RESTRICTED STOCK AGREEMENT VERTEX PHARMACEUTICALS INCORPORATED

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Exhibit 10.5

35,000 Shares
Sign-on Grant 1

RESTRICTED STOCK AGREEMENT

VERTEX PHARMACEUTICALS INCORPORATED

        AGREEMENT made as of the 18th day of June, 2008 (the " Grant Date ") between Vertex Pharmaceuticals Incorporated (the " Company "), a Massachusetts corporation having its principal place of business in Cambridge, Massachusetts, and Freda Lewis-Hall (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:

(i)

the Participant is convicted of a crime involving moral turpitude;

(ii)

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 Company shall have given the Participant prior written notice of the directive(s) or instruction(s) that the Participant failed to follow, and provided , further , that the Company shall have given the Participant, in good faith, 30 days to correct such failure and further provided that if the Participant corrects such failure, any termination of the Participant's employment on account of such failure shall not be treated for purposes of this Agreement as a termination of employment for "Cause;"

(iii)

the Participant violates any of the Company's policies made known to the Participant regarding confidentiality, securities trading or insider information; or

(iv)

the Participant, in carrying out the Participant's duties, commits (A) willful gross negligence or (B) willful gross misconduct resulting, in either case, in material harm to the Company unless such act, or failure to act, was believed by the Participant, in good faith, to be in the best interests of the Company.

        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; or

(b)

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 (i) a transaction solely for the purpose of reincorporating the Company or one of its subsidiaries in a different jurisdiction or recapitalizing or reclassifying the Company's stock; or (ii) 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 (" Code ") Section 22(e)(3); provided that , solely for purposes of determining whether any amount that is payable other than upon termination of employment can be made as a result of disability consistent with the provisions of Code Section 409A, the following definition of " Disability " shall apply: an individual has a " Disability " if he is unable to engage in any substantial gainful activity because of any medically determinable physical or mental impairment that can be expected to result in death or last for a continuous period of no less than 12 months. Alternatively, an individual is considered disabled if he is, because of any medically determinable physical or mental impairment that can be expected to result in death or last for a continuous period of at least 12 months, receiving income replacement benefits for a period of not less than three months under the Company's long-term disability plan.

        1.4   " Employment Agreement " shall mean the Employment Agreement dated June 18, 2008 between the Company and the Participant.

        1.5   " Good Reason " shall mean that, without the Participant's consent, one or more of the following events occurs, and the Participant, at the Participant's own initiative provides notice of termination within 30 days after such event:

(i)

the Participant's Base Salary is decreased or the target levels under the Company's target bonus program, or equity compensation program are reduced, unless each or any such reduction is part of an across-the-board proportionate reduction in the salaries, target bonuses, or target equity compensation, as applicable, provided, however, that it is expressly understood that payments or awards under any such program in amounts lower than the target amounts in accordance with any such program shall not constitute "Good Reason;"

(ii)

the office to which the Participant is assigned is relocated to a place 35 or more miles away and such relocation is not at the Participant's request or with the Participant's prior agreement (and other than, for Participants assigned to the Company's principal Executive offices, in connection with a change in location of the Company's principal Executive offices); or

(iii)

the Participant's duties are materially diminished to an extent that results in either (A) the Participant no longer being an "officer," as such term is defined in Rule 16a-1(f) promulgated under the Securities Exchange Act of 1934; or (B) the Participant ceases to be a member of the executive management team of the Company.

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 Employment Agreement, the Plan and this Agreement, 35,000 shares of the Company's Common Stock (such shares, subject to adjustment pursuant to

2

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, if for any reason the Participant experiences a Termination of Service prior to June 18, 2012, 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 herein (the " Lapsing Repurchase Right "). The Company's Lapsing Repurchase Right shall lapse with respect to 2,188 of the Granted Shares on a quarterly basis, beginning on September 18, 2008, unless the Participant shall have, prior to any such quarterly lapsing date, experienced a Termination of Service. 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.

        (b)     Effect of Termination by the Company Without Cause, or by the Participant for Good Reason.     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 or if the Participant terminates her employment for Good Reason.

        (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 that are subject to the Lapsing Repurchase Right. 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 repurchase price shall be delivered to the Participant or the Participant's survivor and the Granted Shares being repurchased, duly endorsed for transfer, shall, to the extent that they are not then in the possession of the Company, be delivered to the Company by the Participant or the Participant's survivor.

        (d) &