Exhibit 10.10
November 8, 2004
Vicki L. Sato
43 Larch Road
Cambridge, MA 02138
Re: Second Amendment to Employment Agreement
Dear Vicki,
The Employment Agreement dated as of November 1, 1994, as amended by
letter agreement dated May 12, 1995, between you and Vertex Pharmaceuticals
Incorporated (the "Agreement") hereby is amended, effective November 8, 2004, as
follows:
1. Section 6.4 shall be deleted in its entirety, and the following
substituted therefor:
6.4 TERMINATION WITHOUT CAUSE. If the Executive's employment is
terminated by the Company without Cause, the Executive shall
be entitled to 18 months of Severance Pay. "Severance Pay"
shall mean an amount equal to the Executive's base salary
then in effect, plus the amount of the target bonus for the
year in which the Executive's employment is terminated
divided by twelve (12) (each of the 12 shares to constitute
a "month's" Severance Pay). In addition: (i) all
unexercisable stock options held by the Executive as of the
date of termination shall be deemed to have been held by the
Executive for an additional eighteen (18) months after the
date of termination, for purposes of vesting and exercise
rights, and any unexercisable stock options that become
exercisable as a result thereof shall remain exercisable
until the earlier of (1) the end of the 90-day period
following the date of termination and (2) the date the
option would otherwise expire and (ii) the Company's lapsing
repurchase right with respect to shares of restricted stock
held by the Executive shall lapse with respect to the
Pro-Rata Share of Restricted Stock. The "Pro-Rata Share of
Restricted Stock" shall mean, for any grant of restricted
stock as to which the Company's repurchase right lapses
ratably over a specified period (e.g. in equal annual
increments over four years), that number of shares as to
which the Company's repurchase right with respect to those
shares would have lapsed if the Executive's employment by
the Company had continued an additional eighteen month
period. For any other shares of restricted stock, "Pro-Rata
Share of Restricted Stock" shall mean, as to any shares of
restricted stock which were granted on the same date and as
to which the Company's repurchase right lapses on the same
date, that portion of such shares calculated by multiplying
the number of shares by a fraction, the numerator of which
is the number of days that have passed since the date of
grant, plus the number of days in 18 months, and the
denominator of which is
Vicki L. Sato
November 8, 2004
Page 2
the total number of days from the date of the grant until
the date (without regard to any provisions for earlier
vesting upon achievement of a specified goal) on which the
Company's repurchase right would lapse under the terms of
the grant. Notwithstanding the foregoing, the terms of any
option agreement or restricted stock agreement shall govern
the acceleration of vesting or lapsing of the Company's
repurchase rights, as applicable, except to the extent that
the terms of this Employment Agreement are more favorable to
the Executive.
2. Appendix A, Section 1.3(i)(a) shall be deleted in its entirety,
and the following substituted therefor:
(a) substantial adverse alteration in the nature or status of the
Executive's position or responsibilities as President of the
Company or the condition of her employment as President of the
Company;
As so amended, the Agreement shall remain in full force and effect.
If you agree to the foregoing amendment, please so indicate by signing
and returning the enclosed copy of this letter.
VERTEX PHARMACEUTICALS INCORPORATED
By: /s/ Joshua S. Boger
---------------------------------
Joshua S. Boger, Chairman and CEO
Accepted and Agreed:
/s/ Vicki L. Sato
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Vicki L. Sato