Exhibit 10.5
RESTRICTED STOCK AGREEMENT
VERTEX
PHARMACEUTICALS INCORPORATED
AGREEMENT made as
of the 24 th day of January, 2007 (the “ Grant
Date ”) between Vertex Pharmaceuticals Incorporated (the
“ Company ”), a Massachusetts corporation having
its principal place of business in Cambridge, Massachusetts, and
(the “ Participant ”).
WHEREAS, the
Company has adopted the Vertex Pharmaceuticals Incorporated 2006
Stock and Option Plan (the “ Plan ”) to promote
the interests of the Company by providing an incentive for
employees, directors and consultants of the Company or its
Affiliates;
WHEREAS, pursuant
to the provisions of the Plan, the Company desires to offer for
sale to the Participant shares of the Company’s common stock,
$0.01 par value per share (“ Common Stock ”), in
accordance with the provisions of the Plan, all on the terms and
conditions hereinafter set forth;
WHEREAS,
Participant wishes to accept said offer; and
WHEREAS, the
parties agree that any terms used and not defined herein have the
meanings ascribed to such terms in the Plan.
NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained
herein and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:
1.
Definitions .
1.1
“ Cause ” shall mean:
(a)
conviction of the Participant of a crime of moral turpitude;
(b)
the Participant’s willful refusal or failure to follow a
lawful directive or instruction of the Company’s Board of
Directors or the individual(s) to whom the Participant reports
provided that the Participant received prior written notice of the
directive(s) or instruction(s) that the Participant failed to
follow, and provided further that the Participant did
not correct any such problems within thirty (30) days after
receiving notice in good faith from the Company;
(c)
the Participant commits (i) willful gross negligence, or (ii)
willful gross misconduct in carrying out the Participant’s
duties, resulting in either case in material harm to the Company,
unless such act, or failure to act, was believed by the
Participant, in good faith, to be in the best interests of the
Company; or
(d)
the Participant’s violation of the Company’s policies
made known to the Participant regarding confidentiality, securities
trading or inside information.
1.2
a “ Change of Control ” shall be deemed to have
occurred if:
(a)
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 ”);
(b)
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;
or
(c)
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.
1.3
“ Disability ” 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
Section 22(e)(3).
1.4
“ 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.
1.5
“ Good Reason ” shall mean that, without the
Participant’s consent, one or more of the following events
occurs, and the Participant, of his or her own initiative,
terminates his or her employment by the Company or an affiliate
within ninety (90) days of such event:
(i)
The Participant is assigned to any duties or responsibilities that
are inconsistent, in any significant respect, with the scope of the
Participant’s duties and responsibilities on the date hereof,
provided that such reassignment of duties or responsibilities is
not due to the Participant’s Disability or the
Participant’s performance, nor is at the Participant’s
request;
(ii)
The Participant suffers a reduction in the authorities, duties and
responsibilities associated with the Participant’s position
and office on the date hereof, provided that such reduction is not
due to the Participant’s Disability or the
Participant’s performance, nor is at the Participant’s
request;
(iii)
The Participant’s base salary is decreased below the level on
the date hereof, other than a reduction which is part of an
across-the-board proportionate reduction in the salaries of the
senior management team;
(iv)
The Participant is assigned, without Participant ‘s consent,
to an office location thirty-five (35) or more miles away from
Participant’s office
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location immediately prior to such reassignment (other than in
connection with a relocation of the Company’s principal
executive offices); or
(v)
Following a Change of Control, the Company’s successor fails
to assume the Company’s rights and obligations under this
Agreement.
2.
Terms of Purchase . The Participant hereby accepts the offer
of the Company to issue to the Participant, in accordance with the
terms of the Plan and this Agreement, 20,000 shares of the
Company’s Common Stock (such shares, subject to adjustment
pursuant to Section 17 of the Plan and Subsection 3(g) hereof, the
“ Granted Shares ”) at a purchase price per
share of $0.01 (the “ Purchase Price ”), receipt
of which is hereby acknowledged by the Company.
3.
Company’s Lapsing Repurchase Right .
(a)
Lapsing Repurchase Right . Except as set forth in Subsection
3(b) hereof, and subject to subsections (i) and (ii) below, if for
any reason the Participant no longer is an employee, director or
consultant of the Company or an affiliate prior to May 6, 2010, the
Company (or its designee) shall have the option, but not the
obligation, to purchase from the Participant, and, in the event the
Company exercises such option, the Participant shall be obligated
to sell to the Company (or its designee), at a price per Granted
Share equal to the Purchase Price, all or any part of the Granted
Shares as set forth in clauses (i) and (ii) below (the
“ Lapsing Repurchase Right ”). The
Company’s Lapsing Repurchase Right shall be valid for a
period of one year commencing with the date of such termination of
employment or service. Notwithstanding any other provision hereof,
if the Company is prohibited during such one year period from
exercising its Lapsing Repurchase Right by applicable law, then the
time period during which such Lapsing Repurchase Right may be
exercised shall be extended until the later of (a) the end of such
one-year period or (b) 30 days after the Company is first not so
prohibited. Notwithstanding the foregoing,
(i)
the Company’s Lapsing Repurchase Right shall lapse with
respect to 5,000 of the Granted Shares on May 6, 2008, if the
Participant continues to serve as an employee, director or
consultant of the Company on that date; and
(ii)
the Company’s Lapsing Repurchase Right shall lapse with
respect to 15,000 of the Granted Shares on May 6, 2010, if the
Participant continues to serve as an employee, director or
consultant of the Company on that date.
(b)
Effect of Termination by the Company Without Cause, by the
Participant for Good Reason, or Upon Disability or Death . The
Company’s Lapsing Repurchase Right shall terminate, and the
Participant’s ownership of all Granted Shares then owned by
the Participant shall become vested, if the Company or an affiliate
terminates the Participant’s employment or service other than
for Cause, if the Participant terminates his or her employment for
Good Reason, or if the Participant ceases to be an employee,
director or consultant of the Company by reason of Disability or
death.
(c)
Closing . If the Company exercises the Lapsing Repurchase
Right, the Company shall notify the Participant, or, in the case of
the Participant’s death, his or her survivor, in writing of
its intent to repurchase the Granted Shares. Such notice may be
mailed by the Company up to and including the last day of the time
period provided for above for exercise of the Lapsing Repurchase
Right. The notice shall specify the place, time and date for
payment of the repurchase price (the “ Closing
”) and the number of Granted Shares with respect to which the
Company is exercising the Lapsing Repurchase Right. The Closing
shall be not less than ten days nor more than 60 days from the date
of mailing of the notice, and the Participant or the
Participant’s survivor with respect to the Granted Shares
which the Company elects to repurchase shall have no further rights
as the owner thereof from and after the date specified in the
notice. At the Closing, the repurch
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