Exhibit
10.31


Theravance, Inc. 2004
Equity Incentive Plan

Notice of Restricted Stock Award


You
have been granted restricted shares of Common Stock of Theravance, Inc. (the “Company”)
on the following terms:


	
  

  	
  Name of Recipient:

  	
  «Name»

  
	
   

  	
   

  	
   

  
	
   

  	
  Total Number of Shares Granted:

  	
  «TotalShares»

  
	
   

  	
   

  	
   

  
	
   

  	
  Fair Market Value per Share:

  	
  $«ValuePerShare»

  
	
   

  	
   

  	
   

  
	
   

  	
  Total Fair Market Value of Award:

  	
  $«TotalValue»

  
	
   

  	
   

  	
   

  
	
   

  	
  Date of Grant:

  	
  «DateGrant»

  
	
   

  	
   

  	
   

  
	
   

  	
  Vesting Commencement Date:

  	
  «VestDay»

  
	
   

  	
   

  	
   

  
	
   

  	
  Vesting Schedule:

  	
  «VestSchedule»

  



 


You
and the Company agree that these shares are granted under and governed by the
terms and conditions of the Theravance, Inc. 2004 Equity Incentive Plan (the “Plan”)
and the Restricted Stock Agreement, which is attached to and made a part of
this document.


You further agree that the Company may deliver by email
all documents relating to the Plan or this award (including, without
limitation, prospectuses required by the Securities and Exchange Commission)
and all other documents that the Company is required to deliver to its security
holders (including, without limitation, annual reports and proxy
statements).  You also agree that the
Company may deliver these documents by posting them on a web site maintained by
the Company or by a third party under contract with the Company.  If the Company posts these documents on a web
site, it will notify you by email.


	
  Recipient:

  	
  Theravance, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						



 


















THERAVANCE,
INC. 2004 EQUITY INCENTIVE PLAN:

RESTRICTED STOCK AGREEMENT


	
  Payment for Shares

  	
   

  	
  No payment is required for the shares that you are
  receiving, except for satisfying any withholding taxes that may be due as a
  result of the grant of this award or the vesting or transfer of the shares.

  
	
   

  	
   

  	
   

  
	
  Transfer

  	
   

  	
  On the terms and conditions set forth in the Notice
  of Restricted Stock Award and this Agreement, the Company agrees to transfer
  to you the number of Shares set forth in the Notice of Restricted Stock
  Award.

  
	
   

  	
   

  	
   

  
	
  Vesting

  	
   

  	
  The shares will vest in installments, as shown in
  the Notice of Restricted Stock Award, as you continue in service as an
  employee, consultant or outside director of the Company or a parent or
  subsidiary of the Company (“Service”).

  
	
   

  	
   

  	
   

  
	
  Change in Control

  	
   

  	
  The shares will fully vest if the Company is subject
  to a “Change in Control” (as defined in
  the Plan) before your Service terminates and you are subject to an
  Involuntary Termination (as defined below) within 3 months prior or 24 months
  after the Change in Control. Should the vesting of the shares accelerate as
  the result of a Change in Control prior to the First Vesting Date, the
  acceleration of vesting shall be deferred as to the additional shares until
  the First Vesting Date.

  
	
   

  	
   

  	
   

  
	
  Involuntary Termination

  	
   

  	
  For purposes of this
  Agreement, “Involuntary Termination” means
  the termination of your Service by reason of:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)  an involuntary
  dismissal or discharge by the Company for reasons other than for Cause; or 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)  your voluntary
  resignation following (i) a change in your position with the Company (or
  Parent or Subsidiary employing you) which materially reduces your level of
  responsibility, (ii) a reduction in your level of compensation (including
  base salary, fringe benefits and participation in corporate-performance
  based bonus or incentive programs) or (iii) a relocation of your workplace
  more than fifty miles away from the workplace designated by the Company on
  your initial date of service, provided and only if such change, reduction or
  relocation is effected by the Company without your consent.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For purposes of this
  Agreement, “Cause” shall
  mean (i) the unauthorized use or disclosure of the confidential information
  or trade secrets of the Company, which use causes material harm to the

  



 













 


	
  

  	
   

  	
  Company, (ii) conviction of a felony under the laws
  of the United States or any state thereof, (iii) gross negligence or (iv)
  repeated failure to perform lawful assigned duties for thirty days after
  receiving written notification from the Board of Directors.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  No additional shares will vest after your Service
  has terminated for any reason, except to the extent set forth above if you
  are subject to an Involuntary Termination within 3 months prior to a Change
  in Control.

  
	
   

  	
   

  	
   

  
	
  Shares Restricted

  	
   

  	
  Unvested shares will be considered “Restricted Shares.” You may not sell, transfer, pledge or
  otherwise dispose of any Restricted Shares without the written consent of the
  Company, except as provided in the next sentence. You may transfer Restricted
  Shares to your spouse, children or grandchildren or to a trust established by
  you for the benefit of yourself or your spouse, children or grandchildren.
  However, a transferee of Restricted Shares must agree in writing on a form
  prescribed by the Company to be bound by all provisions of this Agreement.

  
	
   

  	
   

  	
   

  
	
  Forfeiture

  	
   

  	
  If your Service terminates for any reason, then your
  shares will be forfeited to the extent that they have not vested before the
  termination date and do not vest as a result of the termination. This means
  that the Restricted Shares will immediately revert to the Company. You
  receive no payment for Restricted Shares that are forfeited. The Company
  determines when your Service terminates for this purpose.

  
	
   

  	
   

  	
   

  
	
  Leaves of Absence and Part-Time Work

  	
   

  	
  For purposes of this award, your Service does not
  terminate when you go on a military leave, a sick leave or another bona fide leave of absence, if the leave was approved by
  the Company in writing. But your Service terminates when the approved leave
  ends, unless you immediately return to active work.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If you go on a leave of absence, then the vesting
  schedule specified in the Notice of
  Restricted Stock Award may be adjusted in accordance with the Company’s leave of absence policy or the
  terms of your leave. If you commence working on a part-time basis,
  then the vesting schedule specified in
  the Notice of Restricted Stock Award may be adjusted in accordance
  with the Company’s part-time work policy or the terms of an agreement between
  you and the Company pertaining to your part-time schedule.

  
	
   

  	
   

  	
   

  
	
  Stock Certificates

  	
   

  	
  The certificates for Restricted Shares have stamped
  on them a special legend referring to the Company’s forfeiture right. In
  addition to or in lieu of imposing the legend, the Company may hold the
  certificates in escrow. As your vested percentage increases, you may request
  (at reasonable intervals) that the Company release to you a non-legended

  



 



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  certificate for your vested shares.

  
	
   

  	
   

  	
   

  
	
  Voting Rights

  	
   

  	
  You may vote your shares even before they vest.

  
	
   

  	
   

  	
   

  
	
  Withholding Taxes

  	
   

  	
  No stock certificates will be released to you unless
  you have made arrangements acceptable to the Company to pay any withholding
  taxes that may be due as a result of this award or the vesting of the shares. With the Company’s consent, these arrangements
  may include (a) withholding shares of Company stock that otherwise would
  be issued to you when they vest or (b) surrendering shares that you
  previously acquired. The fair market value of the shares you
  surrender, determined as of the date taxes otherwise would have been withheld
  in cash, will be applied as a credit against the withholding taxes.

  
	
   

  	
   

  	
   

  
	
  Restrictions on Resale

  	
   

  	
  You agree not to sell any shares at a time when
  applicable laws, Company policies or an agreement between the Company and its
  underwriters prohibit a sale. This restriction will apply as long as your
  Service continues and for such period of time after the termination of your
  Service as the Company may specify.

  
	
   

  	
   

  	
   

  
	
  No Retention Rights

  	
   

  	
  Your award or this Agreement does not give you the
  right to be employed or retained by the Company or a subsidiary of the
  Company in any capacity. The Company and its subsidiaries reserve the right
  to terminate your Service at any time, with or without cause.

  
	
   

  	
   

  	
   

  
	
  Adjustments

  	
   

  	
  In the event of a stock split, a stock dividend or a
  similar change in Company stock, the number of Restricted Shares that remain
  subject to forfeiture will be adjusted accordingly.

  
	
   

  	
   

  	
   

  
	
  Applicable Law

  	
   

  	
  This Agreement will be interpreted and enforced
  under the laws of the State of Delaware
  (without regard to their choice-of-law provisions).

  
	
   

  	
   

  	
   

  
	
  The Plan and Other Agreements

  	
   

  	
  The text of the Plan is incorporated in this Agreement
  by reference. 

   

  This Agreement and the Plan constitute the entire
  understanding between you and the Company regarding this award. Any prior
  agreements, commitments or negotiations concerning this award are superseded.
  This Agreement may be amended only by another written agreement between the
  parties.

  



 


BY SIGNING THE COVER SHEET OF
THIS AGREEMENT, YOU AGREE TO ALL OF THE

TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.



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