Exhibit
10.4


 


IKARIA HOLDINGS, INC.


 


2007 STOCK OPTION PLAN


 


1.             Purposes of
the Plan.  The purposes of this 2007 Stock Option Plan
are to attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to Employees and
Consultants and to promote the success of the business of the Company and any
Subsidiary, Parent or Affiliate.  Options
granted under the Plan may be Incentive Stock Options or Nonstatutory Stock
Options, as determined by the Administrator at the time of grant of an option
and subject to the applicable provisions of Section 422 of the Code and
the regulations and interpretations promulgated thereunder.


 


2.             Definitions.  As used herein, the following
definitions shall apply:


 


(a)           “Administrator” means the
Board or its Committee appointed pursuant to Section 4 of the Plan.


 


(b)           “Affiliate” means an
entity other than a Subsidiary (as defined below) which, together with the
Company, is under common control of a third person or entity.


 


(c)           “Applicable
Laws” means the legal requirements relating to the
administration of stock option and restricted stock purchase plans, including
under applicable U.S. state corporate laws, U.S. federal and applicable state
securities laws, other U.S. federal and state laws, the Code, any Stock
Exchange rules or regulations and the applicable laws, rules and
regulations of any other country or jurisdiction where Options are granted
under the Plan, as such laws, rules, regulations and requirements shall be in place
from time to time.


 


(d)           “Board” means the
Board of Directors of the Company.


 


(e)           “Cause” for
termination of a Participant’s Continuous Service Status will exist if the
Participant is terminated by the Company for any of the following reasons:  (i) Participant’s willful failure
substantially to perform his or her duties and responsibilities to the Company
or deliberate violation of a Company policy; (ii) Participant’s commission
of any act of fraud, embezzlement, dishonesty or any other willful misconduct
that has caused or is reasonably expected to result in material injury to the
Company; (iii) unauthorized use or disclosure by Participant of any
proprietary information or trade secrets of the Company or any other party to
whom the Participant owes an obligation of nondisclosure as a result of his or
her relationship with the Company; or (iv) Participant’s willful breach of
any of his or her obligations under any written agreement or covenant with the
Company.  The determination as to whether
a Participant is being terminated for Cause shall be made in good faith by the
Company and shall be final and binding on the Participant.  The foregoing definition does not in any way
limit the Company’s ability to terminate a Participant’s employment or
consulting relationship at any time as provided in Section 5(d) below,
and the term “Company” will be interpreted to include any Subsidiary, Parent or
Affiliate, as appropriate.


 


(f)            “Change
of Control” means (1) a sale of all or substantially all
of the Company’s assets, or (2) any merger, consolidation or other
business combination transaction of the Company with or into another
corporation, entity or person, other than a transaction in which


 


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the
holders of at least a majority of the shares of voting capital stock of the
Company outstanding immediately prior to such transaction continue to hold
(either by such shares remaining outstanding or by their being converted into
shares of voting capital stock of the surviving entity) a majority of the total
voting power represented by the shares of voting capital stock of the Company
(or the surviving entity) outstanding immediately after such transaction, or (3) the
direct or indirect acquisition (including by way of a tender or exchange offer)
by any person, or persons acting as a group, of beneficial ownership or a right
to acquire beneficial ownership of shares representing a majority of the voting
power of the then outstanding shares of capital stock of the Company; provided,
however, that none of the following shall be considered a Change of Control: (i) a
merger effected exclusively for the purpose of changing the domicile of the
Company, (ii) an equity financing in which the Company is the surviving
corporation, or (iii) a transaction in which the stockholders of the
Company immediately prior to the transaction own 50% or more of the voting
power of the surviving corporation immediately following the transaction.  For avoidance of doubt, the term “Change of
Control” does not include the Company’s Series B Preferred Stock
financing, the merger of a wholly owned subsidiary of the Company with Ikaria, Inc.,
or the acquisition of INO Therapeutics LLC by an Affiliate of the Company
(collectively, the “Ikaria-INO Transactions”).


 


(g)           “Code” means the
Internal Revenue Code of 1986, as amended.


 


(h)           “Committee” means one or
more committees or subcommittees of the Board appointed by the Board to
administer the Plan in accordance with Section 4 below.


 


(i)            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), the term “Common Stock” shall mean the
Non-Voting Common Stock, par value $0.01 per share, of the Company.  Upon and following an Initial Public
Offering, the term “Common Stock”
shall mean the Voting Common Stock, par value $0.01 per share, of the Company
and all Options outstanding at the time of the Initial Public Offering (to the
extent not previously exercised) shall automatically convert into options to
purchase an equivalent number of shares of the Company’s Voting Common Stock
without any further action on the part of the Company or any Optionee.


 


(j)            “Company” means Ikaria
Holdings, Inc., a Delaware corporation.


 


(k)           “Consultant” means any
person, including an advisor, who is engaged by the Company or any Parent,
Subsidiary or Affiliate to render services and is compensated for such
services, and any director of the Company whether compensated for such services
or not.


 


(l)            “Continuous
Service Status” means the absence of any interruption or
termination of service as an Employee or Consultant.  Continuous Service Status as an Employee or
Consultant shall not be considered interrupted in the case of:  (i) sick leave; (ii) military
leave; (iii) any other leave of absence approved by the Administrator,
provided that such leave is for a period of not more than ninety (90) days,
unless reemployment upon the expiration of such leave is guaranteed by contract
or statute, or unless provided otherwise pursuant to any policy of the Company
or any Subsidiary, Parent or Affiliate thereof that may be adopted from time to
time; or (iv) in the case of transfers between locations of the Company or
between the Company, its


 


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Parents,
Subsidiaries, Affiliates or their respective successors.  A change in status from an Employee to a
Consultant or from a Consultant to an Employee will not constitute an
interruption of Continuous Service Status.


 


(m)          “Corporate
Transaction” means a sale of all or substantially all of the
Company’s assets, or a merger, consolidation or other capital reorganization or
business combination transaction of the Company with or into another
corporation, entity or person, or the direct or indirect acquisition (including
by way of a tender or exchange offer) by any person, or persons acting as a
group, of beneficial ownership or a right to acquire beneficial ownership of
shares representing a majority of the voting power of the then outstanding
shares of capital stock of the Company.


 


(n)           “Director” means a member
of the Board.


 


(o)           “Employee” means any
person employed by the Company or any Parent, Subsidiary or Affiliate, with the
status of employment determined based upon such factors as are deemed
appropriate by the Administrator in its discretion, subject to any requirements
of the Code or the Applicable Laws.  The
payment by the Company of a director’s fee to a Director shall not be
sufficient to constitute “employment” of such Director by the Company.


 


(p)           “Exchange
Act” means the Securities Exchange Act of 1934, as
amended.


 


(q)           “Fair
Market Value” means, as of any date, the fair market value of the
Common Stock, as determined by the Administrator in good faith on such basis as
it deems appropriate and applied consistently with respect to
Participants.  Whenever possible, the
determination of Fair Market Value shall be based upon the closing price for
the Shares as reported in the Wall Street Journal for the applicable
date.


 


(r)            “Incentive
Stock Option” means an Option intended to qualify as an incentive
stock option within the meaning of Section 422 of the Code, as designated
in the applicable Option Agreement.


 


(s)           “Listed
Security” means any security of the Company that is listed or
approved for listing on a national securities exchange or designated or
approved for designation as a national market system security on an interdealer
quotation system by the National Association of Securities Dealers, Inc.


 


(t)            “Named
Executive” means any individual who, on the last day of the
Company’s fiscal year, is the chief executive officer of the Company (or is
acting in such capacity) or among the four most highly compensated officers of
the Company (other than the chief executive officer).  Such officer status shall be determined
pursuant to the executive compensation disclosure rules under the Exchange
Act.


 


(u)           “Nonstatutory
Stock Option” means an Option not intended to qualify as an
Incentive Stock Option, as designated in the applicable Option Agreement.


 


(v)           “Option” means a stock
option granted pursuant to the Plan.


 


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(w)          “Option
Agreement” means a written document, the form(s) of which
shall be approved from time to time by the Administrator, reflecting the terms
of an Option granted under the Plan and includes any documents attached to or
incorporated into such Option Agreement, including, but not limited to, a
notice of stock option grant and a form of exercise notice.


 


(x)            “Option
Exchange Program” means a program approved by the
Administrator whereby outstanding Options are exchanged for Options with a
lower exercise price or are amended to decrease the exercise price as a result
of a decline in the Fair Market Value of the Common Stock.


 


(y)           “Optioned
Stock” means the Common Stock subject to an Option,


 


(z)            “Optionee” means an
Employee or Consultant who receives an Option.


 


(aa)         “Parent” means a “parent
corporation,” whether now or hereafter existing, as defined in Section 424(e) of
the Code, or any successor provision.


 


(bb)         “Participant” means any
holder of one or more Options, or the Shares issuable or issued upon exercise
of such Options, under the Plan.


 


(cc)         “Plan” means this
2007 Stock Option Plan.


 


(dd)         “Reporting
Person” means an officer, Director, or greater than ten
percent stockholder of the Company within the meaning of Rule 16a-2 under
the Exchange Act, who is required to file reports pursuant to Rule 16a-3
under the Exchange Act.


 


(ee)         “Rule 16b-3” means Rule 16b-3
promulgated under the Exchange Act, as amended from time to time, or any
successor provision.


 


(ff)           “Share” means a share
of the Common Stock, as adjusted in accordance with Section 13 of the
Plan.


 


(gg)         “Stock
Exchange” means any stock exchange or consolidated stock
price reporting system on which prices for the Common Stock are quoted at any
given time.


 


(hh)         “Subsidiary” means a “subsidiary
corporation,” whether now or hereafter existing, as defined in Section 424(f) of
the Code, or any successor provision.


 


(ii)           “Ten
Percent Holder” means a person who owns stock representing more
than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary.


 


3.             Stock
Subject to the Plan.  Subject to the provisions of Section 13
of the Plan, the maximum aggregate number of Shares that may be sold under the
Plan is 8,058,834 Shares of Common Stock, of which number (i) 1,504,088
Shares relate to outstanding options originally granted under the Ikaria, Inc.
2004 Stock Option Plan (the “Existing Options”), which options were
exchanged for options under this Plan in connection with consummation of the
Ikaria-INO


 


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Transactions,
and (ii) the remaining 6,554,746 Shares do not relate to the Existing
Options.  The Shares may be authorized,
but unissued, or reacquired Common Stock. 
If an award should expire or become unexercisable for any reason without
having been exercised in full, or is surrendered pursuant to an Option Exchange
Program, the unpurchased Shares that were subject thereto shall, unless the
Plan shall have been terminated, become available for future grant under the
Plan.  In addition, any Shares of Common
Stock which are retained by the Company upon exercise of an award in order to
satisfy the exercise or purchase price for such award or any withholding taxes
due with respect to such exercise or purchase shall be treated as not issued
and shall continue to be available under the Plan.  Shares issued under the Plan and later
repurchased by the Company pursuant to any repurchase right which the Company
may have shall not be available for future grant under the Plan.


 


4.             Administration
of the Plan.


 


(a)           General.  The Plan shall be administered
by the Board or a Committee, or a combination thereof, as determined by the
Board.  The Plan may be administered by
different administrative bodies with respect to different classes of
Participants and, if permitted by the Applicable Laws, the Board may authorize
one or more officers to make awards under the Plan.


 


(b)           Committee
Composition.  If a Committee has been appointed pursuant to
this Section 4, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board. 
From time to time the Board may increase the size of any Committee and
appoint additional members thereof, remove members (with or without cause) and
appoint new members in substitution therefor, fill vacancies (however caused)
and remove all members of a Committee and thereafter directly administer the
Plan, all to the extent permitted by the Applicable Laws and, in the case of a
Committee administering the Plan in accordance with the requirements of Rule 16b-3
or Section 162(m) of the Code, to the extent permitted or required by
such provisions.  The Committee shall in
all events conform to any requirements of the Applicable Laws.


 


(c)           Powers of
the Administrator.  Subject to the provisions of the Plan and in
the case of a Committee, the specific duties delegated by the Board to such
Committee, the Administrator shall have the authority, in its discretion:


 


(i)            to determine the Fair Market
Value of the Common Stock, in accordance with Section 2(q) of the
Plan, provided that such determination shall be applied consistently with
respect to Participants under the Plan;


 


(ii)           to select the Employees and
Consultants to whom Options may from time to time be granted;


 


(iii)          to determine whether and to
what extent Options are granted;


 


(iv)          to determine the number of
Shares of Common Stock to be covered by each award granted;


 


(v)           to approve the form(s) of
agreement(s) used under the Plan;


 


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(vi)          to determine the terms and
conditions, not inconsistent with the terms of the Plan, of any award granted
hereunder, which terms and conditions include but are not limited to the
exercise or purchase price, the time or times when awards may be exercised
(which may be based on performance criteria), any vesting acceleration or
waiver of forfeiture restrictions, any pro rata adjustment to vesting as a
result of a Participant’s transitioning from full- to part-time service (or
vice versa), and any restriction or limitation regarding any Option, Optioned
Stock or restricted stock issued upon exercise of an Option, based in each case
on such factors as the Administrator, in its sole discretion, shall determine;


 


(vii)         to determine whether and
under what circumstances an Option may be settled in cash under Section 10(c) instead
of Common Stock;


 


(viii)        to implement an Option
Exchange Program on such terms and conditions as the Administrator in its
discretion deems appropriate, provided that no amendment or adjustment to an
Option that would materially and adversely affect the rights of any Optionee
shall be made without the prior written consent of the Optionee;


 


(ix)           to adjust the vesting of an
Option held by an Employee or Consultant as a result of a change in the terms
or conditions under which such person is providing services to the Company or
any Subsidiary, Parent or Affiliate thereof;


 


(x)            to construe and interpret
the terms of the Plan and awards granted under the Plan, which constructions,
interpretations and decisions shall be final and binding on all Participants;
and


 


(xi)           in order to fulfill the
purposes of the Plan and without amending the Plan, to modify grants of Options
to Participants who are foreign nationals or employed outside of the United
States in order to recognize differences in local law, tax policies or customs.


 


5.             Eligibility.


 


(a)           Recipients
of Grants.  Nonstatutory Stock Options may be granted to
Employees and Consultants.  Incentive
Stock Options may be granted only to Employees, provided that Employees of
Affiliates shall not be eligible to receive Incentive Stock Options.


 


(b)           Type of
Option.  Each Option shall be designated in the Option
Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.


 


(c)           ISO
$100,000 Limitation.  Notwithstanding any designation under Section 5(b),
to the extent that the aggregate Fair Market Value of Shares with respect to
which Options designated as Incentive Stock Options are exercisable for the
first time by any Optionee during any calendar year (under all plans of the
Company or any Parent or Subsidiary) exceeds $100,000, such excess Options
shall be treated as Nonstatutory Stock Options. 
For purposes of this Section 5(c), Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market
Value of the Shares subject to an Incentive Stock Option shall be determined as
of the date of the grant of such Option.


 


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(d)           No
Employment Rights.  The Plan shall not confer upon any
Participant any right with respect to continuation of an employment or
consulting relationship with the Company or any Subsidiary, Parent or Affiliate
thereof, nor shall it interfere in any way with such Participant’s right or the
right of the Company or any Subsidiary, Parent or Affiliate thereof to
terminate the employment or consulting relationship at any time for any reason.


 


6.             Term of
Plan.  The Plan shall become effective upon its
adoption by the Board of Directors.  It
shall continue in effect for a term often (10) years unless sooner
terminated under Section 15 of the Plan.


 


7.             Term of
Option.  The term of each Option shall be the term
stated in the Option Agreement; provided that the term shall be no more than
ten years from the date of grant thereof or such shorter term as may be
provided in the Option Agreement and provided further that, in the case of an
Incentive Stock Option granted to a person who at the time of such grant is a
Ten Percent Holder, the term of the Option shall be five years from the date of
grant thereof or such shorter term as may be provided in the Option Agreement.


 


8.             [Reserved.]


 


9.             Option
Exercise Price and Consideration.


 


(a)           Exercise
Price.  The per Share exercise price for the Shares
to be issued pursuant to exercise of an Option shall be such price as is
determined by the Administrator and set forth in the Option Agreement, but
shall be subject to the following:


 


(i)            In the case of an Incentive
Stock Option


 


(A)          granted to an Employee who
at the time of grant is a Ten Percent Holder, the per Share exercise price
shall be no less than 110% of the Fair Market Value per Share on the date of
grant; or


 


(B)           granted to any other
Employee, the per Share exercise price shall be no less than 100% of the Fair
Market Value per Share on the date of grant.


 


(ii)           In the case of a Nonstatutory
Stock Option, the per share Exercise Price shall be such price as determined by
the Administrator provided that if such eligible person is, at the time of the
grant of such Option, a Named Executive of the Company, the per share Exercise
Price shall be no less than 100% of the Fair Market Value on the date of grant
if such Option is intended to qualify as performance-based compensation under Section 162(m) of
the Code.


 


(iii)          Notwithstanding the
foregoing, Options may be granted with a per Share exercise price other than as
required above pursuant to a merger or other corporate transaction.


 


(b)           Permissible
Consideration.  The consideration to be paid for the Shares
to be issued upon exercise of an Option, including the method of payment, shall
be determined by the Administrator (and, in the case of an Incentive Stock
Option, shall be determined at the


 


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time
of grant) and may consist entirely of (1) cash; (2) check; (3) subject
to any requirements of the Applicable Laws (including without limitation Section 153
of the Delaware General Corporation Law), delivery of Optionee’s promissory
note having such recourse, interest, security and redemption provisions as the
Administrator determines to be appropriate after taking into account the
potential accounting consequences of permitting an Optionee to deliver a
promissory note; (4) cancellation of indebtedness; (5) other Shares
that have a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which the Option is exercised, provided that
in the case of Shares acquired, directly or indirectly, from the Company, such
Shares must have been owned by the Optionee for more than six months on the
date of surrender (or such shorter or longer period of time as may be deemed
necessary in the Administrator’s sole discretion to avoid risk of the
incurrence of adverse accounting charges by the Company); provided, however,
that this clause (5) shall only apply to Options granted after March 28,
2007 if permitted by the Administrator at the time of exercise in its sole
discretion; (6) if, as of the date of exercise of an Option the Company
then is permitting employees to engage in a “same-day sale” cashless brokered
exercise program involving one or more brokers, through such a program that
complies with the Applicable Laws (including without limitation the
requirements of Regulation T and other applicable regulations promulgated by
the Federal Reserve Board) and that ensures prompt delivery to the Company of
the amount required to pay the exercise price and any applicable withholding
taxes; or (7) any combination of the foregoing methods of payment.  In making its determination as to the type of
consideration to accept, the Administrator shall consider if acceptance of such
consideration maybe reasonably expected to benefit the Company and the
Administrator may, in its sole discretion, refuse to accept a particular form
of consideration at the time of any Option exercise.


 


10.           Exercise of
Option.


 


(a)           General.


 


(i)            Exercisability.  Any Option granted hereunder
shall be exercisable at such times and under such conditions as determined by
the Administrator, consistent with the term of the Plan and reflected in the
Option Agreement, including vesting requirements and/or performance criteria
with respect to the Company and/or the Optionee.


 


(ii)           Leave of
Absence.  The Administrator shall have the discretion
to determine whether and to what extent the vesting of Options shall be tolled
during any unpaid leave of absence; provided, however, that in the absence of
such determination, vesting of Options shall be tolled during any such unpaid
leave (unless otherwise required by the Applicable Laws).  In the event of military leave, vesting shall
toll during any unpaid portion of such leave, provided that, upon a Participant’s
returning from military leave (under conditions that would entitle him or her
to protection upon such return under the Uniform Services Employment and
Reemployment Rights Act), he or she shall be given vesting credit with respect
to Options to the same extent as would have applied had the Participant
continued to provide services to the Company or any Subsidiary, Parent or
Affiliate thereof throughout the leave on the same terms as he or she was
providing services immediately prior to such leave.


 


(iii)          Minimum
Exercise Requirements.  An Option may not be exercised for a fraction
of a Share.  The Administrator may
require that an Option be exercised


 


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as
to a minimum number of Shares, provided that such requirement shall not prevent
an Optionee from exercising the full number of Shares as to which the Option is
then exercisable.


 


(iv)          Procedures
for and Results of Exercise.  An Option shall be deemed exercised when
written notice of such exercise has been given to the Company in accordance
with the terms of the Option by the person entitled to exercise the Option and
the Company has received full payment for the Shares with respect to which the
Option is exercised.  Full payment may,
as authorized by the Administrator, consist of any consideration and method of
payment allowable under Section 9(b) of the Plan, provided that the
Administrator may, in its sole discretion, refuse to accept any form of
consideration at the time of any Option exercise.  If required by the Option Agreement, it shall
be a condition precedent to the exercise of an Option that the Optionee (and
such Optionee’s spouse, if applicable) execute and deliver to the Company a
counterpart signature page indicating such Optionee’s agreement to be
bound as a “Stockholder” by the Company’s Common Stockholders Agreement
attached to the Option Agreement or that is in use by the Company from time to
time (the “Common Stockholders Agreement”).


 


Exercise of an Option in any
manner shall result in a decrease in the number of Shares that thereafter may
be available, both for purposes of the Plan and for sale under the Option, by
the number of Shares as to which the Option is exercised.


 


(v)           Rights as
Stockholder.  Until the issuance of the Shares (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) and, if required by the Stock Option
Agreement, a counterpart signature page to the Common Stockholders
Agreement, no right to vote or receive dividends or any other rights as a
stockholder shall exist with respect to the Optioned Stock, notwithstanding the
exercise of the Option.  No adjustment
will be made for a dividend or other right for which the record date is prior
to the date the stock certificate is issued, except as provided in Section 13
of the Plan.


 


(b)           Termination
of Employment or Consulting Relationship.  Except as otherwise set forth in this Section 10(b),
the Administrator shall establish and set forth in the applicable Option
Agreement the terms and conditions upon which an Option shall remain
exercisable, if at all, following termination of an Optionee’s Continuous
Service Status, which provisions may be waived or modified by the Administrator
at any time.  Unless the Administrator
otherwise provides in the Option Agreement, to the extent that the Optionee is
not vested in Optioned Stock at the date of termination of his or her
Continuous Service Status, or if the Optionee (or other person entitled to
exercise the Option) does not exercise the Option to the extent so entitled
within the time specified in the Option Agreement or below (as applicable), the
Option shall terminate and the Optioned Stock underlying the unexercised
portion of the Option shall revert to the Plan. 
In no event may any Option be exercised after the expiration of the
Option term as set forth in the Option Agreement (and subject to Section 7).


 


The following provisions (1) shall
apply to the extent an Option Agreement does not specify the terms and
conditions upon which an Option shall terminate upon termination of an Optionee’s
Continuous Service Status, and (2) establish the minimum post-termination
exercise periods that may be set forth in an Option Agreement:


 


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(i)            Termination
other than Upon Disability or Death or for Cause.  In the event of termination of
Optionee’s Continuous Service Status other than under the circumstances set forth
in subsections (ii) through (iv) below, such Optionee may exercise an
Option for ninety (90) days following such termination to the extent the
Optionee was vested in the Optioned Stock as of the date of such
termination.  No termination shall be deemed
to occur and this Section 10(b)(i) shall not apply if (i) the
Optionee is a Consultant who becomes an Employee, or (ii) the Optionee is
an Employee who becomes a Consultant.


 


(ii)           Disability
of Optionee.  In the event of termination of an Optionee’s
Continuous Service Status as a result of his or her disability (including a
disability within the meaning of Section 22(e)(3) of the Code), such
Optionee may exercise an Option at any time within six months following such
termination to the extent the Optionee was vested in the Optioned Stock as of
the date of such termination.


 


(iii)          Death of
Optionee.  In the event of the death of an Optionee
during the period of Continuous Service Status since the date of grant of the
Option, or within ninety (90) days following termination of Optionee’s
Continuous Service Status, the Option may be exercised by Optionee’s estate or
by a person who acquired the right to exercise the Option by bequest or
inheritance at any time within six months following the date of death, but only
to the extent the Optionee was vested in the Optioned Stock as of the date of
death or, if earlier, the date the Optionee’s Continuous Service Status
terminated.


 


(iv)          Termination
for Cause.  In the event of termination of an Optionee’s
Continuous Service Status for Cause, any Option (including any exercisable
portion thereof) held by such Optionee shall immediately terminate in its
entirety upon first notification to the Optionee of termination of the Optionee’s
Continuous Service Status.  If an Optionee’s
employment or consulting relationship with the Company or any Subsidiary,
Parent or Affiliate thereof is suspended pending an investigation of whether
the Optionee shall be terminated for Cause, all the Optionee’s rights under any
Option likewise shall be suspended during the investigation period and the
Optionee shall have no right to exercise any Option.  Nothing in this Section 10(b)(iv) shall
in any way limit the Company’s right to purchase unvested Shares issued upon
exercise of an Option as set forth in the applicable Option Agreement.


 


(c)           Buyout
Provisions.  The Administrator may at any time offer to
buy out for a payment in cash or Shares an Option previously granted under the
Plan based on such terms and conditions as the Administrator shall establish
and communicate to the Optionee at the time that such offer is made.


 


11.           Taxes.


 


(a)           As a condition of the grant,
vesting or exercise of an Option granted under the Plan, the Participant (or in
the case of the Participant’s death, the person exercising the Option) shall
make such arrangements as the Administrator may require for the satisfaction of
any applicable federal, state, local or foreign withholding tax obligations
that may arise in connection with such grant, vesting or exercise of the Option
or the issuance of Shares.  The Company
shall not be required to issue any Shares under the Plan until such obligations
are satisfied.  If the Administrator
allows the withholding or surrender of Shares to satisfy a


 


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Participant’s
tax withholding obligations under this Section 11 (whether pursuant to
Section11(c), (d) or (e), or otherwise), the Administrator shall not allow
Shares to be withheld in an amount that exceeds the minimum statutory withholding
rates for federal and state tax purposes, including payroll taxes.


 


(b)           In the case of an Employee
and in the absence of any other arrangement, the Employee shall be deemed to
have directed the Company or a Subsidiary, Parent or Affiliate thereof, as applicable,
to withhold or collect from his or her compensation an amount sufficient to
satisfy such tax obligations from the next payroll payment otherwise payable
after the date of an exercise of the Option.


 


(c)           This Section 11(c) shall
apply only after the date, if any, upon which the Common Stock becomes a Listed
Security.  In the case of Participant
other than an Employee (or in the case of an Employee where the next payroll
payment is not sufficient to satisfy such tax obligations, with respect to any
remaining tax obligations), in the absence of any other arrangement and to the
extent permitted under the Applicable Laws, the Participant shall be deemed to
have elected to have the Company withhold from the Shares to be issued upon
exercise of the Option that number of Shares having a Fair Market Value
determined as of the applicable Tax Date (as defined below) equal to the amount
required to be withheld; provided, however, that that this
sentence shall only apply to Options granted after March 28, 2007 if
permitted by the Administrator at the time of exercise in its sole
discretion.  For purposes of this Section 11,
the Fair Market Value of the Shares to be withheld shall be determined on the
date that the amount of tax to be withheld is to be determined under the
Applicable Laws (the “Tax Date”).


 


(d)           If permitted by the
Administrator, in its discretion, a Participant may satisfy his or her tax
withholding obligations upon exercise of an Option by surrendering to the
Company Shares that have a Fair Market Value determined as of the applicable
Tax Date equal to the amount required to be withheld.  In the case of shares previously acquired
from the Company that are surrendered under this Section 11 (d), such
Shares must have been owned by the Participant for more than six (6) months
on the date of surrender (or such other period of time as is required for the
Company to avoid adverse accounting charges).


 


(e)           Any election or deemed
election by a Participant to have Shares withheld to satisfy tax withholding
obligations under Section 11(c) or (d) above shall be
irrevocable as to the particular Shares as to which the election is made and
shall be subject to the consent or disapproval of the Administrator.  Any election by a Participant under Section 11(d) above
must be made on or prior to the applicable Tax Date.


 


(f)            In the event an election to
have Shares withheld is made by a Participant and the Tax Date is deferred
under Section 83 of the Code because no election is filed under Section 83(b) of
the Code, the Participant shall receive the full number of Shares with respect
to which the Option is exercised but such Participant shall be unconditionally
obligated to tender back to the Company the proper number of Shares on the Tax
Date.


 


11














 


12.           Non-Transferability
of Options.


 


(a)           General.  Except as set forth in this Section 12,
Options may not be sold, pledged, assigned, hypothecated, transferred or
disposed of in any manner other than by will or by the laws of descent or
distribution.  The designation of a
beneficiary by an Optionee will not constitute a transfer.  An Option may be exercised, during the
lifetime of the holder of an Option, only by such holder or a transferee
permitted by this Section 12.


 


(b)           Limited
Transferability Rights. 
Notwithstanding anything else in this Section 12, the Administrator
may in its discretion grant Nonstatutory Stock Options that may be transferred
by instrument to an inter vivos or testamentary trust in which the Options are
to be passed to beneficiaries upon the death of the trustor (settlor) or by
gift or pursuant to domestic relations orders to “Immediate Family Members” (as
defined below) of the Optionee.  “Immediate
Family” means any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law
(including adoptive relationships), a trust in which these persons have more
than fifty percent of the beneficial interest, a foundation in which these
persons (or the Optionee) control the management of assets, and any other
entity in which these persons (or the Optionee) own more than fifty percent of
the voting interests.


 


13.           Adjustments
Upon Changes in Capitalization, Merger or Certain Other Transactions.


 


(a)           Changes
in Capitalization. 
Subject to any action required under Applicable Laws by the stockholders
of the Company, the number of Shares of Common Stock covered by each
outstanding Option, and the number of Shares of Common Stock that have been
authorized for issuance under the Plan but as to which no Options have yet been
granted or that have been returned to the Plan upon cancellation or expiration
of an Option, as well as the price per Share of Common Stock covered by each
such outstanding Option, shall be proportionately adjusted for any increase or
decrease in the number of issued Shares of Common Stock resulting from a stock
split, reverse stock split, stock dividend, combination, recapitalization or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued Shares of Common Stock effected without receipt of
consideration by the Company; provided, 
however, that conversion of any convertible securities of the Company
shall not be deemed to have been “effected without receipt of consideration.”  Such adjustment shall be made by the
Administrator, whose determination in that respect shall be final, binding and
conclusive.  Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of Shares of Common Stock subject to an Option. 
In the event of 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) or any other conversion of all of the outstanding
shares of the Company’s Non-Voting Common Stock, all outstanding Options shall
automatically convert into options to purchase an equivalent number of shares
of the Company’s Voting Common Stock without any further action on the part of
the Company or any Optionee.


 


12

















 


(b)           Dissolution
or Liquidation.  In the
event of the dissolution or liquidation of the Company, each Option will
terminate immediately prior to the consummation of such action, unless
otherwise determined by the Administrator.


 


(c)           Corporate
Transaction.  In the event
of a Corporate Transaction (including without limitation a Change of Control),
each outstanding Option shall be assumed or an equivalent option or right shall
be substituted by such successor corporation or a parent or subsidiary of such
successor corporation (the “Successor Corporation”), unless the
Successor Corporation does not agree to assume the award or to substitute an
equivalent option or right, in which case such Option shall terminate upon the
consummation of the transaction.


 


For purposes of this Section 13(c),
an Option shall be considered assumed, without limitation, if, at the time of
issuance of the stock or other consideration upon a Corporate Transaction or a
Change of Control, as the case may be, each holder of an Option would be
entitled to receive upon exercise of the award the same number and kind of
shares of stock or the same amount of property, cash or securities as such
holder would have been entitled to receive upon the occurrence of the transaction
if the holder had been, immediately prior to such transaction, the holder of
the number of Shares of Common Stock covered by the award at such time (after
giving effect to any adjustments in the number of Shares covered by the Option
as provided for in this Section 13); provided that if such consideration
received in the transaction is not solely common stock of the Successor
Corporation, the Administrator may, with the consent of the Successor
Corporation, provide for the consideration to be received upon exercise of the
award to be solely common stock of the Successor Corporation equal to the Fair
Market Value of the per Share consideration received by holders of Common Stock
in the transaction.


 


(d)           Certain
Distributions.  In the
event of any distribution to the Company’s stockholders of securities of any
other entity or other assets (other than dividends payable in cash or stock of
the Company) without receipt of consideration by the Company, the Administrator
may, in its discretion, appropriately adjust the price per Share of Common
Stock covered by each outstanding Option to reflect the effect of such
distribution.


 


14.           Time
of Granting Options.  The
date of grant of an Option shall, for all purposes, be the date on which the
Administrator makes the determination granting such Option, or such other date
as is determined by the Administrator, provided that in the case of any
Incentive Stock Option, the grant date shall be the later of the date on which
the Administrator makes the determination granting such Incentive Stock Option
or the date of commencement of the Optionee’s employment relationship with the
Company or any Subsidiary, Parent or Affiliate thereof.  Notice of the determination shall be given to
each Employee or Consultant to whom an Option is so granted within a reasonable
time after the date of such grant.


 


15.           Amendment
and Termination of the Plan.


 


(a)           Authority
to Amend or Terminate. 
The Board may at any time amend, alter, suspend or discontinue the Plan,
but no amendment, alteration, suspension or discontinuation (other than an
adjustment pursuant to Section 13 above) shall be made that would
materially and adversely affect the rights of any Optionee under any
outstanding grant, without his or her consent. 
In addition, to the extent necessary and desirable to comply with the


 


13

















 


Applicable
Laws, the Company shall obtain stockholder approval of any Plan amendment in
such a manner and to such a degree as required.


 


(b)           Effect
of Amendment or Termination. 
Except as to amendments which the Administrator has the authority under
the Plan to make unilaterally, no amendment or termination of the Plan shall
materially and adversely affect Options already granted, unless mutually agreed
otherwise between the Optionee and the Administrator, which agreement must be
in writing and signed by the Optionee and the Company.


 


16.           Conditions
Upon Issuance of Shares. 
Notwithstanding any other provision of the Plan or any agreement entered
into by the Company pursuant to the Plan, the Company shall not be obligated,
and shall have no liability for failure, to issue or deliver any Shares under
the Plan unless such issuance or delivery would comply with the Applicable
Laws, with such compliance determined by the Company in consultation with its
legal counsel.  As a condition to the
exercise of an Option, the Company may require the person exercising the award
to represent and warrant at the time of any such exercise that the Shares are
being purchased only for investment and without any present intention to sell
or distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required by law. 
Shares issued upon exercise of Options granted prior to the date on
which the Common Stock becomes a Listed Security shall be subject to a right of
first refusal in favor of the Company pursuant to which the Participant will be
required to offer Shares to the Company before selling or transferring them to
any third party on such terms and subject to such conditions as is reflected in
the applicable Option Agreement.


 


17.           Reservation
of Shares.  The Company,
during the term of this Plan, will at all times reserve and keep available such
number of Shares as shall be sufficient to satisfy the requirements of the
Plan.


 


18.           Agreements.  Options shall be evidenced by Option
Agreements in such form(s) as the Administrator shall from time to time
approve.


 


19.           Stockholder
Approval.  If required by
the Applicable Laws, continuance of the Plan shall be subject to approval by
the stockholders of the Company within twelve (12) months before or after the
date the Plan is adopted.  Such
stockholder approval shall be obtained in the manner and to the degree required
under the Applicable Laws.


 


20.           Information
and Documents to Optionees. 
Prior to the date, if any, upon which the Common Stock becomes a Listed
Security and if required by the Applicable Laws, the Company shall provide
financial statements at least annually to each Optionee and to each individual
who acquired Shares pursuant to the Plan, during the period such Optionee has
one or more Options outstanding, and in the case of an individual who acquired
Shares pursuant to the Plan, during the period such individual owns such
Shares.  The Company shall not be
required to provide such information if the issuance of Options under the Plan
is limited to key employees whose duties in connection with the Company or any
Subsidiary, Parent or Affiliate thereof assure their access to equivalent
information.


 


14

















 


21.           Awards
Granted to California Residents. 
Options granted under the Plan on any date on which the Common Stock is
not a Listed Security to persons resident in California shall be subject to the
provisions set forth in Attachment A hereto.  To the extent the provisions of the Plan
conflict with the provisions set forth on Attachment A.  the provisions on Attachment A
shall govern the terms of such Options.


 


15

















 


Attachment A

Provisions Applicable to Option Recipients

Resident in California


 


The following additional
terms shall apply if required by the Applicable Laws to (i) Options
granted on any date the Common Stock is not a Listed Security, and (ii) any
Shares issued upon exercise of such Options on any date the Common Stock is not
a Listed Security, which are granted or issued to persons resident in
California as of the date of grant or issuance, as applicable (each such
person, a “California recipient”):


 


1.             In the case of an Option, whether
an Incentive Stock Option or a Nonqualified Stock Option, that is granted to a
California Recipient who, at the time of the grant of such Option, owns stock
representing more than 10% of the total combined voting power of all classes of
stock of the Company or any Parent or Subsidiary, the per Share exercise price
shall be no less than 110% of the Fair Market Value on the grant date.


 


2.             In the case of a Nonqualified Stock
Option that is granted to any other California Recipient, the per Share
exercise price shall be no less than 85% of the Fair Market Value per Share on
the grant date.


 


3.             With respect to an Option issued to
any California Recipient who is not an Officer, Director or Consultant, such
Option shall become exercisable, or any repurchase option in favor of the
Company shall lapse, at the rate of at least 20% per year over five years from
the grant date.


 


4.             The following rules shall
apply to an Option issued to any California Recipient or to stock issued to a
California Recipient upon exercise of an Option, in the event of termination of
the California Recipient’s employment or services with the Company or any
Subsidiary, Parent or Affiliate thereof:


 


(a)           If such termination was for reasons
other than death or disability, the California Recipient shall have at least 30
days after the date of such termination (but in no event later than the
expiration of the term of such Option established by the Plan Administrator as
of the grant date) to exercise such Option.


 


(b)           If such termination was on account of
the death or disability of the California Recipient, the holder of the Option
may, but only within six months from the date of such termination (but in no
event later than the expiration date of the term of such Option established by
the Plan Administrator as of the grant date), exercise the Option to the extent
the California Recipient was otherwise entitled to exercise it at the date of
such termination.  To the extent that the
California Recipient was not entitled to exercise the Option at the date of
termination, or if the holder does not exercise such Option to the extent so
entitled within six months from the date of termination, the Option shall
terminate and the Common Stock underlying the unexercised portion of the Option
shall revert to the Plan.


 


(c)           Section 10(b)(iv) of the
Plan shall apply with equal effect to vested Shares acquired upon exercise of
an Option granted prior to the date, if any, upon which the Common Stock
becomes a Listed Security to a person other than an Officer, Director or
Consultant, in that 


 


A1

















 


the
Company shall have the right to repurchase such Shares from the Participant
upon the following terms:  (A) the
repurchase is made within 90 days of termination of the Participant’s
Continuous Service for Cause at the Fair Market Value of the Shares as of the
date of termination, (B) consideration for the repurchase consists of cash
or cancellation of purchase money indebtedness, and (C) the repurchase
right terminates upon the effective date of the Company’s initial public
offering of its Common Stock.  With
respect to vested Shares issued upon exercise of an Option granted to any
Officer, Director or Consultant, the Company’s right to repurchase such Shares
upon termination of the Participant’s Continuous Service for Cause shall be
made at the Participant’s original cost for the Shares and shall be effected
pursuant to such terms and conditions, and at such time, as the Administrator
shall determine.  Nothing in this Section 10(b)(iv) shall
in any way limit the Company’s right to purchase unvested Shares issued upon
exercise of an Option as set forth in the applicable Option Agreement.


 


5.             The Company shall provide financial
statements at least annually to each California Recipient during the period
such person has one or more Options outstanding, and in the case of an
individual who acquired Shares pursuant to the Plan, during the period such
individual owns such Shares.  The Company
shall not be required to provide such information if the issuance of awards
under the Plan is limited to key employees whose duties in connection with the
Company or any Subsidiary, Parent or Affiliate thereof assure their access to
equivalent information.


 


6.             Unless defined below or otherwise
in this Attachment, Capitalized terms shall have the meanings set forth in the
Plan.  For purposes of this Attachment, “Officer”
means a person who is an officer of the Company within the meaning of Section 16(a) of
the Exchange Act and the rules and regulations promulgated thereunder.


 


A2

















 


Amendment No. 1 to the Ikaria Holdings, Inc. 

2007 Stock Option Plan


 


WHEREAS, Ikaria
Holdings, Inc. a Delaware corporation (the “Company”), has adopted
the Ikaria Holdings, Inc. 2007 Stock Option Plan (the “Plan”) for
the purpose of granting options to purchase shares of common stock, par value
$0.01 per share, of the Company (the “Common Stock”) to the employees
and consultants of the Company or its subsidiaries or affiliates;


 


WHEREAS, Section 15(a) of
the Plan provides that the Board of Directors of the Company (the “Board”)
may amend the Plan, subject, in the case of an amendment that materially and
adversely affects the rights of an optionee under any option granted prior to
such amendment, to such optionee’s consent;


 


WHEREAS, by resolution
dated April 18, 2007, the Compensation Committee of the Board (the “Compensation
Committee”), pursuant to authority granted to it by the Board, amended Section 2(e) of
the Plan to provide that an option agreement may include a definition of “Cause”
that differs from the definition included in the Plan; and


 


WHEREAS, by resolution
dated April 18, 2007, the Compensation Committee, pursuant to authority
granted to it by the Board, amended Section 9(b) of the Plan to
provide that the consideration to be paid for the shares of Common Stock to be
issued upon exercise of an option  may be
paid with the shares underlying such option.


 


NOW
THEREFORE, the Plan is amended as follows:


 


1.             Section 2(e) of
the Plan is amended to insert the following sentence after the last sentence
thereof:


 


“Notwithstanding the
foregoing, an Option Agreement may include a definition of Cause that is
different from the foregoing definition.”


 


2.             Section 9(b) of
the Plan is amended and restated in its entirety to read as follows:


 


“Permissible
Consideration.  The
consideration to be paid for the Shares to be issued upon exercise of an
Option, including the method of payment, shall be determined by the
Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and may consist entirely of (1) cash; (2) check;
(3) subject to any requirements of the Applicable Laws (including without
limitation Section 153 of the Delaware General Corporation Law), delivery
of Optionee’s promissory note having such recourse, interest, security and
redemption provisions as the Administrator determines to be appropriate after
taking into account the potential accounting consequences of permitting an
Optionee to deliver a promissory note; (4) cancellation of indebtedness; (5) other
Shares that have a Fair Market Value on the date of surrender equal to the  aggregate exercise price of the Shares as to
which the Option is exercised, provided that in the case of Shares acquired,
directly or indirectly, from the Company, such Shares must have been owned by
the Optionee for more than six months on the date of surrender (or such shorter
or longer period of time as may be deemed necessary in the Administrator’s sole
discretion to avoid risk of the incurrence of adverse accounting 


 

















 


charges by the Company); (6) Shares
of Optioned Stock that have a Fair Market Value on the date of surrender equal
to the aggregate exercise price of the Shares as to which the applicable Option
is exercised; provided, however, that clauses (5) and (6) shall
apply only to Options granted after March 28, 2007, if permitted by the
Administrator at the time of exercise in its sole discretion; and provided,
further, however, that clause (6) shall apply only to
Nonstatutory Stock Options; (7) if, as of the date of exercise of an
Option the Company then is permitting employees to engage in a “same-day sale”
cashless brokered exercise program involving one or more brokers, through such
a program that complies with the Applicable Laws (including without limitation
the requirements of Regulation T and other applicable regulations promulgated
by the Federal Reserve Board) and that ensures prompt delivery to the Company
of the amount required to pay the exercise price and any applicable withholding
taxes; or (8) any combination of the foregoing methods of payment.  In making its determination as to the type of
consideration to accept, the Administrator shall consider if acceptance of such
consideration may be reasonably expected to benefit the Company and the
Administrator may, in its sole discretion, refuse to accept a particular form
of consideration at the time of any Option exercise.


 


IN WITNESS WHEREOF, this
Amendment has been executed by the undersigned, thereunto duly authorized,
effective as of May 14, 2007.


 


 


	
   

  	
  IKARIA HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Elizabeth A. Larkin

  
	
   

  	
  Name: Elizabeth A. Larkin

  
	
   

  	
  Title:   Chief Financial Officer

  



 


2

















 


Amendment No. 2 to the Ikaria Holdings, Inc. 

2007 Stock Option Plan


 


WHEREAS, Ikaria
Holdings, Inc. a Delaware corporation (the “Company”), has adopted
the Ikaria Holdings, Inc. 2007 Stock Option Plan (the “Plan”) for
the purpose of granting options to purchase shares of common stock, par value
$0.01 per share, of the Company (the “Common Stock”) to the employees
and consultants of the Company or its subsidiaries or affiliates;


 


WHEREAS, Section 15(a) of
the Plan provides that the Board of Directors of the Company (the “Board”)
may amend the Plan, subject, in the case of an amendment that materially and
adversely affects the rights of an optionee under any option granted prior to
such amendment, to such optionee’s consent; and


 


WHEREAS, by resolution
dated January 21, 2008, the Board amended Section 9(b) of the
Plan to clarify the authority of the Administrator (as such term is defined in
the Plan) to determine of the type of consideration to be paid for the shares
of Common Stock to be issued upon exercise of an option.


 


NOW
THEREFORE, Section 9(b) of the Plan is amended and
restated in its entirety to read as follows:


 


“Permissible
Consideration.  The
consideration to be paid for the Shares to be issued upon exercise of an Option,
including the method of payment, shall be 
determined by the Administrator in its sole discretion at the time of
grant or, with  respect to a Nonstatutory
Stock Option, at that time or at any time thereafter and may consist entirely
of (1) cash; (2) check; (3) subject to any requirements of the
Applicable Laws (including without limitation Section 153 of the Delaware
General Corporation Law), delivery of Optionee’s promissory note having such
recourse, interest, security and redemption provisions as the Administrator
determines to be appropriate after taking into account the potential accounting
consequences of permitting an Optionee to deliver a promissory note; (4) cancellation
of indebtedness; (5) other Shares that have a Fair Market Value on the date
of surrender equal to the aggregate exercise price of the Shares as to which
the Option is exercised, provided that in the case of Shares acquired, directly
or indirectly, from the Company, such Shares must have been owned by the
Optionee for more than six months on the date of surrender (or such shorter or
longer period of time as may be deemed necessary in the Administrator’s sole
discretion to avoid risk of the incurrence of adverse accounting charges by the
Company); (6) Shares of Optioned Stock that have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which the applicable Option is exercised; provided, however, that
clauses (5) and (6) shall apply only to Options granted after March 28,
2007; and provided, further, however, that clause (6) shall
apply only to Nonstatutory Stock Options; (7) if, as of the date of
exercise of an Option the Company then is permitting employees to engage in a “same-day
sale” cashless brokered exercise program involving one or more brokers, through
such a program that complies with the Applicable Laws (including without
limitation the requirements of Regulation T and other with applicable
regulations promulgated by the Federal Reserve Board) and that ensures prompt
delivery to the 


 

















 


Company of the amount
required to pay the exercise price and any applicable withholding taxes; or (8) any
combination of the foregoing methods of payment.  In making its determination as to the type of
consideration to accept, the Administrator shall consider if acceptance of such
consideration may be reasonably expected to benefit the Company and the
Administrator may, in its sole discretion, refuse to accept a particular form
of consideration at the time of any Option exercise.”


 


IN WITNESS WHEREOF, this
Amendment has been executed by the undersigned, thereunto duly authorized,
effective as of January 21, 2008.


 


 


	
   

  	
  IKARIA HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Elizabeth A. Larkin

  
	
   

  	
  Name: Elizabeth A. Larkin

  
	
   

  	
  Title:   Chief Financial Officer

  



 


2














 


Amendment No. 3
to the Ikaria Holdings, Inc.


2007 Stock
Option Plan


 


WHEREAS, Ikaria
Holdings, Inc. a Delaware corporation (the “Company”), has adopted
the Ikaria Holdings, Inc. 2007 Stock Option Plan (the “Plan”) for
the purpose of granting options to purchase shares of common stock, par value
$0.01 per share, of the Company (the “Common Stock”) to the employees
and consultants of the Company or its subsidiaries or affiliates;


 


WHEREAS, Section 15(a) of
the Plan provides that the Board of Directors of the Company (the “Board”)
may amend the Plan, subject, in the case of an amendment that materially and
adversely affects the rights of an optionee under any option granted prior to
such amendment, to such optionee’s consent; and


 


WHEREAS, by resolution
dated May 4, 2010, the Board amended Section 9(b) of the Plan to
clarify the authority of the Administrator (as such term is defined in the
Plan) to determine of the type of consideration to be paid for the shares of
Common Stock to be issued upon exercise of an option.


 


NOW THEREFORE, Section 9(b) of
the Plan is amended and restated in its entirety to read as follows:


 


“Permissible Consideration.  The consideration to be paid for the
Shares to be issued upon exercise of an Option, including the method of payment,
may consist entirely of (1) cash; (2) check; (3) subject to any
requirements of the Applicable Laws (including without limitation Section 153
of the Delaware General Corporation Law), delivery of Optionee’s promissory
note having such recourse, interest, security and redemption provisions as the
Administrator determines to be appropriate after taking into account the
potential accounting consequences of permitting an Optionee to deliver a
promissory note; (4) cancellation of indebtedness; (5) other Shares
that have a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which the Option is exercised; (6) Shares
of Optioned Stock that have a Fair Market Value on the date of surrender equal
to the aggregate exercise price of the Shares as to which the applicable Option
is exercised; provided, however, that clauses (5) and (6) shall
apply only to Options granted after March 28, 2007; and provided, further,
however, that clause (6) shall apply only to Nonstatutory Stock
Options; (7) through a “same-day sale” cashless brokered exercise program
involving one or more brokers that complies with the Applicable Laws (including
without limitation the requirements of Regulation T and other applicable
regulations promulgated by the Federal Reserve Board) and that ensures prompt
delivery to the Company of the amount required to pay the exercise price and
any applicable withholding taxes; or (8) any combination of the foregoing
methods of payment.  Notwithstanding the
foregoing, (i) clauses (3) through (6) shall only apply 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)
as determined by the Administrator at the time of grant or with respect to a 


 

















 


NonStatutory Stock Option, at any time thereafter, (ii) clause
(7) shall only apply while the Company’s Shares are publicly traded and (iii) the
availability of any method of payment shall be subject to the terms and conditions
of the Company’s credit facilities as in effect from time to time.”


 


IN WITNESS WHEREOF, this Amendment has been executed
by the undersigned, thereunto duly authorized, effective as of May 4, 2010.


 


	
   

  	
  IKARIA
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Matthew M. Bennett

  
	
   

  	
  Name:
  

  	
  Matthew
  M. Bennett

  
	
   

  	
  Title:

  	
  Senior
  Vice President and Secretary

  



 


2