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                                  Exhibit 10.4

                       VERTEX PHARMACEUTICALS INCORPORATED

                           1996 STOCK and OPTION PLAN

                  (as amended on March 12, 2001, and restated)

1. DEFINITIONS

      Unless otherwise specified or unless the context otherwise requires, the
following terms, as used in this Vertex Pharmaceuticals Incorporated 1996 Stock
and Option Plan, have the following meanings:

Affiliate means a corporation which, for purposes of Section 424 of the Code, is
a parent or subsidiary of the Company, direct or indirect.

Board of Directors means the Board of Directors of the Company.

Code means the United States Internal Revenue Code of 1986, as amended.

Committee means the Compensation Committee of the Board of Directors or any
successor thereto appointed by the Board of Directors pursuant to Section 4
hereof to administer this Plan.

Common Stock means shares of the Company's common stock, $.01 par value.

Company means Vertex Pharmaceuticals Incorporated, a Massachusetts corporation.

Disability or Disabled means permanent and total disability as defined in
Section 22(e)(3) of the Code.

Exchange Act means the Securities Exchange Act of 1934, as amended.

Fair Market Value of a Share of Common Stock on a particular date shall be the
mean between the highest and lowest quoted selling prices on such date (the
"valuation date") on the securities market where the Common Stock of the Company
is traded, or if there were no sales on the valuation date, on the next
preceding date within a reasonable period (as determined in the sole discretion
of the Committee) on which there were sales. In the event that there were no
sales in such a market within a reasonable period, the fair market value shall
be as determined in good faith by the Committee in its sole discretion. The Fair
Market Value as determined in this paragraph rounded down to the next lower
whole cent if the foregoing calculation results in fractional cents.

ISO means an option intended to qualify as an incentive stock option under Code
Section 422(b).

Key Employee means an employee of the Company or of an Affiliate (including,
without limitation, an employee who is also serving as an officer or director of
the Company or of an Affiliate), designated by the Committee to be eligible to
be granted one or more Stock Rights under the Plan.

NQSO means an option which is not intended to qualify as an ISO.

Non-Employee Director means a member of the Board of Directors who is not an
employee of the Company or any Affiliate.

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Option means an ISO or NQSO granted under the Plan.

Participant means a Key Employee, Non-Employee Director, consultant or advisor
of the Company to whom one or more Stock Rights are granted under the Plan. As
used herein, "Participant" shall include "Participant's Survivors" and a
Participant' s permitted transferees where the context requires.

Participant's Survivors means a deceased Participant's legal representatives
and/or any person or persons who acquires the Participant's rights to a Stock
Right by will or by the laws of descent or distribution.

Plan means this Vertex Pharmaceuticals Incorporated 1996 Stock and Option Plan,
as amended from time to time.

Shares means shares of the Common Stock as to which Stock Rights have been or
may be granted under the Plan or any shares of capital stock into which the
Shares are changed or for which they are exchanged within the provisions of
Section 3 of the Plan. The Shares issued upon exercise of Stock Rights granted
under the Plan may be authorized and unissued shares or shares held by the
Company in its treasury, or both.

Stock Agreement means an agreement between the Company and a Participant
executed and delivered pursuant to the Plan, in such form as the Committee shall
approve.

Stock Award means an award of Shares or the opportunity to make a direct
purchase of Shares of the Company granted under the Plan.

Stock Right means a right to Shares of the Company granted pursuant to the Plan
as an ISO, an NQSO or a Stock Award.

2. PURPOSES OF THE PLAN

      The Plan is intended to encourage ownership of Shares by Key Employees,
Non-Employee Directors and certain consultants and advisors to the Company in
order to attract such persons, to induce them to work for the benefit of the
Company or of an Affiliate and to provide additional incentive for them to
promote the success of the Company or of an Affiliate. The Plan provides for the
granting of Stock Rights to Key Employees, Non-Employee Directors, consultants
and advisors of the Company.

3. SHARES SUBJECT TO THE PLAN

      The number of Shares subject to this Plan as to which Stock Rights may be
granted from time to time shall be 13,000,000 plus the number of shares of
Common Stock previously reserved for the granting of options under the Vertex
Pharmaceuticals Incorporated 1991 Stock Option Plan and 1994 Stock and Option
Plan but not granted thereunder, or the equivalent of such number of Shares
after the Committee, in its sole discretion, has interpreted the effect of any
stock split, stock dividend, combination, recapitalization or similar
transaction in accordance with Section 17 of this Plan.

      If an Option granted hereunder or any option granted under the 1991 Stock
Option Plan or 1994 Stock and Option Plan ceases to be "outstanding", in whole
or in part, or if the Company shall reacquire any Shares issued pursuant to
Stock Awards, the Shares which were subject to such Option and any Shares so
reacquired by the Company shall also be available for the granting of other
Stock Rights under the Plan. Any Stock Right shall be treated as "outstanding"

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until such Stock Right is exercised in full, or terminates or expires under the
provisions of the Plan, or by agreement of the parties to the pertinent Stock
Agreement, without having been exercised in full.

4. ADMINISTRATION OF THE PLAN

      The Plan shall be administered by the Committee. Subject to the provisions
of the Plan, the Committee is authorized to:

      a.    Interpret the provisions of the Plan or of any Option, Stock Award
            or Stock Agreement and to make all rules and determinations which it
            deems necessary or advisable for the administration of the Plan;

      b.    Determine which employees of the Company or of an Affiliate shall be
            designated as Key Employees and which of the Key Employees,
            Non-Employee Directors, consultants and advisors of the Company and
            its Affiliates shall be granted Stock Rights;

      c.    Determine the number of Shares and exercise price for which a Stock
            Right or Stock Rights shall be granted;

      d.    Specify the terms and conditions upon which a Stock Right or Stock
            Rights may be granted; and

      e.    In its discretion, accelerate the date of exercise of any
            installment of any Option; provided that the Committee shall not,
            without the consent of the Option holder accelerate the exercise
            date of any installment of any Option granted to any Key Employee as
            an ISO (and not previously converted into an NQSO pursuant to
            Section 20) if such acceleration would violate the annual vesting
            limitation contained in Section 422(d) of the Code, as described in
            Section 6.2.3.

provided, however, that all such interpretations, rules, determinations, terms
and conditions shall be made and prescribed in the context of preserving the tax
status under Code Section 422 of those Options which are designated as ISOs and
shall be in compliance with any applicable provisions of Rule 16b-3 under the
Exchange Act. Subject to the foregoing, the interpretation and construction by
the Committee of any provisions of the Plan or of any Stock Right granted under
it shall be final, unless otherwise determined by the Board of Directors, if the
Committee is other than the Board of Directors.

      The Committee may employ attorneys, consultants, accountants or other
persons, and the Committee, the Company and its officers and directors shall be
entitled to rely upon the advice, opinions or valuations of such persons. All
actions taken and all interpretations and determinations made by the Committee
in good faith shall be final and binding upon the Company, all Participants, and
all other interested persons. No member or agent of the Committee shall be
personally liable for any action, determination, or interpretation made in good
faith with respect to this Plan or grants hereunder. Each member of the
Committee shall be indemnified and held harmless by the Company against any cost
or expense (including counsel fees) reasonably incurred by him or liability
(including any sum paid in settlement of a claim with the approval of the
Company) arising out of any act or omission to act in connection with this Plan
unless arising out of such member's own fraud or bad faith. Such indemnification
shall be in addition to any rights of indemnification the members of the
Committee may have as directors or otherwise under the by-laws of the Company,
or any agreement, vote of stockholders or disinterested directors, or otherwise.

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5. ELIGIBILITY FOR PARTICIPATION

      The Committee shall, in its sole discretion, name the Participants in the
Plan, provided, however, that each Participant must be a Key Employee,
Non-Employee Director, consultant or advisor of the Company or of an Affiliate
at the time a Stock Right is granted. Notwithstanding the foregoing, the
Committee may authorize the grant of a Stock Right to a person not then an
employee, Non-Employee Director, consultant or advisor of the Company or of an
Affiliate; provided, however, that the actual grant of such Stock Right shall be
conditioned upon such person becoming eligible to become a Participant at or
prior to the time of execution of the Stock Agreement evidencing such Stock
Right. The granting of any Stock Right to any individual shall neither entitle
that individual to, nor disqualify him or her from, participation in other
grants of Stock Rights. Nothwithstanding anything to the contrary contained in
this Plan, no Stock Rights shall be granted to any director or officer of the
Company except in accordance with the applicable rules of the Nasdaq Stock
Market or other securities market where the Common Stock is traded.

6. TERMS AND CONDITIONS OF OPTIONS

      6.1 General. Each Option shall be set forth in writing in a Stock
Agreement, duly executed by the Company and, to the extent required by law or
requested by the Company, by the Participant. The Committee may provide that
Options be granted subject to such conditions as the Committee may deem
appropriate including, without limitation, subsequent approval by the
shareholders of the Company of this Plan or any amendments thereto, provided,
however, that the option price per share of the Shares covered by each Option
shall not be less than the Fair Market Value per share of the Common Stock on
the date of grant (or par value if greater). Each Stock Agreement shall state
the number of Shares to which it pertains, the date or dates on which it first
is exercisable and the date after which it may no longer be exercised. Option
rights may accrue or become exercisable in installments over a period of time,
or upon the achievement of certain conditions or the attainment of stated goals
or events. Exercise of any Option may be conditioned upon the Participant's
execution of a Share purchase agreement in form satisfactory to the Committee
providing for certain protections for the Company and its other shareholders,
including requirements that the Participant's or the Participant's Survivors'
right to sell or transfer the Shares may be restricted, and the Participant or
the Participant's Survivors may be required to execute letters of investment
intent and to acknowledge that the Shares will bear legends noting any
applicable restrictions.

      6.2 ISOs. ISOs shall be issued only to Key Employees. In addition to the
minimum standards set forth in Section 6.1, ISOs shall be subject to the
following terms and conditions, with such additional restrictions or changes as
the Committee determines are appropriate but not in conflict with Code Section
422 and relevant regulations and rulings of the Internal Revenue Service:

            6.2.1 ISO Option Price: The Option price per Share of the Shares
subject to an ISO shall not be less than one hundred percent (100%) of the Fair
Market Value per share of the Common Stock on the date of grant of the ISO;
provided, however that the Option price per share of the Shares subject to an
ISO granted to a Participant who owns, directly or by reason of the applicable
attribution rules in Code Section 424(d), more than ten percent (10%) of the
total combined voting power of all classes of share capital of the Company or an
Affiliate, shall not be less than one hundred ten percent (110%) of the said
Fair Market Value on the date of grant.

            6.2.2 Term of ISO: Each ISO shall expire not more than ten (10)
years from the date of grant; provided, however, that an ISO granted to a
Participant who owns, directly or by reason of the applicable attribution rules
in Code Section 424(d), more than ten percent (10%) of

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the total combined voting power of all classes of share capital of the Company
or an Affiliate, shall expire not more than five (5) years from the date of
grant.

            6.2.3 Limitation on Grant of ISOs: No ISOs shall be granted after
December 8, 2004, the date which is ten (10) years from the earlier of the date
of the adoption of this Plan and the date of the approval of the Plan by the
shareholders of the Company.

      6.3 Non-Employee Directors' Options. Each Non-Employee Director, upon
first being elected or appointed to the Board of Directors, shall be granted an
NQSO to purchase 20,000 Shares. Each such Option shall (i) have an exercise
price equal to the Fair Market Value (per share) on the date of grant of the
Option, (ii) have a term of ten (10) years, and (ii) shall become cumulatively
exercisable in sixteen (16) equal quarterly installments, upon completion of
each full quarter of service on the Board of Directors after the date of grant.
In addition, on June 1 of each year, each Non-Employee Director shall be granted
a NQSO to purchase 7,500 shares. Each such Option shall (i) have an exercise
price equal to the Fair Market Value (per share) on the date of grant of such
Option, (ii) have a term of ten (10) years, and (iii) be exercisable in full
immediately on the date of grant. Any director entitled to receive an Option
grant under this Section may elect to decline the Option. Notwithstanding the
provisions of Section 24 concerning amendment of the Plan, the provisions of
this Subsection shall not be amended more than once every six months, other than
to comport with changes in the Code, the Employee Retirement Income Security
Act, or the rules thereunder. Notwithstanding anything to the contrary contained
in any other provisions of this Plan, the Committee shall have no discretion to
vary the terms of Options granted under this Section 6.3 from those set forth
herein. The provisions of Sections 11, 13 and 14 below shall not apply to
Options granted pursuant to this Subsection.

      6.4 Limitation on Number of Options Granted. Notwithstanding anything in
this Plan to the contrary, no Participant shall be granted Options in any
calendar year for the purchase of more than 200,000 Shares (subject to
adjustment pursuant to Section 17 to the extent consistent with Section 162(m)
of the Code).

7. TERMS AND CONDITIONS OF STOCK AWARDS

      Each Stock Award shall be set forth in a Stock Agreement, duly executed by
the Company and, to the extent required by law or requested by the Company, by
the Participant. The Stock Agreement shall be in the form approved by the
Committee, with such changes and modifications to such form as the Committee, in
its discretion, shall approve with respect to any particular Participant or
Participants. The Stock Agreement shall contain terms and conditions which the
Committee determines to be appropriate and in the best interest of the Company;
provided, however, that the purchase price per share of the Shares covered by
each Stock Award shall not be less than the par value per Share. Each Stock
Agreement shall state the number of Shares to which the Stock Award pertains,
the date prior to which the Stock Award must be exercised by the Participant,
and the terms of any right of the Company to reacquire the Shares subject to the
Stock Award, including the time and events upon which such rights shall accrue
and the purchase price therefor, and any restrictions on the transferability of
such Shares. All Stock Awards shall be subject to restrictions on transfer and a
right of repurchase by the Company and shall vest over a period of not less than
three years from the date of grant, or upon the later of one year after the date
of grant or the achievement of such performance objectives as shall be approved
by the Committee when granting the Stock Award. The Committee, in its
discretion, may accelerate the vesting of Stock Awards in the event of (a) death
or disability of the Participant, or (b) in connection with an Acquisition as
defined in Section 17.2.

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8. EXERCISE OF STOCK RIGHTS AND ISSUANCE OF SHARES

      A Stock Right (or any part or installment thereof) shall be exercised by
giving written notice to the Company, together with provision for payment of the
full purchase price in accordance with this Section for the Shares as to which
such Stock Right is being exercised, and upon compliance with any other
condition(s) set forth in the Stock Agreement. Such written notice shall be
signed by the person exercising the Stock Right, shall state the number of
Shares with respect to which the Stock Right is being exercised and shall
contain any representation required by the Plan or the Stock Agreement.

      Payment of the purchase price for the Shares as to which such Stock Right
is being exercised shall be made (a) in United States dollars in cash or by
check acceptable to the Committee, or (b) at the discretion of the Committee,
(i) through delivery of shares of Common Stock (which, in the case of shares
acquired from the Company, have been held by the Participant for at least six
(6) months) not subject to any restriction under any plan and having a fair
market value equal as of the date of exercise to the cash exercise price of the
Stock Right, determined in good faith by the Committee, or (ii) in accordance
with a cashless exercise program established with a securities brokerage firm,
and approved by the Company, or (iii) by any other means (excluding, however,
delivery of a promissory note of the Participant) which the Committee determines
to be consistent with the purpose of this Plan and applicable law, or (iv) by
any combination of the foregoing. Notwithstanding the foregoing, the Committee
shall accept only such payment on exercise of an ISO as is permitted by Section
422 of the Code.

      The Company shall then as soon as is reasonably practicable deliver the
Shares as to which such Stock Right was exercised to the Participant (or to the
Participant's Survivors, as the case may be). It is expressly understood that
the delivery of the Shares may be delayed by the Company in order to comply with
any law or regulation which requires the Company to take any action with respect
to the Shares prior to their issuance. The Shares shall, upon delivery, be fully
paid, non-assessable Shares.

9. RIGHTS AS A SHAREHOLDER

      No Participant to whom a Stock Right has been granted shall have rights as
a shareholder with respect to any Shares covered by such Stock Right, except
after due exercise thereof and tender of the full purchase price for the Shares
being purchased pursuant to such exercise and registration of the Shares in the
Company's share register in the name of the Participant.

10. ASSIGNABILITY AND TRANSFERABILITY OF STOCK RIGHTS

      ISOs and, except as otherwise provided by the Committee, NQSOs and Stock
Awards shall not be transferable by the Participant other than by will or by the
laws of descent and distribution or pursuant to a qualified domestic relations
order as defined by the Code or Title I of the Employee Retirement Income
Security Act or the rules thereunder, provided, however, that the designation of
a beneficiary of a Stock Right by a Participant shall not be deemed a transfer
prohibited by this Section. Except as provided in the preceding sentence or as
otherwise permitted under an NQSO or Stock Award Stock Agreement, a Stock Right
shall be exercisable, during the Participant's lifetime, only by such
Participant (or by his or her legal representative) and shall not be assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment or similar process. Any
attempted transfer, assignment, pledge, hypothecation or other disposition of
any Stock Right or of any rights granted thereunder contrary to the provisions
of this Plan, or the levy of any attachment or similar process upon a Stock
Right, shall be null and void.

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11. EFFECT OF TERMINATION OF SERVICE

      11.1 Except as otherwise provided in the pertinent Stock Agreement or as
otherwise provided in Sections 12, 13 or 14, if a Participant ceases to be an
employee, director, consultant or advisor with the Company and its Affiliates
(for any reason other than termination "for cause", Disability, or death) (a
"Termination of Service") before the Participant has exercised all Stock Rights,
the Participant may exercise any Stock Right granted to him or her to the extent
that the Stock Right is exercisable on the date of such Termination of Service,
but only within the originally prescribed term of the Stock Right.

      11.2 The provisions of this Section, and not the provisions of Section 13
or 14, shall apply to a Participant who subsequently becomes disabled or dies
after the Termination of Service; provided, however, that in the case of a
Participant's death within three (3) months after the Termination of Service,
the Participant's Survivors may exercise the Stock Right within one (1) year
after the date of the Participant's death, but in no event after the date of
expiration of the term of the Stock Right.

      11.3 Notwithstanding anything herein to the contrary, if subsequent to a
Participant's Termination of Service, but prior to the exercise of a Stock
Right, the Committee determines that, either prior or subsequent to the
Participant's Termination of Service, the Participant engaged in conduct which
would constitute "cause" (as defined in Section 12), then such Participant shall
forthwith cease to have any right to exercise any Stock Right.

      11.4 Absence from work with the Company or an Affiliate because of
temporary disability or a leave of absence for any purpose, shall not, during
the period of any such absence in accordance with Company policies, be deemed,
by virtue of such absence alone, a Termination of Service, except as the
Committee may otherwise expressly provide.

      11.5 A change of employment or other service within or among the Company
and its Affiliates shall not be deemed a Termination of Service, so long as the
Participant continues to be an employee, director, consultant or advisor of the
Company or any Affiliate.

12. EFFECT OF TERMINATION OF SERVICE FOR "CAUSE"

      Except as otherwise provided in the pertinent Stock Agreement, in the
event of a Termination of Service of a Participant "for cause" all outstanding
and unexercised Stock Rights as of the date the Participant is notified his or
her service is terminated "for cause" will immediately be forfeited. For
purposes of this Section 12, "cause" shall include (and is not limited to)
dishonesty with respect to the Company and its Affiliates, insubordination,
substantial malfeasance or non-feasance of duty, unauthorized disclosure of
confidential information, conduct substantially prejudicial to the business of
the Company or any Affiliate, and termination by the Participant in violation of
an agreement by the Participant to remain in the employ of the Company of an
Affiliate. The determination of the Committee as to the existence of cause will
be conclusive on the Participant and the Company. "Cause" is not limited to
events which have occurred prior to a Participant's Termination of Service, nor
is it necessary that the Committee's finding of "cause" occur prior to
termination. If the Committee determines, subsequent to a Participant's
Termination of Service but prior to the exercise of a Stock Right, that either
prior or subsequent to the Participant's termination the Participant engaged in
conduct which would constitute "cause," then the right to exercise any Stock
Right shall be forfeited. Any definition in an agreement between a Participant
and the Company or an Affiliate which contains a conflicting definition of
"cause" for termination and which is in effect at the time of such termination
shall supersede the definition in this Plan with respect to that Participant.

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13. EFFECT OF TERMINATION OF SERVICE FOR DISABILITY

      Except as otherwise provided in the pertinent Stock Agreement, in the
event of a termination of service with the Company and its Affiliates by reason
of Disability, the Disabled Participant may exercise any Stock Right granted to
him or her to the extent exercisable but not exercised on the date of
Disability. A Disabled Participant may exercise such rights only within a period
of not more than one (1) year after the date that the Participant became
Disabled or, if earlier, within the originally prescribed term of the Stock
Right.

      The Committee shall make the determination both of whether Disability has
occurred and of the date of its occurrence (unless a procedure for such
determination is set forth in another agreement between the Company and such
Participant, in which case such procedure shall be used for such determination).
If requested, the Participant shall be examined by a physician selected or
approved by the Committee, the cost of which examination shall be paid for by
the Company.

14. EFFECT OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT

      Except as otherwise provided in the pertinent Stock Agreement, in the
event of death of a Participant while the Participant is an employee, director,
consultant or advisor of the Company or of an Affiliate, any Stock Rights
granted to such Participant may be exercised by the Participant's Survivors to
the extent exercisable but not exercised on the date of death. Any such Stock
Right must be exercised within one (1) year after the date of death of the
Participant but in no event after the date of expiration of the term of the
Stock Right.

15. PURCHASE FOR INVESTMENT

      Unless the offering and sale of the Shares to be issued upon the
particular exercise of an Stock Right shall have been effectively registered
under the Securities Act of 1933, as now in force or hereafter amended (the
"1933 Act"), the Company shall be under no obligation to issue the Shares
covered by such exercise unless and until the following conditions have been
fulfilled:

      a.    The person(s) who exercise such Stock Right shall warrant to the
            Company, at the time of such exercise or receipt, as the case may
            be, that such person(s) are acquiring such Shares for their own
            respective accounts, for investment, and not with a view to, or for
            sale in connection with, the distribution of any such Shares, in
            which event the person(s) acquiring such Shares shall be bound by
            the provisions of the following legend which shall be endorsed upon
            the certificate(s) evidencing their Shares issued pursuant to such
            exercise or such grant:

                  "The shares represented by this certificate have been taken
                  for investment and they may not be sold or otherwise
                  transferred by any person, including a pledgee, unless (1)
                  either (a) a Registration Statement with respect to such
                  shares shall be effective under the Securities Act of 1933, as
                  amended, or (b) the Company shall have received an opinion of
                  counsel satisfactory to it that an exemption from registration
                  under such Act is then available, and (2) there shall have
                  been compliance with all applicable state securities laws.

      b.    The Company shall have received an opinion of its counsel that the
            Shares may be issued upon such particular exercise in compliance
            with the 1933 Act without registration thereunder.

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      The Company may delay issuance of the Shares until completion of any
action or obtaining of any consent which the Company deems necessary under any
applicable law (including, without limitation, state securities or "blue sky"
laws).

16. DISSOLUTION OR LIQUIDATION OF THE COMPANY

      Upon the dissolution or liquidation of the Company (other than in
connection with a transaction subject to the provisions of Section 17.2), all
Stock Rights granted under this Plan which as of such date shall not have been
exercised will terminate and become null and void; provided, however, that if
the rights of a Participant have not otherwise terminated and expired, the
Participant will have the right immediately prior to such dissolution or
liquidation to exercise any Stock Right to the extent that such Stock Right is
exercisable as of the date immediately prior to such dissolution or liquidation.

17. ADJUSTMENTS

      Upon the occurrence of any of the following events, a Participant's rights
with respect to any Stock Right granted to him or her hereunder which have not
previously been exercised in full shall be adjusted as hereinafter provided,
unless otherwise specifically provided in the written agreement between the
Participant and the Company relating to such Stock Right or in any employment
agreement between a Participant and the Company or an Affiliate:

      17.1 Stock Dividends and Stock Splits. If the shares of Common Stock shall
be subdivided or combined into a greater or smaller number of shares or if the
Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock deliverable upon
the exercise of such Stock Right shall be appropriately increased or decreased,
and appropriate adjustments shall be made in the purchase price per share to
reflect such subdivision, combination or stock dividend.

      17.2 Consolidations or Mergers. In the event of a consolidation or merger
in which the Company is not the surviving corporation or which results in the
acquisition of substantially all the Company's outstanding stock by a single
person or entity or by a group of persons and/or entities acting in concert, or
in the event of the sale or transfer of substantially all the Company's assets
(any of the foregoing, an "Acquisition"), all then outstanding Options shall
terminate unless assumed pursuant to clause (i) below; provided, that either (i)
the Committee shall provide for the surviving or acquiring entity or an
affiliate thereof to assume the outstanding Options or grant replacement options
in lieu thereof, any such replacement to be upon an equitable basis as
determined by the Committee, or (ii) if there is no such assumption or
substitution, all outstanding Options shall become immediately and fully
exercisable immediately prior to the Acquisition, notwithstanding any
restrictions or vesting conditions set forth therein.

      17.3 Recapitalization or Reorganization. In the event of a
recapitalization or reorganization of the Company (other than a transaction
described in Section 17.2 above) pursuant to which securities of the Company or
of another corporation are issued with respect to the outstanding shares of
Common Stock, a Participant upon exercising a Stock Right shall be entitled to
receive for the purchase price paid upon such exercise the securities he or she
would have received if he or she had exercised such Stock Right prior to such
recapitalization or reorganization.

      17.4 Modification of ISOs. Notwithstanding the foregoing, any adjustments
made pursuant to Section 17.1, 17.2 or 17.3 with respect to ISOs shall be made
only after the Committee determines whether such adjustments would constitute a
"modification" of such ISOs (as that term is defined in Section 424(h) of the
Code) or would cause any adverse tax consequences for the holders of such ISOs.
If the Committee determines that such adjustments made with respect to ISOs
would constitute a modification of such ISOs, it may refrain from making such

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adjustments, unless the holder of an ISO specifically requests in writing that
such adjustment be made and such writing indicates that the holder has full
knowledge of the consequences of such "modification" on his or her income tax
treatment with respect to the ISO.

18. ISSUANCES OF SECURITIES

      Except as expressly provided herein, no issuance (including for this
purpose the delivery of shares held in treasury) by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of Shares subject to Options. Except as expressly provided
herein, no adjustments shall be made for dividends paid in cash or in property
(including without limitation, securities) of the Company.

19. FRACTIONAL SHARES

      No fractional share shall be issued under the Plan and the person
exercising any Stock Right shall receive from the Company cash in lieu of any
such fractional share equal to the Fair Market Value thereof determined in good
faith by the Board of Directors.

20. CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS: TERMINATION OF ISOs

      Any Options granted under this Plan which do not meet the requirements of
the Code for ISOs shall automatically be deemed to be NQSOs without further
action on the part of the Committee. The Committee, at the written request of
any Participant, may in its discretion take such actions as may be necessary to
convert such Participant's ISOs (or any portion thereof) that have not been
exercised on the date of conversion into NQSOs at any time prior to the
expiration of such ISOs, regardless of whether the Participant is an employee of
the Company or an Affiliate at the time of such conversion. Such actions may
include, but not be limited to, extending the exercise period or reducing the
exercise price of the appropriate installments of such Options. At the time of
such conversion, the Committee (with the consent of the Participant) may impose
such conditions on the exercise of the resulting NQSOs as the Committee in its
discretion may determine, provided that such conditions shall not be
inconsistent with this Plan. Nothing in the Plan shall be deemed to give any
Participant the right to have such Participant's ISOs converted into NQSOs, and
no such conversion shall occur until and unless the Committee takes appropriate
action. The Committee, with the consent of the Participant, may also terminate
any portion of any ISO that has not been exercised at the time of such
termination.

21. WITHHOLDING

      In the event that any federal, state, or local income taxes, employment
taxes, Federal Insurance Contributions Act ("FICA") withholdings or other
amounts are required by applicable law or governmental regulation to be withheld
from the Participant's salary, wages or other remuneration in connection with
the exercise of a Stock Right or a Disqualifying Disposition (as defined in
Section 22), the Participant shall advance in cash to the Company, or to any
Affiliate of the Company which employs or employed the Participant, the amount
of such withholdings unless a different withholding arrangement, including the
use of shares of the Company's Common Stock, is authorized by the Committee (and
permitted by law), provided, however, that with respect to persons subject to
Section 16 of the Exchange Act, any such withholding arrangement shall be in
compliance with any applicable provisions of Rule 16b-3 promulgated under
Section 16 of the Exchange Act. For purposes hereof, the Fair Market Value of
any shares withheld for purposes of payroll withholding shall be determined in
the manner provided in Section 1 above, as of the most recent practicable date
prior to the date of exercise. If the Fair

                                      -10-
<PAGE>

Market Value of the shares withheld is less than the amount of payroll
withholdings required, the Participant my be required to advance the difference
in cash to the Company or the Affiliate employer. The Committee in its
discretion may condition the exercise of an Option for less than the then Fair
Market Value on the Participant's payment of such additional withholding. In no
event shall shares be withheld from any award in satisfaction of tax withholding
requirements in an amount that exceeds the minimum tax withholding requirements
of law.

22. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION

      Each Key Employee who receives an ISO must agree to notify the Company in
writing immediately after the Key Employee makes a "Disqualifying Disposition"
of any Shares acquired pursuant to the exercise of an ISO. A Disqualifying
Disposition is any disposition (as defined in Section 424(c) of the Code) of
such shares before the later of (a) two years from the date the Key Employee was
granted the ISO, or (b) one year after the date the Key Employee acquired Shares
by exercising the ISO. If the Key Employee has died before such Shares are sold,
the notice provisions of this Section 22 shall not apply.

23. EFFECTIVE DATE; TERMINATION OF THE PLAN

      The Plan shall be effective on December 12, 1996, the date of its approval
by the Board of Directors. The Plan will terminate on December 12, 2006. The
Plan may be terminated at an earlier date by vote of the Board of Directors;
provided, however, that any such earlier termination will not affect any Stock
Rights granted or Stock Agreements executed prior to the effective date of such
termination.

24. AMENDMENT OF THE PLAN; AMENDMENT OF STOCK RIGHTS

      The Plan may be amended by the stockholders of the Company. The Plan may
also be amended by the Board of Directors or the Committee, including, without
limitation, to the extent necessary to qualify any or all outstanding Stock
Rights granted under the Plan or Stock Rights to be granted under the Plan for
favorable federal income tax treatment (including deferral of taxation upon
exercise) as may be afforded incentive stock options under Section 422 of the
Code, to the extent necessary to ensure that Stock Rights granted or to be
granted under the Plan are in accordance with Rule 16b-3 under the Exchange Act,
and to the extent necessary to qualify the shares issuable upon exercise of any
outstanding Stock Rights granted, or Stock Rights to be granted, under the Plan
for listing on any national securities exchange or quotation in any national
automated quotation system of securities dealers. No modification or amendment
of the Plan shall adversely affect a Participant's rights under a Stock Right
previously granted to the Participant without such Participant's consent.

      In its discretion, the Committee may amend any term or condition of any
outstanding Stock Right, provided, (i) such term or condition as amended is
permitted by the Plan, (ii) if the amendment is adverse to the Participant, such
amendment shall be made only with the consent of the Participant, (iii) any such
amendment of any ISO shall be made only after the Committee determines whether
such amendment would constitute a "modification" of any Stock Right which is an
ISO (as that term is defined in Section 424(h) of the Code) or would cause any
adverse tax consequences for the holder of such ISO, and (iv) with respect to
any Stock Right held by any Participant who is subject to the provisions of
Section 16(a) of the Exchange Act, any such amendment shall be made only after
the Committee determines whether such amendment would constitute the grant of a
new Stock Right. Notwithstanding the foregoing, the Committee may not reprice
any Options, either directly through a reduction of the exercise price or
indirectly by cancellation of outstanding Options in return for an immediate
grant of Options with a lower exercise price.

                                      -11-
<PAGE>

25. EMPLOYMENT OR OTHER RELATIONSHIP

      Nothing in this Plan or any Stock Agreement shall be deemed to prevent the
Company or an Affiliate from terminating the employment, consultancy or director
status of a Participant, nor to prevent a Participant from terminating his or
her own employment, consultancy or director status or to give any Participant a
right to be retained in employment or other service by the Company or any
Affiliate for any period of time.

26. GOVERNING LAW

      This Plan shall be construed and enforced in accordance with the law of
The Commonwealth of Massachusetts.

                                      -12-<PAGE>

                                  Exhibit 10.9

                              EMPLOYMENT AGREEMENT

      THIS AGREEMENT, dated as of 3rd October, 1994 (the "Effective Date"), is
made by and among VERTEX PHARMACEUTICALS INCORPORATED, a Massachusetts
corporation ("Vertex"), its wholly-owned subsidiary, VERTEX PHARMACEUTICALS
(EUROPE) LIMITED, a U.K. limited liability company (the "Company"), and IAIN
P.M. BUCHANAN (the "Executive").

Recitals:

      The Company wishes to engage the services of the Executive as a key
employee of the Company and the Executive wishes to perform such services. The
Board of Directors of Vertex has determined that it is in the best interests of
the Company and Vertex to assure that the Company will have the continued
dedication of the Executive. The Board believes that it is important to
encourage the Executive's full attention and dedication to the Company currently
and in the event of any threatened or pending Change of Control of Vertex (as
hereinafter defined), and to provide the Executive with compensation
arrangements which provide the Executive with individual financial security in
the event of certain terminations of employment, including termination upon a
Change of Control, and which are competitive with those of other corporations.
In order to accomplish these objectives Vertex, the Company and the Executive
agree as follows:

1. Definitions. For purposes of this Agreement:

      1.1 "Cause" shall mean (i) the willful and continued failure by the
Executive to substantially perform his duties with the Company (other than any
such failure resulting from the Executive's incapacity due to physical or mental
illness or any such failure after the issuance of a notice of termination in
accordance with Section 11.8 by the Executive for Good Reason, as hereinafter
defined) after a written demand for substantial performance is delivered to the
Executive by the Board of Directors of Vertex, which demand specifically
identifies the manner in which the Board believes that the Executive has not
substantially performed his duties, or (ii) the willful engaging by the
Executive in conduct which is demonstrably and materially injurious to the
Company, monetarily or otherwise, or (iii) any conduct on the part of the
Executive (whether or not in the course of his duties) which, in the reasonable
opinion of the Board, has or is likely to bring himself, the Company or Vertex
into serious disrepute, or which causes the Board to lose all trust and
confidence in him, or (iv) the voluntary resignation by the Executive of his
office as a director of the Company or his disqualification from being a
director, or (v) the Executive becoming bankrupt or making any arrangement or
composition with his creditors generally.

      1.2 "Disability" shall have the same meaning as in the Company's long-term
disability insurance coverage in effect on the applicable date, or, if the
Company carries no such insurance, the Executive's inability to perform the
Executive's duties hereunder for a period of 90 consecutive days by reason of
physical or mental illness or incapacity.

                                      -1-
<PAGE>

      1.3 "Good Reason" shall mean:

(i) at any time during the term hereof, without the Executive's express written
consent, the occurrence of any of the following:

      (a)   a substantial adverse alteration in the nature or status of the
            Executive's position or responsibilities or the condition of his
            employment;

      (b)   a reduction by the Company in the Executive's annual base salary;

      (c)   the failure by the Company to pay to the Executive any portion of
            his current compensation or compensation under any deferred
            compensation program of the Company within seven (7) days after the
            date such compensation is due;

      (d)   any purported termination by the Company of the Executive's
            employment which is not effected pursuant to a notice of termination
            satisfying the requirements of the applicable provisions of this
            Agreement, which purported termination shall not be effective for
            purposes of this Agreement;

      (e)   any act or omission to act on the part of the Company which causes
            the Executive to lose all trust and confidence in it as his
            employer; or

(ii) during the nine (9) month period following a Change in Control of Vertex
(as hereinafter defined):

      (a)   the assignment to the Executive of any duties inconsistent in any
            respect with the Executive's position (including status, offices,
            titles, and reporting requirements), authority, duties or
            responsibilities as contemplated by Section 4 of this Agreement or
            any other action by the Company which results in a diminishment in
            such position, authority, duties or responsibilities; or

      (b)   the failure by the Company to continue in effect after such Change
            in Control any material compensation or benefit plan in which the
            Executive participates immediately prior to such Change in Control,
            unless an equitable arrangement has been made with respect to such
            plan, on a basis not materially less favorable, both in terms of the
            amount of benefits provided and the level of his participation
            relative to other participants, or the failure of the Company to
            continue the Executive's participation therein (or in such
            substitute or alternative plan); or

(iii) the failure of the Company or Vertex to obtain a satisfactory agreement
from any successor to assume and agree to perform this Agreement, as
contemplated in Section 11.5.1 hereof

      1.4 "Change in Control" shall mean a change in control of Vertex of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the U.S. Securities Exchange
Act of 1934, as amended (the "Exchange Act"), whether or not Vertex is in fact
required to comply therewith; provided, that, without limitation, a Change in
Control shall be deemed to have occurred if:

      (A) any individual, firm, corporation or other entity ("Person") becomes
an Acquiring Person (as hereinafter defined), except to the extent that such
Person is deemed to have acquired Beneficial Ownership (as hereinafter defined)
of 20% or more of the voting shares of Vertex because all or some of such voting
shares were acquired pursuant to an Approved Transaction (as hereinafter
defined);

                                      -2-
<PAGE>

      (B) during any period of twenty-four (24) consecutive months (not
including any period prior to the Effective Date), individuals who at the
beginning of such period constitute the Board of Directors of Vertex and any new
directors (other than a director designated by a person who has entered into an
agreement with Vertex to effect a transaction described in paragraphs (A), (C)
or (D) of this section) whose election by the Board of Directors of Vertex or
nomination for election by the stockholders of Vertex was approved by a vote of
at least two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof; or

      (C) the stockholders of Vertex approve a merger or consolidation of Vertex
with any other corporation, other than (a) a merger or consolidation which would
result in the voting shares of Vertex outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting shares of the surviving entity) at least 50% of the combined voting
shares of Vertex or such surviving entity outstanding immediately after such
merger or consolidation or (b) a merger or consolidation effected to implement a
recapitalization of Vertex (or similar transaction) in which no Person becomes
an Acquiring Person; or

      (D) the stockholders of Vertex approve a plan of complete liquidation of
Vertex or an agreement for the sale or disposition by Vertex of all or
substantially all of Vertex's assets.

      For purposes hereof:

            1.4.1 "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 20% or more of the shares of the voting shares of Vertex
then outstanding, but shall not include Vertex, any subsidiary of Vertex, any
employee benefit plan of Vertex or any subsidiary of Vertex, any entity holding
Common Shares for or pursuant to the terms of any such plan, or any Person who,
alone or together, with all Affiliates and Associates of such Person, is, as of
the Effective Date of this Agreement, the Beneficial Owner of 20% or more of the
voting shares of Vertex. Notwithstanding the foregoing, no Person shall become
an "Acquiring Person" as the result of an acquisition of Common Shares by Vertex
which, by reducing the number of shares outstanding, increases the proportionate
number of shares beneficially owned by such Person to 20% or more of the voting
shares of Vertex outstanding; provided, however, that if a Person shall become
the Beneficial Owner of 20% or more of the Common Shares of Vertex then
outstanding by reason of share purchases by Vertex and shall, after such share
purchases by Vertex, become the Beneficial Owner of any additional voting shares
of Vertex, then such Person shall be deemed to be an "Acquiring Person".

            1.4.2 "Affiliates" and "Associates" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.

            1.4.3 "Beneficial Owner" and "Beneficial Ownership" shall have the
respective meanings ascribed to such terms in Rule 13d-3 of the General Rules
and Regulations under the Exchange Act.

            1.4.4 "Approved Transaction" shall mean any purchase of Beneficial
Ownership of voting shares of Vertex directly from Vertex in a transaction
expressly and affirmatively approved by a vote of at least two thirds (2/3) of
those members of the Board of Directors of Vertex, voting separately and as a
subclass of directors on such transaction, who are not and do not, pursuant to
such transaction, become Acquiring Persons or Affiliates or Associates of an
Acquiring Person or representatives of an Acquiring Person or of any such
Affiliate or Associate.

                                      -3-
<PAGE>

2. Employment.

      The Company hereby agrees to employ the Executive, and the Executive
hereby accepts employment by the Company, upon the terms and conditions set
forth herein and in the schedules to this Agreement.

3. Effective Date and Term.

      This Agreement shall take effect as of the Effective Date, and shall
continue in full force and effect until terminated in accordance with the
provisions of this Agreement. The provisions of Sections 6 and 7 of this
Agreement shall survive any termination or expiration of this Agreement, in
accordance with their terms.

4. Title and Duties.

      The Executive shall promote the business and affairs of the Company as
Managing Director of the Company, with responsibility for performing such duties
consistent with such position as the Board of Directors of the Company may from
time to time designate. In addition, the Executive shall serve as Vice
President-Europe of Vertex, with responsibility for performing such duties
consistent with such position as the Chief Executive Officer of Vertex may from
time to time designate. Except as otherwise provided in this Agreement and
except for vacations and absences due to temporary illness in accordance with
Company policies in effect from time to time, the Executive shall devote his
full working time and efforts to the business and affairs of the Company, and
shall comply, to the best of his abilities, with all reasonable directions given
him by the Board of Directors of the Company or the Chief Executive Officer of
Vertex.

5. Compensation and Benefits.

      In consideration for the services rendered by the Executive under this
Agreement, the Executive shall receive a base salary as determined annually by
the Compensation Committee of the Board of Directors of Vertex or by the full
Board of Directors of Vertex, and such bonuses, stock option grants and other
compensation as may be determined from time to time by the Compensation
Committee or the Board of Directors of Vertex. In addition, the Executive shall
be entitled to such life insurance, health insurance and other employee benefits
as may be offered or generally made available by the Company to its executive
employees from time to time, and which are at least substantially equivalent to
those offered or generally made available to Vertex's United States executive
employees and which are described in Schedule 1 to this Agreement.

6. Termination; Severance.

      6.1 Death. In the event of termination by reason of the Executive's death,
the Executive's estate shall not be entitled to any compensation or benefits
hereunder accruing after the date of death, except as otherwise provided under
the Company's benefit plans as then in effect.

      6.2 Disability. In the event of the Executive's Disability, the
Executive's employment hereunder shall terminate, at the election of the
Company, upon not less than thirty (30) days prior written notice duly given to
the Executive, unless the Executive shall have returned to the full-time
performance of his duties hereunder prior to the effective date of such
termination. In the event of any dispute concerning the existence of a
Disability, such question shall be determined by a licensed physician selected
by the Company and reasonably acceptable to the Executive, whose determination
shall be final and binding upon the parties. The Executive shall submit to such
examinations and furnish such information as such physician may reasonably

                                      -4-
<PAGE>

request. In the event of termination by reason of Disability, the Executive
shall not be entitled to any compensation or benefits hereunder accruing after
the effective date of termination, except as otherwise provided under the
Company's benefit plans as then in effect.

      6.3 Termination for Cause. The Company may terminate the Executive's
employment hereunder at any time for Cause by written notice duly given to the
Executive. No such notice of termination for Cause shall be effective unless
accompanied by a copy of a resolution duly adopted by the affirmative vote of
not less than two-thirds (2/3) of the entire membership of the Board of
Directors of Vertex (after reasonable notice to the Executive and an opportunity
for the Executive to be heard before the Board), finding that in the good faith
opinion of the Board the Executive was guilty of the conduct set forth in
Section 1.1 and specifying the particulars in detail. In the event of
termination for Cause, the Executive shall not be entitled to any compensation
or benefits hereunder accruing after the effective date of termination, except
as otherwise provided under the Company's benefit plans as then in effect.

      6.4 Termination Without Cause. The Company may terminate the Executive's
employment hereunder without Cause by written notice duly given to the Executive
not less than six (6) months prior to the effective date of such termination.
Except as otherwise provided in Section 7 with respect to a termination after a
Change in Control, or as otherwise provided under the Company's benefit plans as
then in effect, the Executive shall not be entitled to any compensation or
benefits hereunder accruing after the effective date of termination. The Company
reserves the right to pay salary (less statutory deductions) in lieu of notice.

      6.5 Termination by the Executive. The Employee may terminate his
employment hereunder effective as of any date on or after 3 October 1995 upon
not less than six (6) months prior written notice to the Company.
Notwithstanding anything in this Agreement to the contrary, a termination of
employment by the Executive for Good Reason pursuant to written notice duly
given in accordance with Section 11.8 shall be deemed a termination of the
Executive by the Company without Cause, and not a voluntary termination by the
Executive. Except as otherwise provided in Section 7 with respect to a
termination after a Change in Control, in the event of termination for Good
Reason, the Executive shall be entitled to severance pay in an amount equal to
six (6) months' base salary (as in effect on the date the notice of termination
is given, payable in a lump sum within ten (10) business days after the
effective date of termination.

      6.6 Reduction for Certain Payments. Any payments to be made under this
Agreement following the termination of the Executive's employment pursuant to
any provision of this Agreement shall be reduced by an amount equal to any
amount(s) which the Company may then be obliged to pay to the Executive as a
result of that termination pursuant to the Employment Protection (Consolidation)
Act 1978 by way of a statutory redundancy payment, a Basic Award and/or the
maximum Compensatory Award.

7. Change in Control

      7.1 Termination Following Change in Control. Notwithstanding anything in
this Agreement to the contrary, if the Executive's employment is terminated
after a Change in Control shall have occurred, either (i) by the Company without
Cause, or (ii) by the Executive for Good Reason, the Executive shall, in
accordance with the resolution of the Company of even date herewith approving
the terms of this contract and, in particular, the payment envisaged by this
clause, be entitled to the following benefits:

            7.1.1 The Company shall pay the Executive his full base salary up to
and including the date of termination at the rate in effect on the date the
notice of termination is

                                      -5-
<PAGE>

given, plus all other amounts to which he is entitled under any compensation or
benefit plan of the Company as of the date of termination.

            7.1.2 In compensation for the Executive's likely loss of earnings by
reason of the early termination of his employment and any consequent disruption
to his career prospects, the Company shall pay as severance pay to the Executive
a lump sum payment equal to three (3) times the sum of (i) the Executive's
annual rate of base salary in effect immediately prior to the Change in Control,
and (ii) the average of the last two annual bonuses (annualized in the case of
any bonus paid with respect to a partial year) paid to the Executive preceding
the Change in Control, payable within ten (10) business days after the date of
termination. The amount payable pursuant to this Section 7.1.2 shall be reduced
by the amount of any payments made in lieu of notice or severance pay pursuant
to Sections 6.4 or 6.5.

            7.1.3 All rights, options and awards held by the Executive under any
stock option, stock purchase or other equity incentive plan or agreement of the
Company or Vertex shall be fully vested and not subject to forfeiture or
repurchase on account of the termination of employment, notwithstanding any
provision to the contrary contained in such plan or agreement.

            7.1.4 For three (3) years after the date of termination, the Company
shall provide the Executive with life, disability, accident and health insurance
benefits substantially similar to those which the Executive was receiving
immediately prior to the Change in Control. Benefits otherwise receivable by the
Executive pursuant to this Section 7.1.4 shall be reduced to the extent
comparable benefits are actually received by the Executive from a subsequent
employer during such period, and any such benefits actually received by the
Executive shall be reported to the Company.

            7.1.5 The Company shall also pay to the Executive, within ten (10)
business days after any such fees or expenses are incurred, all legal fees and
expenses incurred by the Executive as a result of or in connection with such
termination, including all such fees and expenses, if any, incurred in seeking
to obtain or enforce any right or benefit provided by this Agreement or in
connection with any tax audit or proceeding to the extent attributable to the
application of Section 4999 of the U.S. Internal Revenue Code of 1986, as
amended (the "Code"), to any payment or benefit provided hereunder.

      7.2 No Mitigation. The Executive shall not be required to mitigate the
amount of the severance payment or any other benefit provided under this Section
7 by seeking other employment or otherwise, nor shall the amount of any payment
or benefit provided for in this Section 7 be reduced by any compensation earned
by the Executive as the result of employment by another employer, by retirement
benefits, by offset against any amount claimed to be owed by the Executive to
the Company, or otherwise, except to the extent expressly so provided.

8. AGREEMENT NOT TO COMPETE.

      The Executive acknowledges the unique nature of the business of Vertex and
the need of Vertex to maintain its competitive advantage in the industry through
the protection of its trade secrets and proprietary information. Accordingly,
the Executive agrees that for a period of one (1) year after the termination of
his employment, the Executive shall not, directly or indirectly, within the
United States of America or its territories or possessions or within any other
country in which Vertex conducts or plans to conduct its business or distributes
any of its products or renders any services (determined in each case as of the
employment termination date and in relation only to those aspects of its
business and those products and services with which the Executive shall have had
a material involvement), engage in business with, own an interest in, be
employed by, or consult or advise for, any person or entity (except as a holder
of not more than a two percent (2%) equity interest in a publicly-traded entity)
which is in competition with the

                                      -6-
<PAGE>

business of Vertex, provided that the foregoing shall not preclude the
Executive's employment by any multi-divisional employer having a division which
engages in activities in competition with the business of Vertex so long as the
Executive shall not be involved in the operations or management of such
competitive division. For purposes hereof, an entity shall be deemed to be in
competition with the business of Vertex if it is engaged in the discovery of
novel pharmaceuticals, using structure-based rational drug design as its primary
research methodology.

      The Executive further agrees that for a period of one (1) year after
termination of this Executive's employment hereunder he will not, directly or
indirectly:

(i) endeavor to entice away from the Company or Vertex any senior employee or
consultant employed or engaged in a sales or technical capacity with whom he
shall have worked at any time during the period of 12 months preceding the
termination of his employment; or

(ii) solicit the custom of any client, supplier, customer or business partner of
the Company or Vertex with whom or which the Executive shall have dealt
personally to any material extent during the period of 12 months preceding the
termination of his employment or in relation to which he shall possess any
confidential information or seek by any means to induce such client, supplier,
customer or business partner to terminate his, her or its relationship with the
Company or Vertex.

9. FREEDOM TO CONTRACT.

      The Executive represents that he is free to enter into this Agreement,
that he has not made and will not make any agreements in conflict with this
Agreement. The Executive will not, and the Company will not require the
Executive to, disclose to the Company, or use for the Company's benefit, any
trade secrets or confidential information now or hereafter in the Executive's
possession which is the property of any other party. In particular, the
Executive agrees to be bound by the terms of the Employee Non-Disclosure and
Inventions Agreement attached as Schedule 2 hereto.

10. REMEDIES.

      The parties agree and acknowledge that the rights and obligations set
forth under this Agreement are of a unique and special nature and that the
Company and Vertex are, therefore, without an adequate legal remedy in the event
of Executive's violation of the covenants set forth in this Agreement. The
parties agree, therefore, that the covenants made by the Executive under this
Agreement shall be specifically enforceable in equity, in addition to all other
rights and remedies, at law or in equity or otherwise (including termination of
employment) that may be available to the Company or Vertex.

11. PROVISIONS OF GENERAL APPLICATION.

      11.1 Governing Law. This Agreement and the rights and obligations of the
parties hereunder shall be construed, interpreted and determined in accordance
with the laws of England and Wales.

      11.2 Other Agreements. This Agreement represents the entire understanding
and agreement between the parties as to the subject matter hereof and supersedes
all prior or concurrent oral or written agreements relating thereto, including
without limitation the Consulting Agreement between the parties dated 5 April
1994.

      11.3 Amendment. This Agreement may be amended only by a written instrument
executed in one or more counterparts by the parties hereto.

                                      -7-
<PAGE>

      11.4 Waiver. No consent to or waiver of any breach or default in the
performance of any obligation hereunder shall be deemed or construed to be a
consent to or waiver of any other breach or default in the performance of any of
the same or any other obligation hereunder. Failure on the part of either party
to complain of any act or failure to act of the other party or to declare the
other party in default, irrespective of the duration of such failure, shall not
constitute a waiver of rights hereunder and no waiver hereunder shall be
effective unless it is in writing, executed by the party waiving the breach or
default hereunder.

      11.5 Successors; Binding Agreement.

            11.5.1 Each of the Company and Vertex shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of its business or assets to expressly assume and agree
to perform this Agreement in the same manner and to the same extent that it
would be required to perform it if no such succession had taken place. Failure
of the Company or Vertex to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Executive to compensation from the Company, Vertex or their
respective successors in the same amount and on the same terms as he would be
entitled to hereunder if he terminates employment for Good Reason following a
Change in Control, except that for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "Company" and "Vertex" shall mean the
Company and Vertex, respectively, as hereinbefore defined and any successor to
its business or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.

            11.5.2 This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.

      11.6 Headings. The headings of sections and subsections of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be a part of this Agreement or to affect the meaning of any of its provision.

      11.7 Severability. If any provision of this Agreement shall, in whole or
in part, prove to be invalid for any reason, such invalidity shall affect only
the portion of such provision which shall be invalid, and in all other respects
this Agreement shall stand as if such invalid provisions, or the invalid portion
thereof, had not been a part hereof.

      11.8. Notices and Other Communications. All notices and other
communications required hereunder shall be in writing and personally delivered
or sent by certified mail, return receipt requested (a) if to the Executive at
Briar House, Bagwell Lane, Odiham, Hampshire, RG25 1JQ; and (b) if to the
Company, at 5 Cheapside Court, Buckhurst Road, Ascot, Berkshire, UK, SL5 7RF;
and (c) if to Vertex at 40 Allston Street, Cambridge, MA 02139-4211 USA,
attention: Chief Executive Officer; or in each case to such other persons or
addresses as the parties hereto may specify by a written notice to the other
from time to time. Such notices shall be effective four (4) business days after
so mailed or, if earlier, upon actual receipt. In order to be effective, any
notice of a purported termination of the Executive's employment by the Company
or by the Executive shall be communicated by writing to the other party in
accordance with this Section 11.8, indicating the specific termination provision
in this Agreement relied upon and setting forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated.

                                      -8-
<PAGE>

12. STATUTORY PARTICULARS OF EMPLOYMENT.

The particulars required to be given to the Executive by Section 1 of the
Employment Protection (Consolidation) Act, 1978 and which are not given
elsewhere in this Agreement are set out in schedule 1 to this Agreement.

      IN WITNESS WHEREOF, this Agreement has been executed by the Company, by
its duly authorized officer, and by the Executive, as of the date first above
written.

VERTEX PHARMACEUTICALS                  EXECUTIVE:
(EUROPE) LIMITED

By: /s/ Richard H. Aldrich              /s/ Iain P.M. Buchanan
    ----------------------------        ----------------------------
    Richard H. Aldrich                  Iain P.M. Buchanan
    Director

VERTEX PHARMACEUTICALS
INCORPORATED

By: /s/ Joshua S. Boger
    ----------------------------
    Joshua S. Boger
    President and Chief Executive Officer

                                      -9-
<PAGE>

                                   SCHEDULE 1

                       STATUTORY PARTICULARS OF EMPLOYMENT

1.    This Statement sets out the particulars required by Section 1 of the
      Employment Protection (Consolidation) Act 1978 relating to the employment
      by VERTEX PHARMACEUTICALS (EUROPE) LIMITED (the "Company"), of 5 Cheapside
      Court, Buckhurst Road, Ascot, Berkshire, SL5 7RF of IAIN P.M. BUCHANAN of
      Briar House, Bagwell Lane, Odiham, Hampshire, RG25 1JQ.

2.    PERIOD OF EMPLOYMENT

2.1   Your employment by the Company began on 3rd October, 1994. No previous
      period of employment is continuous with your employment by the Company.

2.2   Your employment is subject to termination by you or the Company upon
      notice as set forth in the attached Employment Agreement.

3.    JOB TITLE

3.1   Your job title is Vice President of European Operations of Vertex
      Pharmaceuticals Incorporated and and Managing Director of the Company.

3.2   In addition to the usual duties of a Managing Director, you may be
      required to undertake other duties, compatible with your status, from time
      to time to suit the Company's business needs.

3.3   You are required to report on a regular basis to the Board of the Company
      and the Board of Vertex Pharmaceuticals Inc. ("Vertex"), providing such
      details of your activities and other information as they may reasonably
      require, and to carry out, promptly, efficiently and to the best of your
      abilities all reasonable and lawful instructions which they may give you
      from time to time.

3.4   You must devote the whole of your time, attention and abilities during
      your hours of work to your duties for the Company. You may not, under any
      circumstances, whether directly or indirectly, undertake any other
      employment or engagement of any kind during the period of your employment
      by the Company.

4.    SALARY

4.1   Your basic salary is(pound)100,020 per annum.

4.2   Your salary will be paid monthly in arrears by credit transfer on or about
      the 25th day of each month.

4.3   Personal Performance-related bonus payments may be made from time to time
      at the Company's discretion.

5.    NORMAL HOURS OF WORK

5.1   Your normal hours of work are the Company's standard business hours from 8
      am to 5 pm each weekday together with such additional unpaid hours, either
      on weekdays or weekends, as may be necessary for the proper performance of
      your duties.

                                      -10-
<PAGE>

6.    HOLIDAY ENTITLEMENT

6.1   The Company's holiday year is the calendar year from 1st January to 31st
      December. However, your holiday entitlement, during the one-year term of
      this appointment will be 20 working days' holiday in addition to the
      normal English public and Bank holidays. Your holiday must be taken during
      the holiday year and your holiday dates agreed in advance by the Board of
      Vertex and the Company

6.2   When your employment ceases, you will (unless your employment is
      terminated by the Company for Cause) be paid in lieu of any unused
      holiday. If you have taken too much holiday, you will be required to repay
      any salary received for additional holiday days. One day's holiday pay
      will be deemed to be 1/260th of your annual basic salary.

7.    CAR

7.1   You will be provided with a Company car for your business and personal use
      in accordance with and subject to the Company's car policy from time to
      time. The Company will bear all standing and running costs of the car but
      reserves the right in its absolute discretion to withdraw the use of the
      car from you at any time for any reason without compensation. You must, in
      any event, return the car to the Company's head office upon termination of
      your employment.

7.2   It is a condition of your employment that you have and keep a current
      driving licence. If you are disqualified from driving for any period, the
      Company reserves the right to dismiss you. If you commit any motoring
      offence or the car suffers or causes any accidental damage, you must
      notify the Company immediately.

8.    EXPENSES

8.1   The Company will reimburse to you all expenses properly incurred by you in
      the proper performance of your duties, provided that on request you
      provide the Company with such vouchers or other evidence of actual payment
      of such expenses as the Company may reasonably require.

9.    PENSION

9.1   You will be eligible to join the Vertex Personal pension scheme, subject
      to and in accordance with its trust deed and rules from time to time. The
      Company will contribute an amount equal to 10% of your salary and requires
      you to contribute 5% of your salary. You will hold the option to contract
      out of the State Earnings Related Pension Scheme (SERPS).

10.   OTHER BENEFITS

10.1  You will receive Private Health Insurance (BUPA) with subsidised rates for
      dependants.

10.2  You will be covered by the Company's death-in-service life assurance
      scheme for two times your annual basic salary including dependant's
      benefit of approximately four-ninths of basic salary.

                                      -11-
<PAGE>

10.3  You will be granted a Stock Option over stock in Vertex under the terms of
      its 1991 Stock Option Plan on such terms as may be designated by the Board
      of Vertex. Details of your grant are outlined under a separate letter.

10.4  You will also be eligible to participate in the Vertex Employee Stock
      Purchase Plan on such terms as the Board of Vertex may decide. This will
      enable you to withdraw up to 10% of your net salary to purchase registered
      Vertex common stock at fair market value at the beginning or end of each
      six-month withholding period, whichever is the lower.

11.   PLACE OF WORK

11.1  Your normal place of work will be Cheapside Court, Ascot and/or any other
      UK place of business of the Company from time to time. You will be given
      at least one month's notice of any such change. The Company may, at its
      discretion, contribute towards any removal costs which you may incur
      should your place of work be changed to one which is more than fifty miles
      away from your previous place of work.

12.   CONFIDENTIALITY

12.1  You agree to treat as confidential all trade secrets and other
      confidential information relating to the Company's and Vertex's business
      and to sign and be bound by the terms of the Employee Non-Disclosure and
      Inventions Agreement, of which you have a copy.

12.2  You agree to return to the Company at the end of your employment all
      documents, computer disks and other items which belong to the Company or
      Vertex or relate to their business.

12.3  You will be responsible for the security of all keys, codes, electronic
      passes and combinations to security locks given to you by the Company to
      use in the course of your employment. You may not lend any of them or
      disclose combination numbers to any unauthorised person at any time after
      the end of your employment.

13.   SICKNESS ABSENCE

13.1  If you are unable to come to work for any reason and your absence has not
      been previously authorised by the Company, you must inform the Company
      immediately and keep the Company regularly informed of your progress and
      likely return date. For any absence of less than seven consecutive days,
      you are required to certify in writing the reasons for your absence. A
      doctor's certificate is required for all periods of absence in excess of
      seven days.

13.2  If you are absent from work due to sickness or injury and have complied
      with the requirements of clause 13.1. you will be paid:

      13.2.1 Your entitlement to Statutory Sick Pay ("SSP") (if any) in
             accordance with the provisions of the Social Security Contributions
             and Benefits Act 1992. For Statutory Sick Pay purposes your
             qualifying days are Monday to Sunday.

      13.2.2 Company Sick Pay (if the Company so decides from time to time),
             consisting of discretionary payments of all or part of your basic
             salary (less any entitlement to SSP and/or other state sickness
             benefits) for up to a maximum of 13 weeks'

                                      -12-
<PAGE>

             absence in any 12-month period.

      13.2.3 An amount equal to any sums receivable by the Company, as a result
             of your absence, under the terms of its permanent health insurance
             scheme.

14.   DISCIPLINARY & GRIEVANCE PROCEDURE

14.1  There are no particular disciplinary rules or procedures applicable to you
      and you are expected to conduct yourself in a thoroughly professional
      manner at all times. If you have any grievance relating to your
      employment, you should raise the matter with the Board of the Company,
      whose decision will be final and binding on you.

15.   HEALTH & SAFETY AT WORK

15.1  The Company will take all reasonably practicable steps to ensure your
      health, safety and welfare when at work. In the interests of all
      employees, the Company operates a no-smoking policy.

16.   MISCELLANEOUS

16.1  The Company reserves the right to make reasonable changes to any of your
      terms and conditions of employment.

16.2  The Company has the right to deduct from your pay any sums which you may
      owe the Company, and you agree to the Company making such deductions.

16.3  There are no collective agreements in force which directly affect your
      terms and conditions of employment.

16.4  The Company has no immediate requirement for you to work outside the
      United Kingdom for a period of one month or more.

16.5  The terms and conditions of your employment shall be governed by and
      construed in accordance with English law.

                                      -13-

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