Exhibit 10.43


 


                                                                                                             July 26, 2007


 


 


 


Dear Leonard:


 


On behalf of Theravance, Inc. (the “Company”), I am pleased to offer
you the position of Senior Vice President and Chief Commercial Officer at a
starting salary of $360,000 per year.  In
addition, on your first day of employment you will receive a $50,000 signing
bonus (less applicable taxes). If you voluntarily leave the Company or are
terminated for cause during your first twelve (12) consecutive months of
employment, this signing bonus will be repayable to the Company. You will be
eligible to receive an annual bonus up to 40% of your annual salary, based on
performance. However, your bonus for 2007 will be guaranteed at the 40% level
and will not be prorated notwithstanding your mid-year employment start date
provided you have remained in continuous service through the date that annual
bonuses are paid. You will report to the Chief Executive Officer.


 


Subject
to the approval of the Compensation Committee of the Board of Directors (the “Compensation
Committee”), you will be granted an option to purchase shares of Common Stock
of the Company at a purchase price equal to the fair market value of our Common
Stock on the date of grant, which we anticipate will be the date of the first
Compensation Committee meeting following your date of hire. Your option grant
will be for 175,000 shares. The vesting and exercise details of your option
will be set forth in your stock option paperwork, but in general your option
will vest monthly over the first four years of your employment measured from
the date of grant, with a one-year “cliff” provision that prevents it from
being exercised prior to the first anniversary of the grant date. The option
shall be fully vested and exercisable on the 4-year anniversary of the grant
date provided you have remained in continuous service through such date. The
option granted to you will be contingent on your execution of the Company’s
Stock Option Agreement and will be subject to all terms of the Company’s 2004
Equity Incentive Plan (the “Plan”).


 


Subject to the approval of
the Compensation Committee, you will also be granted 50,000 shares of the
Company’s Common Stock in a “restricted stock grant,” in consideration of
services to be rendered by you.  The
shares will be subject to the terms and conditions applicable to shares awarded
under the Plan, as described in the Plan and the applicable Restricted Stock
Agreement. The shares will be issued to you in a series of installments as you
vest in the shares.  You will vest in
33.3% of the shares on the third anniversary of your employment start date,
33.3% of the shares on the fourth anniversary of such date, and 33.3% of the
shares on the fifth anniversary of such date provided you have remained in
continuous service through each such vesting date.


 


 


 


 

















 


Subject to approval of the
Compensation Committee, you will also receive a performance-contingent
restricted stock unit award under the Plan, the details of which will be set
forth in the Notice of Restricted Stock Unit Award. The number of performance-contingent
restricted stock units to be granted under the Plan will be determined on the
date of grant based on a formula that is 10X your 2007 annualized salary
divided by the closing sale price of the Company’s Common Stock on the grant
date.  The shares will
be earned and issued on April 26, 2010 only to the extent the Company achieves
the performance milestones set forth in the award.  You will forfeit the award if your employment
terminates prior to April 26, 2010 for any reason except as set forth in the
Notice of Restricted Stock Unit Award.


 


Performance and merit
reviews will be conducted annually. The Company’s current guidelines provide
that you, as a Senior Vice President, will be eligible to receive an annual
replenishment stock option grant for up to 70,000 shares, based on performance.
These guidelines may be changed from time to time by the Compensation
Committee.


 


As
a regular employee of Theravance, Inc., you will be eligible for a number of
Company-sponsored benefits.  These are
described in the Summary Plan Description that you will receive when you begin
work; however, they include enrollment in our Aetna PPO or HMO plan and in our
Vision and Dental plans for you and your family.  The Company also provides life, LTD and
AD&D insurance.


You
will be able to participate in our 401(k) program.  In addition to the Company’s generous
allotment of standard holidays, you will be eligible for three weeks of paid
vacation per year. As an officer of the  Company you
will also participate in the Company’s “Change in Control Severance Plan.”


 


It is understood that your
spouse and children will remain in Seattle until the summer of 2008, when you
intend to relocate them to the Bay Area. 
We will provide you with the temporary living and relocation assistance
outlined in Exhibit A attached hereto.


 


Your
employment pursuant to this offer is contingent on you executing the Company’s
standard form of Proprietary Information and Inventions Agreement.  Also, the United States Immigration and
Naturalization Service requires that employers establish the eligibility of
each employee as a U.S. citizen, permanent resident or individual authorized
for employment in the United States.


 


While we hope that your
employment with the Company will be mutually satisfactory, employment with
Theravance, Inc. is for no specific period of time.  As a result, either you or the Company is
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, 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 the Chief Executive Officer or Chairman of the Board
of the Company.


 


 


2


 

















 


This letter sets forth the terms of your employment
with us and supersedes any prior representations or agreements, whether written
or oral.  A duplicate original of this
offer is enclosed for your records.  To
accept this offer, please sign and return this letter to me, in which event
your employment will begin on a date mutually agreed to, but in any event no
later than August 1, 2007.


 


 


 


Leonard, we look forward to having you join us.  If you have any questions, please call me at


(650) 808-6000.


 


	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  /s/
  Rick E Winningham

  
	
   

  	
   

  
	
   

  	
  Rick
  E Winningham

  
	
   

  	
  Chief
  Executive Officer

  



 


I have read and accept this employment offer:


 


	
  /s/
  Leonard Blum

  	
   

  
	
  Leonard
  Blum

  	
   

  



 


 


Date: July 27, 2007


 


 


3


 

















 


Exhibit A


 


Temporary Living and Relocation Assistance


 


 


 


 


•                  We will provide you with up
to 12 months of temporary housing (e.g. hotel room or apartment) near the
Company’s facility in South San Francisco. This assistance will be provided on
a fully grossed up basis to neutralize the income tax impact on you.


 


•                  Until July 30, 2008, the
Company will reimburse you for the cost of a weekly round-trip coach class
ticket between San Francisco and Seattle, provided these tickets are purchased
in compliance with the Company’s travel policy. 
The Company will also reimburse you for incidental expenses incurred by
you during such travel (e.g. taxi fare). These reimbursements will not be “grossed
up”.  Accordingly, any tax liability which
may result from these reimbursements will be your responsibility.


 


•                  We will pay for the cost of
a rental car in South San Francisco for 60 days following the beginning of your
employment. This assistance will not be grossed up.


 


•                  Theravance will reimburse
you for 100% of the non-reoccurring transaction costs associated with your home
sale up to 7% of the sales price and up to 2% of the purchase price on your
home.  This assistance related to the
home sale only will be provided on a fully grossed up basis to neutralize the
income tax impact on you.


 


•                  We will also pay for
shipment and storage of your household goods from Seattle to the Bay Area and
one-time travel expenses for you and your family.


 


•                  You will have up to 18
months to utilize your relocation assistance.


 


•                  If you choose to leave
Theravance within the first year of your employment all relocation expenses
paid by the Company will be fully repayable.