Exhibit 10.1

 

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May 30, 2019

 

Andrew Hindman

 

Dear Andrew:

Theravance Biopharma US, Inc. (the “Company” or “Theravance Biopharma US”) is
pleased to offer you the exempt position of Senior Vice President & Chief
Financial Officer,  reporting to Rick Winningham.  Your salary on an annualized
basis will be $540,000.  In addition, you will be paid an employment bonus of
$175,000 less taxes and payable in your first paycheck.  If you choose to leave
Theravance Biopharma US within the first two (2) years of your employment, the
full gross amount of this bonus will be fully repayable to Theravance Biopharma
US upon your departure.  You will be eligible to receive an annual discretionary
bonus of up to 50% of your annual salary, based on the Company’s performance
against its annual goals and a review of your individual performance.  You must
be an active employee in good standing at the time the bonus is paid in order to
receive the bonus.  For 2019 your annual discretionary bonus will not be
prorated notwithstanding your June 3rd, 2019 start date provided you have
remained in continuous services through the date that annual bonuses are paid. 
The Company’s bonus percentage targets may change from time-to-time at the sole
discretion of the Board of Directors.  This offer will expire on Thursday, May
30th, 2019.

Subject to the approval by the appropriate committee of the Theravance
Biopharma, Inc. Board of Directors, you will be granted an option to purchase
260,000 ordinary shares of Theravance Biopharma, Inc. at a per share purchase
price equal to the fair market value of one Theravance Biopharma, Inc. ordinary
share on the date of grant (“Base Value”),  which we anticipate will be on or
around the first business day of the month following your employment start
date.  The number of shares subject to the option and the vesting and exercise
details of your option grant will be set forth in your option paperwork, but in
general your option will vest monthly over the first four years of your
employment, with a one year “cliff” provision that prevents it from being
exercised before the first anniversary of the grant date.  The option granted to
you will be contingent on your execution of Theravance Biopharma, Inc.’s
standard form of option agreement and will be subject to all of the terms and
conditions contained in the Theravance Biopharma, Inc. Employee Equity Incentive
Plan.

 

Subject to the approval by the appropriate committee of the Theravance
Biopharma, Inc. Board of Directors, you will also be granted a restricted share
unit (RSU) award for 50,000 ordinary shares of Theravance Biopharma, Inc.  The
RSU award will be subject to the terms and conditions applicable to restricted
share units awarded under the Company’s applicable Equity Incentive Plan and
shall be evidenced by the applicable form of RSU agreement as approved by the
committee.  The RSU award will vest as follows: 25% of the RSUs will vest on the
first Company Vesting Date after the first anniversary of the grant date; 25% of
the shares will vest on the first Company Vesting Date after the second
anniversary of the grant date; 25% of the shares will vest on the first Company
Vesting Date after the third anniversary of your Start Date; and 25% of the
shares will vest on the first Company Vesting Date after the fourth anniversary
of the grant date, provided you remain in continuous service through each such
vesting date, and as described in the applicable RSU agreement.  A “Company
Vesting Date” means February 20, May 20, August 20 or November 20.

 

 

Subject to the approval by the appropriate committee of the Theravance
Biopharma, Inc. Board of Directors, you will also be granted a
performance-contingent restricted share unit (RSU) award for 60,000 ordinary
shares of Theravance Biopharma, Inc.  The RSU award will be subject to the terms
and conditions generally applicable to restricted share units awarded under the
applicable Theravance Biopharma, Inc. Equity Incentive Plan and the applicable
award agreement.  Vesting of these performance-contingent RSUs is subject to the
achievement of performance milestones described in the attached Exhibit A by
June 30, 2022 and continued employment, both of which must be satisfied in order
for the RSUs to vest.  Subject to your continued employment through the
applicable vesting date:

 

·

One-third of the RSU award will vest on the first Company Vesting Date (as
defined above) that occurs on or after achievement of any one of the three
performance milestones and related certification of achievement by the
Compensation Committee of Theravance Biopharma, Inc. (“Compensation Committee”);

·

One-third of the RSU award will vest on the first Company Vesting Date that
occurs on or after the one (1) year anniversary of achievement of a second (of
the three) performance milestones and related certification of achievement by
the Compensation Committee; and

·

One-third of the RSU award will vest on the first Company Vesting Date that
occurs on or after the one (1) year anniversary of achievement of a third (of
the three) performance milestones and related certification of achievement by
the Compensation Committee; and

·

If Theravance Biopharma, Inc. is subject to a change in control before June 30,
 2022 and prior to achievement of the performance milestones, a portion of the
RSU award may vest depending on the value of the transaction consideration and
subject to your continued employment through the first and second anniversaries
of the change in control date.  Any portion that does not vest will be
forfeited.  The formula for determining what portion, if any, of the RSU that
may vest in a change in control will be set forth in detail in your
performance-contingent RSU award; provided, however, it will use the applicable
Base Value (as defined above) and be substantially similar to the change in
control formula already in place for the Company’s current executive officers
under their existing performance-contingent restricted stock awards granted to
them in 2016.

 

Subject to the approval by the appropriate committee of the Theravance
Biopharma, Inc. Board of Directors, you will be eligible to receive an annual
equity “replenishment” grant at the time the Company conducts its annual
performance and corporate reviews of its officers.  These reviews are typically
held in the first quarter of each new calendar year. Subject to the review and
approval by the appropriate committee, at present, your 2020 target equity
“replenishment” grant as an officer would likely be 65,000 RSUs and such officer
grants would be expected to vest on applicable Company Vesting Dates over
approximately 4 years  from the date of grant (with such RSUs having  an initial
1 year cliff vesting of 25% and equal quarterly vesting of the remainder for the
three years thereafter).  So long as you have commenced employment on or by June
3, 2019, you will be considered and eligible for a non pro-rated 2020 equity
replenishment grant.

 

Theravance Biopharma US provides a comprehensive company-paid benefits package
that begins on your first day of employment.  Benefits are provided by
Theravance Biopharma US to you and your dependents at a  minimal cost.  Included
are medical, vision and dental coverage, life insurance, long-term disability
insurance and a flexible spending plan.  Additionally, we offer a 401(k) plan
and an Employee Stock Purchase Plan.  Additional information will be provided at
New Employee Orientation shortly after you begin employment.

 

As a condition of employment, you will be provided a copy of our Company
Handbook and will be expected to acknowledge and abide by our policies.  You
will also be required to accept and abide by the terms of our Proprietary
Information and Inventions Agreement.  Pursuant to that Agreement, you must
comply with Theravance Biopharma US’s strict company policy that prohibits any
new employee from using or bringing with them from any prior employer any
confidential information, trade secrets, proprietary materials or processes of
such former employers.  In addition, you will be required to present documents
establishing your legal right to work in the United States as required by the
government’s Form I-9.

 

While we hope that your employment with the Company will be mutually
satisfactory, employment with Theravance Biopharma US is for no specific period
of time.  As a result, either you or the Company are free to

 

terminate your employment relationship at any time for any reason, with or
without cause.  This is the full and complete agreement between us on this
term.  Although your job duties, title, compensation and benefits, as well as
the Company’s personnel policies and procedures to which you will be subject,
may change from time-to-time, the “at-will” nature of your employment may only
be changed in an express writing signed by you and a Senior Officer of the
Company.

 

This offer is contingent upon the successful completion of your background
investigation and referencing.

 

We are very excited about the possibility of you joining our team and becoming a
part of our company!  We look forward to determining a mutually convenient start
date as soon as possible.

 

If you have any questions, please don’t hesitate to contact me at
650-808-3777.  We look forward to your favorable response.

 

Sincerely,

 

/s/ Rick E Winningham

 

Rick E Winningham

Chief Executive Officer

 

 

 

 

Foregoing terms and conditions hereby accepted:

 

Signed:

/s/ Andrew Hindman

 

 

Date:

May 30, 2019

 

 

Start Date:

June 3, 2019

 

 

Exhibit A

 

Performance Milestones

(subject to approval

of the Compensation Committee)

 

 

A.

Successful Completion of a BD Transaction (1)

 

B.

Achieve additional sell-side analyst coverage (2)

 

C.

Achieve a more diversified shareholder base (3)

 

 

***

 

 

(1)

“Successful Completion of a BD Transaction” means the execution of a definitive
agreement for the out-license of a Company-discovered compound which provides
for total upfront and potential milestone payments and/or purchases of the
Company’s equity securities at or above market prices of at least $250 million
in aggregate.

 

(2)

“Achieve additional sell-side analyst coverage” means sell-side analyst coverage
of the Company by at least two leading equity research analysts from brokerage
firms or investment banks that are not currently covering the Company (i.e.,
producing investment research on the Company to be circulated to the firm’s
clients) measured as of the date of commencement of your employment with the
Company.

 

(3)

“Achieve a more diversified shareholder base”  means a scenario in which the
Company’s top five shareholders (aggregating affiliated entities for such
purpose) together own a meaningfully lower aggregate percentage of the
outstanding ordinary shares of the Company as determined by the Compensation
Committee,  with shareholder ownership as measured in the Company’s beneficial
ownership of voting securities table in a proxy statement filed by the Company
with the SEC or other method suitable to the Compensation Committee.