Exhibit 10.4


 


Confidential


June
4, 2007


Mr. Amit Sachdev


5218 Loughboro Road NW


Washington,
DC  20016


Dear
Amit:


This letter sets
forth the principal terms for you to join Vertex Pharmaceuticals Incorporated (“Vertex”
or the “Company”).


Position:                                                                                                Senior
Vice President, Public Policy and Government Affairs


Status:                                                                                                          Full-Time,
Exempt


Reporting
to:                                                                         Joshua
S. Boger, Ph.D.


President and Chief Executive Officer


Base Salary Rate:                                                   $13,461.53 per bi-weekly pay period


Hiring Bonus:
                                                                  $50,000
less normal withholdings, payable with your first paycheck.  If you terminate your employment voluntarily
before the end of the first twelve months of employment, you will be required
to repay the Hiring Bonus to the Company in full.


Equity:                                                                                                         Stock
Options – 75,000


Upon commencement of your employment with the Company,
you will be granted an option to purchase 75,000  shares (non-qualified stock options) of the common stock of
Vertex pursuant to the Vertex 2006 Stock and Option Plan (the “Stock Plan”).
The option exercise price per share will be equal to the average of the high
and low market price of Vertex common stock on the date of commencement of your
employment.  The shares of common stock
subject to your stock option will vest quarterly over four years.


Restricted Shares –
15,000


In addition to the stock options grant, you will also
be granted 15,000 restricted shares of the Common Stock of Vertex pursuant to
the Stock 













Plan.  One
quarter of the restricted shares will vest at each anniversary of your employment start
date, assuming you are still employed by Vertex at that time.  Any shares that have not vested at the end of
your employment at Vertex will be forfeited.


Restricted Shares – 2,000


You will also receive an
additional grant of 2,000 restricted shares of the Common Stock of Vertex
pursuant to the Stock Plan.  One quarter
of the restricted shares for this grant will vest quarterly over a 12 month
period commencing on the date of hire.


The specific terms and conditions of your stock option
and restricted share grants will be set forth in separate agreements between
you and Vertex which, among other things, will incorporate the terms and
conditions of the Stock Plan.  These
agreements will be entered into and executed after you commence your employment
with the Company.  You may wish to
consult with your tax advisor regarding the income tax aspects of restricted
stock and option grants.


Bonus:                                                                                                         You
will also be eligible to 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 Company’s board of directors in its sole discretion, and in accordance
with the terms of such program.


Under
the Company’s target bonus program as presently constituted, the 2007 target
bonus for senior executives at your level is 35% of your annual base
salary.  The final amount of any bonus
award is subject to adjustment on the basis of the board’s appraisal of the
Company’s performance and your supervisor’ appraisal of your performance, and
could range from 0% - 150% of target bonus amount.  All awards for the first year of employment
are prorated based on your date of hire. 
All bonus targets and awards are made at the discretion of the Board of Directors
and are subject to change without notice.


Annual Equity


Grants:                                                                                                         You
will also be eligible to participate in the Company’s annual equity grant
program applicable to the Company’s senior executives, as any such programs are
established and modified from time to time by the Company’s board of directors
in its sole discretion, and in accordance with the terms of such program.


Under
the Company’s annual equity grant program as presently constituted, the 2007
target equity grants for senior executives at your level are 61,000 stock
options and 8,133 shares of Performance-Accelerated Restricted Stock.  The final amount of any equity award is 



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subject
to adjustment on the basis of your supervisor’ appraisal of your performance,
and could range from 0% - 150% of the target equity grant amounts. All equity
awards are made at the discretion of the Board of Directors and are subject to
change without notice.


Severance:                                                                                     You
will be eligible for the Company’s
severance program for its Senior Vice Presidents, if adopted, and as it may be
amended from time to time by the Board of Directors. There currently is no such
program.  In lieu thereof, we agree that
if your employment is involuntarily terminated before any such program is
adopted, or if the terms of any such program are less favorable to you than the
terms of this offer letter, you shall be entitled to the severance benefits set
forth in this offer letter.  These
benefits will be payable for any termination of your employment by the Company,
other than for Cause (as defined herein), or by you for Good Reason (as defined
herein), whether in the ordinary course of business, in the context of a change
in control or otherwise (all such instances being an “involuntary termination”
of employment).


If you experience an involuntary termination of
employment, you will be entitled to receive 12 months of base salary and will
be reimbursed for 12 months of COBRA coverage. 
All exercisable stock options held by you as of the date of the
involuntary termination of employment that are not exercisable as of that date
shall be deemed to have been held by you 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 until the earlier of
(1) the end of the 90-day period following the date of the employment
termination and (2) the date the stock option otherwise would expire.  The Company’s lapsing repurchase right with
respect to shares of restricted stock held by you shall lapse with respect to
the Pro-Rata Share of Restricted Stock (as defined herein).


“Good Reason”:  For purposes of the
severance benefit described above, “Good Reason” shall mean that without your
consent, one or more of the following events occurs and you, of your own
initiative, terminate your employment by notice in writing to the Company
within 90 days after the first occurrence of the event:


(a)                            You
are assigned to any duties or responsibilities that are inconsistent, in any
significant respect, with the scope of duties and responsibilities customarily
associated with the position and office of Senior Vice President, Public Policy
and Government Affairs , provided that such reassignment of duties or
responsibilities is not due to your Disability or performance, nor is at your
request;



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(b)                           You
suffer a reduction in the authorities, duties, and responsibilities customarily
associated with your position as Senior Vice President, Public Policy and Government
Affairs, provided that such reassignment of authorities, duties and
responsibilities is not due to your Disability or your performance, and is not
at your request or with your prior agreement;


(c)                            Your
base salary is decreased below $350,000 per year, other than a reduction which
is part of an across-the-board proportionate reduction in the salaries of the
senior management team; or


(d)                           Your
office location as assigned to you by the Company is relocated thirty-five (35)
or more miles from Cambridge, Massachusetts (other than in connection with a relocation of the Company’s principal
executive offices).


“Cause”:   For purposes of the severance benefit
described above, “Cause” shall mean


(a)                                  your conviction of a crime of moral
turpitude;


(b)                                 your willful refusal or failure to follow
a lawful directive or instruction of the Company’s Board of Directors or the
individual(s) to whom you report, provided that you receive prior
written notice of the directive(s) or instruction(s) that you failed to follow,
and provided  further that the Company, in good faith, gives you
thirty (30) days to correct any problems and further  provided if
you correct the problem(s) you may not be terminated for Cause in that
instance;


(c)                                  in carrying out your duties you commit
(i) willful gross negligence, or (ii) willful gross misconduct, resulting in
either case in material harm to the Company, unless such act, or failure
to act, was believed by you, in good faith, to be in the best interests of the
Company; or


(d)                                 your violation of the Company’s policies
made known to you regarding confidentiality, securities trading or inside
information.


“Pro-Rata Share of Restricted
Stock”:  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 your employment by the Company had continued for an additional 18
months.  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 (until the employment termination date), plus the number of days in the
18 months after the employment termination date, and the denominator of which is
the total number of days from the date of 



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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.


In order to be eligible
to receive the severance benefits described above, you shall be required to
execute and deliver to Vertex (without subsequent revocation if provided for
therein), a general release of claims against Vertex, including any claims
concerning the Company’s obligations under this offer letter.


Benefits:                                                                                                You
will be entitled to receive standard medical, life and dental insurance
benefits for yourself and your dependents in accordance with Company policy.


401(k) Plan:                                                                                 You
will be eligible to participate in the Vertex 401(k) Plan on the same basis as
other senior executives of the Company. 
Currently, eligible employees may enroll in the plan on a monthly basis,
on the first of any month following original date of hire. Through automatic
payroll deduction, you can contribute from 1% to 60% of your eligible pay on a
pretax basis, up to the annual IRS dollar limit. Under the current plan, Vertex
contributes 100% on the dollar on the first 3% of earnings contributed by
employees to the plan, and 50% on the dollar on the next 3% of earnings
contributed by employees to the plan. This matching contribution is in the form
of Vertex unitized stock, vests immediately, and is deposited in participants’
accounts on a quarterly basis.


ESPP                                                                                                                  You
will be eligible to participate in the Employee Stock Purchase Plan (“ESPP”),
as in effect from time to time,  on the
same basis as other senior executives of the Company.   Under the current terms of the ESPP, you will
be able to enroll at the next offering after your employment begins.  Offering Dates are currently May 15th and
November 15th of each year and you are able to contribute between 1% and 15%
(whole percentages only) of your Base Salary to purchase Vertex common stock at
a discounted price.


Vacation:                                                                                            During
the term of employment, you 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.


Employment-


At-Will:                                                                                                   Your
employment will be on an at-will basis, which means it may be terminated at any
time by you or the Company, with or without cause.


Start Date:                                                                                      July
30, 2007



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As a condition of
your employment, you will be required to sign a copy of our “Non-disclosure, Non-competition and Inventions
Agreement” prior to your start date. 
It is the Company’s policy to respect fully the rights of your previous
employers in their proprietary or confidential information.  No employee is expected to disclose, or is
allowed to use for the Company’s purposes, any confidential or proprietary information
he or she may have acquired as a result of previous employment.


[In addition, to
conform with the Immigration Reform and Control Act of 1986, you will be
required to provide sufficient documentation to show proof of employment
eligibility in the United States.  Please
bring with you on your start date, the original of one of the documents noted
in List A or one document from List B and one document from List C as itemized
in the enclosed “Lists of Acceptable Documents”.  If you do not have the originals of any of
these documents, please contact me immediately.]


I am pleased to
extend this offer to you and look forward to your acceptance.  Please sign and return the enclosed copy of
this offer letter as soon as possible to indicate your agreement with the terms
of this offer.  This offer will lapse if
not signed and returned by fax to 617-444-6773 by June 8, 2007.


Once signed by you, this
letter will constitute the complete agreement between you and the Company
regarding employment matters and will supersede all prior written or oral
agreements or understandings on these matters.


I believe you will be
able to make an immediate contribution to Vertex’s effort, and I think you will
enjoy the rewards of working for an innovative, fast-paced company.  One of the keys to our accomplishments is
good people.  We hope you accept our
offer to be one of those people.


Yours sincerely,


	
  /s/ Joshua S. Boger

  	
   

  
	
   

  
	
  Joshua S. Boger

  
	
  President and
  Chief Executive Officer

  



 


Enclosures


I
accept the terms of employment as described in this offer letter dated   June
4, 2007          and will start my
employment on                .  I confirm that by my start date at Vertex I
will be under no contract or agreement with any other entity which would in any
way restrict my ability to work at Vertex or perform the functions of my job
for Vertex, including, but not limited to, any employment agreement and/or
non-compete agreement.


	
  /s/ Amit Sachdev  

  	
   

  	
   

  	
   

  
	
  Name

  	
   

  	
  Date

  



 



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