Document:

Exhibit 10.45

 

IKARIA, INC.

 

2010 EMPLOYEE STOCK PURCHASE PLAN

 

October 15, 2010

 

The
purpose of this Plan is to provide eligible employees of Ikaria, Inc. (the
“Company”) and certain of its subsidiaries with opportunities to purchase
shares of the Company’s common stock, $0.01 par value (the “Common Stock”),
commencing at such time as the Board of Directors of the Company (the “Board”)
shall determine.  Subject to any
adjustment pursuant to Section 15 hereof, one million (1,000,000) shares
of Common Stock in the aggregate have been approved for this purpose; provided,
prior to the termination of the Plan, that number shall be increased
automatically beginning on [January 1, 2012] and on each two-year
anniversary of such date, by the number of shares of Common Stock equal to the
lesser of (i) one million (1,000,000) shares of Common Stock, (ii) one
percent (1%) of the number of outstanding shares of Common Stock on such date
and (iii) the number of shares of Common Stock determined by the
Board.  This Plan is intended to qualify
as an “employee stock purchase plan” as defined in Section 423 of the
Internal Revenue Code of 1986, as amended (the “Code”), and the regulations
issued thereunder, and shall be interpreted and applied consistent therewith.

 

1.             Administration. 
The Plan will be administered by the Board or by a Committee appointed
by the Board (the “Committee”).  The
Board or the Committee has authority to make rules and regulations for the
administration of the Plan and its interpretation and decisions with regard
thereto shall be final and conclusive.

 

2.             Eligibility. 
All employees of the Company and all employees of any subsidiary of the
Company (as defined in Section 424(f) of the Code) designated by the
Board or the Committee from time to time (a “Designated Subsidiary”), are
eligible to participate in any one or more of the offerings of Options (as
defined in Section 9) to purchase Common Stock under the Plan provided
that:

 

(a)           they are customarily employed by the
Company or a Designated Subsidiary for more than 20 hours a week and for more
than five months in a calendar year; and

 

(b)           they are employees of the Company or
a Designated Subsidiary on the Offering Commencement Date (as defined
below).

 

No
employee may be granted an Option hereunder if such employee, immediately after
the Option is granted, owns 5% or more of the total combined voting power
or value of the stock of the Company or any subsidiary.  For purposes of the preceding sentence, the
attribution rules of Section 424(d) of the Code shall apply in
determining the stock ownership of an employee, and all stock that the employee
has a contractual right to purchase shall be treated as stock owned by the
employee.

 

The
Company retains the discretion to determine which eligible employees may
participate in an offering pursuant to and consistent with Treasury Regulation
Sections 1.423-2(e) and (f).

 

 

3.             Offerings.

 

(a)           Offerings;
Purchase Periods.    The Plan shall be implemented by
consecutive, offering periods (“Offerings”) commencing on the first trading day
on or after April 1 and October 1 (each such date, an “Offering
Commencement Date”).  Each Offering shall
be for a period of approximately six months, with the Option (as defined below)
granted with respect to such Offering being exercisable on the trading day that
is approximately six months after the Offering Commencement Date (such date,
the “Exercise Date”).  During each
Offering, payroll deductions will be held for the purchase of Common Stock on
the Exercise Date.

 

(b)           Board
Discretion with Respect to Offerings. 
Notwithstanding anything herein to the contrary, the duration and timing
of the Offerings may be changed with respect to subsequent Offerings, by the
Board or the Committee in its sole discretion without stockholder approval.  For example, but not by way of limitation,
the Board or Committee may, for subsequent Offerings, change the Offering
Commencement Date for Offerings, change the duration for Offerings to a period
of twelve (12) months or less, or choose to have more than one Purchase Period
per Offering.

 

4.             Participation. 
An employee eligible on the Offering Commencement Date of any Offering
may participate in such Offering by completing and submitting, in the manner
determined by the Company, a payroll deduction authorization form at least 10
days prior to the applicable Offering Commencement Date.  The form will authorize a regular
payroll deduction from the Compensation received by the employee during the
Offering.  Unless an employee files a new
form or withdraws from the Plan, his deductions and purchases will continue at
the same rate for future Offerings under the Plan as long as the Plan remains
in effect and the employee remains eligible to participate.  The term “Compensation” means the amount of
money reportable on the employee’s Federal Income Tax Withholding Statement,
excluding overtime, shift premium, spot bonus awards, allowances and
reimbursements for expenses such as relocation allowances for travel expenses,
income or gains associated with the grant or vesting of restricted stock,
income or gains on the exercise of Company stock options or stock appreciation
rights, and similar items, whether or not shown or separately identified on the
employee’s Federal Income Tax Withholding Statement, but including, annual
bonus awards and, in the case of salespersons, sales commissions to the extent
determined by the Board or the Committee.

 

5.             Deductions. 
The Company will maintain payroll deduction accounts for all
participating employees.  With respect to
any Offering made under this Plan, an employee may authorize a payroll
deduction in any dollar amount or percentage up to the maximum amount
determined by the Board for such Offering. 
Any change in compensation during the Offering will result in an
automatic corresponding change in the amount withheld.  In the absence of a determination by the
Board or the Committee, the maximum payroll contribution percentage shall be
15%, and any such designated payroll contribution percentage must be a whole
number.  The Board or the Committee may,
at its discretion, designate a higher or lower maximum contribution rate and
may designate a minimum contribution rate.

 

6.             Deduction Changes.  An employee may decrease or discontinue his
payroll deduction once during any Offering, by filing a new payroll
deduction authorization form.  However,
an employee may not increase his payroll deduction during an
Offering.  If an 

 

 

employee elects to
discontinue his payroll deductions during an Offering, but does not elect to
withdraw his funds pursuant to Section 8 hereof, funds deducted prior to
his election to discontinue will be applied to the purchase of Common Stock on
the next Exercise Date.

 

7.             Interest. 
Interest will not be paid on any employee accounts, except to the extent
that the Board or the Committee, in its sole discretion, elects to credit
employee accounts with interest at such rate as it may from time to time
determine.

 

8.             Withdrawal of Funds.  An employee may at any time prior to the
close of business on the last business day in an Offering and for any reason
permanently draw out the balance accumulated in the employee’s account and
thereby withdraw from participation in an Offering.  Partial withdrawals are not permitted.  The employee may not begin participation again
during the remainder of the Offering during which the employee withdrew his or
her balance.  The employee may
participate in any subsequent Offering in accordance with terms and conditions
established by the Board or the Committee.

 

9.             Purchase
of Shares.

 

(a)           Number
of Shares.               On the
Offering Commencement Date of each Offering, the Company will grant to each
eligible employee who is then a participant in the Plan an option (an “Option”)
to purchase on each Exercise Date at the applicable purchase price (the “Option
Price”) up to a whole number of shares of Common Stock determined by
multiplying $2,083 by the number of full months in the Offering and dividing
the result by the closing price (as determined below) on the Offering
Commencement Date; provided, however, that no employee may be granted an Option
which permits his rights to purchase Common Stock under this Plan and any other
employee stock purchase plan (as defined in Section 423(b) of the
Code) of the Company and its subsidiaries, to accrue at a rate which exceeds
$25,000 of the fair market value of such Common Stock (determined at the date
such Option is granted) for each calendar year in which the Option is
outstanding at any time.

 

(b)           Option Price.         The Board or the Committee shall
determine the Option Price for each Offering, including whether such Option
Price shall be determined based on the lesser of the closing price of the
Common Stock on (i) the first business day of the Offering or (ii) the
Exercise Date, or shall be based solely on the closing price of the Common
Stock on the Exercise Date; provided, however, that such Option Price shall be
at least 85% of the applicable closing price. 
In the absence of a determination by the Board or the Committee, the
Option Price will be 85% of the lesser of the closing price of the Common Stock
on (i) the first business day of the Offering or (ii) the Exercise
Date.  The closing price shall be
(a) the closing price (for the primary trading session) on any national
securities exchange on which the Common Stock is listed or (b) the average
of the closing bid and asked prices in the over-the-counter-market, whichever
is applicable, as published in The Wall Street Journal or another source
selected by the Board or the Committee. 
If no sales of Common Stock were made on such a day, the price of the
Common Stock shall be the reported price for the next preceding day on which
sales were made.

 

(c)           Exercise of Option.               Each employee who continues to be
a participant in the Plan on the Exercise Date shall be deemed to have
exercised his Option at the Option Price

 

 

on
such date and shall be deemed to have purchased from the Company the number of
whole shares of Common Stock reserved for the purpose of the Plan that his
accumulated payroll deductions on such date will pay for, but not in excess of
the maximum numbers determined in the manner set forth above.  .

 

(d)           Return of Unused Payroll
Deductions.  Any balance remaining in
an employee’s payroll deduction account following the exercise of the Option on
the Exercise Date will be automatically refunded to the employee as soon as
administratively possible.

 

10.           Issuance
of Certificates.  Certificates
representing shares of Common Stock purchased under the Plan may be issued only
in the name of the employee, in the name of the employee and another person of
legal age as joint tenants with rights of survivorship, or (in the Company’s
sole discretion) in the name of a brokerage firm, bank, or other nominee holder
designated by the employee.  The Company
may, in its sole discretion and in compliance with applicable laws, authorize
the use of book entry registration of shares in lieu of issuing stock
certificates.

 

11.           Rights
on Retirement, Death or Termination of Employment.  If a participating employee’s employment ends
before the last business day of an Offering, no payroll deduction shall be
taken from any pay then due and owing to the employee and the balance in the
employee’s account shall be paid to the employee.  In the event of the employee’s death before
the last business day of an Offering, the Company shall, upon notification of
such death, pay the balance of the employee’s account (a) to the executor
or administrator of the employee’s estate or (b) if no such executor or
administrator has been appointed to the knowledge of the Company, to such other
person(s) as the Company may, in its discretion, designate.  If, before the last business day of an
Offering, the Designated Subsidiary by which an employee is employed ceases to
be a subsidiary of the Company, or if the employee is transferred to
a subsidiary of the Company that is not a Designated Subsidiary, the
employee shall be deemed to have terminated employment for the purposes of
this Plan.

 

12.           Optionees
Not Stockholders.  Neither the
granting of an Option to an employee nor the deductions from his or her
pay shall make such employee a stockholder of the shares of Common Stock
covered by an Option under this Plan until he or she has purchased and received
such shares.

 

13.           Options
Not Transferable.  Options under this
Plan are not transferable by a participating employee other than by will or the
laws of descent and distribution, and are exercisable during the employee’s
lifetime only by the employee.

 

14.           Application
of Funds.  All funds received or held
by the Company under this Plan may be combined with other corporate funds and
may be used for any corporate purpose.

 

15.           Adjustment
for Changes in Common Stock and Certain Other Events.

 

(a)           Changes in Capitalization.  In the event of any stock split, reverse
stock split, stock dividend, recapitalization, combination of shares,
reclassification of shares, spin-off or other similar change in capitalization
or event, or any dividend or distribution to holders of Common Stock other than
an ordinary cash dividend, (i) the number and class of securities

 

 

available under this Plan, (ii) the share
limitations set forth in Section 9, and (iii) the Option Price shall
be equitably adjusted to the extent determined by the Board or the Committee.

 

(b)           Reorganization
Events.

 

(1)           Definition.  A “Reorganization Event” shall mean:  (a) any merger or consolidation of the
Company with or into another entity as a result of which all of the Common
Stock of the Company is converted into or exchanged for the right to receive cash,
securities or other property or is cancelled, (b) any transfer or
disposition of all of the Common Stock of the Company for cash, securities or
other property pursuant to a share exchange or other transaction or
(c) any liquidation or dissolution of the Company.

 

(2)           Consequences of a Reorganization
Event on Options.  In connection with
a Reorganization Event, the Board or the Committee may take any one or more of
the following actions as to outstanding Options on such terms as the Board or
the Committee determines: 
(i) provide that Options shall be assumed, or substantially
equivalent Options shall be substituted, by the acquiring or succeeding
corporation (or an affiliate thereof), (ii) upon written notice to
employees, provide that all outstanding Options will be terminated immediately
prior to the consummation of such Reorganization Event and that all such
outstanding Options will become exercisable to the extent of accumulated
payroll deductions as of a date specified by the Board or the Committee in such
notice, which date shall not be less than ten (10) days preceding the
effective date of the Reorganization Event, (iii) upon written notice to
employees, provide that all outstanding Options will be cancelled as of a date
prior to the effective date of the Reorganization Event and that all
accumulated payroll deductions will be returned to participating employees on
such date, (iv) in the event of a Reorganization Event under the terms of
which holders of Common Stock will receive upon consummation thereof a cash
payment for each share surrendered in the Reorganization Event (the “Acquisition
Price”), change the next Exercise Date of the Offering to be the date of the
consummation of the Reorganization Event and make or provide for a cash payment
to each employee equal to (A) (i) the Acquisition Price times (ii) the
number of shares of Common Stock that the employee’s accumulated payroll
deductions as of immediately prior to the Reorganization Event could purchase
at the Option Price, where the Acquisition Price is treated as the fair market
value of the Common Stock on the new Exercise Date for purposes of determining
the Option Price under Section 9(b) hereof, and where the number of
shares that could be purchased is subject to the limitations set forth in Section 9(a),
minus (B) the result of multiplying such number of shares by such Option
Price, (v) provide that, in connection with a liquidation or dissolution
of the Company, Options shall convert into the right to receive liquidation
proceeds (net of the Option Price thereof) and (vi) any combination of the
foregoing.

 

For
purposes of clause (i) above, an Option shall be considered assumed if,
following consummation of the Reorganization Event, the Option confers the
right to purchase, for each share of Common Stock subject to the Option
immediately prior to the consummation of the Reorganization Event, the
consideration (whether cash, securities or other property) received as a result
of the Reorganization Event by holders of Common Stock for each share of Common
Stock held immediately prior to the consummation of the Reorganization Event
(and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding shares of
Common Stock); provided, however, that if the

 

 

consideration
received as a result of the Reorganization Event is not solely common stock of
the acquiring or succeeding corporation (or an affiliate thereof), the Company
may, with the consent of the acquiring or succeeding corporation, provide for
the consideration to be received upon the exercise of Options to consist solely
of such number of shares of common stock of the acquiring or succeeding
corporation (or an affiliate thereof) that the Board determines to be equivalent
in value (as of the date of such determination or another date specified by the
Board) to the per share consideration received by holders of outstanding shares
of Common Stock as a result of the Reorganization Event.

 

16.           Amendment
of the Plan.  The Board may at any
time, and from time to time, amend or suspend this Plan or any portion thereof,
except that (a) if the approval of any such amendment by the shareholders
of the Company is required by Section 423 of the Code, such amendment
shall not be effected without such approval, and (b) in no event may any
amendment be made that would cause the Plan to fail to comply with
Section 423 of the Code.

 

17.           Insufficient
Shares.  If the total number of
shares of Common Stock specified in elections to be purchased under any
Offering plus the number of shares purchased under previous Offerings under
this Plan exceeds the maximum number of shares issuable under this Plan, the
Board or the Committee will allot the shares then available on a pro-rata
basis.

 

18.           Termination
of the Plan.  This Plan may be
terminated at any time by the Board. 
Upon termination of this Plan all amounts in the accounts of
participating employees shall be refunded as soon as administratively possible.

 

19.           Governmental
Regulations.  The Company’s
obligation to sell and deliver Common Stock under this Plan is subject to
listing on a national stock exchange (to the extent the Common Stock is then so
listed or quoted) and the approval of all governmental authorities required in
connection with the authorization, issuance or sale of such stock.

 

20.           Governing
Law.  The Plan shall be governed by
Delaware law except to the extent that such law is preempted by federal law.

 

21.           Issuance
of Shares.  Shares may be issued upon
exercise of an Option from authorized but unissued Common Stock, or from any
other proper source determined by the Company.

 

22.           Minimum
Holding Period.  It shall be a
condition to the issuance of the shares to a participant under the Plan that
the participant acknowledge and agree that he or she may not sell, transfer or
otherwise dispose of the shares issued pursuant to the Plan for at least
12 months from the Exercise Date (such 12 month period, the “Minimum
Holding Period”).  The Minimum Holding
Period shall continue to be applicable even if the participant terminates
employment with the Company for any reason or no reason; provided, however,
that the Minimum Holding Period shall be waived in the event that the
participant terminates employment as a result of death, or upon designation of
the participant as having a “long term disability” as defined under the Company’s
disability plan.  Notwithstanding the
foregoing, to the extent that the purchase of shares of Common Stock on the
Exercise Date results in compensation income to the participant, then the
Minimum Holding Period shall be waived with respect to, and the participant
shall be 

 

 

permitted
to sell, such number of shares of Common Stock as have a fair market value
equal to the amount of any Tax obligation (which Tax obligation shall be deemed
to be equal to the amount of the Company’s Tax withholding obligation in
jurisdictions where the Company is obligated to withhold Taxes on the Exercise
Date).  For purposes of this Section 22
of the Plan, “Tax” shall include all federal, state, provincial and local
income, employment and social insurance taxes that may be applicable.

 

23.           Notification
upon Sale of Shares.  Each employee
agrees, by entering the Plan, to promptly give the Company notice of any
disposition of shares purchased under the Plan where such disposition occurs
within two years after the date of grant of the Option pursuant to which such
shares were purchased.

 

24.           Grants to Employees in Foreign Jurisdictions.  The Company may, to comply with the laws of a
foreign jurisdiction, grant Options to employees of the Company or a Designated
Subsidiary who are citizens or residents of such foreign jurisdiction (without
regard to whether they are also citizens of the United States or resident
aliens (within the meaning of Section 7701(b)(1)(A) of the Code))
with terms that are less favorable (but not more favorable) than the terms of
Options granted under the Plan to employees of the Company or a Designated
Subsidiary who are resident in the United States.  Notwithstanding the preceding provisions of
this Plan, employees of the Company or a Designated Subsidiary who are citizens
or residents of a foreign jurisdiction (without regard to whether they are also
citizens of the United States or resident aliens (within the meaning of Section 7701(b)(1)(A) of
the Code)) may be excluded from eligibility under the Plan if (a) the
grant of an Option under the Plan to a citizen or resident of the foreign
jurisdiction is prohibited under the laws of such jurisdiction or (b) compliance
with the laws of the foreign jurisdiction would cause the Plan to violate the
requirements of Section 423 of the Code. 
The Company may add one or more appendices to this Plan describing the
operation of the Plan in those foreign jurisdictions in which employees are
excluded from participation or granted less favorable Options.

 

25.           Authorization of Sub-Plans.  The Board may from time to time establish one
or more sub-plans under the Plan with respect to one or more Designated
Subsidiaries, provided that such sub-plan complies with Section 423 of the
Code.

 

26.           Withholding. 
If applicable tax laws impose a tax withholding obligation, each
affected employee shall, no later than the date of the event creating the tax
liability, make provision satisfactory to the Board for payment of any taxes
required by law to be withheld in connection with any transaction related to
Options granted to or shares acquired by such employee pursuant to the
Plan.  The Company may, to the extent
permitted by law, deduct any such taxes from any payment of any kind otherwise
due to an employee.

 

27.           Effective Date and Approval of Shareholders.  The Plan shall take effect on
[          ], 2010 subject to
approval by the shareholders of the Company as required by Section 423 of
the Code, which approval must occur within twelve months of the adoption of the
Plan by the Board.

 

 

	
   

  	
  Adopted
  by the Board of Directors on

  
	
   

  	
  October
  13, 2010

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Approved
  by the Stockholders on

  
	
   

  	
  October
  15, 2010Exhibit
10.46

 

Form of Director
Deferred Stock Unit Agreement

 

IKARIA, INC.

 

Director Deferred Stock Unit Agreement

Amended and Restated 2010 Long Term Incentive Plan

 

NOTICE OF GRANT

 

This
Deferred Stock Unit Agreement (this “Agreement”) is made as of the
Agreement Date between Ikaria, Inc. (the “Company”), a Delaware
corporation, and the Participant.

 

I.              Agreement Date

 

Date:

 

II.            Participant Information

 

Participant:

Participant Address:

 

III.           Grant Information

 

Grant Date:

Deferred Stock Units:

 

IV.           Vesting Table

 

	
  Vesting Date

  	
   

  	
  DSUs that Vest

  	
   

  
	
  First anniversary of the Grant Date

  	
   

  	
  100

  	
  %

  

 

This
Agreement includes this Notice of Grant and the following Exhibits, which are
expressly incorporated by reference in their entirety herein:

 

Exhibit A
— General Terms and Conditions

Exhibit B
— Amended and Restated 2010 Long Term Incentive Plan

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Agreement Date.

 

	
  IKARIA,
  INC.

  	
   

  	
  PARTICIPANT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
  Name:

  
	
  Title:

  	
   

  	
   

  

 

1

 

Director Deferred Stock Unit Agreement

Amended and Restated 2010 Long Term Incentive Plan

 

EXHIBIT A

 

GENERAL TERMS AND CONDITIONS

 

For
valuable consideration, receipt of which is acknowledged, the parties hereto
agree as follows:

 

1.                                       Grant of DSUs; Condition of Grant.

 

Grant of DSUs.  In consideration of services
rendered to the Company by the Participant, the Company has granted to the
Participant, subject to the terms and conditions set forth in this Agreement
and in the Company’s Amended and Restated 2010 Long Term Incentive Plan (the “Plan”),
an award of Deferred Stock Units (the “DSUs”),
representing an award of the number of DSUs (the “Share Number”) set
forth in the Notice of Grant that forms part of this Agreement (the “Notice
of Grant”).  The DSUs entitle the
Participant to receive, subject to the vesting of the DSUs described in Section 2
below and at the time set forth in Section 3 below, one share of common
stock, $0.01 par value per share, of the Company (the “Common Stock”)
for each DSU that vests and any related Dividend Equivalents (as defined
below).  The shares of Common Stock that
are issuable upon vesting of the DSUs are referred to in this Agreement as the “Shares.”

 

2.                                       Vesting of the DSUs.

 

(a)                                  Vesting of the DSUs.  Subject to the other provisions of this Section 2,
the DSUs shall vest in accordance with the Vesting Table set forth in the
Notice of Grant (the “Vesting Table”).

 

(b)                                 Change in Control.  Upon a “change in control event” with respect
to the Company within the meaning of Section 409A of the Internal Revenue
Code and the guidance issued thereunder (“Section 409A”), the
vesting of the DSUs shall accelerate in full. 
Such event is referred to herein as a “Section 409A Change in
Control”.

 

(c)                                  Service Termination.

 

(1)                                  Termination of the Participant.  Except to the
extent specifically otherwise provided in another agreement between the
Particpant and the Company or in Section 2(c)(2) below, upon the
termination of the Participant’s service to the Company as a director,
employee, officer or advisor for any reason or no reason, all DSUs that
have not vested pursuant to Section 2(a) or Section 2(b) shall
be automatically forfeited as of such termination.

 

(2)                                  Death.  Upon the death of the Participant, the
vesting of the DSUs shall accelerate in full.

 

(3)                                  Termination for Cause.  Notwithstanding anything herein to the
contrary, in the event that the Participant is terminated for Cause, any DSUs
that have vested 

 

2

 

shall be forfeited and no
Shares or Dividend Equivalents shall be issued pursuant to Sections 3 and 4,
respectively, to the Participant.  If the
Participant is party to an employment or severance agreement with the Company
that contains a definition of “cause” for termination of service, “Cause” shall
have the meaning ascribed to such term in such agreement.  Otherwise, “Cause” shall mean (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 (including, without limitation, breach by the Participant of
any provision of any employment, consulting, advisory, nondisclosure,
non-competition or other similar agreement between the Participant and the
Company), as determined by the Board, which determination shall be conclusive.

 

(4)                                  Service with Affiliated or Successor Companies.  For purposes of this Agreement,
service to the Company shall include service with a parent or subsidiary of the
Company (each as defined under the Plan), or any successor to the Company.

 

3.                                       Issuance of Shares.

 

(a)                                  The Shares that are subject to vested DSUs shall be issued to the
Participant (or his or her estate, if applicable) or to the broker designated
by the Participant (or his or her estate, if applicable), in certificated or
uncertificated form, on the earliest to occur of:

 

(1)                                  The Participant’s “separation from service” from the Company within the
meaning of Section 409A;

 

(2)                                  The Participant’s “disability” within the meaning of Section 409A;

 

(3)                                  The Participant’s death; and

 

(4)                                  A Section 409A Change in Control.

 

(b)                                 In no event shall the Company or the Participant have any right to
accelerate or defer issuance of the Shares to a time or event other than as set
forth in Section 3(a) unless permitted or required by Section 409A.

 

(c)                                  Only if the Participant is a “specified employee” of the Company (within
the meaning of Section 409A) and such Shares are issued to the Participant
as a result of his or her separation from service (within the meaning of Section 409A),
the delivery of the Shares shall be delayed until the date that is the earlier
of (1) six months and one day after the date of the separation from service
and (2) the date of the Participant’s death.

 

(d)                                 Except as set forth in Section 4, the Participant shall have no
rights as a stockholder of the Company with respect to the Shares of Common
Stock underlying the DSUs, including no voting rights, until such time as the
Shares, if any, are issued to the Participant pursuant to this Section 3.

 

3

 

4.                                       Dividends.  An amount equal to any dividends or other
distributions that are declared and paid by the Company with respect to the
number of Shares of Common Stock underlying the vested portion of the DSUs (“Dividend
Equivalents”) shall be credited to an account for the Participant and such
Dividend Equivalents shall be settled, in the discretion of the Board, in
either cash or shares of Common Stock having a value equal to the amount of
such account, at the time that the Shares are delivered to the Participant
pursuant to Section 3(a) of this Agreement.

 

5.                                       Withholding Taxes.

 

(a)                                  Participant acknowledges that he or she has reviewed with his or her own
tax advisors the federal, state, local and foreign tax consequences of this
investment and the actions contemplated by this Agreement.  Participant affirms that he or she is relying
solely on such advisors and not on any statements or representations of the
Company or any of its agents.

 

(b)                                 The Company’s obligation to issue Shares to Participant pursuant to Section 3
shall be subject to Participant’s satisfaction of all applicable income tax
(including federal, state and local taxes), social insurance, payroll tax, or
other tax related withholding requirements associated with or related to the
grant, vesting or delivery of the Shares (“Withholding Taxes”).

 

6.                                       Restrictions on Transfer.  Neither the DSUs nor any interest therein may
be sold, assigned, transferred, pledged or otherwise encumbered by the
Participant, either voluntarily or by operation of law, except by will or the
laws of descent and distribution.  The
terms of this Agreement shall be binding upon the executors, administrators,
heirs, successors and assigns of the Participant.

 

7.                                       Effect of Transaction.

 

(a)                                  In connection with a Transaction (as defined in the Plan), the Board of
Directors or a designated committee thereof (the “Committee”) may take any one
or more of the following actions with respect to the DSUs on such terms as the
Committee determines (except to the extent specifically otherwise provided in
another agreement between the Company and the Participant):  (i) provide that outstanding DSUs shall
become vested upon such Transaction, (ii) provide that the DSUs shall be
assumed, or substantially equivalent DSUs shall be substituted, by the
acquiring or succeeding corporation (or an affiliate thereof), (iii) in
the event of a Transaction under the terms of which holders of Common Stock
will receive upon consummation thereof a cash payment for each share
surrendered in the Transaction (the “Acquisition Price”), provide for a
cash payment to Participant with respect to each DSU held by a Participant, to
be paid at the time set forth in Section 3(a), in an amount equal to (A) the
number of DSUs vested upon or immediately prior to such Transaction multiplied
by (B) the excess of (I) the Acquisition Price over (II) any
applicable tax withholdings, in exchange for the termination of such Award,
(iv) provide that, in connection with a liquidation or dissolution of the
Company, the DSUs shall convert into the right to receive, at the time set
forth in Section 3(a), the liquidation proceeds (if applicable, net of any
applicable tax withholdings), (v) any other action permitted under the
Plan and (vi) any combination of the foregoing.  In taking any of the actions permitted under
this Section 7(a), the Board shall not be obligated by the Plan or this 

 

4

 

Agreement to treat all Awards
under the Plan, all Awards held by Participant, or all Awards of the same type,
identically.

 

(b)                                 Notwithstanding the terms of Section 7(a), (i) if the
Transaction constitutes a Section 409A Change in Control, then no
assumption or substitution shall be permitted pursuant to Section 7(a)(ii) and
instead the Shares with respect to any vested DSUs shall be issued to the
Participant upon such Transaction consistent with Section 3(a) of this
Agreement; and (ii) the Committee may only undertake the actions set forth
in clauses (i), (iii), (iv) or (v) of Section 7(a) if the
Transaction constitutes a Section 409A Change in Control and/ or such
action is permitted or required by Section 409A of the Code; if the
Transaction is not a Section 409A Change in Control or such action is not
permitted or required by Section 409A of the Code, and the acquiring or
succeeding corporation does not assume or substitute the DSUs pursuant to
clause (ii) of Section 7(a), then the unvested DSUs shall terminate
immediately prior to the consummation of the Transaction without any payment in
exchange therefor.

 

(c)                                  For purposes of Section 7(a)(ii), the DSU shall be considered
assumed if, following consummation of the Transaction, such award confers the
right to receive pursuant to the terms of such award, for each share of Common
Stock subject to the DSU immediately prior to the consummation of the
Transaction, the consideration (whether cash, securities or other property)
received as a result of the Transaction by holders of Common Stock for each
share of Common Stock held immediately prior to the consummation of the
Transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding shares of
Common Stock); provided, however, that if the
consideration received as a result of the Transaction is not solely common
stock of the acquiring or succeeding corporation (or an affiliate thereof), the
Company may, with the consent of the acquiring or succeeding corporation,
provide for the consideration to be received upon the exercise or settlement of
the award to consist solely of such number of shares of common stock of the
acquiring or succeeding corporation (or an affiliate thereof) that the
Committee determined to be equivalent in value (as of the date of such
determination or another date specified by the Committee) to the per share
consideration received by holders of outstanding shares of Common Stock as a
result of the Transaction.

 

8.                                       Miscellaneous.

 

(a)                                  No Rights to Service.  The Participant acknowledges and agrees that
the grant of the DSUs and their vesting pursuant to Section 2 do not
constitute an express or implied promise of a continued service relationship
for the vesting period of the DSUs, or for any period.

 

(b)                                 Section 409A.  This Agreement is intended to comply with the
requirements of Section 409A and shall be construed consistently
therewith.  In any event, the Company
makes no representations or warranties and will have no liability to the
Participant or to any other person, if any of the provisions of or payments
under this Agreement are determined to constitute nonqualified deferred
compensation subject to Section 409A but that do not satisfy the
requirements of that Section. 
Notwithstanding anything herein to the contrary, the rights provided for
under this Agreement shall constitute an unfunded and unsecured promise of the
Company.

 

5

 

(c)                                  Entire Agreement.  This Agreement and the Plan constitute the
entire agreement between the parties, and supersede all prior agreements and
understandings, relating to the subject matter of this Agreement.  In the event of a conflict between the terms
and provisions of the Plan and the terms and provisions of this Agreement, the
Plan terms and provisions shall prevail.

 

(d)                                 Governing Law.  This Agreement shall be construed,
interpreted and enforced in accordance with the internal laws of the State of
Delaware, without regard to any applicable conflict of law principles.

 

(e)                                  Interpretation.  The interpretation and construction of any
terms or conditions of the Plan or this Agreement by the Committee shall be
final and conclusive.

 

6

 

EXHIBIT B

 

AMENDED AND RESTATED 2010 LONG TERM INCENTIVE PLAN

 

See
Amended and Restated 2010 Long Term Incentive Plan of Ikaria, Inc., filed as Exhibit
10.3 to Ikaria, Inc.’s Amendment No. 1 to Registration Statement on Form S-1, filed
with the Securities and Exchange Commission on August 17, 2010.

 

7

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