Exhibit 10.66


 


Amendment No. 1


to


Amended and Restated Employment Agreement


 


This
Amendment No. 1 to the Amended and Restated Employment Agreement, dated November 8,
2004 (the “Agreement”), between Vertex Pharmaceuticals Incorporated, a
Massachusetts corporation (together with its successors and assigns, the “Company”),
and Ian F. Smith (the “Executive”) is entered into by the parties on December 29,
2008.  The parties hereby agree that the
Agreement shall be amended as follows:


 


1.                                      Section 1(g) shall be amended by
adding the following thereto:


 


“Notwithstanding
the foregoing, to the extent that any payments under this Agreement that are payable
upon disability constitute nonqualified deferred compensation subject to Section 409A
of the Code, “DISABILTY” or “DISABLED” shall mean, by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, the Executive is either (a) unable to engage in any substantial
gainful activity or (b) receiving income replacement benefits for a period
of not less than three months under any disability plan covering employees of
the Company.  For purposes of the
immediately foregoing sentence, the existence of a disability will be
determined in all respects in accordance with the provisions of Section 409A
(a)(2)(C) of the Code.”


 


2.                                      Section 8 shall be amended by inserting
the following language at the end of the current language, as follows:


 


“Any
reimbursement in one calendar year shall not affect the amount that
may be reimbursed in any other calendar year, and a reimbursement (or
right thereto) may not be exchanged or liquidated for another benefit or
payment.  Any expense reimbursements subject to Section 409A of the
Code shall be made no later than the end of the calendar year following the
calendar year in which such business expense is incurred by the Executive.”


 


3.                                      Section 10(a)(vii) shall be amended
in its entirety to read as follows:


 


“(vii)       six months of Severance Pay, payable in
accordance with the regular payroll practices of the Company, commencing on the
first day of the month following the month in which termination under this SECTION
10(a) occurred;”


 


4.                                      Section 10(b) shall
be amended to delete the second to last paragraph thereof in its entirety.


 


5.                                      The
first phrase of Section 10(c)(iii) shall
be amended to read as follows:


 


“(iii)        Twelve months of Severance Pay, payable
in accordance with the regular payroll practices of the Company, commencing on
the first day of the month following the month during which the Executive’s
employment is terminated under this SECTION 10(c);”


 


6.                                      Section 10(c)(ix) shall
be amended in its entirety as follows:


 


“(ix)         until the earlier of (a) the
expiration of the term of the Severance Pay paid under Section 10(c)(iii) above
or (b) the date the Executive receives equivalent coverage and benefits
under the plan of a subsequent employer, the Company shall provide the
Executive with medical, dental and hospitalization insurance benefits
substantially similar to those which the Executive was


 

















 


receiving
immediately prior to the termination of his employment, including any employer
paid portion of the premium, subject to the Executive’s election of benefits
under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”)
in accordance with the applicable plan procedures.  During such time that the Executive is
receiving such continued medical, dental and hospitalization benefits from the
Company, the Company shall also provide Executive with life insurance benefits
substantially similar to those which the Executive was receiving immediately
prior to the termination of his employment.”


 


7.                                      Section 10 shall be amended by adding
the following at the end of the final paragraph thereof:


 


“For
purposes of clarification, any portion of any payment hereunder that
constitutes nonqualified deferred compensation under Section 409A of the
Code payable as a result of a termination of employment may only be paid upon a
“separation from service” under Section 409A(a)(2)(A)(i) of the Code.  For purposes of clarification, the foregoing
sentence shall not cause any forfeiture of benefits on the part of the
Executive, but shall only act as a delay until such time as a “separation from service”
occurs.”


 


8.                                      Section 26
is amended by adding the following provision to the end thereof:


 


“Notwithstanding
the foregoing, no payments under this Section 26 from the Company to Executive
shall be made after the end of the calendar year immediately following the
calendar year in which the Executive remits the related taxes to the applicable
taxing authority.”


 


9.                                      The
Agreement shall be amended by adding the following new Section 27:


 


“27.  409A COMPLIANCE.


 


Any
severance payment to the Executive under this Agreement shall be bifurcated
into two portions, consisting of a portion that does not constitute “nonqualified
deferred compensation” within the meaning of Section 409A of the Code and
a portion, if any, that does constitute nonqualified deferred compensation. If
the Executive is a “specified employee” as defined in Treasury Reg.
§1.409A-1(i), the commencement of the delivery of any such payments that constitute
nonqualified deferred compensation payable upon a “separation from service”
under Section 409A(a)(2)(A)(i) of the Code (determined after applying the
presumptions set forth in Treasury Reg. §1.409A-1(h)(1)) will be delayed until
the later of (i) the first business day that is more than six months after
the employment termination date and (ii) the date such payments would
otherwise be payable hereunder. The determination of whether, and the extent to
which, any of the payments to be made to the Executive hereunder are
nonqualified deferred compensation shall be made after the application of all
applicable exclusions, including those set forth under Treasury Reg.
§1.409A-1(b)(9). Any payments that are intended to qualify for the exclusion
for separation pay due to involuntary separation from service set forth in
Treasury Reg. §1.409A-1(b)(9)(iii) must be paid no later than the
last day of the second taxable year following the taxable year in which the
employment termination date occurs.  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 are reasonably anticipated to be
provided by the Executive to the Company at the time the Executive’s employment
is terminated, determined after applying the presumptions set forth in Treasury
Reg. §1.409A-1(h)(1)), the payment of any non-qualified deferred compensation
will be further delayed until the later of (i) date the first 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
and (ii) the date such payments would otherwise be payable hereunder.  Any portion of a payment that constitutes
nonqualified deferred compensation under Section 409A of the Code payable
as a result of a termination of employment may only be paid upon a “separation
from 


 

















 


service”
under Section 409A(a)(2)(A)(i) of the Code.  For purposes of clarification, the foregoing
sentence shall not cause any forfeiture of benefits on the part of the Executive,
but shall only act as a delay until such time as a “separation from service”
occurs.”


 

















 


As so amended, the Amended and Restated Employment
Agreement shall remain in full force and effect.  Executed as of the date set forth above:


 


	
   

  	
   

  	
  VERTEX PHARMACEUTICALS INCORPORATED

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Kenneth S. Boger

  
	
   

  	
   

  	
   

  	
  Kenneth S. Boger

  
	
   

  	
   

  	
   

  	
  Senior Vice President and General Counsel

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Ian F. Smith

  
	
   

  	
   

  	
   

  	
  Ian F. Smith