Exhibit
10.19


 


SEPARATION AGREEMENT


 


This Agreement is between
Ikaria Holdings, Inc. and its subsidiaries (referred to in this Agreement
as “Ikaria”) and Elizabeth A. Larkin of                                                                                              
(referred to in this Agreement as “Ms. Larkin”).


 


1.             Background.  Ikaria and Ms. Larkin
are party to an Amended and Restated Employment Agreement dated as of June 1,
2009 (the “Employment Agreement”). 
Ms. Larkin’s employment with Ikaria was terminated other than for
cause on March 15, 2010 (the “Separation Date”).  Both Ms. Larkin and Ikaria desire an
amicable separation and to fully and finally compromise and settle any
differences that may exist between them on the terms set forth in this Agreement.


 


2.             Transition Period.


 


a.             Transition Period.  Ms. Larkin and Ikaria agree that until April 19,
2010, Ms. Larkin will continue to receive the compensation set forth in Section 3
of the Employment Agreement as if her employment continued through that
date.  During the period between the date
on which this Agreement is signed by both parties and April 19, 2010, Ms. Larkin
shall remain available at reasonable times to answer such questions as Ikaria
may have regarding matters within her area of responsibility and to perform
such transition activities as Ikaria may reasonably request.  Ikaria and Ms. Larkin agree and confirm
that notwithstanding any term, condition, or provision of the Employment
Agreement, Ikaria has not terminated Ms. Larkin “for Cause” (as that term
is defined in the Employment Agreement), nor has Ms. Larkin terminated her
employment with Ikaria “for Good Reason” (as that term is defined in the
Employment Agreement).


 


b.             Communication.  Ikaria agrees to distribute to Ikaria’s
employees the internal communication attached hereto as Exhibit A
regarding Ms. Larkin’s separation from Ikaria, and intends that any
communication at the time of announcing a successor and that any external
communication will be consistent with the Exhibit A.


 


3.             Agreed Payment and Additional Payment; No Other Payments.


 


a.             Agreed Payment.  In consideration of (i) the execution of
this Agreement, (ii) this Agreement becoming effective (see  paragraph 18), (iii) Ms. Larkin
honoring all of the terms of this Agreement, and (iv) Ms. Larkin
providing the transition services described in paragraph 2(a) of
this Agreement and the services described in the Professional Services
Agreement between Ms. Larkin and Ikaria, dated as of March 16, 2010
(the “PSA”), Ikaria will pay Ms. Larkin $412,500 less (A) applicable
federal, state, and local taxes and other applicable payroll deductions and
withholdings, such amount to be paid in twelve (12) monthly installments
commencing on the forty-fifth (45th) day after the Separation Date, provided the Agreed
Payment will not be required to be commenced until this Agreement has become
effective (see  paragraph 18)
(the “Agreed Payment”).  Any
amounts owed to Ikaria by Ms. Larkin, and any amounts incurred by Ms. Larkin
which are unauthorized under Ikaria policies (including, without limitation,
any amounts or debts incurred on any company credit or charge card) shall be
deducted from the first such payment and succeeding payments to the extent
necessary.


 


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b.             Additional Payment.  In consideration of (i) the execution of
this Agreement (ii) this Agreement becoming effective (see  paragraph 18) and (iii) Ms. Larkin
honoring all of the terms of this Agreement, Ikaria will pay Ms. Larkin an
additional $337,500, less (A) applicable federal, state, and local taxes
and other applicable payroll deductions and withholdings and (B) any
amounts owed to Ikaria by Ms. Larkin, and any amounts incurred by Ms. Larkin
which are unauthorized under Ikaria policies (including, without limitation,
any amounts or debts incurred on any company credit or charge card) (the “Additional
Payment”).  It is understood and
acknowledged that the Additional Payment represents the amounts described in
Sections 5(a)(A), (B), (D) and (E) of the Employment Agreement and a
supplemental payment of $243,978.68.  The
Additional Payment will be paid on the forty-fifth (45th) day after the Separation
Date, provided that the Additional Payment will not be required to be made
until this Agreement has become effective (see
paragraph 18).


 


c.             No Other Payments.  Ms. Larkin acknowledges and agrees that
the Agreed Payment shall be in satisfaction of, and not in addition to, any payments,
benefits, or other cash or non-cash remuneration of any kind to which Ms. Larkin
may have otherwise been entitled to under (i) the Employment Agreement
(subject to the following sentence), (ii) the INO Therapeutics Long Term
Incentive Plan dated as of June 6, 2002 (or any prior or subsequent
versions or modifications thereof) and any grant certificates or awards issued
thereunder, or (iii) any other agreement, plan, program, or practice of
Ikaria.  Without limiting the generality
of the foregoing, Ms. Larkin acknowledges and agrees that the Agreed
Payment is in satisfaction of, and not
in addition to, any payments or benefits that Ms. Larkin may otherwise
have received under Section 5(a)(C) of the Employment
Agreement.


 


d.             Stock Options.  Notwithstanding any other provision of this
Agreement, Ms. Larkin shall receive the ten-year option granted by the
Compensation Committee of the Board of Directors of Ikaria in December 2009
pursuant to the Company’s 2007 Stock Option Plan, as amended, to purchase
75,000 shares of non-voting common stock, par value $0.01 per share, of the
Company (such shares, including any securities into which such shares are
changed or for which such shares are exchanged, the “Common Stock”) at a
per share exercise price equal to the fair value of the Common Stock (as
determined by the Board) (the “December Option”).  The December Option shall be evidenced
by the form of 2007 Stock Option Plan Stock Option Agreement and shall be
subject to the terms and conditions thereof, including, without limitation, the
vesting conditions set forth in the related Notice of Stock Option Grant
substantially in the form of Exhibit B. 
Pursuant to the terms of the 2007 Stock Option Plan, for so long as Ms. Larkin
is providing services pursuant and in accordance with the PSA, she shall be
considered not to have a termination or interruption of her “Continuous Service
Status”(as defined in the 2007 Stock Option Plan); provided, however,
that Ms. Larkin acknowledges that, to the extent that the December Option
or the stock option granted to Ms. Larkin on April 18, 2007 in
respect of 200,000 shares of Common Stock (the “April Option”) is
exercised more than three (3) months after she ceases to be employed by
Ikaria, the option shall cease to qualify as an “incentive stock option”
(within the meaning of Section 422 of the Internal Revenue Code of 1986),
to the extent it so qualified as of the date hereof.


 


e.             D&O Insurance;
Indemnification.  Ikaria
agrees to continue to cover Ms. Larkin under the directors and officers
insurance policy(ies), if any, maintained by Ikaria for its officers and
directors on terms comparable to the terms in effect from time to time for
Ikaria’s


 


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other officers.  Any indemnification under its certificate of
incorporation or by-laws that Ikaria provides to its other officers will
similarly apply to Ms. Larkin.


 


4.             Acknowledgement.  Ms. Larkin (i) acknowledges
that the Agreed Payment and the Additional Payment will not commence to be paid
or provided unless she accepts this Agreement and this Agreement becomes
effective (see  paragraph 18)
and (ii) acknowledges that the covenants contained in Section 6 of
the Employment Agreement will continue in effect in accordance with their
terms, with the Separation Date being the “Termination Date” for purposes of Section 6
of the Employment Agreement.


 


5.             Release.


 


a.             Ms. Larkin understands
and agrees that her acceptance of this Agreement means that, except as stated
in paragraph 8, she is forever waiving and giving up any and all claims,
actions, causes of action, complaints, charges, demands and rights of whatever
kind or nature in law, equity or otherwise, whether known or unknown
(collectively “Claims”), she has or may have, individually or as a member of a
class, that are based on any event or act or failure to act that occurred prior
to her execution of this Agreement, and hereby releases and forever discharges
Ikaria, its parent, subsidiaries, shareholders and related companies, and their
respective directors, officers, employees, and agents from any and all such
Claims.  Ms. Larkin understands that
this release and waiver of Claims includes Claims relating to (a) her
employment and the termination of her employment, (b) any Ikaria policy,
practice, contract or agreement (including, without limitation, the Employment
Agreement and the INO Therapeutics Long Term Incentive Plan dated as of June 6,
2002), (c) any tort or personal injury, (d) any policies, practices,
laws or agreements governing the payment of wages, commissions or other
compensation, (e) any laws governing employment discrimination including,
but not limited to, the Age Discrimination in Employment Act (ADEA), Older
Worker Benefits Protection Act, Title VII of the Civil Rights Act, the Employee
Retirement Income Security Act, the Americans with Disabilities Act, the New
Jersey Law Against Discrimination and any state or local laws and any state or
local laws, (f) any laws governing whistle blowing or retaliation,
including but not limited to the Sarbanes-Oxley Act, (g) any laws or
agreements that provide for punitive, exemplary or statutory damages, and (h) any
laws or agreements that provide for payment of attorney fees, costs, or
expenses.


 


b.             Subject to (i) the
execution of this Agreement by Ms. Larkin, (ii) this Agreement
becoming effective (see  paragraph
18), (iii) Ms, Larkin honoring all of the terms of this Agreement, and
(iv) Ms. Larkin providing the transition services described in paragraph
2(a) of this Agreement, Ikaria releases and waives any and all claims
it may have against Ms. Larkin that are based on any act or failure to act
by Ms. Larkin that occurred before this Agreement becomes effective (see  paragraph 18), provided,
however, that the foregoing release does not apply to claims relating to
criminal conduct, willful misconduct, gross negligence, fraud or self-dealing.


 


6.             No Disparagement.  Ms. Larkin agrees not
to make critical, negative, or disparaging remarks about Ikaria, its
shareholders, its services, its directors, its employees or its agents to
others.  Ikaria shall advise all of its
officers, directors and human resources personnel not to make, during the term
of their respective employment with Ikaria, critical, negative, or 


 


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disparaging remarks about Ms. Larkin or her employment with or
separation from Ikaria to others.  Ikaria
agrees not to disclose any personal or private information about Ms. Larkin,
except to the extent required by law or court order, or in connection with any
claim, lawsuit, action or other proceeding involving Ikaria and Ms. Larkin.  Ms. Larkin agrees that any request for
employment verification or other employment related information shall be
directed to James Briggs, and she shall so advise any prospective employer or
other person who may make such a request.


 


7.             Future Employment.  Ms. Larkin agrees that
she is not now or hereafter entitled to employment or reemployment with Ikaria
and she agrees not to knowingly seek such employment, on any basis or through
an employment agency.  Ms. Larkin
further agrees and acknowledges that should she apply for any position in
contradiction of this paragraph, Ikaria may completely ignore such application
and fail to consider it based on this paragraph.


 


8.             Claims Not Waived.  Ms. Larkin understands
that this Agreement does not waive any claims that she may have (a) for
compensation for illness or injury or medical expenses under any worker’s
compensation statute, (b) for benefits under any plan currently maintained
by Ikaria that provides for retirement benefits, (c) under any law or any
policy or plan currently maintained by Ikaria that provides health insurance
continuation or conversion rights, (d) under the 2007 Stock Option Plan
and related Notice of Stock Option Grants and Stock Option Agreements, (e) for
indemnification under the Company’s certificate of incorporation, by-laws or
coverage under any of the Company’s directors and officers insurance policies, (f) for
indemnification under Section 5(h) of the Employment Agreement or (g) that
by law cannot be released or waived.


 


9.             Government Cooperation.  Nothing in this Agreement prohibits Ms. Larkin
from cooperating with any government agency.


 


10.           Prior Agreement(s).  Ms. Larkin agrees and understands that
this Agreement does not supersede any obligation to which she was subject under
a prior agreement while employed with Ikaria that addresses confidentiality,
noncompetition, nonsolicitation, or ownership of intellectual or other
proprietary property, nor does this Agreement reduce her obligations to comply
with applicable laws relating to trade secrets, confidential information, or
unfair competition (including, without limitation, any such obligations under
the Employment Agreement or under the Secrecy Agreement between Ikaria and Ms. Larkin
dated as of May 17, 1999).


 


11.           Confidentiality.  Ms. Larkin agrees that
the existence and terms of this Agreement are not to be disclosed to anyone
other than her attorney, tax advisor, or her immediate family, except as
otherwise required by law, and that if disclosed to such persons, Ms. Larkin
will advise them that they may not disclose the existence or terms of this
Agreement to others.  Except for
disclosure required pursuant to applicable laws or regulations, Ikaria agrees
to hold in confidence the existence and terms of this Agreement.


 


12.           Nonadmission.  Ms. Larkin and Ikaria
both acknowledge and agree that nothing in this Agreement is meant to suggest
that Ikaria has violated any law or contract or that Ms. Larkin has any
claim against Ikaria.


 


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13.           Voluntary Agreement.  Ms. Larkin acknowledges
and states that she has entered into this Agreement knowingly and voluntarily.


 


14.           Consulting An Attorney.  Ms. Larkin acknowledges
that Ikaria has advised her that she may consult an attorney of her own choice
about this Agreement and every matter that it covers before signing this
Agreement, and has encouraged her to do so.


 


15.           Obligation to Pay Attorney
Fees and Costs.  Ms. Larkin understands
and agrees that if she violates the commitments she has made in this Agreement,
Ikaria may seek to recover any payments and/or value of any benefits provided
in this Agreement and that, except as provided in paragraph 16, she will
be responsible for paying the actual attorney fees and costs incurred by Ikaria
in enforcing this Agreement or in defending a claim released by paragraph 5.  Ikaria understands and agrees that if Ikaria
violates the commitments it has made in this Agreement, Ms. Larkin may
seek to recover damages from Ikaria and that it will be responsible for paying
the actual attorney fees and costs incurred by Ms. Larkin in enforcing
this Agreement or in defending a claim released by paragraph 5.


 


16.           Exception to Attorney Fees
Obligation. 
The obligation to pay Ikaria’s attorney fees and costs does not apply
to an action by Ms. Larkin regarding the validity of this Agreement under
the ADEA.


 


17.           Complete Agreement.  Ms. Larkin understands
and agrees that this Agreement contains the entire agreement between Ms. Larkin
and Ikaria relating to the termination of her employment, that this Agreement
(except as provided in paragraph 10 of this Agreement) supersedes and
displaces any prior agreements and discussions relating to such matters and
that she may not rely on any such prior agreements or discussions, except that
Sections 5(h), 6, 7 and 10 of the Employment Agreement are not superseded or
displaced by virtue of this paragraph 17 or of this Agreement generally
and shall continue in full force and effect in accordance with their
terms.  Notwithstanding the foregoing,
Ikaria and Ms. Larkin agree that, except as provided in paragraph 3(d) of
this Agreement, the Notice of Stock Option Grant and the related Stock Option
Agreement dated April 18, 2007, and the Stock Purchase Agreement between
Ikaria and Ms. Larkin dated June 15, 2007 (and its related Joinder
Agreement to Common Stockholders Agreement and Stock Certificate and Stock
Power) are not superseded or displaced by virtue of this paragraph 17 or
of this Agreement generally.


 


18.           Effective Date and
Revocation. 
This Agreement shall not be effective until seven days after Ms. Larkin
signs this Agreement and returns it to Ikaria’s Senior Vice President, Human
Resources, James Briggs care of Ikaria Holdings, Inc., 6 Route 173, Clinton,
NJ 08809.  During that seven-day period, Ms. Larkin
may revoke her acceptance of this Agreement by delivering to Mr. Briggs a
written statement stating she wishes to revoke this Agreement and not be bound
by it.  In the event of such revocation,
this Agreement shall become null and void and have no further effect.


 


19.           Final and Binding Effect.  Ms. Larkin understands
that if this Agreement becomes effective it will have a final and binding
effect and that by signing and not timely revoking this Agreement she may be
giving up legal rights.


 


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20.           Future Cooperation.  Ms. Larkin agrees to
cooperate with Ikaria in the future and to provide to Ikaria truthful
information, testimony, or affidavits requested in connection with any matter
that arose during her employment.  This
cooperation may be performed at reasonable times and places and in a manner as
to not interfere with any other employment Ms. Larkin may have at the time
of request.  Ikaria agrees (a) pay Ms. Larkin
$300 per hour for time spent providing such cooperation and (b) to
reimburse Ms. Larkin for expenses incurred in providing such cooperation,
so long as such expenses are approved in advance by Ikaria.


 


21.           Return of Property.  Ms. Larkin acknowledges
an obligation and agrees to return all Ikaria property, unless otherwise
specified in this paragraph.  This
includes all files, memoranda, documents, records, credit cards, keys and key
cards, computers, laptops, personal digital assistants, cellular telephones,
Blackberry devices or similar instruments, other equipment of any sort, badges,
vehicles, and any other property of Ikaria. 
In addition, Ms. Larkin agrees to provide any and all access codes
or passwords necessary to gain access to any computer, program, or other
equipment that belongs to Ikaria or is maintained by Ikaria or on Ikaria
property.  Further, Ms. Larkin
acknowledges an obligation and agrees not to destroy, delete or disable any
Ikaria property, including items, files and materials on computers and laptops.


 


22.           Representations.  By signing this Agreement, Ms. Larkin
represents that she has read this entire document and understands all of its
terms.


 


23.           Twenty One (21) Day
Consideration Period.  Ms. Larkin may consider
whether to sign and accept this Agreement for a period of twenty-one (21) days
from the day she received it.  If this
Agreement is not signed, dated, and returned to Ikaria’s Senior Vice President,
Human Resources, James Briggs care of Ikaria Holdings, Inc., 6 Route 173,
Clinton, NJ 08809 within twenty-two (22) days, the payments and benefits
described in paragraph 3 will no longer be available.


 


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  ACCEPTED:

  	
  ACCEPTED:

  
	
   

  	
   

  
	
   

  	
  Ikaria Holdings, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/
  Elizabeth A. Larkin

  	
   

  	
  /s/
  James Briggs

  
	
  Elizabeth A. Larkin

  	
   

  	
  Senior Vice President

  
	
   

  	
   

  	
  Human Resources

  
	
  Date:

  	
  March 27,
  2010

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date Agreement was originally given to
  Ms. Larkin:

  	
  March 26,
  2010

  	
   

  
						



 

















 


EXHIBIT B


 


IKARIA
HOLDINGS, INC.

2007 STOCK OPTION PLAN

NOTICE OF STOCK OPTION GRANT


 


Elizabeth A. Larkin (“Optionee”) 


 


You have been granted an
option (this “Option”) to purchase Common Stock of Ikaria Holdings, Inc.
(the “Company”) as follows:


 


	
  Board
  Approval Date:

  	
   

  	
  December 31,
  2009

  
	
   

  	
   

  	
   

  
	
  Date
  of Grant (Later of Board Approval Date or Commencement of
  Employment/Consulting):  

  	
   

  	
  December 31,
  2009

  
	
   

  	
   

  	
   

  
	
  Exercise
  Price per Share:

  	
   

  	
  $[          ]

  
	
   

  	
   

  	
   

  
	
  Type
  of Shares:

  	
   

  	
  Prior
  to an “Initial Public Offering” (as such term is defined in the Company’s
  Amended and Restated Certificate of Incorporation as may be amended from time
  to time), this Option shall be exercisable for shares of Non-Voting
  Common Stock of the Company.  Upon and
  following an “Initial Public Offering” any unexercised portion of this Option
  shall automatically become exercisable instead for an equivalent number of
  shares of the Company’s Voting Common
  Stock without any further action on the part of the Company or Optionee.

  
	
   

  	
   

  	
   

  
	
  Total
  Number of Shares Granted:

  	
   

  	
  75,000

  
	
   

  	
   

  	
   

  
	
  Total
  Exercise Price:

  	
   

  	
  $[          ]

  
	
   

  	
   

  	
   

  
	
  Type
  of Option:

  	
   

  	
  Incentive
  Stock Option

  
	
   

  	
   

  	
   

  
	
  Expiration
  Date:

  	
   

  	
  December 30,
  2019

  
	
   

  	
   

  	
   

  
	
  Vesting
  Commencement Date:  

  	
   

  	
  December 31,
  2009

  
	
   

  	
   

  	
   

  
	
  Vesting/Exercise
  Schedule:

  	
   

  	
  This
  Option shall vest and become exercisable as follows:  25% of the total number of shares that may
  be purchased pursuant to the Option shall be vested and become exercisable on
  each of the first four anniversaries of the Vesting Commencement Date for so

  



 

















 


	
   

  	
   

  	
  long
  as the Optionee remains an employee of or consultant to the Company, such that
  the total number of shares shall be fully vested on the four-year anniversary
  of the Vesting Commencement Date.

  
	
   

  	
   

  	
   

  
	
  Termination
  Period:

  	
   

  	
  This
  Option may be exercised for ninety (90) days after termination of employment
  or consulting relationship except as set out in Section 5 of the Stock
  Option Agreement (but in no event later than the Expiration Date).  Optionee is responsible for keeping track
  of these exercise periods following termination for any reason of his or her
  service relationship with the Company. 
  The Company will not provide further notice of such periods.

  
	
   

  	
   

  	
   

  
	
  Transferability:

  	
   

  	
  This
  Option may not be transferred.

  



 


By your signature and the
signature of the Company’s representative below, you and the Company agree that
this Option is granted under and governed by the terms and conditions of the
Ikaria Holdings, Inc. 2007 Stock Option Plan and the Stock Option
Agreement, both of which are attached and made a part of this document.


 


In addition it is a
condition precedent to the exercise of this Option that you sign and return to
the Company a counterpart signature page indicating your agreement to be
bound as a “Stockholder” by the Company’s Common Stockholders Agreement dated
as of February 22, 2007, as may be amended from time to time.


 


In addition, you agree and
acknowledge that your rights to any Shares underlying this Option will be
earned only as you provide services to the Company over time, that the grant of
this Option is not as consideration for services you rendered to the Company
prior to your Vesting Commencement Date, and that nothing in this Notice or the
attached documents confers upon you any right to continue your employment or
consulting relationship with the Company for any period of time, nor does it
interfere in any way with your right or the Company’s right to terminate that
relationship at any time, for any reason, with or without cause.


 


	
   

  	
  IKARIA
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:
  [                              ]

  
	
  Elizabeth
  A. Larkin

  	
  Title:  
  [                              ]