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Exhibit 10.1    
    

Executed
on February 7, 2005 

VIA HAND DELIVERY  

Vicki
L. Sato

43 Larch Road

Cambridge, MA 02138 

	Re:
	Severance
Agreement and Release 

Dear
Vicki: 

        This
letter summarizes the terms of your separation from employment with Vertex Pharmaceuticals Incorporated (the "Company") and the
severance agreement and release between you and the Company (the "Agreement"). The purpose of this Agreement is to establish an amicable arrangement for
ending our employment relationship, to provide for a smooth transition of your responsibilities, to release the Company from any claims and to permit you to receive severance pay and related benefits.
With this understanding, and in exchange for your promises and those of the Company as set forth below, you and the Company agree as follows. 

        1.    Employment Status and Final Payments:    

        (a)   Your
employment as President of the Company shall continue until May 11, 2005 (the "Termination Date"). During
this period of continued employment, you will to devote your full time and best efforts to the business of the Company and faithfully perform such duties and responsibilities consistent with your
position as President, as the Company's Chief Executive Officer or Board of Directors, or any of its designees, may direct from time to time. 

        (b)   Effective
as of the Termination Date, your employment with the Company shall cease, and you shall no longer hold any positions or offices with the Company or any of its
subsidiaries, including, without limitation, the positions of President and member of the Scientific Advisory Board of the Company, and all duties and obligations associated therewith shall cease. As
of the Termination Date, your salary will cease, and any entitlement you have or might have under a Company-provided benefit plan, program, contract or practice will terminate, except as required by
federal or state law, or as otherwise described below. 

        (c)   On
the Termination Date, the Company shall pay you all earned but unpaid wages, subject to standard payroll deductions and withholding, and all accrued but unused
vacation time. The Company will also reimburse you for all reasonable, business-related expenses incurred by you up to and through the Termination Date, in accordance with the Company's expense
reimbursement policy. 

        2.    Consideration:    After the seven-day revocation period set forth in Section 13 has expired,
and subject to your continued compliance with your obligations under this Agreement, including but not limited to delivery of the supplemental release pursuant to Section 5(ii) of this
Agreement, the Company will provide the following benefits in exchange for, and in consideration of, your full execution of this Agreement: 

        (a)   On
the Termination Date, the Company will pay you severance equal to 18 months' of your base salary and pro rata Target Bonus, or $995,230.50. This severance
payment shall be paid in one installment. 

        (b)   During
the period beginning on the Termination Date, you may elect to continue your participation in the Company's group health and dental insurance plans in accordance
with the provisions of COBRA, provided you timely pay the full monthly premium for such continued coverage yourself. 

 

        (c)   Except
as otherwise provided herein, you acknowledge and agree that you will not receive nor are entitled to receive any additional compensation or benefits and that no
additional benefits are otherwise due or owing to you under any Company employment agreement or policy or practice. 

        (d)   Any
and all payments due under this Section 2 shall be subject to all applicable federal, state and/or local withholding and/or payroll taxes. 

        3.    Stock Options:    All of your rights and obligations regarding stock options granted to your during your
employment with the Company, including without limitation vesting, exercise and expiration, are governed by the terms and conditions of the Company's 1994 and 1996 Stock and Option Plans, as amended,
and the stock option agreements between you and the Company, as amended hereby. On the Termination Date, the options issued under each such stock option agreement shall be deemed to have been held by
you for the period commencing on the date of its issuance and ending on the Termination Date, plus an additional eighteen (18) months after the Termination Date, for purposes of vesting rights.
Any options that are or become vested by reason of the foregoing shall remain exercisable until the earlier of (a) November 11, 2006 or (b) the date the option would otherwise
expire at the end of its ten-year term, after which date, unless previously exercised, they will expire. Schedule 1 to this Agreement
lists each stock option granted to you by the Company, together with the number of shares that will be vested on the Termination Date pursuant to the terms of this Section 3. The termination of
your employment as President of the Company shall be deemed to be a "Termination of Service" for all purposes under each of the 1994 and 1996 Stock Plans, without regard to any future position you may
hold with the Company (as a board member, consultant or otherwise). You acknowledge and agree that the amendments made pursuant to this Section 3 may have the result of causing those stock
options eligible for "ISO" treatment under the Internal Revenue Code of 1986, as amended, to lose such eligibility. Any stock options granted to you during your employment which are not vested or
which do not become vested pursuant to this Section 3 on the Termination Date shall expire as of the Termination Date and may no longer be exercised in accordance with the terms of the
applicable stock option agreement. Upon the effectiveness of this Agreement, all stock option agreements held by you shall be deemed to have been amended to reflect the provisions of this
Section 3. 

        4.    Restricted Stock:    All of your rights and obligations regarding restricted stock granted to you during your
employment with the Company, including without limitation the lapsing of the Company's repurchase rights, are governed by the terms and conditions of the Company's 1996 Stock and Option Plan, as
amended, and the restricted stock agreements between you and the Company, as amended hereby. Schedule 2 to this Agreement lists each restricted
stock grant made to you by the Company. On the Termination Date, the Company's lapsing repurchase right shall terminate with respect to the number of shares set forth under the heading "Vested Shares"
on Schedule 2, and the Company shall exercise its repurchase right with respect to the number of shares set forth under the heading "Shares to be
Repurchased by the Company" on Schedule 2. On the Termination Date, the Company will withhold from the amounts due to you under this Agreement
the amount of taxes the Company is required to withhold upon the termination of its repurchase rights, and you shall make immediate
payment to the Company in the amount of any tax required to be withheld by the Company in excess of the amounts available for such withholding. 

        5.    Releases    

        (a)    Release of Company.    In exchange for the benefits to be provided to you hereunder, and other good and
valuable consideration, the sufficiency of which is hereby acknowledged: 

	(i)
	you
and your representatives, agents, estate, heirs, successors and assigns, absolutely and unconditionally hereby release, remise, discharge, indemnify and hold
harmless the Company Releasees (defined to include the Company and/or any of its parents, subsidiaries or affiliates, predecessors, successors or assigns, and its and their respective current and/or
former partners, 

2

 

directors,
shareholders/stockholders, officers, employees, attorneys and/or agents, all both individually and in their official capacities), from any and all actions or causes of action, suits,
claims, complaints, contracts, liabilities, agreements, promises, contracts, torts, debts, damages, controversies, judgments, rights and demands, whether existing or contingent, known or unknown,
suspected or unsuspected, which arise out of your employment with, change in employment status with, and/or separation of employment from, the Company. This release is intended by you to be all
encompassing and to act as a full and total release of any claims, whether specifically enumerated herein or not, that you may have or have had against the Company Releasees arising from conduct
occurring up to and through the date of execution of this Agreement, including, but not limited to, any claims arising from any federal, state or local law, regulation or constitution dealing with
either employment, employment benefits (other than your vested rights under ERISA) or employment discrimination such as those laws or regulations concerning discrimination on the basis of race, color,
creed, religion, age, sex, sexual harassment, sexual orientation, national origin, ancestry, genetic carrier status, handicap or disability, veteran status, any military service or application for
military service, or any other category protected under federal or state law; any contract, whether oral or written, express or implied; any tort; any claim for stock, stock options, equity or other
benefits; any alleged wrongful termination or constructive discharge, intentional or negligent infliction of emotional distress, negligent misrepresentation, intentional misrepresentation, fraud,
defamation, violation of public policy; or other statutory or common law cause of action; and 

	(ii)
	you
agree to execute an additional release in which you waive your right to assert any and all forms of legal claims against the Company Releasees (as defined in
Section 5(i) above) of any kind whatsoever, whether known or unknown, arising from the date of this Agreement through the Termination Date. You acknowledge and agree that such release
shall be substantially similar in form and substance to Section 5(i) of this Agreement.. 

        Notwithstanding
any contrary provisions of this Agreement, you are not hereby releasing and will not, on the Termination Date be releasing, the Company Releasees from (i) any
claims for indemnification by the Company pursuant to the Company's by-laws; (ii) any claims to enforce the terms of this Agreement; or (iii) any claims that you may have, or
may have had, against any Company Releasee in your capacity as a stockholder of the Company, to the extent that any such claim arises from facts unknown to you at the time the release is made (on the
Effective Date and again on the Termination Date). 

        (b)    Release of Employee.    In exchange for the benefits to be provided to the Company hereunder, and other good
and valuable consideration, the sufficiency of which is hereby acknowledged: 

	(i)
	the
Company hereby releases, remises, discharges, indemnifies and holds you harmless from any and all actions or causes of action, suits, claims, complaints, contracts,
liabilities, agreements, promises, contracts, torts, debts, damages, controversies, judgments, rights and demands, whether existing or contingent, which arise out of your employment with, change in
employment status with, and/or separation of employment from, the Company. Except as set forth below, this release is intended by the Company to be all encompassing and to act as a full and total
release of any claims, whether specifically enumerated herein or not, that the Company may have or have had against you arising from conduct occurring up to and through the date of execution of this
Agreement, including, but not limited to, any claims arising from any contract, whether oral or written, express or implied; any tort; intentional or negligent infliction of emotional distress,
negligent misrepresentation, intentional misrepresentation, fraud, defamation, violation of public policy; or other statutory or common law cause of action; and 

3

 

	(ii)
	the
Company agrees to execute an additional release in which the Company's waives its right to assert any and all forms of legal claims against you (as defined in
Section 5(i) above) of any kind whatsoever, whether known or unknown, arising from the date of this Agreement through the Termination Date. You acknowledge and agree that such release
shall be substantially similar in form and substance to Section 5(i) of this Agreement. 

        Notwithstanding
any contrary provisions of this Agreement, the Company is not hereby releasing and will not, on the Termination Date be releasing, you, from (i) any claims made by
stockholders of the Company, by means of stockholder derivative action or otherwise; (ii) any claims not actually known to the Company at the time the release is made (on the Effective Date and
again on the Termination Date); and (iii) any claims to enforce the terms of this Agreement. 

        6.    Accord and Satisfaction:    The amounts set forth above in Sections 1 and 2, and the amendments set forth above
in Sections 3 and 4, shall be complete and unconditional payment, settlement, accord and/or satisfaction with respect to all obligations and liabilities of the Company Releasees to you, including,
without limitation, all claims for back wages, salary, vacation pay, draws, incentive pay, bonuses, stock and stock options, commissions, severance pay, reimbursement of expenses, any and all other
forms of compensation or benefits, attorney's fees, or other costs or sums. 

        7.    Waiver of Rights and Claims Under the Age Discrimination in Employment Act of 1967:    

        Since
you are 40 years of age or older, you are being informed that you have or may have specific rights and/or claims under the Age Discrimination in Employment Act of 1967
(ADEA) and you agree that: 

        (a)   in
consideration for the severance payments and benefits described in Sections 2, 3 and 4 of this Agreement, a portion of which you are not otherwise entitled to
receive, you specifically and voluntarily waive such rights and/or claims you might have against the Company Releasees under the ADEA to the extent such rights and/or claims arose prior to the date
this Agreement was executed; 

        (b)   you
are advised that you have at least 21 days within which to consider the terms of this Agreement and to consult with or seek advice from an attorney of your
choice or any other person of your choosing prior to executing this Agreement; 

        (c)   you
are advised that, notwithstanding any other contrary provision of this Agreement, consistent with the provisions of the ADEA and other federal discrimination laws,
nothing in this Agreement shall be deemed to prohibit you from challenging the validity of the Release under Section 5(i) or the Supplemental Release provided pursuant to
Section 5(ii) (together the "Releases") under the federal age or other discrimination laws (the "Federal
Discrimination Laws") or from filing a charge or complaint of age or other employment related discrimination with the Equal Employment Opportunity Commission
("EEOC"), or from participating in any investigation or proceeding conducted by the EEOC. Further, nothing in the Releases or this Agreement shall be
deemed to limit the Company's right to seek immediate dismissal of such charge or complaint on the basis that your signing of this Agreement constitutes a full release of any individual rights under
the Federal Discrimination Laws, or to seek restitution to the extent permitted by law of the economic benefits provided to you under this Agreement if you successfully challenge the validity of
either or both of the Releases and prevail in any claim under the Federal Discrimination Laws 

        (d)   you
have carefully read and fully understand all of the provisions of this Agreement, and you knowingly and voluntarily agree to all of the terms set forth in this
Agreement; and 

        (e)   in
entering into this Agreement you are not relying on any representation, promise or inducement made by the Company or its attorneys with the exception of those
promises described in this document. 

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        8.    Period for Review and Consideration of Agreement:    

        (a)   You
acknowledge that you were informed and understand that you have twenty-one (21) days to review this Agreement and consider its terms before
signing it. 

        (b)   The
21-day review period will not be affected or extended by any revisions, whether material or immaterial, that might be made to this Agreement. 

        9.    Company Files, Documents and Other Property:    You agree that on or before the Termination Date you will return
to the Company all Company property and materials, including but not limited to, (if applicable) personal computers, laptops, fax machines, scanners, copiers, Company credit cards and telephone charge
cards, manuals, building keys and passes, courtesy parking passes, diskettes, intangible information stored on diskettes, software programs and data compiled with the use of those programs, software
passwords or codes, tangible copies of trade secrets and confidential information, sales forecasts, names and addresses of Company customers and potential customers, customer lists, customer contacts,
sales information, sales forecasts, memoranda, sales brochures, business or marketing plans, reports, projections, and any and all other information or property previously or currently held or used by
you that is or was related to your employment with the Company ("Company Property"). You agree that in the event that you discover any other Company
Property in your possession after the Termination Date of this Agreement you will immediately return such materials to the Company. 

The
Company agrees that it will maintain your Company email account for the period of 30 days immediately following the Termination Date and shall automatically forward a copy of all emails
sent to you at the Company during such period to your home email address; provided that you immediately return or delete any and all correspondence containing Company trade secrets or confidential
information, as referenced above, and any and all correspondence that is not of a personal nature to you. In addition, the Company agrees that it will maintain your Company voicemail account for the
period of 30 days immediately following the Termination Date, and you and the Company agree that your current executive assistant shall be given access to your voicemail account and shall be
instructed to communicate to you on a regular basis all personal messages left on your voicemail as well as all other communication not containing confidential or proprietary information of the
Company. 

        10.    Future Conduct:    

        (a)    Mutual Nondisparagement:    You will not make disparaging, critical or otherwise detrimental comments to any
person or entity concerning the Company, its officers, directors, employees, shareholders or business partners; the products, services or programs provided or to be provided by the Company; the
business affairs, operation, management or the financial condition of the Company; or the circumstances surrounding your employment and/or separation of employment from the Company. Likewise, the
Company will not, and will take actions designed to ensure that its executive officers and members of its Board of Directors will not make disparaging, critical or otherwise detrimental comments to
any person or entity concerning you or the circumstances surrounding your employment and/or separation of employment from the Company. The Company shall instruct all the executive officers and members
of its Board of Directors of their respective obligations under this Section 10(a). 

        (b)    Press Release:    The Company will be required to issue a press release in connection with your execution of
this Agreement and your separation from employment. The Company will provide you an opportunity to review the press release and recommend changes to the substance of the press release within the time
parameters requested by the Company. However, the timing and substance of the press release rests within the sole discretion of the Company. 

        (c)    Confidentiality of this Agreement:    Both parties agree that they shall not disclose, divulge or publish,
directly or indirectly, any information regarding the substance, terms or existence of 

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this
Agreement and/or any discussion or negotiations relating to this Agreement, to any person or organization other than (i) with respect to the Company, as is required in the course of
business and (ii) with respect to you, to (x) your immediate family members or (y) to your accountants or attorneys when such disclosure is necessary to render professional
services. Prior to any such disclosure that you may make, you shall secure from your attorney or accountant their agreement to maintain the confidentiality of such matters. If the Company includes
this Agreement as part of its public filings, then from and after the date of such disclosure you and the Company shall be permitted to disclose information regarding the substance, terms or existence
of this Agreement, but not the discussions or negotiations relating to this Agreement. 

        (d)    Disclosures:    Nothing herein shall prohibit or bar you or the Company from providing truthful testimony in
any legal proceeding or in communicating with any governmental agency or representative or from making any truthful disclosure required, authorized or permitted under law; provided, however, that in
providing such testimony or making such disclosures or communications, you and the Company agree to use reasonable efforts to ensure that this Section is complied with to the maximum extent possible.
Notwithstanding the foregoing, nothing in this Agreement shall bar or prohibit you from contacting, seeking assistance from or participating in any proceeding before any federal or state
administrative agency to the extent permitted by applicable federal, state and/or local law. However, you nevertheless will be prohibited to the fullest extent authorized by law from obtaining
monetary damages in any agency proceeding in which you do so participate. 

        (e)    No Agency Relationship.    From and after the Termination Date, unless otherwise expressly authorized in
writing by the Company's Board of Directors, you shall no longer be the agent of the Company and shall no longer have the power or authority to, and you shall no longer attempt to, (i) bind the
Company, (ii) incur any liability or obligation on behalf of the Company, or (iii) hold yourself out as authorized to act on behalf of the Company, including, without limitation,
participating in any investor calls or communicating with the media regarding the Company. 

        (f)    Litigation Cooperation.    During your continued employment with the Company and after the Termination Date,
you agree to cooperate fully with the Company in any action, proceeding, charge or lawsuit in which the Company is a party as reasonably requested by the Company from time to time or as required by
law or legal process. For the twelve-month period immediately following the Termination Date, you agree to provide such litigation assistance without further compensation than the agreements of the
Company in this Agreement and reimbursement of reasonable expenses directly incurred by you in connection with such litigation assistance. After the twelve-month anniversary of the Termination Date,
the Company shall pay you $150.00 per hour in connection with such litigation assistance (other than your participation as a witness or deponent pursuant to a deposition notice, subpoena, summons or
other legal process) and reimburse you for reasonable expenses directly incurred by you in connection with such litigation assistance. For purposes of this Paragraph, the term "expenses" shall not
include attorneys' fees. 

        (g)    Indemnification.    During your continued employment with the Company and after the Termination Date, you shall
be eligible for indemnification to the fullest extent permitted under the Company's Amended and Restated By-Laws, and for coverage under the Company's Directors and Officers Liability
Insurance Policy in accordance with the terms and conditions set forth therein and provided the Company continues to maintain such insurance coverage. 

        11.    Employee Nondisclosure and Inventions Agreement; Agreement Not to Compete:    

        You
hereby acknowledge the existence and continued validity of the Employee Non-Disclosure Non-Competition and Inventions Agreement that you preciously executed
(the "Inventions Agreement") and the "Agreement Not to Compete" set forth in Section 8 ("Non-competition
Covenant") of the Employment Agreement dated November 1, 1994 between you and the Company, as amended to date. 

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You
agree to abide by your obligations contained in the Inventions Agreement and the Noncompetition Covenant for the periods set forth therein. 

        12.    Representations and Governing Law:    

        (a)   This
Agreement sets forth the complete and sole agreement between the parties and supersedes any and all other agreements or understandings, whether oral or written,
except the Inventions Agreement, the Noncompetition Covenant and the stock option and restricted stock agreements referenced in Sections 3 and 4, each of which shall remain in full force and effect in
accordance with their respective terms. This Agreement may not be changed, amended, modified, altered or rescinded except upon the express written consent of the Company and you. 

        (b)   If
any provision of this Agreement, or part thereof, is held invalid, void or voidable as against public policy or otherwise, the invalidity shall not affect other
provisions, or parts thereof, which may be given effect without the invalid provision or part. To this extent, the provisions and parts thereof of this Agreement are declared to be severable. Any
waiver of any provision of this Agreement shall not constitute a waiver of any other provision of this Agreement unless expressly so indicated otherwise. The language of all parts of this Agreement
shall in all cases be construed according to its fair meaning and not strictly for or against either of the parties. 

        (c)   This
Agreement and any claims arising out of this Agreement (or any other claims arising out of the relationship between the parties) shall be governed by and construed
in accordance with the laws of The Commonwealth of Massachusetts and shall in all respects be interpreted, enforced and governed under the internal and domestic laws of Massachusetts, without giving
effect to the principles of conflicts of laws of such state. Any claims or legal actions by one party against the other shall be commenced and maintained in state or federal court located in
Massachusetts, and you hereby submit to the jurisdiction and venue of any such court. 

        (d)   You
may not assign any of your rights or delegate any of your duties under this Agreement. The rights and obligations of the Company shall inure to the benefit of, and
shall be binding upon, the Company's successors and assigns. 

        13.    Revocation Period:    You may revoke this Agreement at any time during the seven-day period
immediately following your execution hereof. As a result, this Agreement shall not become effective or enforceable until the seven-day revocation period has expired. 

        14.    Deferred Compensation Amendments    You acknowledge and agree that certain compensation arrangements under this
Agreement may be subject to the requirements of Section 409A of the Code. The parties further acknowledge that the U.S. Department of Treasury and the Internal Revenue Service are expected to
issue additional future guidance as to how Code Section 409A affects all deferred compensation arrangements, possibly including the arrangements under this Agreement. As soon as practicable
following the issuance of any such guidance, the parties agree to negotiate in good faith and amend all applicable provisions of this Agreement on a timely basis to the extent necessary to comply with
Code Section 409A, in a manner that preserves, as near as possible, the economic benefits to you which you and the Company negotiated in good faith when entering into this Agreement. 

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        If
this letter correctly states the agreement and understanding we have reached, please indicate your acceptance by countersigning the enclosed copy and returning it to me. 

	 	 	Very truly yours,
	

 	
 	
VERTEX PHARMACEUTICALS INCORPORATED
	

 	
 	

By:	

/s/  JOSHUA S. BOGER      
Joshua S. Boger

Chief Executive Officer

I
REPRESENT THAT I HAVE READ THE FOREGOING AGREEMENT, THAT I FULLY UNDERSTAND THE TERMS AND CONDITIONS OF SUCH AGREEMENT AND THAT I AM KNOWINGLY AND VOLUNTARILY EXECUTING THE SAME. IN ENTERING INTO
THIS AGREEMENT, I DO NOT RELY ON ANY REPRESENTATION, PROMISE OR INDUCEMENT MADE BY THE COMPANY OR ITS REPRESENTATIVES WITH THE EXCEPTION OF THE CONSIDERATION DESCRIBED IN THIS DOCUMENT. 

Accepted
and Agreed to: 

	

/s/  VICKI L. SATO      
Vicki L. Sato	

 
	

Date: February 7, 2005
	

 

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IF
YOU DO NOT WISH TO USE THE 21-DAY PERIOD,

PLEASE CAREFULLY REVIEW AND SIGN THIS DOCUMENT 

        I,
Vicki L. Sato, acknowledge that I was informed and understand that I have 21 days within which to consider the attached Severance Agreement and Release, have been advised of my
right to consult with an attorney regarding such Agreement and have considered carefully every provision of the Agreement, and that after having engaged in those actions, I prefer to and have
requested that I enter into the Agreement prior to the expiration of the 21 day period. 

	

Dated: February 7, 2005
	
 	

/s/  VICKI L. SATO      
 Vicki L. Sato

9

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Exhibit 10.2    
    

EMPLOYMENT AGREEMENT  

        AGREEMENT, made and entered into as of the 15th day of February, 2005 by and between Vertex Pharmaceuticals Incorporated, a Massachusetts corporation (together
with its successors and assigns, the "Company"), and Victor Hartmann (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—Strategic and Corporate 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, 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;

	(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, in the sole discretion of the Company, is determined to compete with the business of 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, for purposes of any arrangement subject to or deemed subject to 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 or she is unable to engage in any substantial gainful activity
because of any medically determinable physical or mental impairment which 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 or she is, because of any medically determinable physical or mental impairment which 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 the first date written above. 

        (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 initiative, terminates his employment: 

	(i)
	The
Executive 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 suffers a reduction in the authorities, duties, and responsibilities customarily associated with his position and office 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 reduction in the authorities, duties or responsibilities is not for Cause, or due to Executive's Disability, and is not at the Executive's request;

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

	(iv)
	The
principal executive office of the Company, or the Executive's own office location as assigned to him by the Company at the Effective Date is relocated to a place
thirty-five (35) or more miles away, without the Executive's agreement; or 

2

 

	(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 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 such period. 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, 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. 

        (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 the agreement". 

	3.
	POSITION,
DUTIES AND RESPONSIBILITIES. 

        On
the Effective Date and continuing for the remainder of the term of employment, the Executive shall be employed as the Executive Vice President, Strategic & Corporate
Development of the Company, and shall be responsible for portfolio management of the Company's development-stage product portfolio and for management of the Company's business and corporate
development activities. The Executive will be a member of the senior management team, which oversees operations for the pharmaceutical business worldwide. The Executive shall represent and serve the
Company faithfully, conscientiously and to the best of the Executive's ability and shall promote the interests, reputation and current and long term plans, objectives and policies of the Company. 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 

3

 

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 President of the Company. 

	4.
	BASE
SALARY. 

        The
Executive's initial annualized Base Salary shall be $429,000, 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 $150,000
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. In the event the Executive terminates this
Agreement without "Good Reason" 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 150,000 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 1996 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 five (5) year period commencing on the Effective Date, and as
otherwise specified herein and in the Company's stock 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, 70,000 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 cease to be employed by the Company either voluntarily or through "for cause" termination, but this
repurchase right will lapse, as to 20,000 shares of the stock, on the first anniversary of the Effective Date, and as to 25,000 shares of the stock on the third anniversary of the Effective Date. The
repurchase right will lapse as to the remaining 25,000 shares of the stock at the earlier of the fifth anniversary of the Effective Date, or achievement of Company Profitability (as defined in the
Restricted Stock Agreement) for four consecutive financial quarters, all as set forth in the Restricted Stock Agreement. 

	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. 

4

 

	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 from
time to time to its senior executives, to the same extent and on the same terms applicable to other senior executives. 

	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: 

        The
Executive will be promptly reimbursed for out-of-pocket expenses reasonably and necessarily incurred by him from the commencement date of his employment
through July 01, 2005 in connection with the following items: 

	•
	Temporary
housing for the Executive in the greater Boston metropolitan area reasonably acceptable to the Executive and the Company, pending a permanent move to Boston.

	•
	Travel
expenses associated with commuting from time to time, to and from the Executive's current home in France, prior to the Executive's permanent move to the Boston area,
but no more than one round-trip per month.

	•
	One-time
moving and transportation costs associated with the relocation of the Executive's household goods (the "Relocation
Cost") to the Boston metropolitan area. The Company will continue to make Relocation Cost reimbursement available after July 01, 2005 (but in
any event no longer than one year after the Effective Date) in the event the Executive is engaged beyond that time in actual and substantial efforts to relocate his household to the Boston
metropolitan area (for example, in the event that the purchase of the Executive's Boston-area home is delayed by the seller beyond July 01, 2005).

	•
	Such
other relocation benefits as described in the Company's Relocation Policy previously delivered to the Executive, to the extent not inconsistent with the provisions of
this Agreement. 

        All
reimbursement amounts will be "grossed up" as necessary to provide the Executive with the expense benefit on a post-tax basis. 

        In
the event the Executive voluntarily terminates his employment or if his employment is terminated by the Company for Cause during the twelve-month period following the Effective Date,
the Executive will be required to repay the aggregate relocation benefit provided to him by the Company within thirty (30) days of the termination date. Termination of employment for Good
Reason (as defined below), or death or for disability or as a result of a Change of Control (as defined below) shall be deemed an involuntary termination. 

	10.
	VACATION.

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

	11.
	TERMINATION
OF EMPLOYMENT. 

        (a)   Termination Due to Death or Disability. In the event Executive's employment is terminated due to Executive's death or
Disability, the term of employment shall end as of the date of the 

5

 

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 of Directors;

	(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 which 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 1-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 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. In the event the Company
terminates the Executive's employment for Cause, or if Executive terminates his employment without Good Reason, 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);

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

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

        Termination
by Company for Cause shall be effective as of the date noticed by the Company. Termination by Executive without Good Reason 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 his Base Salary for the notice period or for any remaining portion thereof. 

6

 

        (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, but in no event shall the Executive or his estate or beneficiaries receive 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) shall remain exercisable until
the earlier of (1) the end of the one-year period following the date of the termination of his employment or (2) 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 held by the Executive for an additional 18 months, for purposes of vesting and exercise rights, and any stock options which become exercisable as a result thereof shall remain exercisable
as provided in Section 11(c)(v) above;

	(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(D)(iii) above; or 

        (B)  the
date, or dates, 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
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
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 

7

 

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
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. To the extent any of the payments
provided in this Section 11 are deemed to constitute nonqualified deferred compensation for purposes of Internal Revenue Code Section 409A, payment of any portion thereof that otherwise
would be paid to the Executive prior to the date that is six months after the date on which the Executive's employment is terminated under this Section 11 (the "Deferred Payment Date") shall be
paid to the Executive on the Deferred Payment Date. 

	12.
	MITIGATION.

        In
the event of any termination of this Agreement, Company is hereby 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, which 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 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. 

8

 
	14.
	NONCOMPETITION;
NONSOLICITATION. 

        (a)   Notwithstanding
any of the provisions herein to the contrary, in the event that 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 not to exceed the lesser of 12 months from the date of
termination under such applicable provision listed above or 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 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. 

	17.
	ENTIRE
AGREEMENT. 

        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. 

	18.
	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. 

9

 

	19.
	SEVERABILITY.

        In
the event that 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. 

	20.
	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. 

	21.
	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. 

	22.
	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. 

	23.
	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 which 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. 

	24.
	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 

10

 

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: Chairman of the Board

with copies to:

General Counsel

Vice President of Human Resources
	

If to the Executive:	
 	

Victor Hartmann

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. 

	25.
	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. 

	26.
	COUNTERPARTS. 

        This
Agreement may be executed in two or more counterparts. 

	27.
	SPECIAL
AMENDMENT. 

        It
is the intention of the Company and the Executive that this Agreement and the payments provided for herein meet the requirements of Internal Revenue Code Section 409A, to the
extent applicable to the Agreement and such payments. Recognizing such intent and the lack of guidance currently available under Section 409A, 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 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. 

11

 

        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

Chairman & Chief Executive Officer
	

 	
 	
Executive
	

 	
 	

/s/  VICTOR HARTMANN      
 Victor Hartmann

12

QuickLinks

Exhibit 10.2

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