Document:

irwd_Ex10_2

		
			EXHIBIT 10.2
		

		
			 
		

		
			IRONWOOD PHARMACEUTICALS, INC.
		

		
			 
		

		
			Restricted Stock Unit Award Notice
		

		
			 
		

		
			Restricted Stock Unit Award under the
		

		
			Amended and Restated 2010 Employee, Director and Consultant Equity Incentive Plan
		

		
			 
		

		
			Name and Address of Participant:
		

		
			Award Number:
		

		
			Plan: 2010 Plan
		

		
			 
		

		
			Ironwood Pharmaceuticals, Inc. (the “Company”) hereby grants to the above-named Participant an award of restricted units of Class A Common Stock of the Company (the “Award”), subject to the additional terms and conditions in the Restricted Stock Unit Agreement and the Amended and Restated 2010 Employee, Director and Consultant Equity Incentive Plan (the “2010 Plan”) which are delivered concurrently herewith and incorporated by reference, as follows:
		

		
			 
		

		
			Grant Date:
		

		
			Total Number of Restricted Stock Units Subject to this Award (the “Restricted Stock Units):
		

		
			Vest Dates:
		

		
			 
		

		
			Vesting Schedule: Unless earlier terminated, forfeited, relinquished or expired, the Award shall vest as follows, provided in each case that the Participant has remained in continuous service as an Employee, director or Consultant of the Company or of an Affiliate from the Grant Date through the applicable Vest Date:
		

		
			 
		

		
			By your acceptance of this Award, you acknowledge receipt of this Restricted Stock Unit Award Notice, the Restricted Stock Unit Agreement, the 2010 Plan (collectively, the “Award Documents”) and the prospectus for the 2010 Plan, and you further agree to be bound by all of the terms and conditions of the Award Documents.
		

		
			 
		

		
			IRONWOOD PHARMACEUTICALS, INC.
		

		
			 
		

		
			    
		

			
					
						By:

					
						 

					
					
						 

					
						 

					
					
						 

					
						 

				
	
					
						Name:

					
						 

					
					
						 

					
						 

					
					
						 

					
						 

				
	
					
						Title:

					
						 

					
					
						 

					
						 

					
					
						 

					
						 

				

		
			 
		

		
			
		

		
			

		 

 

		

		
			RESTRICTED STOCK UNIT AGREEMENT
		

		
			 
		

		
			IRONWOOD PHARMACEUTICALS, INC.
		

		
			 
		

		
			AGREEMENT (together with the Restricted Stock Unit Award Notice, the “Agreement”) made as of the date of grant set forth in the attached Restricted Stock Unit Award Notice (the “Grant Date”), between Ironwood Pharmaceuticals, Inc. (the “Company”), a Delaware corporation, and the individual whose name appears on the attached Restricted Stock Unit Award Notice (the “Participant”) pursuant to and subject to the terms of the Ironwood Pharmaceuticals, Inc. Amended and Restated 2010 Employee, Director and Consultant Equity Incentive Plan (as amended from time to time, the “Plan”).
		

		
			 
		

		
			WHEREAS, the Company has adopted the Plan to promote the interests of the Company by providing an incentive for Employees, directors and Consultants of the Company;
		

		
			 
		

		
			WHEREAS, pursuant to the provisions of the Plan, the Company desires to offer to the Participant restricted units of Common Stock (“Restricted Stock Units”) in accordance with the provisions of the Plan, all on the terms and conditions hereinafter set forth;
		

		
			 
		

		
			WHEREAS, the Participant wishes to accept said offer; and
		

		
			 
		

		
			WHEREAS, the parties hereto understand and agree that any terms used and not defined herein have the meanings ascribed to such terms in the Plan.
		

		
			 
		

		
			NOW, THEREFORE, in consideration of the promises and the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and subject to the Participant’s continued compliance with any restrictive covenants contained in the Participant’s Employee Agreement or other agreement with the Company, the parties hereto hereby agree as follows:
		

		
			 
		

			
	
			
				 1.
			Grant of Restricted Stock Units.  The Company hereby grants to the Participant on the Grant Date an award for the number of Restricted Stock Units indicated on the attached Restricted Stock Unit Award Notice (the “Award”) consisting of the right to receive, on the terms provided herein and in the Plan, one share of Common Stock with respect to each Restricted Stock Unit forming part of the Award, in each case, subject to adjustment pursuant to Section 20 of the Plan in respect of transactions occurring after the date hereof.

			
	
			
				 2.
			Vesting.  The term “vest” as used herein with respect to any Restricted Stock Unit means the lapsing of the forfeiture rights described herein with respect to such Restricted Stock Unit.  Unless earlier terminated, forfeited, relinquished or expired, the Award shall vest as indicated on the attached Restricted Stock Unit Award Notice, provided in each case that the Participant has remained in continuous service as an Employee, director or Consultant of the Company or of an Affiliate from the Grant Date through the applicable vesting date.

			
	
			
				 3.
			Forfeiture Rights.  If the Participant’s service as an Employee, director, or Consultant of the Company or of an Affiliate ceases for any reason other than the death of the Participant, any then outstanding and unvested Restricted Stock Units acquired by the Participant hereunder shall be automatically and immediately forfeited.  In the event of the death of the Participant while an Employee, director or Consultant of the Company or of an Affiliate, the outstanding and unvested Restricted Stock Units acquired by the Participant hereunder will accelerate and vest in full upon the Participant’s death.  No later than the date thirty (30) days prior to the first vesting date set forth on the attached Restricted Stock Unit Award Notice, the Participant must activate his/her Company stock plan account with Agent (as defined below).  If the Participant fails to activate such account in accordance with the foregoing sentence, the Participant hereby acknowledges and agrees that the Company may, in its sole discretion and without notice, terminate and cancel the Restricted Stock Units and the Award in their entirety, such cancellation to be deemed a forfeiture of the Restricted Stock Units and the Award by the Participant.

		
			

		 

		

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				 4.
			Delivery of Common Stock.  The Company shall deliver to the Participant as soon as practicable upon the vesting of the Award (or any portion thereof), but in all events no later than thirty (30) days following the date on which Restricted Stock Units vest (or no later than seventy-five (75) days following the date on which such Restricted Stock Units vest in the event of the Participant’s death), one share of Common Stock with respect to each such fully vested Restricted Stock Unit, subject to the terms of the Plan and this Agreement.  No fractional shares shall be issued.

			
	
			
				 5.
			Dividends, etc.  The Participant shall have the rights of a shareholder with respect to a share of Common Stock subject to the Award only at such time, if any, as such share is actually delivered under the Award.  Without limiting the generality of the foregoing and for the avoidance of doubt, the Participant shall not be entitled to vote any share of Common Stock subject to the Award or to receive or be credited with any dividend or other distribution declared and payable on any such share unless such share has been actually delivered hereunder and is held by the Participant on the record date for such vote or dividend (or other distribution), as the case may be.

			
	
			
				 6.
			Nontransferability, etc.  Except as set forth in Section 13 of the Plan, neither the Award nor the Restricted Stock Units may be transferred, assigned, pledged or hypothecated in any way. In the event the Award or the Restricted Stock Units are transferred, or in the event a spouse or domestic partner has or is deemed to have any community property rights with respect to the Award or the Restricted Stock Units, the transferee, spouse, or domestic partner, as applicable, will be subject to and bound by all terms and conditions of this Agreement and the Plan.

			
	
			
				 7.
			Certain Tax Matters; Sell to Cover.  

			
	
			
				 (a)
			

			
	
			
			The Participant expressly acknowledges and agrees that the Participant’s rights hereunder, including the right to be issued shares of Common Stock upon the vesting of the Award (or any portion thereof), are subject to the Participant’s promptly paying, or in respect of any later requirement of withholding being liable promptly to pay at such time as such withholdings are due, to the Company in cash (or by such other means as may be acceptable to the Administrator in its discretion) all taxes required to be withheld, if any, relating to the Award (the “Withholding Obligation”).  

			
	
			
				 (b)
			

			
	
			
			By accepting this Award, the Participant hereby acknowledges and agrees that he or she elects to sell shares of Common Stock issued in respect of the Award and to allow the Agent to remit the cash proceeds of such sale to the Company (“Sell to Cover”) to satisfy the Withholding Obligation, to the extent that the Company chooses to satisfy the Withholding Obligation by such means.

			
	
			
				 (c)
			

			
	
			
			If the Withholding Obligation is satisfied through a Sell to Cover, the Participant hereby irrevocably appoints E*Trade, or such other registered broker-dealer that is a member of the Financial Industry Regulatory Authority as the Company may select, as the Participant’s agent (the “Agent”), and the Participant authorizes and directs the Agent to: (i) sell on the open market at the then prevailing market price(s), on the Participant’s behalf, as soon as practicable on or after the date on which the shares of Common Stock are delivered to the Participant pursuant to Section 4 hereof in connection with the vesting of the Restricted Stock Units, the number (rounded up to the next whole number) of shares of Common Stock sufficient to generate proceeds to cover (A) the satisfaction of the Withholding Obligation arising from the vesting of the Restricted Stock Units and the related issuance and delivery of shares of Common Stock to the Participant and (B) all applicable fees and commissions due to, or required to be collected by, the Agent with respect thereto; (ii) remit directly to the Company the proceeds from the sale of the shares of Common Stock referred to in clause (i) above necessary to satisfy the Withholding Obligation; (iii) retain the amount required to cover all applicable fees and commissions due to, or required to be collected by, the Agent, relating directly to the sale of the 

		 

		

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	shares of Common Stock referred to in clause (i) above; and (iv) maintain any remaining funds from the sale of the shares of Common Stock referred to in clause (i) above in the Participant’s account with the Agent. The Participant hereby authorizes the Company and the Agent to cooperate and communicate with one another to determine the number of shares of Common Stock that must be sold to satisfy the Participant’s obligations hereunder and to otherwise effect the purpose and intent of this Agreement and satisfy the rights and obligations hereunder.

			
	
			
				 (d)
			

			
	
			
			The Participant acknowledges that the Agent is under no obligation to arrange for the sale of Common Stock at any particular price under a Sell to Cover and that the Agent may affect sales under any Sell to Cover in one or more sales and that the average price for executions resulting from bunched orders may be assigned to the Participant’s account. The Participant further acknowledges that he or she will be responsible for all brokerage fees and other costs of sale associated with any Sell to Cover or transaction contemplated by this Section 7 and agrees to indemnify and hold the Company harmless from any losses, costs, damages, or expenses relating to any such sale.  In addition, the Participant acknowledges that it may not be possible to sell shares of Common Stock as provided for in this Section 7 due to various circumstances. If it is not possible to sell shares of Common Stock in a Sell to Cover, the Company will assist the Participant in determining additional alternatives available to the Participant.  In the event of the Agent’s inability to sell shares of Common Stock, the Participant will continue to be responsible for the timely payment to the Company of all federal, state, local and foreign taxes that are required by applicable laws and regulations to be paid or withheld with respect to the Restricted Stock Units or the Award.  In such event, or in the event that the Company determines that the cash proceeds from a Sell to Cover are insufficient to meet the Withholding Obligation, the Participant authorizes the Company and its subsidiaries to withhold such amounts from any amounts otherwise owed to the Participant, but nothing in this sentence shall be construed as relieving the Participant of any liability for satisfying his or her obligations under the preceding provisions of this Section. 

			
	
			
				 (e)
			

			
	
			
			The Participant hereby agrees to execute and deliver to the Agent or the Company any other agreements or documents as the Agent or the Company reasonably deem necessary or appropriate to carry out the purposes and intent of this Agreement, including without limitation, any agreement intended to ensure the Sell to Cover and the corresponding authorization and instruction to the Agent set forth in this Section 7 to sell Common Stock to satisfy the Withholding Obligation comply with the requirements of Rule 10b5-1(c) under the Exchange Act. The Agent is a third-party beneficiary of this Section 7. 

			
	
			
				 (f)
			

			
	
			
			The Participant’s election to Sell to Cover to satisfy the Withholding Obligation is irrevocable.  Upon acceptance of the Award, the Participant has elected to Sell to Cover to satisfy the Withholding Obligation, and the Participant acknowledges that he or she may not change this election at any time in the future.

			
	
			
				 (g)
			

			
	
			
			The Participant expressly acknowledges that because the Award consists of an unfunded and unsecured promise by the Company to deliver Common Stock in the future, subject to the terms hereof, it is not possible to make a so-called “83(b) election” with respect to the Award.

			
	
			
				 8.
			Plan; Form S-8 Prospectus.  The Participant acknowledges having received and reviewed a copy of the Plan and the prospectus required by Part I of Form S-8 relating to shares of Common Stock that may be issued under the Plan.  

			
	
			
				 9.
			Section 409A of the Code.  This Agreement shall be interpreted and administered in such a manner that all provisions relating to the grant and settlement of the Award are exempt from the requirements of Section 409A of the Code.

		
			

		 

		

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				 10.
			No Obligation to Maintain Relationship.  The Company is not by the Plan or this Award obligated to continue the Participant as an Employee, director or Consultant of the Company or an Affiliate.  The Participant acknowledges: (a) that the Plan is discretionary in nature and may be suspended or terminated by the Company at any time; (b) that the grant of the Restricted Stock Units is a one-time benefit which does not create any contractual or other right to receive future grants of restricted stock units, or benefits in lieu of restricted stock units; (c) that all determinations with respect to any such future grants, including, but not limited to, the times when restricted stock units shall be granted, the number of shares subject to restricted stock unit award, and the vesting terms, will be at the sole discretion of the Company; (d) that the Participant’s participation in the Plan is voluntary; (e) that the value of the Restricted Stock Units is an extraordinary item of compensation which is outside the scope of the Participant’s employment or consulting contract, if any; and (f) that the Restricted Stock Units are not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits or similar payments.

			
	
			
				 11.
			Notices.  Notices hereunder shall be mailed or delivered to the Company at its principal place of business and shall be mailed or delivered to the Participant at the address on file with the Company or, in either case, at such other address as one party may subsequently furnish to the other party in writing. 

			
	
			
				 12.
			Benefit of Agreement.  Subject to the provisions of the Plan and the other provisions hereof, this Agreement shall be for the benefit of and shall be binding upon the heirs, executors, administrators, successors and assigns of the parties hereto.

			
	
			
				 13.
			Governing Law.  This Agreement shall be construed and enforced in accordance with the laws of the State of Delaware, without giving effect to the conflict of law principles thereof.  For the purpose of litigating any dispute that arises under this Agreement, whether at law or in equity, the parties hereby consent to exclusive jurisdiction in Massachusetts and agree that such litigation shall be conducted in the state courts of Middlesex County or the federal courts of the United States for the District of Massachusetts.

			
	
			
				 14.
			Severability.  If any provision of this Agreement is held to be invalid or unenforceable by a court of competent jurisdiction, then such provision or provisions shall be modified to the extent necessary to make such provision valid and enforceable, and to the extent that this is impossible, then such provision shall be deemed to be excised from this Agreement, and the validity, legality and enforceability of the rest of this Agreement shall not be affected thereby.

			
	
			
				 15.
			Entire Agreement.  The Plan is incorporated herein by reference. This Agreement, together with the Plan, constitutes the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings relating to the subject matter hereof.  No statement, representation, warranty, covenant or agreement not expressly set forth in this Agreement shall affect or be used to interpret, change or restrict the express terms and provisions of this Agreement; provided, however, in any event, this Agreement shall be subject to and governed by the Plan.

			
	
			
				 16.
			Modifications and Amendments; Waivers and Consents.  The terms and provisions of this Agreement may be modified or amended as provided in the Plan.  Except as provided in the Plan, the terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by written document executed by the party entitled to the benefits of such terms or provisions.  No such waiver or consent shall be deemed to be or shall constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether or not similar.  Each such waiver or consent shall be effective only in the specific instance and for the purpose for which it was given, and shall not constitute a continuing waiver or consent.

			
	
			
				 17.
			Counterparts.  This Agreement may be executed in one or more counterparts, and by different parties hereto on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

		
			

		 

		

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				 18.
			Data Privacy.  By entering into this Agreement, the Participant: (a) authorizes the Company, and any agent of the Company administering the Plan or providing Plan record keeping services, to disclose to the Company such information and data as the Company shall request in order to facilitate the grant of the Award and the administration of this Agreement and the Plan, (b) waives any data privacy rights he or she may have with respect to such information, and (c) authorizes the Company to store and transmit such information in electronic form.

			
	
			
				 19.
			Acknowledgments.  The Participant hereby consents to receive Plan documentation by electronic delivery and to participate in the Plan through an online system designated by the Company. By accepting the Award through electronic means, the Participant agrees to be bound by, and agrees that the Award is, and the Restricted Stock Units are, subject in all respects to, the terms of this Agreement and the Plan.  The Participant further acknowledges and agrees that (a) the signature to this Agreement on behalf of the Company is an electronic signature that will be treated as an original signature for all purposes hereunder, and (b) such electronic signature will be binding against the Company and will create a legally binding agreement when this Agreement is accepted by the Participant.  The Participant further acknowledges and agrees that unless the Participant notifies the Company in writing that he or she does not accept his or her Award before the first vesting date, he or she will be deemed to have accepted the Award as of the Grant Date, and to be bound by, and have the Award and Restricted Stock Units be subject in all respects to, the terms of this Agreement and the Plan. 

		
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			6irwd_Ex10_3

		

			

		

		
			 
		

		
			EXHIBIT 10.3
		

		
			 
		

		
			IRONWOOD PHARMACEUTICALS, INC.
		

		
			 
		

		
			[AMENDED & RESTATED]
		

		
			EXECUTIVE SEVERANCE AGREEMENT
		

		
			 
		

		
			This [Amended & Restated] Executive Severance Agreement (this “Agreement”) is made as of the day of [  ], (the “Effective Date”) by and between Ironwood Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and [  ] (the “Executive”).
		

		
			 
		

		
			WHEREAS the Executive currently serves as an employee of the Company;
		

		
			 
		

		
			[WHEREAS the Company previously provided for severance benefits for the Executive in specified circumstances pursuant to an Executive Severance Agreement, effective as of [  ], by and between the Company and the Executive (the “Prior Agreement”);] and
		

		
			 
		

		
			WHEREAS the Company and the Executive [now] desire to [amend and restate the Prior Agreement to] provide for [additional] severance benefits for the Executive in specified circumstances that may arise on or after the Effective Date;
		

		
			 
		

		
			NOW, THEREFORE, in consideration of the premises and the mutual promises hereinafter set forth, the Company and the Executive agree as follows:
		

		
			 
		

			
	
			
				 1.
			Severance Benefits.

			
	
			
				 (a)
			If the Executive’s employment terminates by reason of an Involuntary Termination or Constructive Termination (in either case, other than a Change of Control Termination), (i) the Company will pay the Executive an amount equal to [twelve (12)] months of his or her base salary, at the rate in effect as of the Termination Date ([the “Initial Salary Payment”), plus an amount equal to a maximum of six (6) months of his or her base salary for any period beginning as of the first anniversary of the Termination Date during which the Executive has not secured new, reasonably similar full-time employment (the “Additional Salary Payment”, and together with the Initial Salary Payment,] the “Salary Payment”)[, provided that the Executive seeks to obtain such new employment and keep the Company informed thereof, consistent with the terms of the Separation Agreement (as such term is defined in Section 4 below)], (ii) if the termination occurs prior to the payment of an annual cash incentive award from the prior completed year, the Company will pay the Executive such unpaid award to the extent the Executive would have received such award should he or she have been employed on the date such awards are paid to the rest of the Company (the “Prior Year Bonus Payment”), (iii) the Company will pay the Executive a pro rata amount of the Executive’s annual cash incentive award target for the current year (pro-rated based on the percentage of the year worked prior to the termination) (the “Current Year Bonus Payment”), (iv) the Company will pay the Executive an additional amount equal to the Executive’s full annual cash incentive award target for the current year (the “Additional Bonus Payment”) (collectively, the Prior Year Bonus Payment, if any, the Current Year Bonus Payment, and the Additional Bonus Payment are referred to as the “Aggregate Bonus Payment”), (v) provided that the Executive timely elects continued medical coverage pursuant to Part 6 of Subtitle B of Title I of the Employee Retirement Income Security Act of 1974, as amended, the Company will permit the Executive to 

		 

 

		

			

		

	continue to participate in its group medical plan for [twelve (12)] months following the Termination Date[, plus any additional period during which the Executive is not eligible to participate in a group medical plan of another employer other than the Company’s group medical plan, for up to six (6) months following the first anniversary of the Termination Date], at the same rate that the Executive would be required to contribute toward such coverage if he or she were actively employed (the “COBRA Coverage”), and (vi) the Executive will be eligible for outplacement assistance, consistent with industry standards for similarly situated executive officers in the pharmaceutical industry, as determined by the Compensation Committee in its discretion (the “Outplacement Assistance”, collectively with the Salary Payment, the Aggregate Bonus Payment, and the COBRA Coverage, the “Cash Severance Benefits”).

			
	
			
				 (b)
			If as of immediately prior to the time of the Involuntary Termination or Constructive Termination, as applicable, the Executive has any outstanding unvested stock options, restricted stock, restricted stock units or other equity awards granted by the Company and that are subject to vesting solely based on time (“Time-Based Company Equity Awards”) then, immediately prior to the Termination Date, with respect to each Time-Based Company Equity Award, the Executive will vest in (i) the portion of the Time-Based Company Equity Award that would otherwise have vested had the Executive remained employed with the Company through the date that is [eighteen (18)] months following the Termination Date (the “Extended Vesting Date”) and (ii) an additional portion of the Time-Based Company Equity Award equal to the portion that would have vested on the next regular vesting date of such Time-Based Company Equity Award after the Extended Vesting Date (the “Additional Awards”) as if the Additional Awards vested on a daily basis from the last regular award vesting date occurring prior to the Extended Vesting Date (or, if no prior vesting date has occurred, from the grant date of such Additional Awards) through the Extended Vesting Date (rounded down to the nearest whole number of shares). Any Time-Based Company Equity Awards that do not vest in accordance with the immediately preceding sentence of this Section 1(b) shall remain outstanding following the Termination Date (but shall not continue to vest in accordance with the terms of the applicable award agreement) and eligible to vest in accordance with Section 2(b) below, with any such vesting to become effective on the date of the Change of Control. Any Time-Based Company Equity Awards that do not vest pursuant to the first sentence of this Section 1(b) or pursuant to Section 2(b) shall terminate with no consideration due to the Executive. Notwithstanding anything to the contrary in the plan or award agreement under which the Company Equity Awards (as defined below) were issued, any outstanding vested stock options held by the Executive as of the Termination Date (after taking into account the accelerated vesting provided in this Section 1(b)), including any outstanding vested stock options held by the Executive that are granted in connection with the Planned Separation in substitution for or replacement of vested stock options originally granted by the Company, may be exercised by the Executive until the date that is the earlier of (1) [twenty-four (24)] months after the Termination Date (or, in the event that a Public Announcement is made or a Definitive Agreement is entered into during such [twenty-four (24)]  month period, the later of (i) the expiration of such [twenty-four (24)]  month period or (ii) the first to occur of the date that is three (3) months following the Change of Control and thirty (30) days following the date on which the Company announces that such Definitive Agreement has been terminated or that the Company’s efforts to consummate the Change of Control contemplated by such Public Announcement or such Definitive Agreement have been abandoned) and (2) the originally prescribed term of such stock option (together with the accelerated vesting described above, the “Equity Severance Benefits” and together with the Cash Severance Benefits, the “Severance Benefits”). To the extent any Time-Based Company Equity Awards are subject to Section 409A of the Code (“Section 409A”), vesting will be accelerated only to the extent the acceleration does not cause additional taxes or penalties under Section 409A. The acceleration, if any, of any vesting of any outstanding unvested stock options, restricted stock, restricted stock units or other equity awards granted by the Company to the Executive subject to (a) both time- and performance-based vesting criteria or (b) solely performance-based vesting criteria (clauses (a) and (b), collectively, “Performance-Based Company Equity Awards”, and together with the Time-Based Company Equity Awards, “Company Equity Awards”) shall be determined in accordance with the terms of the plan and award agreement under which the Performance-Based 

		 

 

		

			

		

	Company Equity Award was issued.

			
	
			
				 (c)
			Subject to Section 8 below, any [Initial] Salary Payment and Aggregate Bonus Payment to which the Executive is entitled hereunder will be paid in a lump sum on the first regular payroll date of the Company following the thirtieth (30th) calendar day following the Termination Date (except in the event of any group termination to which a forty-five (45)-day release of claims consideration period is required under applicable law, in which case such lump-sum payment will be made on the first regular payroll date of the Company following the sixtieth (60th) calendar day following the Termination Date)[, and any Additional Salary Payment to which the Executive is entitled hereunder will be paid in the form of salary continuation in accordance with the Company’s regular payroll practices, with the first payment being made on the first regular payroll date of the Company following the date that is twelve (12) months following the Termination Date]. In no event will any Outplacement Assistance provided to the Executive hereunder extend beyond the December 31 of the second year following the calendar year in which the Termination Date occurs, and any reimbursement by the Company of Outplacement Assistance expenses paid by the Executive will be paid no later than December 31 of the third year following the calendar year in which the Termination Date occurs.

			
	
			
				 2.
			Change of Control Severance Benefits.  

			
	
			
				 (a)
			If the Executive’s employment terminates by reason of a Change of Control Termination, in lieu of any amounts payable pursuant to Section 1(a) above, (i) the Company will pay the Executive an amount equal to [eighteen (18)] months of his or her base salary, at the rate in effect as of the Termination Date (the “COC Salary Payment”), (ii) if the termination occurs prior to the payment of an annual cash incentive award from the prior completed year, the Company will pay the Executive the Prior Year Bonus Payment, (iii) the Company will pay the Executive the Current Year Bonus Payment, (iv) the Company will pay the Executive [the Additional Bonus Payment, multiplied by 1.5] (the “COC Additional Bonus Payment”) (collectively, the Prior Year Bonus Payment, if any, the Current Year Bonus Payment, and the COC Additional Bonus Payment are referred to as the “COC Aggregate Bonus Payment”), (v) provided that the Executive timely elects continued medical coverage pursuant to Part 6 of Subtitle B of Title I of the Employee Retirement Income Security Act of 1974, as amended, the Company will permit the Executive to continue to participate in its group medical plan for [eighteen (18)] months following the Termination Date, at the same rate that the Executive would be required to contribute toward such coverage if he or she were actively employed (the “COC COBRA Coverage”), and (vi) the Executive will be eligible for Outplacement Assistance (collectively the Outplacement Assistance, the COC Salary Payment, the COC Aggregate Bonus Payment and the COC COBRA Coverage are referred to as the “COC Cash Severance Benefits”).  

			
	
			
				 (b)
			If as of immediately prior to the time of the Change of Control Termination, the Executive has any Time-Based Company Equity Awards, then, as of the later of (i) the date of the Change of Control or (ii) the Termination Date, all Time-Based Company Equity Awards shall have their vesting fully accelerated so as to be 100% vested and exercisable. Notwithstanding anything to the contrary in the plan or award agreement under which the Company Equity Awards were issued, any outstanding vested stock options held by the Executive as of the Termination Date (after taking into account the accelerated vesting provided in this Section 2(b)), including any outstanding vested stock options held by the Executive that are granted in connection with the Planned Separation in substitution for or replacement of vested stock options originally granted by the Company, may be exercised by the Executive until the date that is the earlier of (1) [twenty-four (24)] months after the Termination Date (or, if later, the date that is three (3) months following the Change of Control) and (2) the originally prescribed term of such stock option (such extended exercise window, together with the accelerated vesting described above, the “COC Equity Severance Benefits” and together with the COC Cash Severance Benefits, the “COC Severance Benefits”). To the extent any Time-Based Company Equity Awards are subject to Section 409A, vesting will be accelerated 

		 

 

		

			

		

	only to the extent the acceleration does not cause additional taxes or penalties under Section 409A. The acceleration, if any, of any vesting of any Performance-Based Company Equity Awards shall be determined in accordance with the terms of the plan and award agreement under which the Performance-Based Company Equity Award was issued.

			
	
			
				 (c)
			Subject to Section 8 below, any COC Cash Severance Benefits that become payable will be paid as set forth in this Section 2(c).  An amount equal to the [Initial] Salary Payment and the Aggregate Bonus Payment will be paid in accordance with the timing set forth in Section 1(c) above.  Any severance amounts determined with reference to the Executive’s base salary or annual cash incentive award to which the Executive is entitled pursuant to Section 2(a) above in excess of the [Initial] Salary Payment and the Aggregate Bonus Payment will be paid in a lump sum on the later of (i) the date of the Change of Control or (ii) within ten (10) calendar days following the Executive’s Change of Control Termination. In no event will any Outplacement Assistance provided to the Executive hereunder extend beyond the December 31 of the second year following the calendar year in which the Termination Date occurs, and any reimbursement by the Company of Outplacement Assistance expenses paid by the Executive will be paid no later than December 31 of the third year following the calendar year in which the Termination Date occurs.

			
	
			
				 (d)
			For the avoidance of doubt, the Executive shall only be entitled to the COC Severance Benefits in connection with a Change of Control occurring (i) within twenty-four (24) months prior to the Termination Date or (ii) after the Termination Date as a result of a Public Announcement or a Definitive Agreement, which such Public Announcement is made or Definitive Agreement is entered into no later than that date that is six (6) months following the Termination Date.  Upon the occurrence of a Change of Control Termination and a Change of Control described in the preceding sentence, the COC Severance Benefits shall be the exclusive benefits to which the Executive is entitled, and the Executive shall not be eligible to receive the Severance Benefits set forth in Section 1 hereof or any severance payments or benefits under the Company’s Change of Control Severance Benefit Plan, as amended and restated on April 26, 2014, and as may be further amended from time to time (the “Severance Plan”).  Further, upon the occurrence of an Involuntary Termination or Constructive Termination that does not qualify as a Change of Control Termination, the Severance Benefits shall be the exclusive benefits to which the Executive is entitled, and the Executive shall not be eligible to receive the COC Severance Benefits set forth in Section 2 hereof or any severance payments or benefits under the Severance Plan.

			
	
			
				 3.
			Tax Matters.  

			
	
			
				 (a)
			Withholding. All payments made by the Company hereunder shall be reduced by any tax or other amounts required to be withheld by the Company under applicable law.

			
	
			
				 (b)
			Section 105(h). In the event that, in the determination of the Company, the Company’s provision of the COBRA Coverage as described in Section 1(a)(v) above or the COC COBRA Coverage as described in Section 2(a)(v) above could reasonably be expected to subject the Company to any tax or penalty under the Patient Protection and Affordable Care Act (as amended from time to time, the “ACA”) or could reasonably be expected to subject any highly compensated individual employed or formerly employed by the Company to adverse tax consequences under Section 105(h) of the Code, or applicable regulations or guidance issued under the ACA or Section 105(h) of the Code, the Company and the Executive will work together in good faith, consistent with the requirements for compliance with, or exemption from, Section 409A, to restructure such benefit in a manner intended to result in a benefit that is or remains exempt from Section 409A.

			
	
			
				 4.
			Separation Agreement. Notwithstanding anything herein to the contrary, the Executive acknowledges and agrees that any obligation of the Company to provide the Severance Benefits or the COC Severance Benefits is conditioned on the Executive’s (i) continuing through the Termination Date to perform his or her job duties satisfactorily and otherwise complying with the Company’s rules and policies, (ii) signing a separation agreement on terms and conditions satisfactory to the Company, which separation agreement will contain among other terms a general release of claims (the “Separation Agreement”), and (iii) continuing to comply with his or her obligations to the Company and its affiliates that survive termination of the Executive’s employment, including 

		 

 

		

			

		

	without limitation pursuant to the Proprietary Information and Inventions and Noncompetition Agreement between the Executive and the Company (the “Restrictive Covenants Agreement”). The Executive’s timely execution and non-revocation of the Separation Agreement is a condition precedent to the Executive’s right to receive the Severance Benefits or the COC Severance Benefits. The Separation Agreement will create legally binding obligations on the part of the Executive, and the Company therefore advises the Executive to seek the advice of an attorney before signing the Separation Agreement. The Executive’s compliance with the Restrictive Covenants Agreement is a condition precedent to the Executive’s right to retain the Severance Benefits or the COC Severance Benefits, and the Executive will be required to disgorge any Severance Benefits or COC Severance Benefits received if he or she breaches the Restrictive Covenants Agreement.

			
	
			
				 5.
			Effect on Employment. Nothing contained herein limits the Company’s right to terminate the Executive’s employment at any time.

			
	
			
				 6.
			Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the Commonwealth of Massachusetts, without giving effect to the conflict of law principles thereof. Any action brought by any party to this Agreement shall be brought and maintained in a court of competent jurisdiction in Middlesex or Suffolk Counties in the Commonwealth of Massachusetts, and each party hereby consents to the exclusive jurisdiction of such courts.

			
	
			
				 7.
			Assignment. Neither the Company nor the Executive may make any assignment of this Agreement or any interest herein, by operation of law or otherwise, without the prior written consent of the other; provided, however, that (a) the Executive’s economic rights hereunder will automatically be assigned by the Executive to his or her estate or beneficiaries upon the death of the Executive and (b) the Company will assign its rights and obligations under this Agreement without the consent of the Executive in the event that the Company is a party to a reorganization, consolidation, merger, or sale of all or substantially all of its stock, and (c) the Company will cause an acquirer of all or substantially all of its assets to assume this Agreement. This Agreement shall inure to the benefit of and be binding upon the Company and the Executive, and their respective successors, executors, administrators, heirs and permitted assigns.

			
	
			
				 8.
			Section 409A.

			
	
			
				 (a)
			Notwithstanding anything to the contrary in this Agreement, if at the time of the termination of the Executive’s employment, the Executive is a “specified employee,” as defined below, any and all amounts, if any, payable under this Agreement on account of such termination of employment that constitute deferred compensation and would (but for this provision) be payable within six (6) months following the date of termination, shall instead be paid, without interest, on the next business day following the expiration of such six (6) month period or, if earlier, upon the Executive’s death.

			
	
			
				 (b)
			For purposes of this Agreement, all references to “termination of employment” and correlative phrases shall be construed to require a “separation from service” (as defined in Section 1.409A-1(h) of the Treasury regulations after giving effect to the presumptions contained therein), and the term “specified employee” means an individual determined by the Company to be a specified employee under Treasury regulation Section 1.409A-1(i).

			
	
			
				 (c)
			Each payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments, if any, under this Agreement is to be treated as a right to a series of separate payments.

			
	
			
				 (d)
			The parties agree that their intent is that payments and benefits under this Agreement be exempt from Section 409A to the greatest extent applicable. This Agreement shall be interpreted accordingly to be exempt from Section 409A, and all provisions of this Agreement shall be construed in a manner consistent with this intention. In the event that any payments or benefits under this Agreement are subject to Section 409A, this Agreement shall be construed in a manner consistent with the requirements for compliance with Section 409A and for avoiding taxes or penalties under Section 409A. Notwithstanding the foregoing, neither the Executive nor any beneficiary shall have any claim or right against the Company or any of its directors, officers, employees, advisers 

		 

 

		

			

		

	or agents by reason of any failure or asserted failure of this Agreement, in form or as administered, to comply with or qualify for exemption from Section 409A.

			
	
			
				 9.
			Section 4999. In the event it is determined that the Executive is entitled to payments and/or benefits provided by this Agreement or any other amounts in the “nature of compensation” (whether pursuant to the terms of this Agreement or any other plan, arrangement, or agreement with the Company or any affiliate, any person whose actions result in a change of ownership or effective control of the Company covered by Section 280G(b)(2) of the Code or any person affiliated with the Company or such person) as a result of such change of ownership or effective control of the Company (“Payments”) would be subject to the excise tax imposed by Section 4999 of the Code (the “280G Excise Tax”), the Company shall cause to be determined, before any amounts of the Payments are paid to the Executive, which of the following two alternative forms of payment would maximize the Executive’s after-tax proceeds: (a) payment in full of the entire amount of the Payments, or (b) payment of only a part of the Payments so that the Executive receives the largest payment possible without the imposition of the 280G Excise Tax (“Reduced Payments”). If it is determined that Reduced Payments will maximize the Executive’s after-tax benefit, then (i) cash compensation subject to Section 409A shall be reduced first, cash payments not subject to Section 409A shall be reduced second, non-cash compensation subject to Section 409A shall be reduced third, and then non-cash compensation not subject to Section 409A shall be reduced fourth, (ii) the Payments shall be paid only to the extent permitted under the Reduced Payments alternative, and (iii) the Executive shall have no rights to any additional payments and/or benefits constituting the Payments. Unless the Company and the Executive otherwise agree in writing, any determination required under this Section 9 shall be made in writing by independent public accountants agreed to by the Company and the Executive (the “Accountants”), whose determination shall be conclusive and binding upon the Executive and the Company for all purposes. For purposes of making the calculations required by this Section 9, the Accountants may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Company and the Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make the required determinations. The Company shall bear all fees and expenses the Accountants may reasonably charge in connection with the services contemplated by this Section 9. Notwithstanding the foregoing, the calculations and adjustments set forth above shall not result in any delay in payment of benefits under this Agreement.

			
	
			
				 10.
			Amendment. This Agreement may be amended, modified or supplemented, and any obligation hereunder may be waived, only by a written instrument executed by the parties hereto; provided, that nothing herein shall be construed as limiting the Company’s ability to amend the Severance Plan. The waiver by any party hereto of a breach of any provision of this Agreement shall not operate as a waiver of any subsequent breach. No failure on the part of any party to exercise, and no delay in exercising, any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or remedy by such party preclude any other or further exercise thereof or the exercise of any other right or remedy. All rights and remedies hereunder are cumulative, and are in addition to all other rights and remedies provided by law, agreement or otherwise.

			
	
			
				 11.
			Definitions.

			
	
			
				 (a)
			“Cause” has the same definition as is set forth in the Company’s Amended and Restated 2010 Employee, Director and Consultant Equity Incentive Plan, as in effect at the time of the Executive’s employment termination; if such plan is no longer in effect at the time of such termination, Cause shall have the same definition as is set forth in the last version of such plan in effect prior to such termination.

			
	
			
				 (b)
			“Change of Control” means:

			
	
			
				 (i)
			any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), becomes the “Beneficial Owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of securities of the Company representing more than 50% of the total voting power represented by the Company’s then outstanding voting securities (excluding for this purpose any such voting securities held by the Company, or any affiliate, parent or subsidiary of the Company or any employee benefit plan of the Company) pursuant to a transaction or a series of transactions which the Company’s Board of Directors does not approve;

		
			

		 

 

		

			

		

		

			
	
			
				 (ii)
			a merger or consolidation of the Company, whether or not approved by the Company’s Board of Directors, which results in the securities of the Company outstanding immediately prior thereto failing to continue to represent (either by remaining outstanding or by being converted into securities of the surviving entity) at least 50% of either (i) the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation or (ii) the total fair market value of the securities of the Company or such surviving entity outstanding immediately after such merger or consolidation;

			
	
			
				 (iii)
			the sale or disposition of all or substantially all of the Company’s assets (or consummation of any transaction having similar effect) provided that the sale or disposition is of more than two-thirds (2/3) of the assets of the Company; or

			
	
			
				 (iv)
			the date a majority of the members of the Company’s Board of Directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Company’s Board of Directors before the date of the appointment or election; provided, however, that no individual initially appointed or elected to the Company’s Board of Directors as a result of an actual or threatened election contest with respect to the Company’s Board of Directors or as a result of any other actual or threatened solicitation of proxies by or on behalf of any person other than the Company’s Board of Directors shall be deemed to be endorsed by a majority of the members of the Company’s Board of Directors.

		
			In any case, a Change of Control under this Section 11(b) must also meet the requirements of a change in ownership or effective control, or a sale of a substantial portion of the Company’s assets in accordance with Section 409A(a)(2)(A)(v) of the Code and the applicable provisions of Treasury Regulation § 1.409A-3.
		

			
	
			
				 (c)
			“Change of Control Termination” means an Involuntary Termination or Constructive Termination, in either event during the period commencing six (6) months prior to the earlier of (i) the date that the Company first publicly announces it is conducting negotiations leading to a Change of Control (a “Public Announcement”), or (ii) the date that the Company enters into a definitive agreement that would result in a Change of Control (even though still subject to approval by the Company’s stockholders and other conditions and contingencies (a “Definitive Agreement”); and ending on the earlier of (x) the date on which the Company announces that the Definitive Agreement described in clause (ii) above has been terminated or that the Company’s efforts to consummate the Change of Control contemplated by the Public Announcement or the Definitive Agreement have been abandoned or (y) the date which is twenty-four months after the Change of Control.

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

			
	
			
				 (e)
			“Constructive Termination” means a termination of employment by the Executive for Good Reason; provided, that, “Constructive Termination” shall not include any termination of the employment of the Executive (i) by the Company for Cause, (ii) as a result of the Permanent Disability of the Executive, (iii) as a result of the death of the Executive or (iv) as a result of the voluntary termination of employment by the Executive for reasons other than Good Reason.  For the avoidance of doubt, (A) if the Executive is offered reasonably similar employment by a current or former subsidiary of the Company or his or her employment is transferred to a current or former subsidiary of the Company with the resulting role being reasonably similar to his or her role immediately prior to such transfer, in either case, in connection with the Planned Separation, the termination of the Executive’s employment with the Company in connection with such Planned Separation shall not constitute a Constructive Termination, and (B) an offer of employment by, or the Executive’s transfer of employment to, a current or former subsidiary of the Company in connection with the Planned Separation for a  position substantially equivalent to that set forth on Schedule A shall not constitute a Constructive Termination.

			
	
			
				 (f)
			“Good Reason” means the occurrence of any of the following conditions without the Executive’s express consent: (i) a material diminution in, or material interference with, the Executive’s authority, duties or responsibilities, (ii) a material diminution in the Executive’s total target cash compensation unless such material diminution is in connection with a proportional reduction in compensation for all or substantially all of the Company’s executive officers, or (iii) the relocation of the Executive’s work place for the Company to a location 

		 

 

		

			

		

	more than twenty-five (25) miles from the location of the work place prior to the Constructive Termination. The Executive may terminate his or her employment hereunder for Good Reason by (A) providing notice to the Company, specifying in reasonable detail the condition giving rise to the Good Reason, no later than the sixtieth (60th) day following the date that the Executive knew or should have known (after reasonable inquiry) of the occurrence of that condition, (B) providing the Company a period of sixty (60) days to remedy the condition so specified in the notice, and (C) terminating his or her employment for Good Reason within thirty (30) days following the expiration of the period to remedy if the Company fails to remedy the condition.

			
	
			
				 (g)
			“Involuntary Termination” means a termination of the Executive’s employment by the Company without Cause; provided, that, “Involuntary Termination” shall not include a termination of the employment of the Executive (i) in connection with the sale of some or all of the assets of the Company, including the sale of a facility, division, or subsidiary of the Company, pursuant to which the purchaser offers the Executive substantially equivalent employment, the terms of which would not give rise to Good Reason, (ii) by the Company for Cause, (iii) as a result of the Permanent Disability of the Executive, (iv) as a result of the death of the Executive or (v) as a result of the voluntary termination of employment by the Executive for reasons other than Good Reason.  For the avoidance of doubt, (A) if the Executive is offered reasonably similar employment by a current or former subsidiary of the Company or his or her employment is transferred to a current or former subsidiary of the Company with the resulting role being reasonably similar to his or her role immediately prior to such transfer, in either case, in connection with the Planned Separation, the Company’s termination of the Executive’s employment with the Company in connection with such Planned Separation shall not constitute an Involuntary Termination, and (B) an offer of employment by, or the Executive’s transfer of employment to, a current or former subsidiary of the Company in connection with the Planned Separation for a position substantially equivalent to that set forth on Schedule A shall not constitute an Involuntary Termination.

			
	
			
				 (h)
			“Permanent Disability” means that (i) the Executive has been incapacitated by bodily injury, illness or disease so as to be prevented thereby from engaging in the performance of his or her duties, (ii) such total incapacity shall have continued for a period of six consecutive months and (iii) such incapacity will, in the opinion of a qualified physician, be permanent and continuous during the remainder of the Executive’s life.

			
	
			
				 (i)
			“Planned Separation” means any separation of the Company’s soluble guanylate cyclase business from the Company.

			
	
			
				 (j)
			“Termination Date” means the date of the termination of the Executive’s employment by reason of an Involuntary Termination, a Constructive Termination or a Change of Control Termination.

			
	
			
				 12.
			Entire Agreement. This Agreement constitutes the entire agreement between the parties, and terminates and supersedes any and all prior agreements and understandings (whether written or oral) between the parties with respect to the subject matter of this Agreement, [including, without limitation, the Prior Agreement, but] excluding the Restrictive Covenants Agreement, which shall continue in effect in accordance with its terms. The Executive acknowledges and agrees that neither the Company nor anyone acting on its behalf has made, and in executing this Agreement the Executive has not relied upon, any representations, promises or inducements except to the extent the same is expressly set forth herein.

		
			 
		

			
					
						 

					
						 

					
					
						IRONWOOD PHARMACEUTICALS, INC.

					
						 

				
	
					
						 

					
						 

					
					
						 

					
						 

				
	
					
						 

					
						 

					
					
						By:

					
						 

					
					
						 

					
						 

				
	
					
						 

					
						 

					
					
						 

					
						 

					
					
						 

					
						 

				
	
					
						 

					
						 

					
					
						Title:

					
						 

					
					
						 

					
						 

				

		
			

		 

 

		

			

		

		

		
			 
		

		
			 
		

			
					
						ACKNOWLEDGED AND ACCEPTED:

					
						 

					
					
						 

					
						 

				
	
					
						 

					
						 

					
					
						 

					
						 

				
	
					
						 

					
						 

					
					
						 

					
						 

				
	
					
						Signature:

					
						 

					
					
						 

					
						 

					
					
						 

					
						 

				
	
					
						 

					
						 

					
					
						[Name of Executive]

					
					
						 

				

		
			 
		

		
			 
		

		
			
		

		
			

		 

 

		

			

		

		

		
			 
		

		
			Schedule A
		

		
			 
		

		
			[_______]

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