Exhibit 10.1

 

IRONWOOD PHARMACEUTICALS, INC.
2019 EQUITY INCENTIVE PLAN

1. DEFINED TERMS

Exhibit A, which is incorporated by reference, defines the terms used in the
Plan and includes certain operational rules related to those terms. 

2. PURPOSE

The Plan has been established to advance the interests of the Company by
providing for the grant to Participants of Stock, Stock-based and other
incentive Awards.  The Plan is effective as of the Effective Date.

3. ADMINISTRATION

The Administrator has discretionary authority, subject only to the express
provisions of the Plan, to interpret the Plan; determine eligibility for and
grant Awards; determine, modify or waive the terms and conditions of any Award;
determine the form of settlement of Awards (whether in cash, shares of Stock, or
other property); prescribe forms, rules and procedures relating to the Plan and
Awards; and otherwise do all things necessary or desirable to carry out the
purposes of the Plan.  Determinations of the Administrator made under the Plan
are conclusive and bind all persons.

4. LIMITS ON AWARDS UNDER THE PLAN

(a) Number of Shares.  Subject to adjustment as provided in Section 7(b), the
maximum number of shares of Stock that may be issued in satisfaction of Awards
under the Plan is (1) 10,000,000 shares, plus (2) any shares of Stock underlying
awards that are forfeited, expired or are cancelled without the delivery of
shares of Stock under the Company’s Amended and Restated 2005 Stock Incentive
Plan or the Company’s Amended and Restated 2010 Employee, Director and
Consultant Equity Incentive Plan on and following the Effective Date (each, a
“Prior Plan Award”).  Up to the total number of shares of Stock set forth in the
preceding sentence may be issued in satisfaction of ISOs, but nothing in this
Section 4(a) will be construed as requiring that any, or any fixed number of,
ISOs be awarded under the Plan.  Further, (i) any shares of Stock withheld by
the Company in payment of the exercise price or purchase price of an Award or
Prior Plan Award in satisfaction of tax withholding requirements with respect to
an Award or Prior Plan Award, (ii) the full number of shares covered by a SAR
any portion of which is settled in Stock (and not only the number of shares of
Stock delivered in settlement), and (iii) the number of shares of Stock
underlying any Awards that are settled in cash, expire, become unexercisable,
terminate or are forfeited to or repurchased by the Company without the issuance
of Stock will not be available for grant under the Plan.  For the avoidance of
doubt, the number of shares of Stock available for delivery under the Plan will
not be increased by any shares of Stock delivered under the Plan that are
subsequently repurchased using proceeds directly attributable to Stock Option
exercises.  The limits set forth in this Section 4(a) will be construed to
comply with Section 422. 

(b) Substitute Awards.  The Administrator may grant Substitute Awards under the
Plan.  To the extent consistent with the requirements of Section 422 and the
regulations thereunder and other applicable legal requirements (including
applicable stock exchange requirements), Stock issued under Substitute Awards
will be in addition to and will not reduce the number of shares available for
Awards under the Plan set forth in Section 4(a), but, notwithstanding anything
in Section 4(a) to the contrary, if any Substitute Award is settled in cash,
expires, becomes unexercisable, terminates or is forfeited to or repurchased by
the Company without the issuance of Stock, the shares of Stock previously
subject to such Award will not be available for future grants under the
Plan.  The Administrator will determine the extent to which the terms and
conditions of the Plan apply to Substitute Awards, if at all, provided, however,
that Substitute Awards will not be subject to, or counted toward, the
per-Participant Award limits described in Section 4(d) below.

(c) Type of Shares.  Stock delivered by the Company under the Plan may be
authorized but unissued Stock, treasury Stock or previously issued Stock
acquired by the Company.  No fractional shares of Stock will be delivered under
the Plan.

(d) Individual Limit.    

(1) Awards comprising no more than 2,000,000 shares of Stock may be granted to
any person under the Plan in any calendar year.  In applying the foregoing
limit, (i) all Awards granted to the same person in the same calendar year are
aggregated and made subject to one limit; (ii) the limit as applicable to Stock
Options and SARs refers to the number of shares of Stock underlying those
Awards; and (iii) the share limit as applicable to Awards other than Stock
Options and SARs refers to the maximum number of shares of Stock that may be
delivered, or the value of which could be paid in cash or other property, under
an Award or Awards assuming a maximum payout.

(2) Notwithstanding the foregoing limit, the aggregate value of all compensation
granted or paid to any Director with respect to any calendar year, including
Awards granted under the Plan and cash fees or other compensation paid by the
Company to such Director outside of the Plan, for his or her services as a
Director during such calendar year may not exceed $600,000 in the aggregate,
calculating the value of any Awards based on the grant date fair value in
accordance with the Accounting Rules, assuming a maximum payout. 

5. ELIGIBILITY AND PARTICIPATION

The Administrator shall select Participants from among Employees and Directors
of, and consultants and advisors to, the Company and its
subsidiaries.  Eligibility for ISOs is limited to individuals described in the
first sentence of this Section 5 who are employees of the Company or of a
“parent corporation” or “subsidiary corporation” of the Company as those terms
are defined in Section 424 of the Code.  Eligibility for Stock Options, other
than ISOs, and SARs is limited to individuals described in the first sentence of
this Section 5 who are providing direct services on the date of grant of the
Award to the Company or to a subsidiary of the Company that would be described
in the first sentence of Treas. Regs. §1.409A-1(b)(5)(iii)(E).

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6. RULES APPLICABLE TO AWARDS

(a) All Awards.

(1) Award Provisions.  The Administrator shall determine the terms of all
Awards, subject to the limitations provided herein.  By accepting (or, under
such rules as the Administrator may prescribe, being deemed to have accepted) an
Award, the Participant will be deemed to have agreed to the terms of the Award
and the Plan.  Notwithstanding any provision of this Plan to the contrary,
Substitute Awards may contain terms and conditions that are inconsistent with
the terms and conditions specified herein, as determined by the Administrator.

(2) Term of Plan.  No Awards may be made after 10 years from the Date of
Adoption, but previously granted Awards may continue beyond that date in
accordance with their terms.

(3) Transferability.  Neither ISOs nor, except as the Administrator otherwise
expressly provides in accordance with the third sentence of this Section
6(a)(3), other Awards may be transferred other than by will or by the laws of
descent and distribution.  During a Participant’s lifetime, ISOs and, except as
the Administrator otherwise expressly provides in accordance with the third
sentence of this Section 6(a)(3), SARs and NSOs may be exercised only by the
Participant.  The Administrator may permit the gratuitous transfer (i.e.,
transfer not for value) of Awards other than ISOs, subject to applicable
securities and other laws and such limitations as the Administrator may impose.

(4) Vesting.  The Administrator shall determine the time or times at which an
Award vests or becomes exercisable and the terms on which a Stock Option or SAR
remains exercisable.  Without limiting the foregoing, the Administrator may at
any time accelerate the vesting or exercisability of an Award, including, but
not limited to, in connection with providing consideration for a restrictive
covenant, regardless of any adverse or potentially adverse tax or other
consequences resulting from such acceleration.  Unless the Administrator
expressly provides otherwise, the following rules will apply if a Participant’s
Employment ceases:

(A) Except as provided in (B) and (C) below, immediately upon the cessation of
the Participant’s Employment each Stock Option and SAR that is then held by the
Participant or by the Participant’s permitted transferees, if any, will cease to
be exercisable and will terminate and all other Awards that are then held by the
Participant or by the Participant’s permitted transferees, if any, to the extent
not already vested will be forfeited.

(B) Subject to (C) and (D) below, all Stock Options and SARs held by the
Participant or the Participant’s permitted transferees, if any, immediately
prior to the cessation of the Participant’s Employment, to the extent then
exercisable, will remain exercisable for the lesser of (i) a period of three
months or (ii) the period ending on the latest date on which such Stock Option
or SAR could have been exercised without regard to this Section 6(a)(4), and
will thereupon immediately terminate.

(C) Subject to (D) below, all Stock Options and SARs held by a Participant or
the Participant’s permitted transferees, if any, immediately prior to the

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cessation of the Participant’s Employment due to death or Disability, to the
extent then exercisable, will remain exercisable for the lesser of (i) the
one-year period ending with the first anniversary of the Participant’s cessation
of Employment or (ii) the period ending on the latest date on which such Stock
Option or SAR could have been exercised without regard to this Section 6(a)(4),
and will thereupon immediately terminate.  In addition, if the Participant’s
Employment ceases for any reason other than pursuant to (D) below and in the
three months following such cessation of Employment the Participant dies or
experiences a Disability, the exercisability of all Stock Options and SARs held
by the Participant or the Participant’s permitted transferees, if any, will
automatically be extended upon such event and will remain exercisable for the
lesser of (i) the one-year period ending with the first anniversary of the
Participant’s cessation of Employment or (ii) the period ending on the latest
date on which such Stock Option or SAR could have been exercised without regard
to this Section 6(a)(4), and will thereupon immediately terminate.

(D) All Stock Options and SARs (whether or not exercisable) held by a
Participant or the Participant’s permitted transferees, if any, immediately
prior to the cessation of the Participant’s Employment will immediately
terminate upon such cessation of Employment if the termination is for Cause or
occurs in circumstances that in the determination of the Administrator would
have constituted grounds for the Participant’s Employment to be terminated for
Cause.

(5) Recovery of Compensation.  The Administrator may provide in any case that
outstanding Awards (whether or not vested or exercisable) and the proceeds from
the exercise or disposition of Awards or Stock acquired under Awards will be
subject to forfeiture and disgorgement to the Company, with interest and other
related earnings, if the Participant to whom the Award was granted violates (i)
a non-competition, non-solicitation, no-hire, non-disparagement,
confidentiality, invention assignment or other restrictive covenant by which he
or she is bound, or (ii) any Company policy applicable to the Participant that
provides for forfeiture or disgorgement with respect to incentive compensation
that includes Awards under the Plan.  In addition, the Administrator may require
forfeiture and disgorgement to the Company of outstanding Awards and the
proceeds from the exercise or disposition of Awards or Stock acquired under
Awards, with interest and other related earnings, to the extent required by law
or applicable stock exchange listing standards, including, without limitation,
Section 10D of the Exchange Act, or any related Company policy.  Each
Participant, by accepting or being deemed to have accepted an Award under the
Plan, agrees or will be deemed to have agreed to cooperate fully with the
Administrator, and to cause any and all permitted transferees of the Participant
to cooperate fully with the Administrator, to effectuate any forfeiture or
disgorgement required hereunder.  Neither the Administrator nor the Company nor
any other person, other than the Participant and his or her permitted
transferees, if any, will be responsible for any adverse tax or other
consequences to a Participant or his or her permitted transferees, if any, that
may arise in connection with this Section 6(a)(5).

(6) Taxes.  The delivery, vesting and retention of Stock, cash or other property
under an Award are conditioned upon full satisfaction by the Participant of all
tax withholding requirements with respect to the Award.  The Administrator shall
prescribe such rules for the withholding of taxes with respect to any Award as
it deems necessary, including, but

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not limited to, (a) providing that the Administrator may hold back shares of
Stock from an Award, (b) permitting a Participant to tender previously owned
shares of Stock in satisfaction of tax withholding requirements, or (c)
permitting an authorized broker-dealer to sell shares of Stock subject to an
Award and remit the cash proceeds of such sale to the Company to satisfy any tax
withholding requirements related to such Award (provided that such arrangements
will not result in withholding in excess of the maximum withholding amount
consistent with the award being subject to equity accounting treatment under the
Accounting Rules).

(7) Dividends and Dividend Equivalents.  The  Administrator may provide  for the
payment of amounts (on terms and subject to conditions established by the
Administrator) in lieu of cash dividends or other cash distributions with
respect to Stock subject to an Award whether or not the holder of such Award is
otherwise entitled to share in the actual dividend or distribution in respect of
such Award; provided, however, that (a) dividends or dividend equivalents
relating to an Award that, at the dividend payment date, remains subject to a
risk of forfeiture (whether service-based or performance-based) shall be subject
to the same risk of forfeiture as applies to the underlying Award and (b) no
dividends or dividend  equivalents shall be payable with respect to Options or
SARs.  Any entitlement to dividend equivalents or similar entitlements will be
established and administered either consistent with an exemption from, or in
compliance with, the requirements of Section 409A.  Dividends or dividend
equivalent amounts payable in respect of Awards that are subject to restrictions
may be subject to such limits or restrictions as the Administrator may impose.

(8) Rights Limited.  Nothing in the Plan may be construed as giving any person
the right to be granted an Award or to continued employment or service with the
Company or any of its subsidiaries, or any rights as a stockholder except as to
shares of Stock actually issued under the Plan.  The loss of existing or
potential profit in Awards will not constitute an element of damages in the
event of termination of Employment for any reason, even if the termination is in
violation of an obligation of the Company or any of its subsidiaries to the
Participant.

(9) Coordination with Other Plans.   Awards under the Plan may be granted in
tandem with, or in satisfaction of or substitution for, other Awards under the
Plan or awards made under other compensatory plans or programs of the Company or
any of its subsidiaries.  For example, but without limiting the generality of
the foregoing, awards under other compensatory plans or programs of the Company
or any of its subsidiaries may be settled in Stock (including, without
limitation, Unrestricted Stock) under the Plan if the Administrator so
determines, in which case the shares delivered will be treated as awarded under
the Plan (and will reduce the number of shares thereafter available under the
Plan in accordance with the rules set forth in Section 4). 

(10) Section 409A.    

(A) Without limiting the generality of Section 11(b) hereof, each Award will
contain such terms as the Administrator determines and will be construed and
administered, such that the Award either qualifies for an exemption from the
requirements of Section 409A or satisfies such requirements.

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(B) Notwithstanding Section 9 of this Plan or any other provision of this Plan
or any Award agreement to the contrary, the Administrator may unilaterally
amend, modify or terminate the Plan or any outstanding Award, including but not
limited to changing the form of the Award, if the Administrator determines that
such amendment, modification or termination is necessary or advisable to avoid
the imposition of an additional tax, interest or penalty under Section 409A.

(C) If a Participant is deemed on the date of the Participant’s termination of
Employment to be a “specified employee” within the meaning of that term under
Section 409A(a)(2)(B), then, with regard to any payment that is considered
nonqualified deferred compensation under Section 409A, to the extent applicable,
payable on account of a “separation from service”, such payment will be made or
provided on the date that is the earlier of (i) the expiration of the six-month
period measured from the date of such “separation from service” and (ii) the
date of the Participant’s death (the “Delay Period”).  Upon the expiration of
the Delay Period, all payments delayed pursuant to this Section 6(a)(10)(C)
(whether they would have otherwise been payable in a single lump sum or in
installments in the absence of such delay) will be paid on the first business
day following the expiration of the Delay Period in a lump sum and any remaining
payments due under the Award will be paid in accordance with the normal payment
dates specified for them in the applicable Award agreement.

(D) For purposes of Section 409A, each payment made under this Plan will be
treated as a separate payment. 

(E) With regard to any payment considered to be nonqualified deferred
compensation under Section 409A, to the extent applicable, that is payable upon
a change in control of the Company or other similar event, to avoid the
imposition of an additional tax, interest or penalty under Section 409A, no
amount will be payable unless such change in control constitutes a “change in
control event” within the meaning of Section 1.409A-3(i)(5) of the Treasury
Regulations.

(b) Stock Options and SARs.

(1) Time and Manner of Exercise.   Unless the Administrator expressly provides
otherwise, no Stock Option or SAR will be deemed to have been exercised until
the Administrator receives notice of exercise in a form acceptable to the
Administrator that is signed by the appropriate person and accompanied by any
payment required under the Award.  Any attempt to exercise a Stock Option or SAR
by any person other than the Participant will not be given effect unless the
Administrator has received such evidence as it may require that the person
exercising the Award has the right to do so.

(2) Exercise Price.  The exercise price (or the base value from which
appreciation is to be measured) of each Award requiring exercise must be no less
than 100% (in the case of an ISO granted to a 10-percent stockholder within the
meaning of subsection (b)(6) of Section 422, 110%) of the Fair Market Value of
the Stock subject to the Award, determined as of

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the date of grant, or such higher amount as the Administrator may determine in
connection with the grant. 

(3) Payment of Exercise Price.  Where the exercise of an Award is to be
accompanied by payment, payment of the exercise price must be by cash or check
acceptable to the Administrator or, if so permitted by the Administrator and if
legally permissible, (i) through the delivery of previously acquired
unrestricted shares of Stock, or the withholding of unrestricted shares of Stock
otherwise deliverable upon exercise, in either case that have a Fair Market
Value equal to the exercise price, (ii) through a broker-assisted exercise
program acceptable to the Administrator, (iii) by other means acceptable to the
Administrator, or (iv) by any combination of the foregoing permissible forms of
payment.  The delivery of previously acquired shares in payment of the exercise
price under clause (i) above may be accomplished either by actual delivery or by
constructive delivery through attestation of ownership, subject to such rules as
the Administrator may prescribe.

(4) Maximum Term.  The maximum term of Stock Options and SARs must not exceed 10
years from the date of grant (or five years from the date of grant in the case
of an ISO granted to a 10-percent stockholder described in Section 6(b)(2)
above).

(5) No Repricing.  Except in connection with a corporate transaction involving
the Company (which term includes, without limitation, any stock dividend, stock
split, extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination or exchange of shares) or as
otherwise contemplated by Section 7 below, the Company may not, without
obtaining stockholder approval, (A) amend the terms of outstanding Stock Options
or SARs to reduce the exercise price or base value of such Stock Options or
SARs, (B) cancel outstanding Stock Options or SARs in exchange for Stock Options
or SARs with an exercise price or base value that is less than the exercise
price or base value of the original Stock Options or SARs, or (C) cancel
outstanding Stock Options or SARs that have an exercise price or base value
greater than the Fair Market Value of a share of Stock on the date of such
cancellation in exchange for cash or other consideration.

7. EFFECT OF CERTAIN TRANSACTIONS

(a) Covered Transactions.  Except as otherwise expressly provided in an Award
agreement, another agreement between the Company and a Participant, or the
Company’s Change of Control Severance Plan or otherwise by the Administrator,
the following provisions will apply in the event of a Covered Transaction:

(1) Assumption or Substitution.  If the Covered Transaction is one in which
there is an acquiring or surviving entity, the Administrator may provide for (A)
the assumption or continuation of some or all outstanding Awards or any portion
thereof or (B) the grant of new awards in substitution therefor by the acquiror
or survivor or an affiliate of the acquiror or survivor.

(2) Cash-Out of Awards.   Subject to Section 7(a)(5) below, the Administrator
may provide for payment (a “cash-out”), with respect to some or all Awards or
any portion thereof, equal in the case of each affected Award or portion thereof
to the excess, if

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any, of (A) the Fair Market Value of one share of Stock times the number of
shares of Stock subject to the Award or such portion, over (B) the aggregate
exercise or purchase price, if any, under the Award or such portion (in the case
of a SAR, the aggregate base value above which appreciation is measured), in
each case on such payment terms (which need not be the same as the terms of
payment to holders of Stock) and other terms, and subject to such conditions, as
the Administrator determines; provided, however, for the avoidance of doubt,
that if the exercise or purchase price (or base value) of an Award is equal to
or greater than the Fair Market Value of one share of Stock, the Award may be
cancelled with no payment due hereunder or otherwise in respect of such Award.

(3) Acceleration of Certain Awards.   Subject to Section 7(a)(5) below, the
Administrator may provide that any Award requiring exercise will become
exercisable, in full or in part, and/or that the delivery of any shares of Stock
remaining deliverable under any outstanding Award of Stock Units (including
Restricted Stock Units and Performance Awards to the extent consisting of Stock
Units) will be accelerated, in full or in part, in each case on a basis that
gives the holder of the Award a reasonable opportunity, as determined by the
Administrator, following exercise of the Award or the delivery of the shares, as
the case may be, to participate as a stockholder in the Covered Transaction.

(4) Termination of Awards upon Consummation of a Covered Transaction.  Except as
the Administrator may otherwise determine in any case, each Award will
automatically terminate (and in the case of outstanding shares of Restricted
Stock, will automatically be forfeited) immediately upon consummation of the
Covered Transaction, other than any Award that is assumed or substituted
pursuant to Section 7(a)(1) above.

(5) Additional Limitations.  Any share of Stock and any cash or other property
or other award delivered pursuant to Section 7(a)(1), Section 7(a)(2) or Section
7(a)(3) above with respect to an Award may, in the discretion of the
Administrator, contain such restrictions, if any, as the Administrator deems
appropriate to reflect any performance or other vesting conditions to which the
Award was subject and that did not lapse (and were not satisfied) in connection
with the Covered Transaction.  For purposes of the immediately preceding
sentence, a cash-out under Section 7(a)(2) above or an acceleration under
Section 7(a)(3) above will not, in and of itself, be treated as the lapsing (or
satisfaction) of a performance or other vesting condition.  In the case of
Restricted Stock that does not vest and is not forfeited in connection with the
Covered Transaction, the Administrator may require that any amounts delivered,
exchanged or otherwise paid in respect of such Stock in connection with the
Covered Transaction be placed in escrow or otherwise made subject to such
restrictions as the Administrator deems appropriate to carry out the intent of
the Plan.

(b) Changes in and Distributions with Respect to Stock.

(1) Basic Adjustment Provisions.  In the event of a stock dividend, stock split
or combination of shares (including a reverse stock split), recapitalization or
other change in the Company’s capital structure that constitutes an equity
restructuring within the meaning of the Accounting Rules, the Administrator
shall make appropriate adjustments to the maximum number of shares of Stock
specified in Section 4(a) that may be issued under the Plan and to the maximum
share limits described in Section 4(d), and shall make appropriate adjustments
to the

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number and kind of shares of stock or securities underlying Awards then
outstanding or subsequently granted, any exercise or purchase prices (or base
values) relating to Awards and any other provision of Awards affected by such
change.

(2) Certain Other Adjustments.  The Administrator may also make adjustments of
the type described in Section 7(b)(1) above to take into account distributions
to stockholders other than those provided for in Section 7(a) and 7(b)(1), or
any other event, if the Administrator determines that adjustments are
appropriate to avoid distortion in the operation of the Plan, having due regard
for the qualification of ISOs under Section 422 and the requirements of Section
409A, to the extent applicable.

(3) Continuing Application of Plan Terms.  References in the Plan to shares of
Stock will be construed to include any stock or securities resulting from an
adjustment pursuant to this Section 7.

8. LEGAL CONDITIONS ON DELIVERY OF STOCK

The Company will not be obligated to deliver any shares of Stock pursuant to the
Plan or to remove any restriction from shares of Stock previously delivered
under the Plan until: (i) the Company is satisfied that all legal matters in
connection with the issuance and delivery of such shares have been addressed and
resolved; (ii) if the outstanding Stock is at the time of delivery listed on any
stock exchange or national market system, the shares to be delivered have been
registered with the U.S. Securities and Exchange Commission and listed or
authorized to be listed on such exchange or system upon official notice of
issuance; and (iii) all conditions of the Award have been satisfied or
waived.  The Company may require, as a condition to the exercise of an Award or
the delivery of shares of Stock under an Award, such representations or
agreements as counsel for the Company may consider appropriate to avoid
violation of the Securities Act of 1933, as amended, or any applicable state or
non-U.S. securities law.  Any Stock required to be issued to Participants under
the Plan will be evidenced in such manner as the Administrator may deem
appropriate, including book-entry registration or delivery of stock
certificates.  In the event that the Administrator determines that stock
certificates will be issued to Participants under the Plan or the Shares will be
evidenced by book-entry, the Administrator may require that any certificates
evidencing Stock issued under the Plan or the book-entry reflecting the issuance
of Stock under the Plan bear an appropriate legend reflecting any restriction on
transfer applicable to such Stock, and the Company may hold any such
certificates pending lapse of the applicable restrictions.

9. AMENDMENT AND TERMINATION

The Administrator may at any time or times amend the Plan or any outstanding
Award for any purpose which may at the time be permitted by law, and may at any
time terminate the Plan as to any future grants of Awards; provided, however,
that except as otherwise expressly provided in the Plan the Administrator may
not, without the Participant’s consent, alter the terms of an Award so as to
affect materially and adversely the Participant’s rights under the Award, unless
the Administrator expressly reserved the right to do so at the time the Award
was granted.  Any amendments to the Plan will be conditioned upon stockholder
approval only to the extent, if

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any, such approval is required by law (including the Code) or applicable stock
exchange requirements, as determined by the Administrator.

10. OTHER COMPENSATION ARRANGEMENTS

The existence of the Plan or the grant of any Award will not affect the
Company’s right to award a person bonuses or other compensation in addition to
Awards under the Plan.

11. MISCELLANEOUS

(a) Waiver of Jury Trial.  By accepting or being deemed to have accepted an
Award under the Plan, each Participant waives (or will be deemed to have
waived), to the maximum extent permitted under applicable law, any right to a
trial by jury in any action, proceeding or counterclaim concerning any rights
under the Plan and any Award, or under any amendment, waiver, consent,
instrument, document or other agreement delivered or which in the future may be
delivered in connection therewith, and agrees that any such action, proceedings
or counterclaim will be tried before a court and not before a jury.  By
accepting or being deemed to have accepted an Award under the Plan, each
Participant certifies that no officer, representative, or attorney of the
Company has represented, expressly or otherwise, that the Company would not, in
the event of any action, proceeding or counterclaim, seek to enforce the
foregoing waivers.  Notwithstanding anything to the contrary in the Plan,
nothing herein is to be construed as limiting the ability of the Company and a
Participant to agree to submit disputes arising under the terms of the Plan or
any Award made hereunder to binding arbitration or as limiting the ability of
the Company to require any eligible individual to agree to submit such disputes
to binding arbitration as a condition of receiving an Award hereunder.

(b) Limitation of Liability.  Notwithstanding anything to the contrary in the
Plan, neither the Company, nor any of its subsidiaries, nor the Administrator,
nor any person acting on behalf of the Company, any of its subsidiaries, or the
Administrator, will be liable to any Participant, to any permitted transferee,
to the estate or beneficiary of any Participant or any permitted transferee, or
to any other holder of an Award by reason of any acceleration of income, or any
additional tax (including any interest or penalties), asserted by reason of the
failure of an Award to satisfy the requirements of Section 422 or Section 409A
or by reason of Section 4999 of the Code, or otherwise asserted with respect to
an Award.

12. ESTABLISHMENT OF SUB-PLANS

The Administrator may at any time and from time to time establish one or more
sub-plans under the Plan (for local-law compliance purposes or other
administrative reasons determined by the Administrator) by adopting supplements
to the Plan containing, in each case, such limitations on the Administrator’s
discretion under the Plan, and such additional terms and conditions, as the
Administrator deems necessary or desirable.  Each supplement so established will
be deemed to be part of the Plan but will apply only to Participants within the
group to which the supplement applies (as determined by the Administrator).

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13. GOVERNING LAW

(a) Certain Requirements of Corporate Law.  Awards will be granted and
administered consistent with the requirements of applicable Delaware law
relating to the issuance of stock and the consideration to be received therefor,
and with the applicable requirements of the stock exchanges or other trading
systems on which the Stock is listed or entered for trading, in each case as
determined by the Administrator.

(b) Other Matters.  Except as otherwise provided by the express terms of an
Award agreement, under a sub-plan described in Section 12 or as provided in
Section 13(a) above, the domestic substantive laws of the State of Delaware
govern the provisions of the Plan and of Awards under the Plan and all claims or
disputes arising out of or based upon the Plan or any Award under the Plan or
relating to the subject matter hereof or thereof without giving effect to any
choice or conflict of laws provision or rule that would cause the application of
the domestic substantive laws of any other jurisdiction.

(c) Jurisdiction.  By accepting (or being deemed to have accepted) an Award,
each Participant will be deemed to (a) have submitted irrevocably and
unconditionally to the jurisdiction of the federal and state courts located
within the geographic boundaries of the United States District Court for the
District of Delaware for the purpose of any suit, action or other proceeding
arising out of or based upon the Plan or any Award; (b) agree not to commence
any suit, action or other proceeding arising out of or based upon the Plan or an
Award, except in the federal and state courts located within the geographic
boundaries of the United States District Court for the District of Delaware; and
(c) waive, and agree not to assert, by way of motion as a defense or otherwise,
in any such suit, action or proceeding, any claim that he or she is not subject
personally to the jurisdiction of the above-named courts that his or her
property is exempt or immune from attachment or execution, that the suit, action
or proceeding is brought in an inconvenient forum, that the venue of the suit,
action or proceeding is improper or that the Plan or an Award or the subject
matter thereof may not be enforced in or by such court.

 

 

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EXHIBIT A

Definition of Terms

The following terms, when used in the Plan, have the meanings and are subject to
the provisions set forth below:

“Accounting Rules”:  Financial Accounting Standards Board Accounting Standards
Codification Topics 505 and 718, as applicable, or any successor provision.

“Administrator”: The Compensation Committee, except that the Compensation
Committee may delegate (i) to one or more of its members (or one or more other
members of the Board, including the full Board) such of its duties, powers and
responsibilities as it may determine; (ii) to one or more officers of the
Company the power to grant Awards to the extent permitted by Section 152 or
157(c) of the Delaware General Corporation Law; and (iii) to such Employees or
other persons as it determines such ministerial tasks as it deems
appropriate.  In the event of any delegation described in the preceding
sentence, the term “Administrator” will include the person or persons so
delegated to the extent of such delegation.  Notwithstanding the foregoing, only
the Board or the Compensation Committee shall be authorized to grant an Award to
any director of the Company or to any “officer” of the Company (as defined by
Rule 16a-1 under the Exchange Act).

“Award”: Any or a combination of the following:

(i) Stock Options.

(ii) SARs. 

(iii) Restricted Stock.

(iv) Unrestricted Stock.

(v) Stock Units, including Restricted Stock Units.

(vi) Performance Awards.

(vii) Awards (other than Awards described in (i) through (vi) above) that are
convertible into or otherwise based on Stock.

“Board”:  The Board of Directors of the Company.

“Cause”: With respect to a Participant, (i) dishonesty with respect to the
Company or any affiliate of the Company, (ii) insubordination, substantial
malfeasance or non-feasance of duty, (iii) unauthorized disclosure of
confidential information, (iv) breach by a Participant of any provision of any
employment, consulting, advisory, nondisclosure, non-competition or similar
agreement between the Participant and the Company or any affiliate of the
Company, and (v) conduct substantially prejudicial to the business of the
Company or any affiliate of the Company; provided, however, that this definition
of “Cause” shall be superseded by (a) the

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definition of “Cause” contained in an agreement between a Participant and the
Company or any affiliate of the Company that is in effect at the time of such
termination, with respect to that Participant and (b) the definition of “Cause”
contained in the Company’s Change of Control Severance Benefit Plan to the
extent such plan is in effect at the time of such termination, the Participant
is a participant in such plan and such termination occurs within the period
during which the Participant is eligible for enhanced severance benefits under
the Company’s Change of Control Severance Benefit Plan.  The determination of
the Administrator as to the existence of Cause will be conclusive on the
Participant and the Company; provided, however, that if the determination is
made within the period during which the Participant is eligible for enhanced
severance benefits under the Company’s Change of Control Severance Benefit Plan,
then the determination will be subject to de novo review.

“Code”:  The U.S. Internal Revenue Code of 1986, as from time to time amended
and in effect, or any successor statute as from time to time in effect.

“Compensation Committee”: The Compensation and HR Committee of the Board.

“Company”:  Ironwood Pharmaceuticals, Inc., a Delaware corporation.

“Covered Transaction”:  Any of (i) a consolidation, merger or similar
transaction or series of related transactions, including a sale or other
disposition of stock, in which the Company is not the surviving corporation or
which results in the acquisition of all or substantially all of the Company’s
then outstanding common stock by a single person or entity or by a group of
persons and/or entities acting in concert, (ii) a sale or transfer of all or
substantially all the Company’s assets, or (iii) a dissolution or liquidation of
the Company.  Where a Covered Transaction involves a tender offer that is
reasonably expected to be followed by a merger described in clause (i) (as
determined by the Administrator), the Covered Transaction will be deemed to have
occurred upon consummation of the tender offer.

“Date of Adoption”:  The earlier of the date the Plan was approved by the
Company’s stockholders or adopted by the Board, as determined by the Committee.

“Director”:  A member of the Board who is not an Employee.

“Disability”: A disability that would entitle a Participant to long-term
disability benefits under the Company’s long-term disability plan in which the
Participant participates.  If a Participant does not participate a long-term
disability plan of the Company, Disability means a permanent and total
disability as defined in Section 22(e)(3) of the Code.

“Effective Date”: The date on which the Plan is first approved by the Company’s
stockholders.

“Employee”: Any person who is employed by the Company or any of its
subsidiaries.

“Employment”:  A Participant’s employment or other service relationship with the
Company or any of its subsidiaries.  Employment will be deemed to continue,
unless the Administrator expressly provides otherwise, so long as the
Participant is employed by, or otherwise is providing services in a capacity
described in Section 5 to, the Company or any of its

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subsidiaries.  If a Participant’s employment or other service relationship is
with any subsidiary of the Company and that entity ceases to be a subsidiary of
the Company, the Participant’s Employment will be deemed to have terminated when
the entity ceases to be a subsidiary of the Company unless the Participant
transfers Employment to the Company or any of its remaining
subsidiaries.  Notwithstanding the foregoing, in construing the provisions of
any Award relating to the payment of “nonqualified deferred compensation”
(subject to Section 409A) upon a termination or cessation of Employment,
references to termination or cessation of employment, separation from service,
retirement or similar or correlative terms will be construed to require a
“separation from service” (as that term is defined in Section 1.409A-1(h) of the
Treasury Regulations) from the Company and from all other corporations and
trades or businesses, if any, that would be treated as a single “service
recipient” with the Company under Section 1.409A-1(h)(3) of the Treasury
Regulations.  The Company may, but need not, elect in writing, subject to the
applicable limitations under Section 409A, any of the special elective rules
prescribed in Section 1.409A-1(h) of the Treasury Regulations for purposes of
determining whether a “separation from service” has occurred.  Any such written
election will be deemed a part of the Plan. 

“Exchange Act”:  The Securities Exchange Act of 1934, as amended.

“Fair Market Value”:  As of a particular date, (i) the closing price for a share
of Stock reported on the Nasdaq Stock Market (or any other national securities
exchange on which the Stock is then listed) for that date or, if no closing
price is reported for that date, the closing price on the immediately preceding
date on which a closing price was reported or (ii) in the event that the Stock
is not traded on a national securities exchange, the fair market value of a
share of Stock determined by the Administrator consistent with the rules of
Section 422 and Section 409A to the extent applicable.

“ISO”: A Stock Option intended to be an “incentive stock option” within the
meaning of Section 422.  Each Stock Option granted pursuant to the Plan will be
treated as providing by its terms that it is to be an NSO unless, as of the date
of grant, it is expressly designated as an ISO.

“NSO”:  A Stock Option that is not intended to be an “incentive stock option”
within the meaning of Section 422. 

“Participant”: A person who is granted an Award under the Plan.

“Performance Award”:  An Award subject to Performance Criteria.

“Performance Criteria”:  Specified criteria, other than the mere continuation of
Employment or the mere passage of time, the satisfaction of which is a condition
for the grant, exercisability, vesting or full enjoyment of an Award.  A
Performance Criterion and any targets with respect thereto need not be based
upon an increase, a positive or improved result or avoidance of loss and may be
applied to the Participant individually, or to a business unit or division or
the Company as a whole and may relate to any or any combination of the following
(measured either absolutely or by reference to an index or indices or the
performance of one or more companies and determined either on a consolidated
basis or, as the context permits, on a divisional, subsidiary, line of business,
product or product candidate, project or geographical 

14

basis or in combinations thereof), among any other criteria determined by the
Administrator: achievement of research, clinical trial or other drug development
objectives; achievement of regulatory objectives; achievement of manufacturing
and/or supply chain or other operational objectives; sales; revenues; assets;
expenses; earnings before or after deduction for all or any portion of interest,
taxes, depreciation, or amortization, whether or not on a continuing operations
or an aggregate or per share basis; return on equity, investment, capital or
assets; one or more operating ratios; borrowing levels, leverage ratios or
credit rating; market share; capital expenditures; cash flow; stock price;
stockholder return; sales of particular products or services; customer
acquisition or retention; acquisitions and divestitures (in whole or in part);
joint ventures, licenses, collaborations and strategic alliances; spin-offs,
split-ups and the like; reorganizations; recapitalizations, restructurings,
financings (issuance of debt or equity) or refinancings; or any other objectives
determined by the Administrator.  The Administrator may provide that one or more
of the Performance Criteria applicable to such Award will be adjusted to reflect
events (including, but not limited to, the impact of charges for restructurings,
discontinued operations, mergers, acquisitions, extraordinary items, and other
unusual or non-recurring items, and the cumulative effects of tax or accounting
changes, each as defined by U.S. generally accepted accounting principles)
occurring during the applicable performance period that affect the applicable
Performance Criterion or Criteria.

“Plan”:  The Ironwood Pharmaceuticals, Inc. 2019 Equity Incentive Plan, as from
time to time amended and in effect.

“Restricted Stock”: Stock subject to restrictions requiring that it be
forfeited, redelivered or offered for sale to the Company if specified service
or performance-based conditions are not satisfied.

“Restricted Stock Unit”: A Stock Unit that is, or as to which the delivery of
Stock or cash in lieu of Stock is, subject to the satisfaction of specified
performance or other vesting conditions.

“SAR”:  A right entitling the holder upon exercise to receive an amount (payable
in cash or in shares of Stock of equivalent value at the discretion of the
Administrator) equal to the excess of the Fair Market Value of the shares of
Stock subject to the right over the base value from which appreciation under the
SAR is to be measured.

“Section 409A”: Section 409A of the Code.

“Section 422”: Section 422 of the Code.

“Stock”: Class A common stock of the Company, par value $0.001 per share.

“Stock Option”: An option entitling the holder to acquire shares of Stock upon
payment of the exercise price.

“Stock Unit”: An unfunded and unsecured promise, denominated in shares of Stock,
to deliver Stock or cash measured by the value of Stock in the future.

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“Substitute Awards”:  Awards issued under the Plan in substitution for equity
awards of an acquired company that are converted, replaced or adjusted in
connection with the acquisition.

“Unrestricted Stock”:  Stock not subject to any restrictions under the terms of
the Award.

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