Exhibit 10.3


 


AMENDED AND RESTATED
EMPLOYMENT AGREEMENT


 


This
Amended and Restated Employment Agreement (this “Agreement”) amends and
restates, effective as of this 5th day of February, 2010, that certain Employment
Agreement made and entered into as of the 11th day of February, 2008, as amended by that
certain Amendment to Employment Agreement entered into as of the 29th day of December, 2008 (collectively, the “Original
Agreement”) by and between Vertex Pharmaceuticals Incorporated, a
Massachusetts corporation (together with its successors and assigns, the “Company”),
and Amit Sachdev (the “Executive”).


 


W IT N E S S E T H


 


WHEREAS,
the Company is employing the Executive as the Company’s Senior Vice President,
Public Policy and Government Affairs; and


 


WHEREAS,
the Company and the Executive desire to amend the Original 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 of moral turpitude, (ii) the
Executive willfully refuses or fails to follow a lawful directive or
instruction of the Board or the individual to whom the Executive reports, provided
that the Executive receives prior written notice of the directive(s) or
instruction(s) that the Executive failed to follow and provided further
that the Company, in good faith, gives the Executive thirty (30) days to
correct any problems and further provided that the Executive shall not have
corrected the problem(s) within such 30 day period, or (iii) 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, or (iv) the Executive violates the Company’s policies made known
to him regarding confidentiality, securities trading or inside information.


 


“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 February 11, 2008.


 


“Good
Reason” shall mean that, without the Executive’s consent, one or more of
the following events occurs:


 

















 


(i)          the Executive is
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 the Executive’s Disability or performance, nor
is at the Executive’s request; or


 


(ii)         the Executive suffers a
reduction in the authorities, duties, and responsibilities associated with the
Executive’s position as Senior Vice President, Public Policy and Government
Affairs, provided that such reassignment of duties or responsibilities is not
due to the Executive’s Disability or the Executive’s performance, and is not at
the Executive’s request or with the Executive’s 
prior agreement; or


 


(iii)        the Executive’s Base Salary is
decreased below $350,000 per year, other than a reduction that is part of an
across-the-board proportionate reduction in the salaries of the senior
management team; or


 


(iv)       the Executive’s office is
relocated thirty-five (35) or more miles from Washington, D.C. (other than in
connection with relocation of the Company’s offices);


 


provided
that Good Reason shall not exist unless and until within 30 days after the
event giving rise to Good Reason under any of (i) through (iv) 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 any of (i) through (iv) 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 such 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.


 


“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 period
(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 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 which 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 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.


 


“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
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.


 


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2. TERM OF EMPLOYMENT.


 


The
Company hereby employs the Executive, and the Executive hereby accepts such
employment, 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.


 


On
the Effective Date, the Executive shall be employed as the Company’s Senior
Vice President, Public Policy and Government Affairs.


 


4. BASE SALARY.


 


The
Executive’s annualized Base Salary as of the date of this Agreement is
$376,884.00, 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 PROGRAM.


 


During
the term of employment, the Executive shall be eligible to 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.


 


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. 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 at least 4 weeks of
paid vacation days each calendar year in accordance with the Company’s vacation
policy then in effect.


 


9. 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 9.


 


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(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 9(b); and


 


(ii)         any amounts earned, accrued or
owing to the Executive but not yet paid under Sections 5, 6, or 7  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.


 


(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 (in accordance with the notice and cure provisions
set forth in the definition of “Good Reason” above), 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 executed by
Executive within 30 days of the date of termination 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 9(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 9(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 5, 6 or 7 above;


 


(v)        if COBRA coverage is elected by
the Executive, the Company shall pay the cost of insurance continuation
premiums on the Executive’s behalf (whether or not covered by COBRA) to continue
standard medical, dental and life insurance coverage for the Executive (or the
cash equivalent of same in the event 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).


 


(vi)       all stock options held by the
Executive as of the date of the termination under this Section 9(c) that
are not exercisable as of that date shall be deemed to have been held by the
Executive for an additional 18 months, for purposes of vesting and exercise
rights, and any options that become exercisable shall remain exercisable until
the earlier of (1) the end of 


 


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the 90-day period
following the date of termination of employment or (2) the date the stock
option would otherwise expire; and


 


(vii)      the Company’s lapsing
repurchase right shall lapse with respect to the Pro-Rata Share of Restricted
Stock.


 


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 6 months after the date of a subsequent event
constituting a separation of service under Section 409A(a)(2)(A)(i) of
the Code.


 


10. 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.


 


11.
REPRESENTATIONS.


 


The
Company represents and warrants that it is fully authorized and empowered to
enter into this Agreement, 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 the Executive’s obligations under this
Agreement.


 


12.  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.


 


13. ENTIRE AGREEMENT;
TERMINATION.


 


This
Agreement, the agreements referenced herein, and the Employee Non-Disclosure,
Non-Competition & Inventions Agreement between the Executive and the
Company, 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, 


 


5

















 


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 20 of this Agreement.


 


14. 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.


 


15. 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.


 


16. 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.


 


17.
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 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.


 


18. 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.


 


19. 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.


 


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20. 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

  
	
   

  	
   

  
	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.


 


21. 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.


 


22. COUNTERPARTS.


 


This
Agreement may be executed in two or more counterparts.


 


23. 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 23 shall require
the Company to increase the Executive’s compensation or make the Executive
whole for any requested changes.


 


24. 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.


 


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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,

  
	
   

  	
  and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Executive

  
	
   

  	
   

  
	
   

  	
  /s/Amit Sachdev

  
	 
	Amit Sachdev




 
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