Exhibit 10.42


 


EMPLOYMENT AGREEMENT


 


AGREEMENT,
made and entered into as of the 9th day of December by and between Vertex
Pharmaceuticals Incorporated, a Massachusetts corporation (together with its
successors and assigns, the “Company”), and Nancy J. Wysenski (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;


 


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


 


1. DEFINITIONS.


 


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


 


“Board”
shall mean the Board of Directors of the Company.


 


“Cause”
shall mean: (i) the Executive is convicted of a crime involving moral
turpitude; (ii) the Executive’s willful refusal or failure to follow a
lawful directive or instruction of the Company’s Board of Directors or the
individual(s) to whom the Executive reports, provided that the Company
shall have given the Executive prior written notice of the directive(s) or
instruction(s) that the Executive failed to follow, and provided, further,
that the Company shall have given the Executive, in good faith, 30 days to
correct such failure and further provided that if the Executive corrects such
failure, any termination of the Executive’s employment on account of such
failure shall not be treated for purposes of this Agreement as a termination of
employment for “Cause;” (iii) the Executive violates any of the Company’s
policies made known to the Executive regarding confidentiality, securities trading
or insider information; or (iv) the Executive, in carrying out the
Executive’s duties, commits (A) willful gross negligence 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.


 


“Change
of Control” shall have the meaning set forth in the Change of Control
Agreement.


 

















 


“Change
of Control Agreement” shall mean the Change of Control letter agreement
between the Company and the Executive of even date herewith.


 


“Code”
shall mean the Internal Revenue Code of 1986, as amended.


 


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


 


“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 Section 22(e)(3) of the Code.


 


“Effective
Date” shall mean December 9, 2009.


 


“Good
Reason” shall mean one of the following events has occurred without the
Executive’s consent:


 


(i)                            the
Executive’s Base Salary is decreased or the target levels under the Company’s
target bonus program, or equity compensation program are reduced, unless each
or any such reduction is part of an across-the-board proportionate reduction in
the salaries, target bonuses, or target equity compensation, as applicable,
provided, however, that it is expressly understood that payments or awards
under any such program in amounts lower than the target amounts in accordance
with any such program shall not constitute “Good Reason;”


 


(ii)                         the office to which the Executive is assigned is relocated to
a place 35 or more miles away and such relocation is not at the Executive’s
request or with the Executive’s prior agreement (and other than, for Executives
assigned to the Company’s principal executive offices, in connection with a
change in location of the Company’s principal executive offices); or


 


(iii)                      the
Executive’s duties are materially diminished to an extent that results in
either (A) the Executive no longer being an “officer”, as such term is
defined in Rule 16a-1(f) promulgated under the Securities Exchange
Act of 1934; or (B) the Executive ceases to be a member of the executive
management team of the Company;


 


provided
that Good Reason shall not exist unless and until within 90 days after the
event giving rise to Good Reason under (i), (ii) or (iii) above has
occurred, the Executive delivers a written termination notice to the Company
stating that an event giving rise to Good Reason has occurred and identifying
with reasonable detail the event that the Executive asserts constitutes Good
Reason under (i), (ii) or (iii) above and the Company fails or
refuses to cure or eliminate the event giving rise to Good Reason on or within
30 days after receiving the Executive’s notice. 
To avoid doubt, the termination of the Executive’s employment would become
effective at the close of business on the thirtieth day after the Company
receives the Executive’s termination notice, unless the Company cures or
eliminates the event giving rise to Good Reason prior to such time.


 


“Severance
Payment” 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; provided, however, that
if the Executive terminates the Executive’s employment for Good Reason based on



 


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a reduction in Base Salary, then the Base Salary to be used in
calculating the Severance Payment shall be the Base Salary in effect
immediately prior to such reduction in Base Salary.


 


“Target
Bonus” shall mean the target cash bonus for which the Executive is eligible
on an annual basis, at a level consistent with the Executive’s title and
responsibilities, under the Company’s bonus program then in effect and
applicable to the Company’s senior executives generally.


 


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 the “term of employment.”


 


3. POSITION, DUTIES AND
RESPONSIBILITIES.


 


On
the Effective Date, the Executive shall be employed as Executive Vice
President, Chief Commercial Officer.


 


4. BASE SALARY.


 


The
Executive’s initial annualized Base Salary shall be $460,000, payable in
accordance with the regular payroll practices of the Company. The Base Salary
shall be reviewed no less frequently than annually, and any changes 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 cash 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 $25,000 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 30 days of such termination.


 


(c) Sign-On Stock Option Grants:


 


(i)                             the
Executive shall be granted a stock option under the Company’s 2006 Stock and
Option Plan (the “Stock 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 Stock Plan, on the Effective Date.  The option will vest and become exercisable
as to equal numbers of shares quarterly in arrears over the four year period
commencing on the Effective Date, and as otherwise specified herein and in 


 


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the Stock Plan, and
shall be subject to the other terms and conditions specified in a separate
grant agreement attached hereto as Exhibit A; and


 


(ii)                          the
Executive shall be granted a stock option under the Stock Plan to purchase
300,000 shares of the Company’s common stock at a price equal to the Fair Market
Value of Vertex’s shares, as defined in the Stock Plan, on the Effective Date,
subject to the terms and conditions specified in a separate grant agreement
attached hereto as Exhibit B.


 


(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 (the “Grant Date”),
20,000 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 $0.01 per share purchase price should the
Executive experience a termination of employment, as such term is used in the
Stock Plan, but this repurchase right will lapse as to one quarter of the total
number of shares on each of the first four anniversaries of the Grant Date, and
as otherwise specified herein (including in Section 10(c)(v)) and in the
Stock Plan, and shall be subject to the other terms and conditions specified in
a separate grant agreement.


 


6.  INCENTIVE COMPENSATION PROGRAMS.


 


During
the term of employment, the Executive shall be eligible to participate in the
Company’s 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 to its senior executives, as such plans, programs and
arrangements may be amended from time to time, to the same extent and on the
same terms applicable to other senior executives. Exhibit C to this
Agreement lists and describes the Company’s employee benefit plans as in effect
on the date of this Agreement.  Nothing
in this section shall preclude the Company from amending or terminating any of
its employee benefit plans, programs or arrangements.


 


8. 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.


 


9.  RELOCATION REIMBURSEMENT.


 


The
Executive will be reimbursed for relocation costs in accordance with the
Company’s relocation reimbursement policy currently in effect, except that the
Executive shall be eligible for reimbursement of temporary living expenses for
a period not to exceed six (6) months.


 


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10. TERMINATION OF
EMPLOYMENT.


 


(a) 
Termination in Connection with a Change of
Control.  To the extent the Executive is entitled, in
connection with the Executive’s termination of employment, to severance or
other benefits under the Change of Control Agreement, the Executive shall not
be entitled to corresponding benefits under this Section 10.


 


(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 the
Executive voluntarily terminates the Executive’s employment, other than for
Good Reason, death or 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 10(b); and


 


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


 


If
the Executive voluntarily terminates his or her employment 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 the Executive’s 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
(provided that, with respect to (iii) and (v) such amounts shall be
subject to and in exchange for a general release by Executive of all claims
against the Company, its subsidiaries, and their officers, directors, agents
and representatives):


 


(i)                             Base
Salary earned by Executive but not paid through the date of termination of
Executive’s employment under this Section 10(c);


 


(ii)                          all
incentive compensation awards earned by Executive but not paid prior to the
date of termination of Executive’s employment under this Section 10(c);


 


(iii)                       a
cash payment to the Executive in an amount equal to the Severance Payment,
payable within ten days after the execution of a general release and expiration
without revocation of any applicable revocation periods under the general
release;


 


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


 


(v)                         if
COBRA coverage is elected by the Executive, the Company shall pay the cost of
COBRA continuation premiums on the Executive’s behalf to continue standard
medical, dental and life insurance coverage for the Executive (or the cash 


 


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equivalent of the same
if the Executive is ineligible for continued coverage) until the earlier of:


 


(A)              the date 12 months after the
date the Executive’s employment is terminated; 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).


 


If
Executive is a “specified employee” under Section 409A(a)(2)(B)(i) of
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 after the applicable separation from service (“Deferred
Payment Date”).  Any payments that
would otherwise have been made between the 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
that, in any case, are scheduled to be made after the Deferred Payment Date
shall continue according to the applicable payment schedule.  To the extent that the termination of the
Executive’s employment does not constitute a separation of service under Section 
409A(a)(2)(A)(i) of the Code (as the result of further services that
reasonably are anticipated to be provided by the Executive to the Company at
the time the Executive’s employment is terminated), the payment of any
nonqualified deferred compensation will be further delayed until the date that
is the first full business day that is more than six months after the date of a
subsequent event constituting a separation of service under Section 409A(a)(2)(A)(i) of
the Code.


 


11. CONFIDENTIALITY;
ASSIGNMENT OF RIGHTS, NONCOMPETITION; NONSOLICITATION.


 


On
the Effective Date, the Executive shall enter into the Company’s standard “Employee
Non-Disclosure, Non-Competition & Inventions Agreement,” which is
attached hereto as Exhibit D.


 


12. 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.


 


13.
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 


 


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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 her and any other
person, firm or organization that would be violated by the performance of the
Executive’s obligations under this Agreement.


 


14.  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.


 


15. ENTIRE AGREEMENT;
TERMINATION.


 


This
Agreement, and the agreements referenced herein, contain 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 the Executive’s
employment by the Company, at any time, in each case by written notice provided
in accordance with Section 22 of this Agreement.


 


16. 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.


 


17. 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.


 


18. 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.


 


19.
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 


 


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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 the Executive’s
incompetence, reference in this Agreement to the Executive shall be deemed,
where appropriate, to refer to the Executive’s beneficiary, estate or other
legal representative.


 


20. 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.


 


21. 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.


 


22. NOTICES.


 


All
notices that 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:
the General Counsel; and
the Senior Vice President of Human Resources
 
If to the Executive:                                                      at the Executive’s home address listed in the Company 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.


 


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23. 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.


 


24. COUNTERPARTS.


 


This
Agreement may be executed in two or more counterparts.


 


25. 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 25 shall require
the Company to increase the Executive’s compensation or make the Executive
whole for any requested changes.


 


26. 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/ Matthew W. Emmens

  
	
   

  	
  Matthew W. Emmens

  
	
   

  	
  President, Chairman, & Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Executive

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Nancy J. Wysenski

  
	 
	Nancy J. Wysenski




 


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