Exhibit 10.4


 


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:

  	
   

  	
  Michael W. Aguiar

  
	
   

  	
   

  	
   

  
	
  Total Number of
  Shares Granted:

  	
   

  	
  50,000

  
	
   

  	
   

  	
   

  
	
  Fair Market
  Value per Share:

  	
   

  	
  $«ValuePerShare»

  
	
   

  	
   

  	
   

  
	
  Total Fair
  Market Value of Award:

  	
   

  	
  $«TotalValue»

  
	
   

  	
   

  	
   

  
	
  Date of Grant:

  	
   

  	
  March 7,
  2005

  
	
   

  	
   

  	
   

  
	
  Vesting
  Commencement Date:

  	
   

  	
  March 7,
  2005

  
	
   

  	
   

  	
   

  
	
  Vesting
  Schedule:

  	
   

  	
  The first 50% of the shares subject to this award shall vest on
  the earlier of the Put Date (as defined in the Restricted Stock Agreement) or
  January 1, 2008 (as applicable, the “First Vesting Date”) provided that
  you have remained in continuous Service (as defined in the Restricted Stock
  Agreement) from the Date of Grant through the First Vesting Date. An
  additional 25% of the shares subject to this award shall vest when you
  complete each year of Service thereafter.

  



 


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.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Michael Aguiar

  	
   

  	
  By:

  	
  /s/ Bradford J. Shafer

  
	
   

  	
  Title:

  	
  Senior Vice President &
  General Counsel

  
						



 





















 


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

  



 


2





















 


	
   

  	
   

  	
  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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