Common Stock, Preferred Stock and Equity Plans

12 Months Ended

Dec. 31, 2025

Common Stock, Preferred Stock and Equity Plans

Common Stock and Preferred Stock

We are authorized to issue 500.0 million shares of common stock. Holders of common stock are entitled to one vote per

share. Holders of common stock are entitled to receive dividends, if and when declared by our Board of Directors, and to

share ratably in our assets legally available for distribution to our shareholders in the event of liquidation. Holders of common

stock have no preemptive, subscription, redemption or conversion rights. The holders of common stock do not have

cumulative voting rights.

We are authorized to issue 1.0 million shares of preferred stock in one or more series and to fix the powers, designations,

preferences and relative participating, option or other rights thereof, including dividend rights, conversion rights, voting

rights, redemption terms, liquidation preferences and the number of shares constituting any series, without any further vote or

action by our shareholders. As of December 31, 2025 and 2024, we had no shares of preferred stock issued or outstanding.

Share Repurchase Programs

In February 2023, our Board of Directors approved a share repurchase program (the “2023 Share Repurchase Program”),

pursuant to which we were authorized to repurchase up to $3.0 billion of our common stock. As of December 31, 2025, we

had repurchased the full amount authorized under the 2023 Share Repurchase Program. In May 2025, our Board of Directors

approved an additional share repurchase program (the “2025 Share Repurchase Program”), pursuant to which we are

authorized to repurchase up to $4.0 billion of our common stock.

In 2025, 2024 and 2023, we repurchased 4.8 million, 2.7 million and 1.3 million shares of our common stock,

respectively, under these programs for an aggregate of $2.0 billion, $1.2 billion and $427.6 million, respectively. As of

December 31, 2025, we had $3.4 billion remaining authorization under the 2025 Share Repurchase Program, which does not

have an expiration date and can be discontinued at any time.

Stock and Option Plans

The purpose of each of our stock and option plans is to attract, retain and motivate our employees, consultants and

directors. Awards granted under these plans can be nonstatutory stock options (“NSOs”), incentive stock options (“ISOs”),

RSUs including PSUs, restricted stock (“RSs”), or other equity-based awards, as specified in the individual plans.

Shares issued under all of our plans are funded through the issuance of new shares. The following table contains

information about our equity plans:


Title of Plan	Group Eligible	Type of Award Granted

2013 Stock and Option Plan	Employees, Non-employee Directors and Consultants	NSO, RS, RSU and PSU
2006 Stock and Option Plan	Employees, Non-employee Directors and Consultants	NSO, RS and RSU

As of December 31, 2025, we are authorized to grant 10.9 million additional awards under our 2013 Stock and Option

Plan and have 4.4 million awards outstanding. We are no longer authorized to grant additional awards under our 2006 Stock

and Option Plan.

Restricted Stock Units (excluding PSUs)

The following table summarizes our restricted stock unit activity during the year ended December 31, 2025:


	Restricted Stock Units (excluding PSUs)
	Number of Shares	Weighted-average Grant- date Fair Value
	(in thousands)	(per share)
Unvested at December 31, 2024	2,688	$372.54
Granted	1,469	$456.01
Vested	(1,393)	$345.20
Cancelled	(218)	$425.63
Unvested at December 31, 2025	2,546	$431.34

The total fair value of restricted stock units that vested during 2025, 2024 and 2023 (measured based on the market price

of our common stock on the date of vesting) was $654.6 million, $666.0 million and $433.4 million, respectively.

Performance-based RSUs (PSUs)

Certain members of senior management receive approximately 50% of their annual equity compensation in the form of

PSUs. 50% of the number of PSUs are eligible to vest based on the achievement of one-year financial goals and the

remaining PSUs are eligible to vest based on the achievement of non-financial goals, such as clinical development, regulatory

and/or manufacturing-related milestones. The financial PSUs, if earned, vest in annual installments over a three-year period

measured from the date of grant, and the non-financial PSUs, if earned, cliff vest at the conclusion of the performance period.

The potential shares earned pursuant to these PSU awards range from 0% to 200% of the target number of shares, with the

number of shares issued determined by the achievement of the financial and non-financial performance goals.

The following table summarizes our PSU activity during the year ended December 31, 2025:


	Performance-Based RSU
	Number of Units	Weighted-average Grant- date Fair Value
	(in thousands)	(per share)
Unvested at December 31, 2024 (1)	862	$346.01
Granted (2)	481	$450.83
Vested	(584)	$288.14
Cancelled	(31)	$392.20
Unvested at December 31, 2025	728	$412.52

(1) “Unvested” represents our PSUs at target to the extent performance has not been certified plus the actual number of shares that continue to be subject to service conditions for which the performance has been achieved and certified.
(2) “Granted” represents (i) the target number of shares issuable for grants during 2025 and (ii) any change in the number of shares issuable pursuant to outstanding PSUs based on performance certification during 2025.

The total fair value of PSUs that vested during 2025, 2024 and 2023 (measured on the date of vesting) was $276.6

million, $347.1 million and $160.4 million, respectively.

Stock Options

All options have been granted with an exercise price equal to the fair value of the underlying common stock on the date

of grant. All options awarded under our stock and option plans, cannot have an exercise price less than fair market value on

the date of grant and cannot expire more than 10 years from the grant date. In each of the three years ended December 31,

2025, we only granted stock options to certain of our non-employee directors.

The following table summarizes information related to the outstanding and exercisable options during the year ended

December 31, 2025:


	Stock Options	Weighted- average Exercise Price	Weighted- average Remaining Contractual Life	Aggregate Intrinsic Value
	(in thousands)	(per share)	(in years)	(in millions)
Outstanding at December 31, 2024	1,594	$156.36
Granted	7	$502.97
Exercised	(447)	$125.30
Outstanding at December 31, 2025	1,154	$170.54	2.63	$326.7
Exercisable at December 31, 2025	1,154	$170.54	2.63	$326.7

The aggregate intrinsic value in the table above represents the total pre-tax amount, net of exercise price, that would have

been received by option holders if all option holders had exercised all options with an exercise price lower than the market

price on the last business day of 2025, which was $453.36 based on the closing price of our common stock on that date.

The total intrinsic value (the amount by which the fair market value exceeded the exercise price) of stock options

exercised during 2025, 2024 and 2023 was $147.8 million, $112.8 million and $128.4 million, respectively. The total cash we

received as a result of stock option exercises during 2025, 2024 and 2023 was $55.6 million, $50.0 million and $80.8 million,

respectively.

The following table summarizes information about stock options outstanding as of December 31, 2025, which were all

exercisable:


	Options Outstanding and Exercisable
Range of Exercise Prices	Number Outstanding	Weighted-average Remaining Contractual Life	Weighted-average Exercise Price
	(in thousands)	(in years)	(per share)
$86.52–$100.00	177	0.74	$88.39
$100.01–$150.00	27	1.42	$125.59
$150.01–$200.00	848	2.60	$172.79
$200.01–$502.97	102	6.37	$305.38
Total	1,154	2.63	$170.54

Employee Stock Purchase Plan

We have an employee stock purchase plan (the “ESPP”). The ESPP permits eligible employees to enroll in a twelve-

month offering period comprising two six-month purchase periods. Participants may purchase shares of our common stock,

through payroll deductions, at a price equal to 85% of the fair market value of the common stock on the first day of the

applicable twelve-month offering period, or the last day of the applicable six-month purchase period, whichever is lower.

Purchase dates under the ESPP occur on or about May 14 and November 14 of each year. As of December 31, 2025, there

were 0.9 million shares of common stock authorized for issuance pursuant to the ESPP.

In 2025, the following shares were issued to employees under the ESPP:


	Year Ended December 31, 2025
Number of shares (in thousands)	199
Average price paid per share	$362.43

Employee Benefits

We have a 401(k) retirement plan (the “Vertex 401(k) Plan”) in which substantially all of our permanent U.S. employees

are eligible to participate. Participants may contribute up to 60% of their annual compensation to the Vertex 401(k) Plan,

subject to statutory limitations. We may declare discretionary matching contributions to the Vertex 401(k) Plan. We pay

matching contributions in the form of cash. In ex-U.S. markets, we have similar benefit plans. In 2025, 2024 and 2023, we

recorded approximately $63.1 million, $52.3 million and $43.6 million of expense related to these plans, respectively.