Exhibit 10.5

 

THERAVANCE BIOPHARMA, INC. 2013 EQUITY INCENTIVE PLAN

 

NOTICE OF OPTION GRANT

 

You have been granted the following option to purchase Common Shares of Theravance Biopharma, Inc. (the “Company”):

 

	
Name of Optionee:
    	
 
    	
«First» «Last»
    
	
 
    	
 
    	
 
    
	
ID Number:
    	
 
    	
«ID»
    
	
 
    	
 
    	
 
    
	
Total   Number of Shares:
    	
 
    	
«Shares»
    
	
 
    	
 
    	
 
    
	
Type   of Option:
    	
 
    	
Nonstatutory   Option
    
	
 
    	
 
    	
 
    
	
Grant   Number:
    	
 
    	
«Number»
    
	
 
    	
 
    	
 
    
	
Exercise   Price Per Share:
    	
 
    	
«Price»
    
	
 
    	
 
    	
 
    
	
Date of Grant:
    	
 
    	
«Grant_Date»
    
	
 
    	
 
    	
 
    
	
Vesting Schedule:
    	
 
    	
This   option shall vest and become exercisable with respect to the first 25% of the   Common Shares subject to this option when you complete 12 months of   continuous service as an Employee or Consultant (“Service”) following the   Date of Grant. This option shall vest and become exercisable with respect to   an additional 1/48th of the Common Shares subject to this option   when you complete each month of continuous Service thereafter.  The   option shall be fully vested and exercisable on the 4-year anniversary of the   Date of Grant provided you have remained in continuous Service through   such date.
    
	
 
    	
 
    	
 
    
	
Expiration   Date:
    	
 
    	
«Expiration_Date». This option expires   earlier if your Service terminates earlier, as described in the Option   Agreement, and may be terminated sooner in connection with certain corporate   transactions as provided in Article XI of the Plan.
    


 

You and the Company agree that this option is granted under and governed by the terms and conditions of the Option Agreement, which is attached to and made a part of this document, and the 2013 Equity Incentive Plan (the “Plan”). Capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Plan.

 

You further agree that the Company may deliver by email all documents relating to the Plan or this option (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.

 











 

THERAVANCE BIOPHARMA, INC. 2013 EQUITY INCENTIVE PLAN

 

OPTION AGREEMENT

 

	
Grant   of Option
    	
 
    	
Subject   to all of the terms and conditions set forth in the Notice of Option Grant,   this Option Agreement (the “Agreement”)   and the Plan, the Company has granted you an option to purchase up to the   total number of shares specified in the Notice of Option Grant at the   exercise price indicated in the Notice of Option Grant.
    
	
 
    	
 
    	
 
    
	
Tax   Treatment
    	
 
    	
This   option is intended to be a nonstatutory option, as provided in the Notice of   Option Grant.
    
	
 
    	
 
    	
 
    
	
Vesting
    	
 
    	
This option vests and becomes exercisable as shown in the Notice of   Option Grant.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
This option shall vest and become exercisable in full if the Company   is subject to a “Change in Control”   (as defined in the Plan) before your Service terminates and this option is   not assumed or replaced with a new award as set forth in Section 10.1 of   the Plan.  In addition, this option   shall vest and become exercisable in full if the Company is subject to a Change   in Control before your Service terminates, and you are subject to an   Involuntary Termination (as defined below) within 24 months after the Change   in Control.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
For purposes of this Agreement, “Cause” shall   mean (i) the unauthorized use or disclosure of the confidential   information or trade secrets of the Company, a Parent, a Subsidiary or an   Affiliate, which use causes material harm to the Company, a Parent, a   Subsidiary or an Affiliate, (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.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
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 (or Parent, Subsidiary or Affiliate employing   you) for reasons other than for Cause; or
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(b)          your voluntary resignation   following one of the following that is effected by the Company (or the   Parent, Subsidiary or Affiliate employing you) without your consent   (i) a change in your position with the Company (or Parent, Subsidiary or   Affiliate employing you) which materially reduces your level of   responsibility, (ii) a material reduction in your base
    


 











 

	
 
    	
 
    	
compensation or (iii) a relocation of your workplace by more   than fifty miles from your workplace immediately prior to the Change in   Control that also materially increases your one-way commute. In order for   your resignation under clause (b) to constitute an “Involuntary   Termination,” all of the following requirements must be satisfied:   (1) you must provide notice to the Company of your intent to resign and   assert an Involuntary Termination pursuant to clause (b) within 90 days   of the initial existence of one or more of the conditions set forth in   subclauses (i) through (iii), (2) the Company (or the Parent,   Subsidiary or Affiliate employing you) will have 30 days from the date of   such notice to remedy the condition and, if it does so, you may withdraw your   resignation or resign without any vesting acceleration, and (3) any   termination of Service under clause (b) must occur within two years of   the initial existence of one or more of the conditions set forth in   subclauses (i) through (iii).    Should the Company (or the Parent, Subsidiary or Affiliate employing   you) remedy the condition as set forth above and then one or more of the   conditions arises again within two years following the occurrence of a Change   in Control, you may assert clause (b) again subject to all of the   conditions set forth herein.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
For purposes of this Agreement, “Service”   means your service as an Employee or Consultant.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Notwithstanding the foregoing, if you are or become eligible to   participate in the Company’s Change in Control Severance Plan (the “Severance Plan”), the vesting acceleration provisions in   the Severance Plan shall apply instead of those contained herein.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
No additional shares will vest or become exercisable after your   Service has terminated for any reason, except as set forth in the Severance   Plan to the extent you are eligible for benefits thereunder.
    
	
 
    	
 
    	
 
    
	
Term
    	
 
    	
This   option expires in any event at the close of business at Company headquarters   on the day before the 10th anniversary of the Date of   Grant, as shown in the Notice of Option Grant.  (This option will expire earlier if your   Service terminates, as described below, and this option may be terminated   sooner as provided in Article XI of the Plan.)
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
You   may exercise this option, to the extent vested and exercisable, at any time   before its expiration or termination pursuant to this Agreement or the Plan.
    
	
 
    	
 
    	
 
    
	
Termination   of Service
    	
 
    	
If   your Service terminates for any reason, this option will expire to the extent   it is unvested as of your termination date and does not vest as a result of   your termination of Service.  The   Company determines when your Service terminates for all purposes of this   option.
    


 

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Regular   Termination
    	
 
    	
If   your Service terminates for any reason except death or total and permanent   disability, then this option, to the extent vested as of your termination   date, will expire at the close of business at Company headquarters on the   date three months after your termination date. 
    
	
 
    	
 
    	
 
    
	
Death/Disability
    	
 
    	
If your Service terminates because of your death or due to your total   and permanent disability, then this option, to the extent vested as of your   termination date, will expire at the close of business at Company headquarters   on the date 12 months after your termination date.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
For   all purposes under this Agreement, “total and permanent disability” means   that you are unable to engage in any substantial gainful activity by reason   of any medically determinable physical or mental impairment which can be   expected to result in death or which has lasted, or can be expected to last,   for a continuous period of not less than one year.
    
	
 
    	
 
    	
 
    
	
Leaves   of Absence and Part-Time Work
    	
 
    	
For purposes of this option, 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 (or Parent,   Subsidiary or Affiliate employing you) 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 Option Grant may be adjusted in accordance with the   Company’s leave of absence policy or the terms of your leave.  If you and the Company (or Parent,   Subsidiary or Affiliate employing you) agree to a reduction in your scheduled   work hours, then the Company reserves the right to modify the rate at which   this option vests, so that the rate of vesting is commensurate with your   reduced work schedule.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The Company shall not be required to adjust any vesting schedule   pursuant to this subsection.
    
	
 
    	
 
    	
 
    
	
Restrictions   on Exercise
    	
 
    	
The Company will not permit you to exercise this option if the   issuance of shares at that time would violate any law or regulation.
    
	
 
    	
 
    	
 
    
	
Notice   of Exercise
    	
 
    	
When you wish to exercise this option, you must notify the Company by   filing the proper “Notice of Exercise” form at the address given on the   form.  Your notice must specify how   many shares you wish to purchase.  Your   notice must also specify how your shares should be registered.  The notice will be effective when the   Company receives it.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
However, if you wish to exercise this option by executing a same-day   sale (as described below), you must follow the instructions of the Company   and the broker who will execute the sale.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
If someone else wants to exercise this option after your death, that   person must prove to the Company’s satisfaction that he or she is entitled to   do so.
    


 

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In no event may this option be exercised for any fractional shares.
    
	
 
    	
 
    	
 
    
	
Form of   Payment
    	
 
    	
When you submit your notice of exercise, you must include payment of   the option exercise price for the shares that you are purchasing.  To the extent permitted by applicable law,   payment may be made in one (or a combination of two or more) of the following   forms:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
·                       Your personal   check, a cashier’s check, a money order or by wire transfer.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
·                       Irrevocable   directions to a securities broker approved by the Company to sell all or part   of your option shares and to deliver to the Company from the sale proceeds an   amount sufficient to pay the option exercise price and any withholding   taxes.  (The balance of the sale   proceeds, if any, will be delivered to you.)    The directions must be given in accordance with the instructions of   the Company and the broker.  This   exercise method is sometimes called a “same-day sale.”
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
·                       With the   Company’s consent (which may be granted by the Compensation Committee of the   Board of Directors or, if applicable, by the Equity Award Committee of the   Board of Directors), irrevocable directions to a securities broker or lender   approved by the Company to pledge option shares as security for a loan and to   deliver to the Company from the loan proceeds an amount sufficient to pay the   option exercise price and any withholding taxes.  The directions must be given in accordance   with the instructions of the Company and the broker or lender.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
·                       With the   Company’s consent (which may be granted by the Compensation Committee of the   Board of Directors or, if applicable, by the Equity Award Committee of the   Board of Directors), Common Shares that you own, along with any forms needed   to effect a transfer of those shares to the Company.  The value of the shares, determined as of   the effective date of the option exercise, will be applied to the option   exercise price.  Instead of   surrendering Common Shares, you may attest to the ownership of those shares   on a form provided by the Company and have the same number of shares   subtracted from the option shares issued to you.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
·                       With the   Company’s consent (which may be granted by the Compensation Committee of the   Board of Directors or, if applicable, by the Equity Award Committee of the   Board of Directors), by having the Company withhold Common Shares that would   otherwise be issued on exercise of the option.  The value of the withheld shares,   determined as of the effective date of the option exercise, will be applied   to the option exercise price. This exercise method is sometimes referred to   as a “net exercise.”  
    
	
 
    	
 
    	
 
    
	
Withholding   
    	
 
    	
You will not be allowed to exercise this option unless you make 
    


 

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Taxes   and Share Withholding
    	
 
    	
arrangements acceptable to the Company (and/or the Parent, Subsidiary   or Affiliate employing you) to pay any withholding taxes that may be due as a   result of the option exercise (“Tax Withholding Obligations”).  These arrangements include payment in cash   or via the same-day sale method described above.  With the Company’s consent (which may be   granted by the Compensation Committee of the Board of Directors or, if   applicable, by the Equity Award Committee of the Board of Directors), these   arrangements may also include withholding shares that otherwise would be   issued to you when you exercise this option.    The value of these shares, determined as of the effective date of the   option exercise, will be applied to the Tax Withholding Obligations.
    
	
 
    	
 
    	
 
    
	
Automatic   Exercise at End of Option Term
    	
 
    	
This option, to the extent then outstanding, will be automatically   exercised as to all then-vested Shares at 9:00 am Pacific Time on the fourth   trading day preceding the expiration date set forth in the Notice of Option   Grant if the per share exercise price of the option is at least 1% below the   Fair Market Value of a Common Share at such time.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
In the event of an automatic exercise, you authorize the Company to   instruct the broker whom it has selected for this purpose to sell a number of   Common Shares to be issued upon exercise of the option necessary to generate   cash proceeds to cover the exercise price for the exercised shares and the   Tax Withholding Obligations in connection with such exercise (the “Exercise   Costs”).  Such sales shall be effected   at a market price following the date that the option is exercised.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
You acknowledge that the proceeds of any such sale may not be   sufficient to satisfy the Exercise Costs.    To the extent the proceeds from such sale are insufficient to cover   the Exercise Costs, the Company (or Parent, Subsidiary or Affiliate employing   you) may in its discretion (a) withhold the balance of the Exercise   Costs from your wages or other cash compensation paid to you by the Company   (or Parent, Subsidiary or Affiliate employing you) and/or (b) satisfy   the Exercise Costs by means of a net-exercise arrangement, provided that in   the case of the Tax Withholding Obligations the Company only withholds an   amount of shares not in excess of the amount necessary to satisfy the minimum   withholding amount.  The fair market value   of the withheld shares, determined as of the date of exercise, will be   applied against the Exercise Costs.  If   the Company satisfies the Exercise Costs by means of a net-exercise   arrangement as described above, you are deemed to have been issued the full   number of shares subject to the option so exercised.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
You acknowledge that the instruction to the broker to sell in the   foregoing section is intended to comply with the requirements of   Rule 10b5-1(c)(1)(i)(B) under the Securities Exchange Act of 1934   (the “Exchange Act”), and to be interpreted to comply with the requirements   of Rule 10b5-1(c)(1) under the Exchange Act (a “10b5-1 Plan”).  This 10b5-1 Plan is adopted to be effective   as of the first day of the Company’s first open 
    


 

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trading window following the date on which shares subject to this   option first become vested.  This   10b5-1 Plan is being adopted to permit you to sell a number of shares issued   upon exercise of the option sufficient to pay the Exercise Costs.  You hereby appoint the Company as your   agent and attorney-in-fact to instruct the broker with respect to the number   of shares to be sold under this 10b5-1 Plan.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
You hereby authorize the broker to sell the number of Common Shares   determined as set forth above and acknowledge that the broker is under no   obligation to arrange for such sale at any particular price.  You acknowledge that the broker may   aggregate your sales with sales occurring on the same day that are effected   on behalf of other Company employees pursuant to sales of shares vesting   under Company options or restricted share unit awards and your proceeds will   be based on a blended price for all such sales.  You acknowledge that you will be   responsible for all brokerage fees and other costs of sale, and you agree to   indemnify and hold the Company harmless from any losses, costs, damages or   expenses relating to any such sale.    You acknowledge that it may not be possible to sell Common Shares   during the term of this 10b5-1 Plan due to (a) a legal or contractual   restriction applicable to you or to the broker, (b) a market disruption,   (c) rules governing order execution priority on the Nasdaq Global   Market, (d) a sale effected pursuant to this 10b5-1 Plan that fails to   comply (or in the reasonable opinion of the broker’s counsel is likely not to   comply) with Rule 144 under the Securities Act of 1933, if applicable,   or (e) if the Company determines that sales may not be effected under   this 10b5-1 Plan.  You acknowledge that   this 10b5-1 Plan is subject to the terms of any policy adopted now or   hereafter by the Company governing the adoption of 10b5-1 plans.  
    
	
 
    	
 
    	
 
    
	
Restrictions   on Resale
    	
 
    	
You agree not to sell any option shares at a time when applicable   laws, Company policies (including the Company’s Insider Trading Policy, a   copy of which can be found on the Company’s intranet) 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.
    
	
 
    	
 
    	
 
    
	
Transfer   of Option
    	
 
    	
Prior to your death, only you may exercise this option.  You cannot transfer or assign this   option.  For instance, you may not sell   this option or use it as security for a loan.    If you attempt to do any of these things, this option will immediately   become invalid.  You may, however,   dispose of this option in your will or a beneficiary designation.  A beneficiary designation must be filed   with the Company on the proper form.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Regardless of any marital property settlement agreement, the Company   is not obligated to honor a notice of exercise from your former spouse, nor   is the Company obligated to recognize your former spouse’s interest in your   option in any other way.
    


 

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No   Retention Rights
    	
 
    	
Your option or this Agreement does not give you the right to be   retained by the Company, a Parent, Subsidiary or Affiliate in any   capacity.  The Company and its Parents,   Subsidiaries and Affiliates reserve the right to terminate your Service at   any time, with or without cause. 
    
	
 
    	
 
    	
 
    
	
Shareholder   Rights
    	
 
    	
You, or your estate or heirs, have no rights as a shareholder of the   Company until this option has been exercised by giving the required notice to   the Company, paying the exercise price, satisfying any Tax Withholding   Obligations and being registered on the register of members of the   Company.  No adjustments are made for   dividends or other rights if the applicable record date occurs before   exercise of this option, except as described in the Plan. 
    
	
 
    	
 
    	
 
    
	
Recoupment   Policy
    	
 
    	
This option, and the shares acquired upon exercise of this option,   shall be subject to any Company recoupment policy in effect from time to   time.
    
	
 
    	
 
    	
 
    
	
Adjustments
    	
 
    	
In the event of a share split, a share dividend or a similar change   in the Common Shares, the number of shares covered by this option and the   exercise price per share may be adjusted pursuant to the Plan.
    
	
 
    	
 
    	
 
    
	
Effect   of Significant Corporate Transactions
    	
 
    	
If the Company is a party to a merger, consolidation or certain   change in control transactions, then this option will be subject to the   applicable provisions of Article XI of the Plan.
    
	
 
    	
 
    	
 
    
	
Applicable   Law
    	
 
    	
This Agreement will be interpreted and enforced under the laws of the   Cayman Islands (without regard to its choice-of-law provisions).
    
	
 
    	
 
    	
 
    
	
The   Plan and Other Agreements
    	
 
    	
The text of the Plan is incorporated in this Agreement by   reference.  A copy of the Plan is   available on the Company’s intranet or by request to the Finance Department.  Capitalized terms not otherwise defined   herein shall have the meanings ascribed to such terms in the Plan.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
This Agreement, the Notice of Option Grant, and the Plan constitute   the entire understanding between you and the Company regarding this   option.  Any prior agreements,   commitments or negotiations concerning this option are superseded.  This Agreement may be amended only by   another written agreement between the parties.
    


 

BY ACCEPTING THIS OPTION GRANT, YOU AGREE TO ALL OF THE TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.

 

8









 

[Director Initial and Annual Grants]

 

THERAVANCE BIOPHARMA, INC. 2013 EQUITY INCENTIVE PLAN

 

NOTICE OF OPTION GRANT

 

You have been granted the following option to purchase Common Shares of Theravance Biopharma, Inc. (the “Company”):

 

	
Name of Optionee:
    	
 
    	
«First» «Last»
    
	
 
    	
 
    	
 
    
	
ID Number:
    	
 
    	
«ID»
    
	
 
    	
 
    	
 
    
	
Total   Number of Shares:
    	
 
    	
«Shares»
    
	
 
    	
 
    	
 
    
	
Type   of Option:
    	
 
    	
Nonstatutory   Option
    
	
 
    	
 
    	
 
    
	
Grant   Number:
    	
 
    	
«Number»
    
	
 
    	
 
    	
 
    
	
Exercise   Price Per Share:
    	
 
    	
«Price»
    
	
 
    	
 
    	
 
    
	
Date of Grant:
    	
 
    	
«Grant_Date»
    
	
 
    	
 
    	
 
    
	
Vesting Schedule:
    	
 
    	
[Initial Grant: This option shall vest and become   exercisable as to 1/24th of the Common Shares subject to this option   when you complete each month of continuous service as an Outside Director   (“Service”) following the Date of Grant.] [Annual Grant: This option shall vest   and become exercisable as to 1/12th of the Common Shares subject to this option   when you complete each month of continuous service as an Outside Director   (“Service”) following the Date of Grant. In addition, this option shall vest   and become exercisable in full on the date of the Company’s   20     Annual Meeting of Shareholders, provided you   remain in continuous Service through such date.]
    
	
 
    	
 
    	
 
    
	
Expiration   Date:
    	
 
    	
«Expiration_Date». This option expires   earlier if your Service terminates earlier, as described in the Option   Agreement, and may be terminated sooner in connection with certain corporate   transactions as provided in Article XI of the Plan.
    


 

You and the Company agree that this option is granted under and governed by the terms and conditions of the Option Agreement, which is attached to and made a part of this document, and the 2013 Equity Incentive Plan (the “Plan”). Capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Plan.

 

You further agree that the Company may deliver by email all documents relating to the Plan or this option (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.

 











 

THERAVANCE BIOPHARMA, INC. 2013 EQUITY INCENTIVE PLAN

 

OPTION AGREEMENT

 

	
Grant   of Option
    	
 
    	
Subject   to all of the terms and conditions set forth in the Notice of Option Grant,   this Option Agreement (the “Agreement”)   and the Plan, the Company has granted you an option to purchase up to the   total number of shares specified in the Notice of Option Grant at the   exercise price indicated in the Notice of Option Grant.
    
	
 
    	
 
    	
 
    
	
Tax   Treatment
    	
 
    	
This   option is intended to be a nonstatutory option, as provided in the Notice of   Option Grant.
    
	
 
    	
 
    	
 
    
	
Vesting
    	
 
    	
This   option vests and becomes exercisable as shown in the Notice of Option Grant. 

 

This   option shall vest and become exercisable in full if the Company is subject to   a “Change in Control” (as defined in the   Plan) before your Service terminates or upon your death. 

 

For   purposes of this Agreement, “Service”   means your service as an Outside Director.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
This   option will in no event become exercisable for additional shares after your   Service has terminated for any reason except as set forth above.
    
	
 
    	
 
    	
 
    
	
Term
    	
 
    	
This   option expires in any event at the close of business at Company headquarters   on the day before the 10th anniversary of the Date of   Grant, as shown in the Notice of Option Grant. (This option will expire   earlier if your Service terminates, as described below, and this option may   be terminated sooner as provided in Article XI of the Plan.) 

 

You   may exercise this option, to the extent vested and exercisable, at any time   before its expiration or termination pursuant to this Agreement or the Plan.
    
	
 
    	
 
    	
 
    
	
Termination   of Service
    	
 
    	
If   your Service terminates for any reason, this option will expire immediately   to the extent it is unvested as of your termination date and does not vest as   a result of your termination of Service. The Company determines when your   Service terminates for all purposes of this option. 

 

If   your Service terminates for any reason except a termination for Cause, then   this option, to the extent vested as of your termination date, will expire at   the close of business at Company headquarters on the date 36 months after   your termination date. If your Service terminates for Cause, then this option   will expire on your termination date. 
    


 











 

	
 
    	
 
    	
For   purposes of this Agreement, “Cause” shall mean (i) the unauthorized use   or disclosure of the confidential information or trade secrets of the   Company, a Parent, a Subsidiary or an Affiliate, which use causes material   harm to the Company, a Parent, a Subsidiary or an Affiliate,   (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.
    
	
 
    	
 
    	
 
    
	
Restrictions   on Exercise
    	
 
    	
The   Company will not permit you to exercise this option if the issuance of shares   at that time would violate any law or regulation.
    
	
 
    	
 
    	
 
    
	
Notice   of Exercise
    	
 
    	
When   you wish to exercise this option, you must notify the Company by filing the   proper “Notice of Exercise” form at the address given on the form. Your   notice must specify how many shares you wish to purchase. Your notice must   also specify how your shares should be registered. The notice will be   effective when the Company receives it. 

 

However,   if you wish to exercise this option by executing a same-day sale (as   described below), you must follow the instructions of the Company and the   broker who will execute the sale. 

 

If   someone else wants to exercise this option after your death, that person must   prove to the Company’s satisfaction that he or she is entitled to do so. 

 

In   no event may this option be exercised for any fractional shares.
    
	
 
    	
 
    	
 
    
	
Form of   Payment
    	
 
    	
When   you submit your notice of exercise, you must include payment of the option   exercise price for the shares that you are purchasing. To the extent   permitted by applicable law, payment may be made in one (or a combination of   two or more) of the following forms: 

 

·      Your personal check, a cashier’s check, a money   order or by wire transfer. 

 

·      Irrevocable directions to a securities broker approved by the   Company to sell all or part of your option shares and to deliver to the   Company from the sale proceeds an amount sufficient to pay the option   exercise price and any withholding taxes. (The balance of the sale proceeds,   if any, will be delivered to you.) The directions must be given in accordance   with the instructions of the Company and the broker. This exercise method is   sometimes called a “same-day sale.” 

 

·      With the   Company’s consent (which may be granted by the Board of Directors or the   Compensation Committee of the Board of Directors), Common Shares that you   own, along with any forms needed to effect a transfer of those shares to the   Company. The value of the shares, determined as of the effective date of the   option exercise, will be applied to the option exercise price. Instead of   surrendering 
    


 

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Common   Shares, you may attest to the ownership of those shares on a form provided by   the Company and have the same number of shares subtracted from the option   shares issued to you. 

 

·      With the Company’s consent (which may be   granted by the Board of Directors or the Compensation Committee of the Board   of Directors), by having the Company withhold Common Shares that would   otherwise be issued on exercise of the option. The value of the withheld   shares, determined as of the effective date of the option exercise, will be   applied to the option exercise price. This exercise method is sometimes   referred to as a “net exercise.”
    
	
 
    	
 
    	
 
    
	
Withholding   Taxes and Share Withholding
    	
 
    	
You   will not be allowed to exercise this option unless you make arrangements   acceptable to the Company to pay any withholding taxes that may be due as a   result of the option exercise (“Tax Withholding Obligations”). These   arrangements include payment in cash or via the same-day sale method   described above. With the Company’s consent (which may be granted by the   Board of Directors or the Compensation Committee of the Board of Directors),   these arrangements may also include withholding shares that otherwise would   be issued to you when you exercise this option. The value of these shares,   determined as of the effective date of the option exercise, will be applied   to the Tax Withholding Obligations.
    
	
 
    	
 
    	
 
    
	
Automatic   Exercise at End of Option Term
    	
 
    	
This   option, to the extent then outstanding, will be automatically exercised as to   all then-vested Shares at 9:00 a.m. San Francisco, CA Time on the fourth   trading day preceding the expiration date set forth in the Notice of Option   Grant if the per share exercise price of the option is at least 1% below the   Fair Market Value of a Common Share at such time. 

 

In   the event of an automatic exercise, you authorize the Company to instruct the   broker whom it has selected for this purpose to sell a number of Common   Shares to be issued upon exercise of the option necessary to generate cash   proceeds to cover the exercise price for the exercised shares and the Tax   Withholding Obligations, if any, in connection with such exercise (the   “Exercise Costs”). Such sales shall be effected at a market price following   the date that the option is exercised. 

 

You   acknowledge that the proceeds of any such sale may not be sufficient to   satisfy the Exercise Costs. To the extent the proceeds from such sale are   insufficient to cover the Exercise Costs, the Company may in its discretion   (a) withhold the balance of the Exercise Costs from the cash   compensation paid to you by the Company and/or (b) satisfy the Exercise   Costs by means of a net-exercise arrangement, provided that in the case of   the Tax Withholding Obligations the Company only withholds an amount of   shares not in excess of the amount necessary to satisfy the minimum   withholding amount. The fair market value of the withheld shares, determined   as of the date of exercise, will be applied against the Exercise 
    


 

4











 

	
 
    	
 
    	
Costs.   If the Company satisfies the Exercise Costs by means of a net-exercise   arrangement as described above, you are deemed to have been issued the full   number of shares subject to the option so exercised. 

 

You   acknowledge that the instruction to the broker to sell in the foregoing   section is intended to comply with the requirements of   Rule 10b5-1(c)(1)(i)(B) under the Securities Exchange Act of 1934   (the “Exchange Act”), and to be interpreted to comply with the requirements   of Rule 10b5-1(c)(1) under the Exchange Act (a “10b5-1 Plan”). This   10b5-1 Plan is adopted to be effective as of the first day of the Company’s   first open trading window following the date on which shares subject to this   option first become vested. This 10b5-1 Plan is being adopted to permit you   to sell a number of shares issued upon exercise of the option sufficient to   pay the Exercise Costs. You hereby appoint the Company as your agent and   attorney-in-fact to instruct the broker with respect to the number of shares   to be sold under this 10b5-1 Plan. 

 

You   hereby authorize the broker to sell the number of Common Shares determined as   set forth above and acknowledge that the broker is under no obligation to   arrange for such sale at any particular price. You acknowledge that the   broker may aggregate your sales with sales occurring on the same day that are   effected on behalf of other individuals providing service to the Company   pursuant to sales of shares vesting under Company options or restricted share   unit awards and your proceeds will be based on a blended price for all such   sales. You acknowledge that you will be responsible for all brokerage fees   and other costs of sale, and you agree to indemnify and hold the Company   harmless from any losses, costs, damages or expenses relating to any such   sale. You acknowledge that it may not be possible to sell Common Shares   during the term of this 10b5-1 Plan due to (a) a legal or contractual   restriction applicable to you or to the broker, (b) a market disruption,   (c) rules governing order execution priority on the Nasdaq Global   Market, (d) a sale effected pursuant to this 10b5-1 Plan that fails to   comply (or in the reasonable opinion of the broker’s counsel is likely not to   comply) with Rule 144 under the Securities Act of 1933, if applicable,   or (e) if the Company determines that sales may not be effected under   this 10b5-1 Plan. You acknowledge that this 10b5-1 Plan is subject to the   terms of any policy adopted now or hereafter by the Company governing the   adoption of 10b5-1 plans.
    
	
 
    	
 
    	
 
    
	
Restrictions   on Resale
    	
 
    	
You   agree not to sell any option shares at a time when applicable laws, Company   policies (including the Company’s Insider Trading Policy, a copy of which can   be found on the Company’s intranet) 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.
    
	
 
    	
 
    	
 
    
	
Transfer   of 
    	
 
    	
Prior   to your death, only you may exercise this option. You cannot transfer or   assign this option. For instance, you may not sell this option or
    


 

5











 

	
Option
    	
 
    	
use   it as security for a loan. If you attempt to do any of these things, this   option will immediately become invalid. You may, however, dispose of this   option in your will or a beneficiary designation. A beneficiary designation   must be filed with the Company on the proper form.

 

Regardless   of any marital property settlement agreement, the Company is not obligated to   honor a notice of exercise from your former spouse, nor is the Company   obligated to recognize your former spouse’s interest in your option in any   other way.
    
	
 
    	
 
    	
 
    
	
No   Retention Rights
    	
 
    	
Your   option or this Agreement does not give you the right to be retained by the   Company, a Parent, Subsidiary or Affiliate in any capacity. The Company and   its Parents, Subsidiaries and Affiliates reserve the right to terminate your   Service at any time, with or without cause. Nor shall this Agreement in any   way be construed or interpreted so as to affect adversely or otherwise impair   the right of the Company or its shareholders to remove you from the Board of   Directors at any time in accordance with the provisions of applicable law.
    
	
 
    	
 
    	
 
    
	
Shareholder   Rights
    	
 
    	
You,   or your estate or heirs, have no rights as a shareholder of the Company until   this option has been exercised by giving the required notice to the Company,   paying the exercise price, satisfying any Tax Withholding Obligations and   being registered on the register of members of the Company. No adjustments   are made for dividends or other rights if the applicable record date occurs   before exercise of this option, except as described in the Plan.
    
	
 
    	
 
    	
 
    
	
Recoupment   Policy
    	
 
    	
This   option, and the shares acquired upon exercise of this option, shall be   subject to any Company recoupment policy in effect from time to time.
    
	
 
    	
 
    	
 
    
	
Adjustments
    	
 
    	
In   the event of a share split, a share dividend or a similar change in the   Common Shares, the number of shares covered by this option and the exercise   price per share may be adjusted pursuant to the Plan.
    
	
 
    	
 
    	
 
    
	
Effect   of Significant Corporate Transactions
    	
 
    	
If   the Company is a party to a merger, consolidation or certain change in   control transactions, then this option will be subject to the applicable   provisions of Article XI of the Plan.
    
	
 
    	
 
    	
 
    
	
Applicable   Law
    	
 
    	
This   Agreement will be interpreted and enforced under the laws of the Cayman   Islands (without regard to its choice-of-law provisions).
    
	
 
    	
 
    	
 
    
	
The   Plan and Other Agreements
    	
 
    	
The   text of the Plan is incorporated in this Agreement by reference. A copy of   the Plan is available on the Company’s intranet or by request to the Finance   Department. Capitalized terms not otherwise defined herein shall have the   meanings ascribed to such terms in the Plan. 

 

This   Agreement, the Notice of Option Grant, and the Plan constitute the 
    


 

6











 

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


 

BY ACCEPTING THIS OPTION GRANT, YOU AGREE TO ALL OF THE TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.

 

7









 

THERAVANCE BIOPHARMA, INC. 2013 EQUITY INCENTIVE PLAN

 

NOTICE OF RESTRICTED SHARE UNIT AWARD

 

You have been granted the number of restricted share units indicated below by Theravance Biopharma, Inc. (the “Company”) on the following terms:

 

Name:                                                                                                           «Name»

 

Restricted Share Unit Award Details:

 

	
Date   of Grant:
    	
 
    	
«DateGrant»
    
	
Restricted   Share Units:
    	
 
    	
«TotalShares»
    


 

Each restricted share unit (the “restricted share unit”) represents the right to receive one Common Share of the Company subject to the terms and conditions contained in the Restricted Share Unit Agreement (the “Agreement”).

 

Vesting Schedule:

 

Vesting is dependent upon continuous service as an Employee or Consultant (“Service”) throughout the vesting period.  The restricted share units will vest as follows:  25% on <<InitialVestDate>>; 6.25% on <<SecondVestDate>>; and an additional 6.25% on the final day of each 3-month period thereafter, provided that you remain in continuous Service through each such date.

 

You and the Company agree that your right to receive the restricted share units is granted under and governed by the terms and conditions of the Theravance Biopharma, Inc. 2013 Equity Incentive Plan (the “Plan”) and of the Agreement that is attached to and made a part of this document.  Capitalized terms not defined herein have the meaning ascribed to such terms in the Plan.

 

You 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.

 

You agree to cover the applicable withholding taxes as set forth more fully herein.  In connection with your receipt of the restricted share units, you are simultaneously entering into a trading arrangement that complies with the requirements of Rule 10b5-1(c)(1) under the Securities Exchange Act of 1934 (a “10b5-1 Plan”).  As of the date of the Agreement, you are not aware of any material nonpublic information concerning the Company or its securities, or, as of the date any sales are effected pursuant to the 10b5-1 Plan, you will not effect such sales on the basis of material nonpublic information about the securities or the Company of which you were aware at the time you entered into the Agreement.

 











 

THERAVANCE BIOPHARMA, INC. 2013 EQUITY INCENTIVE PLAN:
 RESTRICTED SHARE UNIT AGREEMENT

 

	
Grant   of Units
    	
 
    	
Subject   to all of the terms and conditions set forth in the Notice of Restricted   Share Unit Award, this Restricted Share Unit Agreement (the “Agreement”) and the Plan, the Company has granted to you   the number of restricted share units set forth in the Notice of Restricted   Share Unit Award.
    
	
 
    	
 
    	
 
    
	
Payment   for Units
    	
 
    	
No   payment is required for the restricted share units you are receiving.
    
	
 
    	
 
    	
 
    
	
Nature of Units
    	
 
    	
Your restricted share units are bookkeeping entries.  They represent only the Company’s unfunded   and unsecured promise to issue Common Shares on a future date.  As a holder of restricted share units, you   have no rights other than the rights of a general creditor of the Company.
    
	
 
    	
 
    	
 
    
	
Settlement of Units
    	
 
    	
Each of your restricted share units will be settled when it vests   (unless you and the Company have agreed to a later settlement date pursuant   to procedures that the Company may prescribe at its discretion).
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
At the time of settlement, you will receive one Common Share for each   vested restricted share unit. 
    
	
 
    	
 
    	
 
    
	
Vesting
    	
 
    	
The restricted share units that you are receiving will vest as shown   in the Notice of Restricted Share Unit Award.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
In addition, the restricted share units will vest in full if the   Company is subject to a “Change in Control”   (as defined in the Plan) before your Service terminates and the restricted   share units are not assumed or replaced with a new award as set forth in   Section 10.1 of the Plan.  In   addition, the restricted share units shall vest in full if the Company is   subject to a Change in Control before your Service terminates, and you are   subject to an Involuntary Termination (as defined below) within 24 months   after the Change in Control.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
For purposes of this Agreement, “Cause” means   (i) the unauthorized use or disclosure of the confidential information   or trade secrets of the Company, a Parent, a Subsidiary or an Affiliate,   which use causes material harm to the Company, a Parent, a Subsidiary or an   Affiliate, (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.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
For purposes of this Agreement, “Involuntary Termination”   means a 
    


 











 

	
 
    	
 
    	
termination of your Service by reason of:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(a)           an involuntary dismissal   or discharge by the Company (or Parent, Subsidiary or Affiliate employing   you) for reasons other than for Cause; or
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(b)           your voluntary resignation   following one of the following that is effected by the Company (or the   Parent, Subsidiary or Affiliate employing you) without your consent (i) a   change in your position with the Company (or the Parent, Subsidiary or   Affiliate employing you) which materially reduces your level of   responsibility, (ii) a material reduction in your base compensation or   (iii) a relocation of your workplace by more than fifty miles from your   workplace immediately prior to the Change in Control that also materially   increases your one-way commute, provided that in either case a “separation   from service” (as defined in the regulations under Code Section 409A)   occurs.  In order for your resignation   under clause (b) to constitute an “Involuntary Termination,” all of the   following requirements must be satisfied: (1) you must provide notice to   the Company of your intent to resign and assert an Involuntary Termination   pursuant to clause (b) within 90 days of the initial existence of one or   more of the conditions set forth in subclauses (i) through (iii), (2) the   Company (or the Parent, Subsidiary or Affiliate employing you) will have 30   days from the date of such notice to remedy the condition and, if it does so,   you may withdraw your resignation or resign without any vesting acceleration,   and (3) any termination of Service under clause (b) must occur   within two years of the initial existence of one or more of the conditions   set forth in subclauses (i) through (iii).  Should the Company (or the Parent,   Subsidiary or Affiliate employing you) remedy the condition as set forth   above and then one or more of the conditions arises again within two years   following the occurrence of a Change in Control, you may assert clause (b) again   subject to all of the conditions set forth herein.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
For purposes of this Agreement, “Service”   means your continuous service as an Employee or Consultant.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Notwithstanding the foregoing, if you are or become eligible to   participate in the Company’s Change in Control Severance Plan (the “Severance Plan”), the vesting acceleration provisions in   the Severance Plan shall apply instead of those contained herein.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
No   additional restricted share units vest after your Service has terminated for   any reason, except as set forth in the Severance Plan to the extent you are   eligible for benefits thereunder.  It   is intended that vesting in the restricted share units is commensurate with a   full-time work schedule.  For possible   adjustments that may be made by the Company, see the Section below   entitled “Leaves of Absence and 
    


 

2











 

	
 
    	
 
    	
Part-Time   Work.”
    
	
 
    	
 
    	
 
    
	
Forfeiture
    	
 
    	
If   your Service terminates for any reason, then your restricted share units that   have not vested before the termination date and do not vest as a result of   the termination pursuant to this Agreement or as set forth on the Notice of   Restricted Share Unit Award will be forfeited.  This means that the restricted share units   will revert to the Company.  You   receive no payment for restricted share units that are forfeited.  The Company determines when your Service   terminates for all purposes of your restricted share units.
    
	
 
    	
 
    	
 
    
	
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 (or the Parent,   Subsidiary or Affiliate employing you) in writing.  If your leave of absence (other than a   military leave) lasts for more than 6 months, then vesting will be suspended   on the day that is 6 months and 1 day after the leave of absence began.  Vesting will resume effective as of the   second vesting date after you return from leave of absence provided you have   worked at least one day during that vesting period.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
In   the case of all leaves, your Service terminates when the approved leave ends,   unless you immediately return to active work.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
If   you and the Company (or the Parent, Subsidiary or Affiliate employing you)   agree to a reduction in your scheduled work hours, then the Company reserves   the right to modify the rate at which the restricted share units vest, so   that the rate of vesting is commensurate with your reduced work schedule.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The   Company shall not be required to adjust any vesting schedule pursuant to this   subsection.
    
	
 
    	
 
    	
 
    
	
Share   Certificates
    	
 
    	
No   Common Shares shall be issued to you prior to the date on which the   restricted share units vest.  After any   restricted share units vest pursuant to this Agreement, the Company shall   promptly cause to be issued in book-entry form, registered in your name or in   the name of your legal representatives, beneficiaries or heirs, as the case   may be, in the register of members of the Company, the number of Common   Shares representing your vested restricted share units.  No fractional shares shall be issued.
    
	
 
    	
 
    	
 
    
	
Section 409A
    	
 
    	
Unless   you and the Company have agreed to a deferred settlement date (pursuant to   procedures that the Company may prescribe at its discretion), settlement of   these restricted share units is intended to be exempt from the application of   Code Section 409A pursuant to the “short-term deferral exemption” in   Treasury Regulation 1.409A-1(b)(4) and shall be administrated and   interpreted in a manner that complies with such exemption.
    


 

3











 

	
 
    	
 
    	
Notwithstanding   the foregoing, to the extent it is determined that settlement of these   restricted share units is not exempt from Code Section 409A as a   short-term deferral or otherwise and the Company determines that you are a   “specified employee,” as defined in the regulations under Code   Section 409A, at the time of your “separation from service,” as defined   in those regulations, then any restricted share units that otherwise would   have been settled during the first six months following your separation from   service will instead be settled on the first business day following the   earlier of the six-month anniversary of your separation from service or your   death, unless the event triggering vesting is an event other than your   separation from service.
    
	
 
    	
 
    	
 
    
	
No Shareholder   Rights
    	
 
    	
The   restricted share units do not entitle you to any of the rights of a   shareholder of Common Shares.  Upon   settlement of the restricted share units into Common Shares, you will obtain   full voting and other rights as a shareholder of the Company.
    
	
 
    	
 
    	
 
    
	
Units   Restricted
    	
 
    	
You   may not sell, transfer, pledge or otherwise dispose of any restricted share   units or rights under this Agreement other than by will or by the laws of   descent and distribution.    Notwithstanding the foregoing, you may designate a beneficiary or   beneficiaries to receive any property distributable with respect to the   restricted share units upon your death. A beneficiary designation must be   filed with the Company on the proper form.
    
	
 
    	
 
    	
 
    
	
Withholding   Taxes
    	
 
    	
No   shares will be distributed to you unless you have made arrangements   acceptable to the Company (and/or the Parent, Subsidiary or Affiliate   employing you) to pay any withholding taxes that may be due as a result of   the vesting and/or settlement of this award (“Tax   Withholding Obligations”).    Prior to the relevant taxable event, you shall pay or make adequate   arrangements satisfactory to the Company (and/or the Parent, Subsidiary or   Affiliate employing you) to satisfy the Tax Withholding Obligations.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
You authorize the Company to instruct the broker whom it has selected   for this purpose to sell a number of Common Shares to be issued upon the   vesting of your restricted share units or a lesser number necessary to meet   the Tax Withholding Obligations.  Such   sales shall be effected at a market price following the date that the   restricted share units vest (unless you and the Company have agreed to a   later settlement date pursuant to procedures that the Company may prescribe   at its discretion).
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
You acknowledge that the proceeds of any such sale may not be   sufficient to satisfy the Tax Withholding Obligations.  To the extent the proceeds from such sale   are insufficient to cover the Tax Withholding Obligations, the Company (or   the Parent, Subsidiary or Affiliate employing you) may in its discretion (a) withhold   the balance of the 
    


 

4











 

	
 
    	
 
    	
Tax Withholding Obligations from your wages or other cash   compensation paid to you by the Company (or the Parent, Subsidiary or   Affiliate employing you) and/or (b) withhold in Common Shares, provided   that the Company only withholds an amount of shares not in excess of the   amount necessary to satisfy the minimum withholding amount.  The fair market value of withheld shares,   determined as of the date taxes otherwise would have been withheld in cash,   will be applied against the Tax Withholding Obligations.  If the Company satisfies the Tax   Withholding Obligations by withholding a number of Common Shares as described   above, you are deemed to have been issued the full number of shares subject   to the award of restricted share units.
    
	
 
    	
 
    	
 
    
	
Rule 10b5-1   Plan
    	
 
    	
You acknowledge that the instruction to the broker to sell in the   foregoing section is intended to comply with the requirements of Rule 10b5-1(c)(1)(i)(B) under   the Securities Exchange Act of 1934 (the “Exchange   Act”), and to be interpreted to comply with the requirements of   Rule 10b5-1(c)(1) under the Exchange Act (a “10b5-1   Plan”).  This 10b5-1 Plan is   adopted to be effective as of the first date on which the restricted share   units vest.  This 10b5-1 Plan is being   adopted to permit you to sell a number of shares awarded upon the vesting of   restricted share units sufficient to pay the Tax Withholding Obligations that   become due as a result of this award or the vesting of the restricted share   units or, if you elect within thirty days following notification via the   broker whom the Company has selected for this purpose of your restricted   share unit award, to permit you to sell all of the vested restricted share   units.  You hereby appoint the Company   as your agent and attorney-in-fact to instruct the broker with respect to the   number of shares to be sold under this 10b5-1 Plan.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
You hereby authorize the broker to sell the number of Common Shares   determined as set forth above and acknowledge that the broker is under no   obligation to arrange for such sale at any particular price. You acknowledge   that the broker may aggregate your sales with sales occurring on the same day   that are effected on behalf of other Company employees pursuant to sales of   shares vesting under Company options, restricted share awards or restricted   share unit awards and your proceeds will be based on a blended price for all   such sales. You acknowledge that you will be responsible for all brokerage   fees and other costs of sale, and you agree to indemnify and hold the Company   harmless from any losses, costs, damages, or expenses relating to any such   sale.  You acknowledge that it may not   be possible to sell Common Shares during the term of this 10b5-1 Plan due to   (a) a legal or contractual restriction applicable to you or to the   broker, (b) a market disruption, (c) rules governing order   execution priority on the Nasdaq Global Market, (d) a sale effected   pursuant to this 10b5-1 Plan that fails to comply (or in the reasonable   opinion of the broker’s counsel is likely not to comply) with Rule 144   under the Securities Act of 1933, if 
    


 

5











 

	
 
    	
 
    	
applicable, or (e) if the Company determines that sales may not   be effected under this 10b5-1 Plan.    You acknowledge that this 10b5-1 Plan is subject to the terms of any   policy adopted now or hereafter by the Company governing the adoption of   10b5-1 plans.
    
	
 
    	
 
    	
 
    
	
Restrictions   on Issuance
    	
 
    	
The Company will not issue shares to you if the issuance of shares at   that time would violate any law or regulation.
    
	
 
    	
 
    	
 
    
	
Restrictions   on Resale
    	
 
    	
You   agree not to sell any Common Shares you receive under this Agreement at a   time when applicable laws, regulations, Company trading policies (including   the Company’s Insider Trading Policy, a copy of which can be found on the   Company’s intranet) 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 Parent, Subsidiary or Affiliate) in any   capacity.  The Company and its Parents,   Subsidiaries and Affiliates reserve the right to terminate your Service at   any time, with or without cause. 
    
	
 
    	
 
    	
 
    
	
Recoupment   Policy
    	
 
    	
This   award, and the shares acquired upon settlement of this award, shall be subject   to any Company recoupment policy in effect from time to time.
    
	
 
    	
 
    	
 
    
	
Adjustments
    	
 
    	
In   the event of a share split, a share dividend or a similar change in the   Common Shares, the number of restricted share units may be adjusted pursuant   to the Plan.
    
	
 
    	
 
    	
 
    
	
Effect   of Significant Corporate Transactions
    	
 
    	
If   the Company is a party to a merger, consolidation or certain change in   control transactions, then this award will be subject to the applicable   provisions of Article XI of the Plan, provided that any action taken   must either (a) preserve the exemption of your restricted share units   from Section 409A of the Code or (b) comply with Section 409A   of the Code.
    
	
 
    	
 
    	
 
    
	
Applicable   Law
    	
 
    	
This   Agreement will be interpreted and enforced with respect to issues of contract   law under the laws of the Cayman Islands (without regard to its choice-of-law   provisions).
    
	
 
    	
 
    	
 
    
	
The   Plan and Other Agreements
    	
 
    	
The   text of the Plan is incorporated in this Agreement by reference. A copy of   the Plan is available on the Company’s intranet or by request to the Finance   Department. Capitalized terms not otherwise defined herein shall have the   meanings ascribed to such terms in the Plan.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
This   Agreement, the Notice of Restricted Share Unit Award, and the Plan constitute   the entire understanding between you and the Company 
    


 

6











 

	
 
    	
 
    	
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 ACCEPTING THIS RESTRICTED SHARE UNIT AWARD, YOU AGREE TO
 ALL OF THE TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.

 

7









 

THERAVANCE BIOPHARMA, INC. 2013 EQUITY INCENTIVE PLAN
 NOTICE OF RESTRICTED SHARE AWARD

 

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

 

Name of Recipient:                                                                                                                                     «Name»

 

Total Number of Shares Granted:                                                          «TotalShares»

 

Date of Grant:                                                                                                                                                                «DateGrant»

 

Vesting Schedule:

 

Vesting of the shares is dependent upon continuous service as an Employee or Consultant (“Service”) throughout the vesting period.  The shares will vest as follows:  25% on <<InitialVestDate>>; 6.25% on <<SecondVestDate>>; and an additional 6.25% on the final day of each 3-month period thereafter, provided that you remain in continuous Service through such date.

 

You and the Company agree that these shares are granted under and governed by the terms and conditions of the Theravance Biopharma, Inc. 2013 Equity Incentive Plan (the “Plan”) and of the Restricted Share Agreement (the “Agreement”) that is attached to and made a part of this document.  Capitalized terms not defined herein have the meaning ascribed to such terms in the Plan.

 

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.

 

You agree to cover the applicable withholding taxes as set forth more fully herein.  In connection with your receipt of these shares, you are simultaneously entering into a trading arrangement that complies with the requirements of Rule 10b5-1(c)(1) under the Securities Exchange Act of 1934 (a “10b5-1 Plan”).  As of the date of the Agreement, you are not aware of any material nonpublic information concerning the Company or its securities, or, as of the date any sales are effected pursuant to the 10b5-1 Plan, you will not effect such sales on the basis of material nonpublic information about the securities or the Company of which you were aware at the time you entered into the Agreement.

 











 

THERAVANCE BIOPHARMA, INC. 2013 EQUITY INCENTIVE PLAN:
 RESTRICTED SHARE AGREEMENT

 

	
Payment   for Shares
    	
 
    	
The shares have been awarded to you in consideration of your past   service to the Company and 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   Share Award, this Restricted Share Agreement (the “Agreement”)   and the Plan, the Company agrees to issue to you the number of shares of its   Common Shares set forth in the Notice of Restricted Share Award.  
    
	
 
    	
 
    	
 
    
	
Vesting
    	
 
    	
The shares will vest as shown in the Notice of Restricted Share   Award.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
In addition, the shares will vest in full if the Company is subject   to a “Change in Control” (as defined in the   Plan) before your Service terminates and the shares are not assumed or   replaced with a new award as set forth in Section 10.1 of the Plan.  In addition, the shares shall vest in full   if the Company is subject to a Change in Control before your Service   terminates, and you are subject to an Involuntary Termination (as defined   below) within 24 months after the Change in Control.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
For purposes of this Agreement, “Cause” means   (i) the unauthorized use or disclosure of the confidential information   or trade secrets of the Company, a Parent, a Subsidiary or an Affiliate,   which use causes material harm to the Company, a Parent, a Subsidiary or an   Affiliate, (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.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
For purposes of this Agreement, “Involuntary Termination”   means a termination of your Service by reason of:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(a)                an involuntary dismissal   or discharge by the Company (or Parent, Subsidiary or Affiliate employing   you) for reasons other than for Cause; or
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
(b)                your voluntary resignation   following one of the following that is effected by the Company (or the   Parent, Subsidiary or Affiliate employing you) without your consent (i) a   change in your position with the Company (or the Parent, Subsidiary or   Affiliate employing you) which materially reduces your level of   responsibility, (ii) a material reduction in your base 
    


 











 

	
 
    	
 
    	
compensation or (iii) a relocation of your workplace by more   than fifty miles from your workplace immediately prior to the Change in   Control that also materially increases your one-way commute.  In order for your resignation under clause (b) to   constitute an “Involuntary Termination,” all of the following requirements   must be satisfied: (1) you must provide notice to the Company of your   intent to resign and assert an Involuntary Termination pursuant to clause (b) within   90 days of the initial existence of one or more of the conditions set forth   in subclauses (i) through (iii), (2) the Company (or the Parent,   Subsidiary or Affiliate employing you) will have 30 days from the date of   such notice to remedy the condition and, if it does so, you may withdraw your   resignation or resign without any vesting acceleration, and (3) any   termination of Service under clause (b) must occur within two years of   the initial existence of one or more of the conditions set forth in   subclauses (i) through (iii).    Should the Company (or the Parent, Subsidiary or Affiliate employing   you) remedy the condition as set forth above and then one or more of the   conditions arises again within two years following the occurrence of a Change   in Control, you may assert clause (b) again subject to all of the   conditions set forth herein.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
For purposes of this Agreement, “Service”   means your continuous service as an Employee or Consultant.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Notwithstanding the foregoing, if you are or become eligible to   participate in the Company’s Change in Control Severance Plan (the “Severance Plan”), the vesting acceleration provisions in   the Severance Plan shall apply instead of those contained herein.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
No additional shares vest after your Service has terminated for any   reason, except as set forth in the Notice of Restricted Share Award, in this   Agreement or, to the extent you are eligible for benefits thereunder, the   Severance Plan.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
It is intended that vesting in the shares is commensurate with a   full-time work schedule.  For possible   adjustments that may be made by the Company, see the Section below   entitled “Leaves of Absence and Part-Time Work.”
    
	
 
    	
 
    	
 
    
	
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
    


 

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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 revert to the Company.  You receive no payment for Restricted Shares   that are forfeited. As a matter of Cayman Islands law, the “forfeiture”   described in this Agreement shall take effect as a surrender of Restricted   Shares by you and by accepting this award of Restricted Shares, you hereby   agree that such Restricted Shares shall be surrendered by you for no   consideration.  The Company determines   when your Service terminates for all purposes of this award.
    
	
 
    	
 
    	
 
    
	
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 (or the Parent,   Subsidiary or Affiliate employing you) in writing.  If your leave of absence (other than a   military leave) lasts for more than 6 months, then vesting will be suspended   on the day that is 6 months and 1 day after the leave of absence began.  Vesting will resume effective as of the   second vesting date after you return from leave of absence provided you have   worked at least one day during that vesting period.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
In   the case of all leaves, your Service terminates when the approved leave ends,   unless you immediately return to active work. 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
If   you and the Company (or the Parent, Subsidiary or Affiliate employing you)   agree to a reduction in your scheduled work hours, then the Company reserves   the right to modify the rate at which the shares vest, so that the rate of   vesting is commensurate with your reduced work schedule.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The   Company shall not be required to adjust any vesting schedule pursuant to this   subsection.
    
	
 
    	
 
    	
 
    
	
Share   Certificates
    	
 
    	
The   Restricted Shares are issued in book-entry form, registered in your name in   the register of members of the Company, and held in escrow at the Company’s   designated brokerage pending the date on which shares vest.  After shares vest, the Company will release   from escrow the number of Common Shares representing your vested shares,   registered in your name or in the name of your legal representatives,   beneficiaries or heirs, as the case may be.    
    
	
 
    	
 
    	
 
    
	
Voting   Rights
    	
 
    	
You   may vote your shares even before they vest.
    


 

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Dividend   Rights
    	
 
    	
Any   cash dividends distributed with respect to Restricted Shares shall be subject   to the same terms and conditions as apply to the Restricted Shares to which   they relate and shall be paid to you (less all applicable withholding taxes)   promptly upon vesting. 
    
	
 
    	
 
    	
 
    
	
Withholding   Taxes
    	
 
    	
No   shares will be released to you unless you have made arrangements acceptable   to the Company (and/or the Parent, Subsidiary or Affiliate employing you) to   pay any withholding taxes that may be due as a result of this award or the   vesting of the shares (“Tax Withholding   Obligations”).  Prior to the   relevant taxable event, you shall pay or make adequate arrangements   satisfactory to the Company (and/or the Parent, Subsidiary or Affiliate   employing you) to satisfy the Tax Withholding Obligations.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
You   authorize the Company to instruct the broker whom it has selected for this   purpose to sell a number of Common Shares to be released to you upon the   vesting of your Restricted Shares or a lesser number necessary to meet the   Tax Withholding Obligations.  Such sales   shall be effected at a market price following the date that the Restricted   Shares vest.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
You   acknowledge that the proceeds of any such sale may not be sufficient to   satisfy the Tax Withholding Obligations.    To the extent the proceeds from such sale are insufficient to cover   the Tax Withholding Obligations, the Company (or the Parent, Subsidiary or   Affiliate employing you) may in its discretion (a) withhold the balance   of the Tax Withholding Obligations from your wages or other cash compensation   paid to you by the Company (or the Parent, Subsidiary or Affiliate employing   you) and/or (b) withhold in Common Shares, provided that the Company   only withholds an amount of shares not in excess of the amount necessary to   satisfy the minimum withholding amount.    The fair market value of withheld shares, determined as of the date   taxes otherwise would have been withheld in cash, will be applied against the   Tax Withholding Obligations.  If the   Company satisfies the Tax Withholding Obligations by withholding a number of   Common Shares as described above, you will be deemed to have received the   full number of shares released from restrictions.
    


 

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Rule 10b5-1   Plan
    	
 
    	
You acknowledge that the instruction to the broker to sell in the   foregoing section is intended to comply with the requirements of Rule 10b5-1(c)(1)(i)(B) under   the Securities Exchange Act of 1934 (the “Exchange   Act”), and to be interpreted to comply with the requirements of   Rule 10b5-1(c)(1) under the Exchange Act (a “10b5-1   Plan”).  This 10b5-1 Plan is   adopted to be effective as of the first date on which Restricted Shares   vest.  This 10b5-1 Plan is being   adopted to permit you to sell a number of shares to be released to you upon   the vesting of Restricted Shares sufficient to pay the Tax Withholding   Obligations that become due as a result of this award or the vesting of the   Restricted Shares or, if you elect within thirty days following notification   via the broker whom the Company has selected for this purpose of your   restricted share award, to permit you to sell all of the vested Restricted   Shares.  You hereby appoint the Company   as your agent and attorney-in-fact to instruct the broker with respect to the   number of shares to be sold under this 10b5-1 Plan.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
You hereby authorize the broker to sell the number of Common Shares   determined as set forth above and acknowledge that the broker is under no   obligation to arrange for such sale at any particular price. You acknowledge   that the broker may aggregate your sales with sales occurring on the same day   that are effected on behalf of other Company employees pursuant to sales of   shares vesting under Company options, restricted share awards or restricted   share unit awards and your proceeds will be based on a blended price for all   such sales. You acknowledge that you will be responsible for all brokerage   fees and other costs of sale, and you agree to indemnify and hold the Company   harmless from any losses, costs, damages, or expenses relating to any such   sale.  You acknowledge that it may not   be possible to sell Common Shares during the term of this 10b5-1 Plan due to   (a) a legal or contractual restriction applicable to you or to the   broker, (b) a market disruption, (c) rules governing order   execution priority on the Nasdaq Global Market, (d) a sale effected   pursuant to this 10b5-1 Plan that fails to comply (or in the reasonable   opinion of the broker’s counsel is likely not to comply) with Rule 144   under the Securities Act of 1933, if applicable, or (e) if the Company   determines that sales may not be effected under this 10b5-1 Plan.  You acknowledge that this 10b5-1 Plan is   subject to the terms of any policy adopted now or hereafter by the Company   governing the adoption or administration of 10b5-1 plans.
    


 

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Restrictions   on Resale
    	
 
    	
You agree not to sell any shares at a time when applicable laws,   regulations, Company trading policies (including the Company’s Insider   Trading Policy, a copy of which can be found on the Company’s intranet) 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, a Parent, a Subsidiary or an Affiliate   in any capacity.  The Company and its   Parent, Subsidiaries and Affiliates reserve the right to terminate your   Service at any time, with or without cause.
    
	
 
    	
 
    	
 
    
	
Additional   or Exchanged Securities and Property
    	
 
    	
In the event of a merger or consolidation of the Company with or into   another entity, any other corporate reorganization, a share split, the   declaration of a share dividend, the declaration of an extraordinary dividend   payable in a form other than shares, a spin-off, a recapitalization or a   similar transaction affecting the Company’s outstanding Common Shares, any   securities or other property (including cash or cash equivalents) that are by   reason of such transaction exchanged for, or distributed with respect to, any   Restricted Shares, shall be subject to the same terms and conditions   (including, without limitation, vesting and forfeiture) as are applicable to   the Restricted Shares under this Agreement and the Plan.  Appropriate adjustments to reflect the   exchange or distribution of such securities or property shall be made to the   number and/or class of the Restricted Shares.    
    
	
 
    	
 
    	
 
    
	
Recoupment   Policy
    	
 
    	
The shares issued pursuant to this award shall be subject to any   Company recoupment policy in effect from time to time.
    
	
 
    	
 
    	
 
    
	
Effect   of Significant Corporate Transactions
    	
 
    	
If the Company is a party to a merger, consolidation or certain   change in control transactions, then the Restricted Shares will be subject to   the applicable provisions of Article XI of the Plan. 
    
	
 
    	
 
    	
 
    
	
Applicable   Law
    	
 
    	
This   Agreement will be interpreted and enforced under the laws of the Cayman   Islands (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.  A copy of the Plan is available on the   Company’s intranet or by request to the Finance Department.  Capitalized terms not otherwise defined   herein shall have the meanings ascribed to such terms in the Plan.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
This   Agreement, the Notice of Restricted Share Award and the Plan constitute the   entire understanding between you and the Company regarding this award.  Any prior agreements, commitments or 
    


 

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negotiations   concerning this award are superseded.    This Agreement may be amended only by another written agreement   between the parties.
    


 

BY ACCEPTING THIS RESTRICTED SHARE AWARD, YOU AGREE TO ALL OF THE
 TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.

 

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