iii) who was a member of the
Company’s Board prior to the date of this Agreement or was recommended for
election or elected by a majority of the Disinterested Directors on the
Company’s Board at the time of such recommendation or election.

(i) “Effective Date” shall mean July 17, 2007.

(j) “Good Reason” shall mean that, without the Executive’s consent, one or more
of the following events occurs during the term of this agreement, and the
Executive, of his own

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initiative, terminates his employment as a result of such event within 90 days
of the first occurrence of that event:

(i)                             The Executive ceases to report solely to the
Chief Executive Officer or is assigned to any material duties or
responsibilities that are inconsistent, in any significant respect, with the
scope of duties and responsibilities customarily associated with the Executive’s
position and office as described in Section 3, provided that such reassignment
of duties or responsibilities is not for Cause or due to Executive’s Disability,
and is not at the Executive’s request;

(ii)                          The Executive’s title is changed from Executive
Vice President, Chief Commercial Officer and Head of Strategic Development, or
the Executive suffers a reduction in the authorities, duties, and
responsibilities customarily associated with his position as described in
Section 3, on the basis of which Executive makes a determination in good faith
that Executive can no longer carry out such position or office in the manner
contemplated at the time this Agreement was entered into, provided that such
change in titles or reduction in the authorities, duties or responsibilities is
not (a) for Cause, (b) due to Executive’s Disability, or (c) at the Executive’s
request; provided, however, that the Executive may not assert that he has Good
Reason for termination due to any reduction in duties or responsibilities that
are due to a change in the commercial prospects of any one or more of the
Company’s product candidates (including but not limited to telaprevir);

(iii)                       The Executive’s Base Salary is decreased;

(iv)                      The Executive is assigned, without the Executive’s
consent, to an office location thirty-five (35) or more miles away from the
Executive’s office location immediately prior to such reassignment (other than
in connection with a change in location of the Company’s principal executive
offices, unless the Executive’s office location ceases to be at the Company’s
principal executive offices);

(v)                         Failure of the Company’s successor, in the event of
a Change of Control, to assume all obligations and liabilities of this
Agreement; or

(vi)                      The Company shall materially breach any of the terms
of this Agreement.

(k) “Pro-Rata Share of Restricted Stock” for any period shall mean, for any
grant of restricted stock as to which the Company’s repurchase right lapses
ratably over a specified time (e.g. in equal annual increments over four years),
that number of shares as to which the Company’s repurchase right with respect to
those shares would have lapsed if the Executive’s employment by the Company had
continued for such period.  For any other shares of restricted stock, “Pro-Rata
Share of Restricted Stock” shall mean, as to any shares of restricted stock that
were granted on the same date and as to which the Company’s repurchase right
lapses on the same date, that portion of such shares calculated by multiplying
the number of shares by a fraction, the numerator of which is the number of days
that have passed since the date of grant, plus the number of days in the period
in question, and the denominator of which is the total number of days from the
date of the grant until the date (without regard to any provisions for earlier
vesting upon achievement of a specified goal) on which the Company’s repurchase
right would lapse under the terms of the grant.

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(l) “Severance Pay” shall mean an amount equal to the sum of the Base Salary in
effect on the date of termination of Executive’s employment, plus the amount of
the Target Bonus for the Executive for the year in which the Executive’s
employment is terminated, divided by twelve (12) (each of the 12 shares to
constitute a “month’s” Severance Pay); provided, however, that in the event
Executive terminates his employment for Good Reason based on a reduction in Base
Salary, then the Base Salary to be used in calculating Severance Pay shall be
the Base Salary in effect immediately prior to such reduction in Base Salary.

(m) “Subsidiary” shall mean a corporation of which the Company owns 50% or more
of the combined voting power of the outstanding securities having the right to
vote in an election of directors, or any other business entity in which the
Company directly or indirectly has an ownership interest of 50% or more.

(n) “Target Bonus” shall mean a bonus for which the Executive is eligible on an
annual basis, at a level consistent with his title and responsibilities, under
the Company’s bonus program then in effect and applicable to the Company’s
senior executives generally, in such amount as may be determined in the sole
discretion of the Board.

2. TERM OF EMPLOYMENT.

The Company hereby employs the Executive, and the Executive hereby accepts such
employment, commencing on the Effective Date and continuing until termination in
accordance with the terms of this Agreement.  The period during which the
Executive is employed hereunder is referred to in this Agreement as “term of
employment” or the “term of this agreement.”

3. POSITION, DUTIES AND RESPONSIBILITIES.

On the Effective Date, the Executive shall be employed as the Executive Vice
President, Chief Commercial Officer and Head, Strategic Development of the
Company, and shall be responsible for strategic development, business
development, and commercial strategy and operations.  In his capacity as head of
strategic development, the Executive will work within a matrix management
system, leading cross-functional product development teams, together with the
heads of medicines development, drug innovation and realization and other
members of senior management, to assess and advance molecules from the
pre-clinical development stage through successful launch and post-launch
evaluation, and to evaluate the Company’s chemical assets from a portfolio point
of view.  As head of business development, the Executive will be responsible for
identifying and establishing channels for value creation in the development and
commercialization with third party collaborators of assets within the Company’s
then-current or projected pipeline, and for investigation of in-licensing or
acquisition opportunities for products or product candidates to supplement the
Company’s development and commercial portfolio.  As the head of commercial
strategy and operations, the Executive will be responsible for commercial launch
of the Company’s drug candidates, including the creation and maintenance of
effective commercial relationships with the Company’s collaborators for any of
those drug candidates.  The Executive will also be responsible for the initial
conception and establishment of a sustainable commercial strategy and vision for
the Company, and for executing on that strategy and vision for assets in the
clinical development stage onward. The Executive will be a member of the
Company’s senior management team, which is ultimately responsible for overseeing
the operation of the Company’s pharmaceutical business worldwide.  The Executive
shall represent and serve the Company faithfully, conscientiously and to the
best of the

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Executive’s ability and shall promote the interests, reputation and current and
long term plans, objectives and policies of the Company, present and future. The
Executive shall devote all of the Executive’s time, attention, knowledge, energy
and skills, during normal working hours, and at such other times as the
Executive’s duties may reasonably require, to the duties of the Executive’s
employment, provided, however, nothing set forth herein shall prohibit the
Executive from engaging in other activities to the extent such activities do not
impair the ability of the Executive to perform his duties and obligations under
this Agreement, nor are contrary to the interests, reputation, current and long
term plans, objectives and policies of the Company. The Executive, in carrying
out his duties under this Agreement, shall report to the Chief Executive Officer
of the Company.

4. BASE SALARY.

The Executive’s initial annualized Base Salary shall be not less than $450,000,
payable in accordance with the regular payroll practices of the Company. The
Base Salary shall be reviewed no less frequently than annually, and any increase
thereto (which shall thereafter be deemed the Executive’s Base Salary) shall be
solely within the discretion of the Board.

5. TARGET BONUS/INCENTIVE COMPENSATION PROGRAM.

(a) Target Bonus Program:  The Executive shall participate in the Company’s
Target Bonus program (and other incentive compensation programs) applicable to
the Company’s senior executives, as any such programs are established and
modified from time to time by the Board in its sole discretion, and in
accordance with the terms of such program.

(b) Sign-On Cash Bonus: The Executive shall receive a sign-on cash bonus in the
amount of $250,000 payable (with appropriate deductions as required by law) to
the Executive at the first regular pay date applicable to the Executive after
the Effective Date.  If the Executive terminates this Agreement without “Good
Reason,” and other than as a result of death or Disability, during the period
commencing on the Effective Date and ending on the first anniversary of the
Effective Date, the Executive shall repay the sign-on cash bonus to the Company
within thirty (30) days of such termination.

(c) Sign-On Stock Option Grant:  The Executive shall be granted a stock option
under the Company’s existing stock option plan to purchase 100,000 shares of the
Company’s common stock at a price equal to the Fair Market Value of Vertex’s
shares, as defined in the Company’s 2006 Stock and Option Plan, on the Effective
Date.  The option will vest and become exercisable as to equal numbers of shares
of stock quarterly in arrears over the four (4) year period commencing on the
Effective Date, and as otherwise specified herein and in the Company’s 2006
Stock and Option plan, and shall be subject to the other terms and conditions
specified in a separate grant agreement.

(d) Sign-On Restricted Stock Grant: The Executive will purchase, in accordance
with the terms of a Restricted Stock Agreement executed and delivered to the
Company by the Executive on the Effective Date, 30,000 shares of the Company’s
Common Stock, at a purchase price per share of $0.01.  The Company will retain
the right to repurchase these shares at $.01 per share purchase price should the
Executive experience a termination of employment, as such term is used in the
2006 Stock and Option Plan, but this repurchase right will lapse as to equal
number of shares of stock annually in arrears over the four (4) year period
commencing on the Effective Date, and as otherwise specified herein and in the
Company’s 2006 Stock and Option

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Plan and shall be subject to the other terms and conditions specified in a
separate grant agreement.

(e)  Tax Return Preparation Costs: The Executive will be entitled to
reimbursement for all reasonable costs incurred for professional assistance in
the initial preparation and filing of his individual income tax returns for the
2007 tax year, in the country or countries, and any subdivisions thereof, for
which any such returns are required.  If the Executive terminates this Agreement
without “Good Reason,” and other than as a result of death or Disability, during
the period commencing on the Effective Date and ending on the first anniversary
of the Effective Date, the Executive shall repay to the Company any such amounts
previously reimbursed by the Company, within thirty (30) days of his termination
date.

6. LONG-TERM INCENTIVE COMPENSATION PROGRAMS.

During the term of employment, the Executive shall be eligible to participate in
the Company’s long-term incentive compensation programs applicable to the
Company’s senior executives, as such programs may be established and modified
from time to time by the Board in its sole discretion.

7. EMPLOYEE BENEFIT PROGRAMS.

During the term of employment, the Executive shall be entitled to participate in
all employee welfare and pension benefit plans, programs and/or arrangements
offered by the Company, as amended, from time to time to its senior executives,
to the same extent and on the same terms applicable to other senior executives.
Nothing in this Section shall preclude the Company from amending or terminating
any of its employee benefit plans, programs or arrangements.

8. REIMBURSEMENT OF BUSINESS EXPENSES.

During the term of employment, the Executive is authorized to incur reasonable
business expenses in carrying out his duties and responsibilities under this
Agreement, and the Company shall reimburse him for all such reasonable business
expenses reasonably incurred in connection with carrying out the business of the
Company, subject to documentation in accordance with the Company’s policy.

9. RELOCATION REIMBURSEMENT AND RESTRICTED STOCK GRANT:

The Executive will be reimbursed for relocation costs in accordance with the
Company’s relocation reimbursement policy currently in effect, with any
exceptions to be approved in advance by the Company’s Chief Executive Officer. 
In addition, the Executive will purchase, in accordance with the terms of a
Relocation Restricted Stock Agreement executed and delivered to the Company by
the Executive on the Effective Date, 18,000 shares of the Company’s Common
Stock, at a purchase price per share of $0.01.  The Company will retain the
right to repurchase these shares at $.01 per share purchase price should the
Executive experience a termination of employment for Cause or without Good
Reason, as such terms are used in this Agreement, but this repurchase right will
lapse as to equal number of shares of stock quarterly in arrears over the three
(3) year period commencing on the Effective Date, and as otherwise specified
herein and in the Company’s 2006 Stock and Option Plan and shall be subject to
the other terms and conditions specified in a separate grant agreement.

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10. VACATION.

During the term of employment, the Executive shall be entitled to not less than
four weeks’ paid vacation days each calendar year in accordance with the
Company’s vacation policy then in effect.

11. TERMINATION OF EMPLOYMENT.

(a)  Termination Due to Death or Disability. If Executive’s employment is
terminated due to Executive’s death or Disability, the term of employment shall
end as of the date of the Executive’s death or termination of employment due to
Disability, and Executive, his estate and/or beneficiaries, as the case may be,
shall be entitled to the following:

(i)                             Base Salary earned by Executive but not paid
through the date of termination under this Section 11(a);

(ii)                          all long-term incentive compensation awards earned
by Executive but not paid prior to the date of termination under this Section
11(a);

(iii)                       a pro rata Target Bonus award for the year in which
termination under this Section 11(a) occurs as determined in its sole discretion
by the Board;

(iv)                      all stock options held by the Executive as of the date
of termination under this Section 11(a) that are not exercisable as of that date
shall be deemed to have been held by the Executive for an additional 12 months,
for purposes of vesting and exercise rights, and any stock options that are
deemed exercisable as a result thereof shall remain exercisable as provided in
Section 11(a)(v) below;

(v)                         all exercisable stock options held by the Executive
as of the date of termination under this Section 11(a) shall remain exercisable
until the earlier of (1) the end of the one-year period following the date of
termination, or (2) the date the option would otherwise expire;

(vi)                      any amounts earned, accrued or owing to the Executive
(including any amounts for which the sole remaining condition to payment is that
the Executive be employed by the Company on the scheduled payment date) but not
yet paid under Sections 6, 7, 8, or 9 above, and in the event of termination due
to Disability, benefits due to Executive under the Company’s then-current
disability program;

(vii)                   six months of Severance Pay, commencing on the first day
of the month following the month in which termination under this Section 11(a)
occurred; and

(viii)                the Company’s repurchase right with respect to shares of
restricted stock held by the Executive shall lapse with respect to the Pro-Rata
Share of Restricted Stock.  The “period” referenced in the first sentence of the
definition of “Pro-Rata Share of Restricted Stock,” and the “period in question”
referenced in the second sentence of that definition shall be 12 months.

(b) Termination by the Company for Cause; or Termination by the Executive
without Good Reason.  If the Company terminates the Executive’s employment for
Cause, or if Executive voluntarily terminates his employment, other than for
Good Reason, death or

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Disability, the term of employment shall end as of the date specified below, and
the Executive shall be entitled to the following:

(i)                             Base Salary earned by Executive but not paid
through the date of termination of Executive’s employment under this Section
11(b); and

(ii)                          any amounts earned, accrued or owing to the
Executive but not yet paid under Sections 6, 7, 8, or 9 above.

Termination by Company for Cause shall be effective as of the date noticed by
the Company.  Voluntary termination by Executive other than for Good Reason,
death or Disability shall be effective upon 90 days’ prior written notice to the
Company and shall not be deemed a breach of this Agreement.

In the event of termination by Executive without Good Reason, the Company may
elect to waive the period of notice, or any portion thereof, and, if the Company
so elects, the Company will pay the Executive at the rate of his Base Salary for
the notice period or for any remaining portion thereof.

(c) Termination by the Company Without Cause; or Termination by the Executive
for Good Reason.  If the Executive’s employment is terminated by the Company
without Cause (other than due to death or Disability), or is terminated by the
Executive for Good Reason, the Executive shall be entitled to the following:

(i)                             Base Salary earned by Executive but not paid
through the date of termination of Executive’s employment under this Section
11(c);

(ii)                          all long-term incentive compensation awards earned
by Executive but not paid prior to the date of termination of Executive’s
employment under this Section 11(c);

(iii)                       Twelve months of Severance Pay, commencing on the
first day of the month following the month during which the Executive’s
employment is terminated under this Section 11(c); provided, however, that if
the Executive dies while receiving benefits under this Section, all payments
shall immediately cease, provided that the Executive or his estate or
beneficiaries shall have received no less than a total of six months of
Severance Pay;

(iv)                      a pro rata Target Bonus award for the year in which
the termination of the Executive’s employment occurs under this Section 11(c),
as determined in its sole discretion by the Board of Directors;

(v)                         all exercisable stock options held by the Executive
as of the date of the termination of his employment under this Section 11(c)
(except for a termination described in the proviso in Section 11(c)(vi) below
with respect to a Change of Control) shall remain exercisable until the earlier
of (i) the end of the one-year period following the date of the termination of
his employment and (ii) the date the stock option would otherwise expire;

(vi)                      all stock options held by the Executive as of the date
of termination under this Section 11(c) that are not exercisable as of that date
shall be deemed to have been

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held by the Executive for an additional 18 months, for purposes of vesting and
exercise rights, and any stock options that become exercisable as a result
thereof shall remain exercisable as provided in Section 11(c)(v) above,
PROVIDED, HOWEVER, that if such termination (1) is by the Company without Cause
or by the Executive for Good Reason, and (2) takes place within (90) days prior
to a Change in Control or within twelve (12) months after a Change in Control,
then all unexercisable and/or unvested stock options held by the Executive as of
the date of the termination under this Section 11(c)(vi) shall be deemed
exercisable, and any unexercisable and/or unvested stock options which become
exercisable as a result thereof shall remain exercisable until the earlier of
(a) the end of the 90-day period following the date of the termination or (b)
the date the stock option would otherwise expire;

(vii)                   any amounts earned, accrued or owing to the Executive
but not yet paid under Sections 6, 7, 8, or 9 above;

(viii)                continued participation, as if the Executive were still an
employee, in the Company’s medical, dental, hospitalization and life insurance
plans in which Executive participated on the date of termination of employment
under this Section 11(c), until the earlier of:

(A)              the end of the period during which Severance Pay is payable
under Section 11(c)(iii) above; or

(B)                the date, or dates, on which the Executive receives
equivalent coverage and benefits under the plans, programs and/or arrangements
of a subsequent employer (such coverage and benefits to be determined on a
coverage-by-coverage or benefit-by-benefit basis);

provided, however, that:

(C)                if the Executive is (i) precluded from continuing his
participation in medical, dental, hospitalization and life insurance plans as
provided in this Section 11(c)(viii) because Executive is not an employee of the
Company, and (ii) not receiving equivalent coverage and benefits through a
subsequent employer, Executive shall be provided with the after-tax economic
equivalent of the benefits provided under the plan, program or arrangement in
which Executive is unable to participate for the period specified in this
Section 11(c)(viii). The economic equivalent of any benefit foregone shall be
deemed to be the lowest cost that would be incurred by the Executive in
obtaining an equivalent benefit himself on an individual basis. Payment of such
after-tax economic equivalent shall be made quarterly in advance; and

(ix)                        the Company’s repurchase right with respect to
shares of restricted stock held by the Executive shall lapse with respect to the
Pro-Rata Share of Restricted Stock.  The “period” referenced in the first
sentence of the definition of “Pro-Rata Share of Restricted Stock,” and the
“period in question” referenced in the second sentence of that definition shall
be 18 months.  Notwithstanding the foregoing, if such termination (1) is by the
Company without Cause or by the Executive for Good Reason, and (2) takes place
within (90) days prior to a Change of Control or within

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twelve (12) months after a Change of Control, then the Company’s lapsing
repurchase right with respect to all shares of restricted stock held by the
Executive shall lapse.

Notwithstanding anything to the contrary in this Section 11, the terms of any
option agreement or restricted stock agreement shall govern the acceleration, if
any, of vesting or lapsing of the Company’s repurchase rights, as applicable,
except to the extent that the terms of this Employment Agreement are more
favorable to the Executive.  If Executive is a “specified employee” under
Section 409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as amended (the
“Code”), any payment of “nonqualified deferred compensation” (as defined under
Section 409A of the Code and related guidance) attributable to a “separation
from service” (as defined under Section 409A of the Code and related guidance)
shall not commence until the first full business day that is more than 6 months
since the applicable separation from service (“Deferred Payment Date”).  Any
payments which would have otherwise been made between a separation from service
and the Deferred Payment Date, but for this paragraph, shall be made in a lump
sum on the Deferred Payment Date.  Payments which, in any case, are scheduled to
be made after the Deferred Payment Date shall continue according to the
applicable payment schedule.

12. MITIGATION.

In the event of any termination of this Agreement, the Company hereby is
authorized to offset against any Severance Pay due the Executive during the
period for which Severance Pay is due under Section 11 any remuneration earned
by the Executive during that period and attributable to any subsequent
employment or engagement that the Executive may obtain. Executive shall provide
Company written notice of subsequent employment or engagement no later than five
(5) business days after commencement by Executive of such employment or
engagement.

13. CONFIDENTIALITY; ASSIGNMENT OF RIGHTS.

(a) During the term of employment and thereafter, the Executive shall not
disclose to anyone or make use of any trade secret or proprietary or
confidential information of the Company, including such trade secret or
proprietary or confidential information of any customer of the Company or other
entity that has provided such information to the Company, that Executive
acquires during the term of employment, including but not limited to records
kept in the ordinary course of business, except (i) as such disclosure or use
may be required or appropriate in connection with his work as an employee of the
Company, (ii) when required to do so by a court of law, by any governmental
agency having supervisory authority over the business of the Company or by any
administrative or legislative body (including a committee thereof) with apparent
jurisdiction to order him to divulge, disclose or make accessible such
information, or (iii) as to such confidential information that becomes generally
known to the public or trade without violation of this Section 13(a).

(b) The Executive hereby sells, assigns and transfers to the Company all of his
right, title and interest in and to all inventions, discoveries, improvements
and copyrightable subject matter (the “rights”) which during the term of
employment are made or conceived by him, alone or with others, and which are
within or arise out of any general field of the Company’s business or arise out
of any work Executive performs or information Executive receives regarding the
business of the Company while employed by the Company. The Executive shall fully
disclose to the Company as promptly as available all information known or
possessed by him concerning the

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rights referred to in the preceding sentence, and upon request by the Company
and without any further remuneration in any form to him by the Company, but at
the expense of the Company, execute all applications for patents and for
copyright registration, assignments thereof and other instruments and do all
things which the Company may deem necessary to vest and maintain in it the
entire right, title and interest in and to all such rights.

14. NONCOMPETITION; NONSOLICITATION.

(a) Notwithstanding any of the provisions herein to the contrary, if the
Executive’s employment with the Company is terminated for any reason other than
due to Executive’s death or termination by Executive for Good Reason, the
Executive shall not engage in Competitive Activity for a period that is the
lesser of (i) 12 months from the date of termination under such applicable
provision listed above or (ii) the maximum length of time allowed under then
current Massachusetts law. The Company may, at its election, waive its rights of
enforcement under this Section 14(a).

(b) The Parties acknowledge that in the event of a breach or threatened breach
of Sections 13 or 14(a), the Company shall not have an adequate remedy at law.
Accordingly, in the event of any breach or threatened breach of Sections 13 or
14(a), the Company shall be entitled to such equitable and injunctive relief as
may be available to restrain the Executive and any business, firm, partnership,
individual, corporation or entity participating in the breach or threatened
breach from the violation of the provisions of Sections 13 or 14(a) above.
Nothing in this Agreement shall be construed as prohibiting the Company from
pursuing any other remedies available at law or in equity for breach or
threatened breach of Sections 13 or 14(a) including the recovery of damages.

15. ASSIGNABILITY; BINDING NATURE.

This Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors, heirs (in the case of the Executive) and assigns.
No rights or obligations of the Company under this Agreement may be assigned or
transferred by the Company except that such rights or obligations may be
assigned or transferred pursuant to a merger or consolidation in which the
Company is not the continuing entity, or the sale or liquidation of all or
substantially all of the assets of the Company; provided, however, that the
assignee or transferee is the successor to all or substantially all of the
assets of the Company and such assignee or transferee assumes the liabilities,
obligations and duties of the Company, as contained in this Agreement, either
contractually or as a matter of law.

16. REPRESENTATIONS.

The Company represents and warrants that it is fully authorized and empowered to
enter into this Agreement, and to make the awards provided for herein under the
terms of the applicable plans, that all equity grants provided for herein have
been duly authorized, and that the performance of its obligations under this
Agreement will not violate any agreement between it and any other person, firm
or organization. The Executive represents and warrants that no agreement exists
between him and any other person, firm or organization that would be violated by
the performance of his obligations under this Agreement.

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17. INDEMNIFICATION; INSURANCE.

The Executive shall at all times be indemnified and eligible for advancement of
expenses on the same basis as is provided for the Company’s other executive
officers and in accordance with the provisions of the Company’s charter and
by-laws then in effect.  The Executive shall also be covered under all of the
Company’s policies of liability insurance maintained for the benefit of its
directors and officers on the same basis as is provided for its other executive
officers.

18. ENTIRE AGREEMENT; TERMINATION.

This Agreement contains the entire understanding and agreement between the
Parties concerning the subject matter hereof and supersedes all prior
agreements, understandings, discussions, negotiations and undertakings, whether
written or oral, between the parties with respect thereto.  Subject to the terms
of this Agreement the Company shall be entitled to terminate the Executive’s
employment at any time, and the Executive may terminate his employment by the
Company, at any time, in each case by written notice provided in accordance with
Section 25 of this Agreement.

19. AMENDMENT OR WAIVER.

No provision in this Agreement may be amended unless such amendment is agreed to
in writing and signed by the Executive and an authorized officer of the Company.
No waiver by either party of any breach by the other party of any condition or
provision contained in this Agreement to be performed by such other party shall
be deemed a waiver of a similar or dissimilar condition or provision at the same
or any prior or subsequent time. Any waiver must be in writing and signed by the
Executive or an authorized officer of the Company, as the case may be.

20. SEVERABILITY.

If any provision or portion of this Agreement shall be determined to be invalid
or unenforceable for any reason, in whole or in part, the remaining provisions
of this Agreement shall be unaffected thereby and shall remain in full force and
effect to the fullest extent permitted by law.

21. SURVIVORSHIP.

The respective rights and obligations of the parties hereunder shall survive any
termination of the Executive’s employment to the extent necessary to the
intended preservation of such rights and obligations.

22. BENEFICIARIES/REFERENCES.

The Executive shall be entitled, to the extent permitted under any applicable
law, to select and change a beneficiary or beneficiaries to receive any
compensation or benefit payable hereunder following the Executive’s death by
giving the Company written notice thereof. In the event of the Executive’s death
or a judicial determination of his incompetence, reference in this Agreement to
the Executive shall be deemed, where appropriate, to refer to his beneficiary,
estate or other legal representative.

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23. GOVERNING LAW/JURISDICTION.

This Agreement shall be governed by and construed and interpreted in accordance
with the laws of The Commonwealth of Massachusetts without reference to
principles of conflict of laws.

24. RESOLUTION OF DISPUTES.

Any disputes arising under or in connection with this Agreement may, at the
election of the Executive or the Company, be resolved by binding arbitration, to
be held in Massachusetts in accordance with the Rules and Procedures of the
American Arbitration Association. If arbitration is elected, the Executive and
the Company shall mutually select the arbitrator. If the Executive and the
Company cannot agree on the selection of an arbitrator, each Party shall select
an arbitrator and the two arbitrators shall select a third arbitrator, and the
three arbitrators shall form an arbitration panel that shall resolve the dispute
by majority vote. Judgment upon the award rendered by the arbitrator or
arbitrators may be entered in any court having jurisdiction thereof. Costs of
the arbitrator or arbitrators and other similar costs in connection with an
arbitration shall be shared equally by the Parties; all other costs, such as
attorneys’ fees incurred by each Party, shall be borne by the Party incurring
such costs.

25. NOTICES.

All notices which are required or permitted hereunder shall be in writing and
sufficient if delivered personally, sent by facsimile (and promptly confirmed by
personal delivery, registered or certified mail or overnight courier), sent by
nationally-recognized overnight courier or sent by registered or certified mail,
postage prepaid, addressed as follows:

If to the Company:

 

Vertex Pharmaceuticals Incorporated

 

 

 

130 Waverly Street

 

 

 

Cambridge, MA 02139-4242

 

 

 

Attn: Chief Executive Officer

 

 

 

with copies to:

 

 

 

General Counsel

 

 

 

Vice President of Human Resources

 

 

 

 

 

 

 

 

 

If to the Executive:

 

Kurt Graves

 

 

 

at his home address then listed in

 

 

 

the Company’s payroll records

 

 

Any such notice shall be deemed to have been given: (a) when delivered if
personally delivered or sent by facsimile on a business day; (b) on the business
day after dispatch if sent by nationally-recognized overnight courier; and/or
(c) on the fifth business day following the date of mailing if sent by mail.

26. HEADINGS.

The headings of the sections contained in this Agreement are for convenience
only and shall not be deemed to control or affect the meaning or construction of
any provision of this Agreement.

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27. COUNTERPARTS.

This Agreement may be executed in two or more counterparts.

28. SECTION 409A COMPLIANCE.

It is the intention of the Company and the Executive that this Agreement and the
payments provided for herein meet the requirements of Section 409A of the Code,
to the extent applicable to this Agreement and such payments.  The Company and
the Executive agree to cooperate in good faith in preparing and executing, at
such time as sufficient guidance is available under Section 409A and from time
to time thereafter, such amendments to this Agreement, if any, as the Executive
may reasonably request solely for the purpose of assuring that this Agreement
and the payments provided hereunder meet the requirements of Section 409A. 
Nothing in this Section 28 shall require the Company to increase the Executive’s
compensation or make the Executive whole for any requested changes.

29. TAX WITHHOLDING; NO GUARANTEE OF ANY TAX CONSEQUENCES.

All payments hereunder shall be subject to all applicable withholding for any
federal, state or local income taxes including any excise taxes under the Code. 
Notwithstanding any other provision of this Agreement to the contrary or other
representation, the Company does not in any way guarantee the tax consequences
of any payment or compensation under this Agreement including, without
limitation, under Section 409A of the Code.

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first written above.

Vertex Pharmaceuticals Incorporated

 

 

 

 

 

/s/ Joshua S. Boger

 

 

Joshua S. Boger

 

President & Chief Executive Officer

 

 

 

Executive

 

 

 

/s/ Kurt Graves

 

 

Kurt Graves

 

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