Exhibit 10.2
VERTEX PHARMACEUTICALS
INCORPORATED
AMENDED AND RESTATED 2006 STOCK
and OPTION PLAN
1.
DEFINITIONS
Unless otherwise specified or unless
the context otherwise requires, the following terms, as used in
this Vertex Pharmaceuticals Incorporated Amended and Restated 2006
Stock and Option Plan, have the following meanings:
Administrator
means the Board of Directors and/or
a committee of the Board of Directors to which the Board of
Directors has delegated power to act on its behalf in administering
this Plan in whole or in part.
Affiliate means a corporation that, 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.
Common Stock
means shares of the Company’s
common stock, $.01 par value.
Company means Vertex Pharmaceuticals Incorporated, a
Massachusetts corporation.
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 Administrator to be eligible to be
granted one or more Stock Rights under the Plan.
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 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 Administrator) on which there were
sales. If 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 Administrator in its sole discretion. The Fair Market Value
as determined in this paragraph shall be 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.
Non-Employee Director
means a member of the Board of
Directors who is not an employee of the Company or any
Affiliate.
Non-Qualified Option
means an option that is not
intended to qualify as an ISO.
Option means an ISO or Non-Qualified Option granted
under the Plan.
Participant
means an Employee, Non-Employee
Director, consultant or advisor of the Company or an Affiliate 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 and
distribution.
Plan means this Vertex Pharmaceuticals Incorporated
Amended and Restated 2006 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 subject to 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 delivered pursuant to the Plan with
respect to a Stock Right, in such form as the Administrator shall
approve.
Stock-Based Award
means a grant by the Company under
the Plan of an equity award or equity-based award that is not an
Option or Stock Grant.
Stock Grant
means a grant by the Company of
Shares under the Plan.
Stock Right
means a right to Shares or the value
of Shares of the Company granted pursuant to the Plan as an ISO, a
Non-Qualified Option, a Stock Grant or a Stock-Based
Award.
2.
PURPOSES OF THE
PLAN
The Plan is intended to encourage
ownership of Shares by 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 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 13,902,380 or the equivalent of such number of Shares
after the Administrator, 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. The number of Shares subject to this
Plan shall be reduced, share for share, by the number of shares
underlying Stock Rights, if any, that are granted under the
Company’s 2007 New Hire Stock and Option Plan after
March 17, 2008.
If an Option granted hereunder
ceases to be outstanding, in whole or in part (other than by
exercise), or if the Company shall reacquire (at no more than its
original issuance price) any Shares issued pursuant to a Stock
Grant, or if any Stock Right expires or is forfeited, cancelled or
otherwise terminated or results in any Shares not being issued, the
unissued Shares that were subject to such Stock Right shall again
be available for issuance from time to time pursuant to this Plan;
provided that, the following Shares may not again be made available
for issuance as Awards under the Plan: (i) Shares that are not
issued or delivered as a result of the net settlement of an
outstanding Stock-Based Award or Option and (ii) Shares that
the Company acquires from a Participant for a price that is more
than the original issuance price of the Share, including any Share
acquired by the Company to fund employee payroll tax withholding
obligations on a Stock Grant or Shares applied to payment of the
exercise price for an Option.
After May 14, 2008, the number
of Shares that may be subject to or delivered pursuant to any form
of Stock Right other than an Option shall not exceed 20% of the
aggregate of (A) the number of Shares available as to which
Stock Rights may be granted under this Plan on May 15, 2008
(taking in account the Shares added on such date, but which amount
does not include those 536,625 Shares as to which the Company
granted Options on February 7, 2008, subject to obtaining
subsequent stockholder approval of such Options) and (B) any
Shares that again become available for issuance on or after
May 15, 2008 pursuant to the preceding paragraph.
4.
ADMINISTRATION OF THE
PLAN
The Administrator shall administer
the Plan. Subject to the provisions of the Plan, the Administrator
is authorized to:
a.
Interpret the provisions of the Plan
and of any Stock Right or Stock Agreement and to make all
rules and determinations that it deems necessary or advisable
for the administration of the Plan;
b.
Determine which 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 shall be granted;
d.
Specify the terms and conditions
upon which a Stock Right or Stock Rights may be granted;
e.
In its discretion,
accelerate:
(i)
the date of exercise of any
installment of any Option; provided that the Administrator shall
not, without the consent of the Option holder accelerate the
exercise date of any installment of any Option granted to any
Employee as an ISO (and not previously converted into a
Non-Qualified Option 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; or
(ii)
the date or dates of vesting of
Shares, or lapsing of Company repurchase rights with respect to any
Shares, under any Stock Rights; and
f.
In its discretion, extend the
exercise date for any Option;
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 (unless the holder of any such Option otherwise agrees).
Subject to the foregoing, the interpretation and construction by
the Administrator 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 Administrator is other than the
Board of Directors.
The Administrator may employ
attorneys, consultants, accountants or other persons, and the
Administrator, 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 Administrator in good faith shall be
final and binding upon the Company, all Participants, and all other
interested persons. No member or agent of the Administrator 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 Administrator shall be
indemnified and held harmless by the Company against any cost or
expense (including counsel fees) reasonably incurred by him or her
or any 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 Administrator may have as directors or otherwise under the
by-laws of the Company, or any agreement, vote of stockholders or
disinterested directors, or otherwise.
5.
ELIGIBILITY FOR
PARTICIPATION
The Administrator shall, in its sole
discretion, name the Participants in the Plan, provided, however,
that each Participant must be a 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
Administrator 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. ISOs may be granted only to Employees. 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.
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 Administrator may
provide that Options be granted subject to such terms and
conditions, consistent with the terms and conditions specifically
required under this Plan, as the Administrator may deem appropriate
including, without limitation, subsequent approval by the
stockholders of the Company of this Plan or any amendments thereto.
Each Stock Agreement shall state the option price (per share) of
the Shares covered by each Option, 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 (subject to
Sections 11, 12 and 13 of this Plan). 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. The Option Price per share of Shares
covered by an Option (including both ISOs and Non-Qualified
Options) 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.
6.2 ISOs. Each
Option intended to be an ISO shall be issued only to 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 Administrator
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. In addition to the limitation set forth in
Section 6.1, the Option price per share of the Shares covered
by each 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 stock of the Company or an
Affiliate shall not be less than one hundred ten percent (110%) of
the 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 the total combined voting power of all classes of
stock of the Company or an Affiliate shall expire not more than
five (5) years from the date of grant.
6.2.3 Annual Limit on
Incentive Stock Options. To the extent required for
“incentive stock option” treatment under
Section 422 of the Code, the aggregate Fair Market Value
(determined as of the time of grant) of the Shares with respect to
which ISOs granted under this Plan and any other plan of the
Company or its Affiliate become exercisable for the first time by a
Participant during any calendar year shall not exceed the aggregate
threshold for ISOs established by the Code ($100,000 as of
March 22, 2006). To the extent that any Option exceeds this
limit, it shall constitute a Non-Qualified Option.
6.3 Non-Employee
Directors’ Options. Each Non-Employee Director,
upon first being elected or appointed to the Board of Directors,
shall be granted a Non-Qualified Option to purchase that number of
Shares as shall be established for such Option grants from time to
time by the Board of Directors. 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
Non-Qualified Option to purchase that number of Shares as shall be
established for such Option grants from time to time by the Board
of Directors. 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. If a Non-Employee
Director ceases to be any of an Employee, Non-Employee Director,
consultant or advisor of the Company, Options granted under this
Section 6.3 shall remain exercisable to the extent such
Options are exercisable on the date of such termination of service,
for their full term, and the provisions of Sections 11 and 13
below shall not apply to any such Options.
6.4 Limitation on Number
of Options Granted. Notwithstanding anything in this
Plan to the contrary, no Participant shall be granted an aggregate
of Options and/or Stock-Based Awards under this Plan in any
calendar year for more than an aggregate of 600,000 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
GRANTS
Each Stock Grant 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 Administrator, with such changes and modifications to such form
as the Administrator, in its discretion, shall approve with respect
to any particular Participant or Participants. The Stock Agreement
shall contain terms and conditions that the Administrator
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 Grant shall not be less than the
par value per Share. Each Stock Agreement shall state the number of
Shares to which the Stock Grant pertains and the terms of any right
of the Company to reacq
