INSMED INCORPORATED RESTRICTED UNIT AWARD AGREEMENT UNDER THE AMENDED AND RESTATED

EXHIBIT 10.4

INSMED INCORPORATED

RESTRICTED UNIT AWARD AGREEMENT

UNDER THE AMENDED AND RESTATED

2000 STOCK INCENTIVE PLAN

Name of Grantee:

Number of Restricted Stock Units:

Grant Date:

Pursuant to the Insmed Incorporated Amended and Restated 2000 Stock Incentive Plan (the “Plan”) as amended through the date hereof, Insmed Incorporated (the “Company”) hereby grants an award of ________ restricted stock units (the “Restricted Stock Units” or the “RSU Award”) to the Grantee named above.  The RSU Award shall be referred to herein as the “Award.”  Upon acceptance of this Award, the Grantee shall receive the number of Restricted Stock Units specified above, subject to the restrictions and conditions set forth herein and in the Plan.

The Company acknowledges the receipt from the Grantee of consideration with respect to the par value of the Stock in the form of cash, past or future services rendered to the Company by the Grantee or such other form of consideration as is acceptable to the Administrator.

1.           Acceptance of Award.  The Grantee shall have no rights with respect to this Award unless he or she shall have accepted this Award by signing and delivering to the Company a copy of this Award Agreement.

2.           Restrictions and Conditions on Award.  Restricted Stock Units granted herein may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of by the Grantee prior to vesting, and shall be subject to all the terms, conditions and restrictions set forth herein and in the Plan.

3.           Timing and Form of Payout of Restricted Stock Units.  As soon as practicable (but in no event later than 30 days) following the applicable Vesting Date, the vested Restricted Stock Units at the Administrator’s discretion, may be paid out in either (a) shares of Stock or (b) a cash payment equal to the Fair Market Value of the shares of Stock underlying the Restricted Stock Units.

4.           Vesting of Award.  Except as set forth in Section 5 of this Agreement, the restrictions and conditions in Section 2 of this Agreement shall lapse, with respect to 100% of the RSU Award, on the first anniversary of the Grant Date (the “Vesting Date”) so long as (a) the Grantee remains a member of the board of directors of the Company or its Affiliates on such Vesting Date and (b) the Grantee attends at least seventy-five percent (75%) of the board of directors meetings that take place during the period of time commencing from the Grant Date and ending of the first anniversary of the Grant Date.

Except as otherwise provided in Sections 5 and 6 of this Agreement, the Grantee shall forfeit any unvested portion of the RSU Award if either the following shall occur: (i) in the event the Grantee’s service as a member of the board of directors of the Company or its Affiliates is terminated for any reason prior to the Vesting Date; or (ii) in the event that the Grantee fails to attend at least seventy-five percent (75%) of the board of directors meetings that take place during the period of time commencing from the Grant Date and ending of the first anniversary of the Grant Date.

Notwithstanding anything to the contrary herein or in the Plan, the Administrator may at any time accelerate the vesting schedule specified in this Section 4.

5.           Change in Control.  In the event of a Change in Control of the Company, the unvested portion of the RSU Award, to the extent not previously forfeited or cancelled, shall immediately vest as of the date of such Change in Control.

6.           Termination of Service.  Except as otherwise provided herein, any unvested portion of the RSU Award shall be forfeited without payment of consideration upon the termination of the Grantee’s service with the Company or its Affiliates for any reason, except as otherwise provided in this Section 6.  Notwithstanding the foregoing, upon the Grantee’s death (while an active director of the board of the Company or its Affiliates) or upon the termination of the Grantee’s service due to Disability (as defined below), the RSU Award to extent not previously forfeited or cancelled, shall immediately vest as of the date of the Grantee’s death or Disability.  For purposes of this Agreement, the Grantee will be considered “disabled” if, as a result of the Grantee’s incapacity due to physical or mental illness, the Grantee shall have been absent from his duties to the Company or its Affiliates on a full-time basis for 180 calendar days in the aggregate in any 12-month period.

7.           Voting Rights and Dividends.  If and until such time as Restricted Stock Units are paid out in shares of Stock (if at all), the Grantee shall not have voting rights.  However, all dividends and other distributions paid with respect to the Restricted Stock Units shall accrue and shall be converted to additional Restricted Stock Units based on the closing price of the Stock on the dividend distribution date.  Such additional Restricted Stock Units shall be subject to the same restrictions on transferability as are the Restricted Stock Units with respect to which they were paid.

8.           Change in Capital Structure.  The terms of these Restricted Stock Units shall be adjusted as the Committee determines is equitably required in the event the Company effects one or more stock dividends, stock split-ups, subdivisions or consolidations of shares or other similar changes in capitalization.

9.           Incorporation of Plan.  Notwithstanding anything herein to the contrary, this Agreement shall be subject to and governed by all the terms and conditions of the Plan, including the powers of the Administrator set forth in Section III of the Plan.  Capitalized terms in this Agreement shall have the meaning specified in the Plan, unless a different meaning is specified herein, provided that, as used herein, the term Administrator shall mean the Committee.

10.           Transferability.  This Agreement is personal to the Grantee, is non-assignable and is not transferable in any manner, by operation of law or otherwise, other than by will or the laws of descent and distribution.

11.           Tax Withholding.  The Grantee shall, not later than the date as of which the receipt of this Award becomes a taxable event for Federal income tax purposes, pay to the Company or make arrangements satisfactory to the Administrator for payment of any Federal, state, and local taxes required by law to be withheld on account of such taxable event.

12.           No Obligation to Continue Service.  Neither the Company nor any Affiliate is obligated by or as a result of the Plan or this Agreement to continue the Grantee’s services and neither the Plan nor this Agreement shall interfere in any way with the right of the Company or any Affiliate to terminate the services of the Grantee at any time.

13.           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 Grantee 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.

	INSMED INCORPORATED
	By:
	Name:	Xxxxxx Xxxxxxxxx
	Title:	Chief Financial Officer

The foregoing Agreement is hereby accepted and the terms and conditions thereof hereby agreed to by the undersigned.

Dated: