Document:

Exhibit 10.51

 

THERAVANCE, INC. 2004 EQUITY INCENTIVE PLAN

NOTICE OF RESTRICTED STOCK AWARD

 

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

 

	
Name   of Recipient:
    	
«Name»
    
	
 
    	
 
    
	
Base   Shares:
    	
«BaseShares»
    
	
 
    	
 
    
	
Total   Number of Shares Granted:
    	
«TotalShares»
    
	
 
    	
 
    
	
Date   of Grant:
    	
«DateGrant»
    
	
 
    	
 
    
	
Base Value:
    	
«Base Value»
    
	
 
    	
 
    
	
Expiration Date:
    	
«ExpDate»
    

 

Vesting Schedule:

 

Vesting of the shares is dependent upon achievement of both the performance-based conditions and service-based conditions set forth below, both of which must be satisfied in order for the shares to vest.

 

Performance-Based Conditions

 

Upon achievement prior to the Expiration Date of performance targets with the aggregate number of points set forth in the table below, the performance-based conditions will be achieved with respect to the number of shares indicated in the table below:

 

	
Aggregate   Number of Points
    	
 
    	
Number of Shares
    
	
 
    	
 
    	
    x Base Shares (“Tranche 1”)
    
	
 
    	
 
    	
    x Base Shares (“Tranche 2”)
    
	
 
    	
 
    	
    x Base Shares (“Tranche 3”)
    

 

The following performance targets and points associated with each performance target will apply to this award:

 

	
 
    	
Performance Target
    	
 
    	
Number of Points Related to Performance Target
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    

 

 

A performance target will not be deemed achieved unless and until the Compensation Committee certifies in writing that the performance target has been achieved.  Minutes of a Compensation Committee meeting or an action by unanimous written consent with resolutions approving achievement constitute written certification.

 

Service-Based Conditions

 

Subject to achievement of the performance-based conditions described above, the service-based conditions applicable to the shares will be satisfied if you remain in continuous service as an employee of the Company, a Parent, a Subsidiary or an Affiliate (“Service”) from the Date of Grant until the following date:

 

·                  Tranche 1 — The first Company Vesting Date on or after «Tranche 1 Service Condition».

 

·                  Tranche 2 — The first Company Vesting Date on or after «Tranche 2 Service Condition».

 

·                  Tranche 3 - The first Company Vesting Date on or after «Tranche 3 Service Condition».

 

A “Company Vesting Date” means February 20, May 20, August 20 or November 20.

 

A share will be considered “vested” when both the performance-based conditions and the service-based conditions applicable to the share have been satisfied.

 

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 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 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.

 

2

 

THERAVANCE, INC. 2004 EQUITY INCENTIVE PLAN:
 RESTRICTED STOCK 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 Stock Award   and this Agreement, the Company agrees to transfer to you the number of   shares of its Common Stock set forth in the Notice of Restricted Stock Award.
    
	
 
    	
 
    	
 
    
	
Vesting
    	
 
    	
The   shares will vest as shown in the Notice of Restricted Stock Award.

 

The   shares are eligible for vesting acceleration under the Company’s Change in   Control Severance Plan and 2009 Change in Control Severance Plan (each, a “Severance Plan”) to the extent you are eligible to   participate in either such Severance Plan. However, notwithstanding the fact   that the Severance Plans provide for vesting acceleration of all unvested   shares under certain circumstances, the number of unvested shares subject to   this award that are eligible for vesting acceleration under the Severance Plans   will be reduced as follows:

 

·                  If the   performance-conditions applicable to any unvested shares have been satisfied   and the shares are unvested solely because the service-based conditions have   not yet been satisfied, all of those unvested shares (“Performance   Shares”) will be eligible for vesting acceleration pursuant to a   Severance Plan regardless of the Change in Control Value (as defined below).   Any unvested shares (determined as of the date vesting would otherwise occur   pursuant to a Severance Plan) that are not Performance Shares shall be   referred to as the “Remaining Unvested   Shares.”

 

·                  If the Change in Control   Value is less than or equal to the Base Value (as defined below), none of the   Remaining Unvested Shares will be eligible for vesting acceleration pursuant   to a Severance Plan.

 

·                  If the Change in Control   Value is greater than the Base Value but less than two times the Base Value,   the number of Remaining Unvested Shares that are eligible for vesting   acceleration pursuant to a Severance Plan will be equal to 1% of the   Remaining Unvested Shares for each 1% (rounded down to the nearest whole   percent) that the Change in Control Value is greater than the Base 
    

 

 

	
 
    	
 
    	
Value.

 

·                  If the Change in Control   Value is equal to or greater than two times the Base Value, all of the   Remaining Unvested Shares will be eligible for vesting acceleration pursuant   to a Severance Plan.

 

“Base Value” means the Base Value specified in the Notice of   Restricted Stock Award, which is equal to the closing price of the Company’s   Common Stock on the Date of Grant. In the event of a stock split or any other   event described in Section 11.1 of the Plan, a corresponding adjustment will   be made in the Base Value.

 

“Change in Control Value” means the total per share value   to be received by a holder of the Company’s Common Stock in a Change in   Control (as defined in the applicable Severance Plan), determined as of the   closing date of the Change in Control. Any non-cash transaction proceeds will   be valued by the Compensation Committee in good faith using, if applicable,   the same valuation methodology set forth in the definitive agreement   evidencing the Change in Control. To the extent not all of the transaction proceeds   will be paid at closing (for example, because of an escrow or earn-out   arrangement), the Compensation Committee will take into account reasonable   discounts for the time value of money, the risk of forfeiture or   non-achievement of future payment milestones and other contingencies in order   to determine the Change in Control Value as of the closing date. The   Compensation Committee’s good faith determination of the Change in Control   Value will be final and binding.

 

No   additional shares vest after your Service has terminated for any reason,   except as set forth in the Notice of Restricted Stock Award, in this   Agreement or, to the extent you are eligible to participate in a Severance   Plan, in a 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 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.
    

 

2

 

	
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 of your Service. This means that the   Restricted Shares will revert to the Company. You receive no payment for   Restricted Shares that are forfeited. The Company determines when your   Service terminates for this purpose.

 

Even   if your Service has not terminated, all shares that are Restricted Shares on   the Expiration Date set forth in the Notice of Restricted Stock Award will be   forfeited to the Company, except to the extent the performance-based   conditions applicable to the Restricted Shares were achieved prior to the Expiration   Date. To the extent some of the performance-based conditions applicable to   the Restricted Shares were achieved prior to the Expiration Date, then those   Restricted Shares will remain eligible to vest based on the service-based   conditions applicable to those shares.
    
	
 
    	
 
    	
 
    
	
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. 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 as of the second   Company Vesting Date after you return from leave of absence provided you have   worked at least one day during that vesting period. In this regard, if the   Compensation Committee certifies achievement of performance-based conditions   applicable to a share while vesting is suspended, then the performance-based   conditions applicable to the share will be deemed achieved on the date   vesting resumes and the service-based conditions applicable to the share will   be measured from such date.

 

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 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.   Any such adjustment shall be consistent with the Company’s policies for   part-time or reduced work schedules or shall be pursuant to the terms of an   agreement between you and the Company pertaining to your reduced work   schedule.

 

The   Company shall not be required to adjust any vesting schedule pursuant to this   subsection.
    
	
 
    	
 
    	
 
    
	
Stock   Certificates
    	
 
    	
The   Restricted Shares are issued in book-entry form, registered in your name, and   held in escrow at the Company’s designated brokerage pending the date on   which shares vest. After shares vest, the Company will 
    

 

3

 

	
 
    	
 
    	
release   from escrow the number of shares of Common Stock 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.
    
	
 
    	
 
    	
 
    
	
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 to pay any withholding taxes that may be due as a result of   this award or the vesting of the shares. Prior to the relevant taxable event,   you shall pay or make adequate arrangements satisfactory to the Company to   satisfy all withholding obligations for applicable taxes.

 

At   your discretion, these arrangements may include (a) payment in cash, (b) payment   from the proceeds of the sale of shares through a Company-approved broker or   (c) withholding shares of Company stock that otherwise would be released to   you upon vesting, provided that the Company, acting through the Board of   Directors or Compensation Committee, may provide prospectively that it no   longer authorizes (c) withholding of shares.

 

If   the Company satisfies the withholding tax obligation by withholding a number   of shares of Common Stock as described above, you will be deemed to have   received the full number of shares released from restrictions, including the   number of shares withheld to satisfy tax withholding obligations, and the   fair market value of these shares, determined as of the date when taxes   otherwise would have been withheld in cash, will be applied to the   withholding taxes.

 

You   acknowledge that the proceeds of a sale pursuant to (b) above or withholding   pursuant to (c) above may not be sufficient to satisfy your withholding   obligations. To the extent the proceeds from such sale are insufficient to   cover the taxes due, the Company may in its discretion withhold the balance   of all applicable taxes legally payable by you from your wages or other cash   compensation paid to you by the Company.
    
	
 
    	
 
    	
 
    
	
Restrictions   on Resale
    	
 
    	
You   agree not to sell any shares at a time when applicable laws, regulations,   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.
    
	
 
    	
 
    	
 
    
	
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 
    

 

4

 

	
 
    	
 
    	
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 stock split, the declaration of   a stock dividend, the declaration of an extraordinary dividend payable in a   form other than stock, a spin-off, a recapitalization or a similar   transaction affecting the Company’s outstanding Common Stock, 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.
    
	
 
    	
 
    	
 
    
	
Applicable   Law
    	
 
    	
This   Agreement will be interpreted and enforced under the laws of the State of   Delaware (without regard to Delaware 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 ACCEPTING THIS RESTRICTED STOCK AWARD, YOU AGREE TO ALL OF THE TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.

 

5Exhibit 10.52

 

THERAVANCE, INC. 2004 EQUITY INCENTIVE PLAN:

PERFORMANCE CASH AWARD AGREEMENT

 

You have been granted a Performance Cash Award by Theravance, Inc. (the “Company”) on the terms set forth in this Performance Cash Award Agreement (the “Agreement”):

 

	
Name:
    	
«Name»
    
	
 
    	
 
    
	
Performance Cash Award Details:
    
	
 
    	
 
    
	
Date   of Grant:
    	
«DateGrant»
    
	
Base   Amount:
    	
$«BaseAmount»
    
	
Maximum Amount:
    	
$«MaxAmount»
    
	
Base Value:
    	
$«BaseValue»
    
	
Expiration Date:
    	
«ExpirationDate»
    

 

	
Grant   of Award
    	
 
    	
This   Performance Cash Award is granted under and governed by the terms and   conditions of the Theravance, Inc. 2004 Equity Incentive Plan (the “Plan”) and represents the right to receive one or more   cash payments (each, a “Payment”),   subject to the terms and conditions set forth in this Agreement and the Plan.

 

Certain   capitalized terms are defined in the Section of this Agreement entitled   “Definitions”. Capitalized terms not otherwise defined herein have the   meaning ascribed to such terms in the Plan.
    
	
 
    	
 
    	
 
    
	
Vesting
    	
 
    	
Your   right to receive the Payments is subject to vesting based on the achievement   of both the performance-based conditions and service-based conditions set   forth on Exhibit A, both of which must be satisfied in order for a   Payment to vest.

 

A   Payment will be considered “vested” when   both the performance-based conditions and service-based conditions applicable   to the Payment have been satisfied, or when a Payment vests in accordance   with the post-Change in Control vesting rules set forth in the Section below   entitled “Change in Control.”

 

In   no event will the aggregate Payments under this Award exceed the Maximum   Amount specified above. In addition, if the Maximum Amount is greater than   $2,000,000, in no event will you be paid more than $2,000,000 per fiscal year   under this award. In the event that the vesting schedule set forth in this   Agreement results in Payments in excess of $2,000,000 in a fiscal year, the   excess will be forfeited.

 

It   is intended that the vesting schedule applicable to the Payments 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.”
    
	
 
    	
 
    	
 
    
	
Change   in Control
    	
 
    	
If   the Company is subject to a Change in Control prior to the Expiration Date,   the following rules will apply to the portion of this award that is unvested   as of the date of the Change in Control:

 

·                  If the performance-based   conditions applicable to a Payment have been achieved prior to the Change in   Control, but the service-based conditions applicable to such Payment have not   yet been achieved as of the date of the Change in Control, that Payment (a, “Pre-CIC Performance Payment”) will remain eligible to vest   based on the applicable service-based conditions.

 

·                  If the performance-based   conditions applicable to any remaining Payments have not been achieved as of   the date of the Change in Control, then such Payments (collectively, the “Remaining Amount”) will be reduced (such reduced amount,   the “Retention Amount”) and the balance of   the Remaining Amount will be forfeited as follows:

 

·                  If the Change in Control   Value is less than or equal to the Base Value, then the Retention Amount will   be $0 and 100% of the Remaining Amount will be forfeited as of the date of   the Change in Control;

 

·                  If the Change in Control   Value is greater than the Base Value but less than two times the Base Value,   then the Retention Amount will be equal to 1% of the Remaining Amount for   each 1% (rounded down to the nearest whole percent) that the Change in   Control Value is greater than the Base Value and the remainder of the   Remaining Amount will be forfeited as of the date of the Change in Control;   and

 

·                  If the Change in Control   Value is equal to or greater than two times the Base Amount, the Retention   Amount will be equal to the Remaining Amount and no portion of such amount   will be forfeited.

 

·                  In lieu of the   performance-based conditions and service-based conditions set forth on   Exhibit A, the following vesting schedule will apply to the Retention Amount   after the Change in Control: 50% of the Retention Amount will vest on the   one-year anniversary of the Change in Control and the remaining 50% of the   Retention Amount will vest on the two-year anniversary of the Change in   Control, subject to your continuous Service through the applicable vesting   date.

 

·                  If you are subject to an   Involuntary Termination within 3 months 
    

 

2

 

	
 
    	
 
    	
prior   to or 24 months after a Change in Control, provided you execute a Release,   you will become vested in (i) any unvested Pre-CIC Performance Payments and   (ii) any unvested portion of the Retention Amount. If you do not sign and   return a Release, and the Release does not become effective, on or before the   date specified by the Company, then no vesting will occur as a result of your   Involuntary Termination. Notwithstanding the definitions of “Pre-CIC   Performance Payment,” “Remaining Amount” and “Retention Amount” set forth   above, in the event of an Involuntary Termination within 3 months prior to a   Change in Control, the amount of any Pre-CIC Performance Payment, the Remaining   Amount and the Retention Amount will be determined based on the achievement   of the applicable performance-based conditions as of the date of your   Involuntary Termination.
    
	
 
    	
 
    	
 
    
	
Termination   of Service and Forfeiture
    	
 
    	
No   additional Payments will vest after your Service has terminated for any   reason, except as set forth above in the event of an Involuntary Termination   within 3 months prior to a Change in Control (in which case vesting will   occur on the date of the Change in Control).

 

If   your Service terminates for any reason, then any portion of this award that   has not vested before the termination date and does not vest as a result of   the termination of your Service pursuant to this Agreement will be forfeited.   The Company determines when your Service terminates for this purpose.

 

Even   if your Service has not terminated, unless a Change in Control occurs prior   to the Expiration Date, any unvested Payments will be forfeited on the   Expiration Date. Notwithstanding the foregoing, if the performance-based   conditions applicable to a Payment were achieved prior to the Expiration   Date, the Payment will remain eligible to vest based on the service-based   conditions applicable to the Payment.

 

In   addition, a portion of this award may be forfeited in connection with a Change   in Control as described in the Section entitled “Change in Control.”
    
	
 
    	
 
    	
 
    
	
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. 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 as of the second   Company Vesting Date after you return from leave of absence provided you have   worked at least one day during that vesting period. In this regard, if the   Compensation Committee certifies achievement of the performance-based conditions   applicable to a Payment while vesting is suspended, then the   performance-based conditions applicable to the Payment will be deemed   achieved on the date vesting resumes and the service-based conditions   applicable to the Payment will be measured from 
    

 

3

 

	
 
    	
 
    	
such   date.

 

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 agree to a reduction in your scheduled work hours, then   the Company reserves the right to modify the rate at which the Payments vest,   so that the rate of vesting is commensurate with your reduced work schedule.   Any such adjustment shall be consistent with the Company’s policies for   part-time or reduced work schedules or shall be pursuant to the terms of an   agreement between you and the Company pertaining to your reduced work   schedule.

 

The   Company shall not be required to make any adjustments pursuant to this   Section.
    
	
 
    	
 
    	
 
    
	
Payment   of Award
    	
 
    	
A   vested Payment will be paid to you as soon as practicable, but in any event   within 60 days, after vesting. The actual payment date will be selected by   the Company in its sole discretion. In addition, if vesting of a Payment is   contingent on your execution of a Release and the 60 day payment period   described above spans two calendar years, then the Payment will in any event   be made in the second calendar year. The Company will reduce the amount of   any Payment by the amount of any withholding taxes that apply to the Payment.
    
	
 
    	
 
    	
 
    
	
[Include if applicable:]  

 

Golden   Parachute Limitation
    	
 
    	
The   Internal Revenue Code imposes a 20% excise tax on certain payments and other   benefits received by certain officers and stockholders in connection with a   change of control involving the Company. Such payments can include severance   pay and vesting acceleration.

 

Basic   Rule

 

In   the event that it is determined that any payment or distribution of any type   to or for your benefit made by the Company, by any of its affiliates, by any   person who acquires ownership or effective control of the Company or   ownership of a substantial portion of the Company’s assets (within the   meaning of section 280G of the Code and the regulations thereunder) or by any   affiliate of such person, whether paid or payable or distributed or   distributable pursuant to the terms of this Agreement or under any other   agreement including your equity award agreements (the “Total   Payments”), would be subject to the excise tax imposed by section 4999   of the Code or any interest or penalties with respect to such excise tax   (such excise tax, together with any such interest or penalties, are   collectively referred to as the “Excise Tax”),   then the Total Payments shall be made to you either (i) in full or (ii) as to   such lesser amount as would result in no portion of the Total Payments being   subject to Excise Tax (a “Reduced Payment”),   whichever of the foregoing results in your receipt on an after-tax basis, of   benefits of the greatest value, notwithstanding that all or some 
    

 

4

 

	
 
    	
 
    	
portion   of the Total Payments may be subject to the Excise Tax.

 

Reduction   of Payments

 

For   purposes of determining whether to make a Reduced Payment, the Company shall   cause to be taken into account all federal, state and local income and   employment taxes and excise taxes applicable to you (including the Excise   Tax). If a Reduced Payment is made, the Company shall reduce or eliminate the   Total Payments in the following order: (1) cancellation of accelerated   vesting of stock options with no intrinsic value, (2) reduction of cash   payments, (3) cancellation of accelerated vesting of equity awards other than   stock options, (4) cancellation of accelerated vesting of stock options with   intrinsic value and (5) reduction of other benefits paid to you. In the event   that acceleration of vesting is reduced, such acceleration of vesting shall   be cancelled in the reverse order of the date of grant of your equity awards.   In the event that cash payments or other benefits are reduced, such reduction   shall occur in reverse order beginning with payments or benefits which are to   be paid the farthest in time from the date of the Determination (as defined   below). For avoidance of doubt, an option will be considered to have no intrinsic   value if the exercise price of the shares subject to the option exceeds the   fair market value of such shares.

 

All   mathematical determinations and all determinations of whether any of the   Total Payments are “parachute payments” (within the meaning of Section 280G   of the Code) shall be made by an independent accounting firm selected by the   Company (the “Accounting Firm”), which shall   provide its determination (the “Determination”),   together with detailed supporting calculations, both to you and the Company   within seven business days of the date your Service terminates, if   applicable, or such earlier time as is requested by the Company or by you (if   you reasonably believe that any of the Total Payments may be subject to   Excise Tax). In any event, as promptly as practicable following the   Accounting Firm’s Determination, the Company shall pay or transfer to or for   your benefit such amounts as are then due to you and shall promptly pay or   transfer to or for your benefit in the future such amounts as become due to   you. Any determination by the Accounting Firm shall be binding upon you and   the Company, absent manifest error.

 

Underpayments   and Overpayments.

 

As   a result of uncertainty in the application of Sections 4999 and 280G of the   Code at the time of an initial Determination by the Accounting Firm   hereunder, it is possible that payments will have been made by the Company   which should not have been made (an “Overpayment”)   or that additional payments which will not have been made by the Company   could have been made (an “Underpayment”),   consistent in each case with the calculation of whether and to what extent a   Reduced Payment shall be made hereunder. In either event, the Accounting Firm   shall determine the amount 
    

 

5

 

	
 
    	
 
    	
of   the Overpayment or Underpayment that has occurred. In the event that the   Accounting Firm determines that an Overpayment has occurred, such Overpayment   shall be treated for all purposes as a loan to you that you shall repay to   the Company, together with interest at the applicable federal rate provided   in Section 7872(f)(2) of the Code; provided, however, that no amount shall be   payable by you to the Company if and to the extent that such payment would   not reduce the amount that is subject to taxation under Section 4999 of the   Code. In the event that the Accounting Firm determines that an Underpayment   has occurred, such Underpayment shall promptly be paid or transferred by the   Company to or for your benefit, together with interest at the applicable   federal rate provided in section 7872(f)(2) of the Code.

 

If   this Section is applicable, it shall supersede any contrary provision of any   plan, arrangement or agreement governing your rights to the Total Payments.
    
	
 
    	
 
    	
 
    
	
Unfunded   Status of Award
    	
 
    	
The   Company’s obligations hereunder are unfunded and unsecured, and you have no   rights other than the rights of a general creditor of the Company.
    
	
 
    	
 
    	
 
    
	
No   Assignment of Benefits
    	
 
    	
You   may not sell, assign, transfer, pledge or otherwise dispose of any rights   under this Agreement other than by will or by the laws of descent and   distribution.
    
	
 
    	
 
    	
 
    
	
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 Parent, Subsidiaries and Affiliates reserve the   right to terminate your Service at any time, with or without cause.
    
	
 
    	
 
    	
 
    
	
Company’s   Successors
    	
 
    	
This   Agreement shall be binding upon any successor (whether direct or indirect and   whether by purchase, merger, consolidation, Change in Control or otherwise)   to all or substantially all of the Company’s business and/or assets. For all   purposes under this Agreement, the term “Company” shall include any successor   to the Company’s business and/or assets that becomes bound by this Agreement.
    
	
 
    	
 
    	
 
    
	
Section   409A
    	
 
    	
Payments   under this award are intended to be exempt from the application of Section 409A   of the Code by virtue of Treasury Regulation 1.409A-1(b)(4) and any   ambiguities herein will be interpreted consistent with that intent.

 

Notwithstanding   the foregoing, if no exemption is available for one or more payments under   this award and if 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 such   payments that would otherwise have been made within six months after your   separation from service will instead be made on the first business day   following the six-month anniversary of your separation from 
    

 

6

 

	
 
    	
 
    	
service,   unless the event triggering vesting is an event other than your separation   from service.

 

For   purposes of Code Section 409A, each payment to be made under this award is   hereby designated as a separate payment.
    
	
 
    	
 
    	
 
    
	
Applicable   Law
    	
 
    	
This   Agreement will be interpreted and enforced with respect to issues of contract   law under the laws of the State of California.
    
	
 
    	
 
    	
 
    
	
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.

 

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.
    
	
 
    	
 
    	
 
    
	
Definitions:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Base   Value
    	
 
    	
“Base   Value” means the Base Value specified in this Agreement, which is equal to   the closing price of the Company’s Common Stock on                    ,   20    . In the event of a stock split   or any other event described in Section 11.1 of the Plan, a corresponding   adjustment will be made in the Base Value.
    
	
 
    	
 
    	
 
    
	
Change   in Control
    	
 
    	
“Change   in Control” shall have the meaning set forth in the Plan, provided that the   transaction or occurrence also constitutes a “change in control event” under   Treasury Regulation 1.409A-3(a)(5).
    
	
 
    	
 
    	
 
    
	
Change   in Control Value
    	
 
    	
“Change   in Control Value” means the total per share value to be received by a holder   of the Company’s Common Stock in a Change in Control, determined as of the   closing date of the Change in Control. Any non-cash transaction proceeds will   be valued by the Compensation Committee in good faith using, if applicable,   the same valuation methodology set forth in the definitive agreement   evidencing the Change in Control. To the extent not all of the transaction   proceeds will be paid at closing (for example, because of an escrow or   earn-out arrangement), the Compensation Committee will take into account   reasonable discounts for the time value of money, the risk of forfeiture or   non-achievement of future payment milestones and other contingencies in order   to determine the Change in Control Value as of the closing date. The   Compensation Committee’s good faith determination of the Change in Control   Value will be final and binding.
    
	
 
    	
 
    	
 
    
	
Company   Vesting Date
    	
 
    	
“Company   Vesting Date” means February 20, May 20, August 20 or November 20.
    
	
 
    	
 
    	
 
    
	
Involuntary   Termination
    	
 
    	
“Involuntary   Termination” means a termination of your Service which occurs by reason of   (i) an involuntary dismissal or discharge by the 
    

 

7

 

	
 
    	
 
    	
Company   for reasons other than Misconduct or (ii) your voluntary resignation   following (A) a material diminution in your authority, duties or   responsibilities, (B) a material reduction in your base compensation, (C) a   material change in the geographic location at which you must perform services   for the Company or (D) any other action or inaction that constitutes a   material breach by the Company of the agreement under which you provide   services, provided that, in either case, a “separation from service” (as   defined in the regulations under Code Section 409A) occurs. In order for   vesting to accelerate under this Agreement as a result of your voluntary   resignation under clause (ii), all of the following requirements must be   satisfied: (1) you must provide notice to the Company of your intent to   assert clause (ii) within 90 days of the initial existence of one or more of   the conditions set forth in subclauses (A) through (D), (2) the Company 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 under this Agreement, and (3) any termination of employment   under clause (ii) must occur within two years of the initial existence of one   or more of the conditions set forth in subclauses (A) through (D). Should the   Company 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 (ii) again subject to all of the conditions   set forth herein.
    
	
 
    	
 
    	
 
    
	
Misconduct
    	
 
    	
“Misconduct”   means your commission of any material act of fraud, embezzlement or   dishonesty, your material unauthorized use or disclosure of confidential   information or trade secrets of the Company (or any Parent, Subsidiary or   Affiliate) or any other intentional material misconduct adversely affecting   the business or affairs of the Company (or any Parent, Subsidiary or   Affiliate).
    
	
 
    	
 
    	
 
    
	
Release
    	
 
    	
“Release”   means a waiver and general release of all claims you may have against the   Company or persons affiliated with the Company, in a form provided by the   Company. You must execute and return the Release on or before the date   specified by the Company, which will in no event be later than 50 days after   your Involuntary Termination. The Release must become effective on or before   the date specified by the Company, which will in no event be later than 60   days after your Involuntary Termination.
    
	
 
    	
 
    	
 
    
	
Service
    	
 
    	
“Service”   means your continuous service as an employee of the Company, a Parent, a   Subsidiary or an Affiliate.
    

 

BY SIGNING THIS PERFORMANCE CASH AWARD AGREEMENT, YOU AGREE TO

ALL OF THE TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.

 

	
RECIPIENT:
    	
 
    	
THERAVANCE,   INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    

 

8

 

EXHIBIT A

 

VESTING SCHEDULE

 

Performance-Based Conditions

 

Upon achievement, prior to the Expiration Date specified in the Agreement, of performance targets with the aggregate number of points set forth in the table below, the performance-based conditions will be achieved with respect to the Payment indicated in the table below:

 

	
Aggregate   Number of Points
    	
 
    	
Dollar Amount of Payment
    
	
 
    	
 
    	
    x Base Amount (“First Payment”)
    
	
 
    	
 
    	
    x Base Amount (“Second Payment”)
    
	
 
    	
 
    	
    x Base Amount (“Third Payment”)
    

 

The following performance targets and points associated with each performance target will apply to this award:

 

	
 
    	
Performance Target
    	
 
    	
Number of Points Related to Performance
   Target
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    

 

A performance target will not be deemed achieved unless and until the Compensation Committee certifies in writing that the performance target has been achieved.  Minutes of a Compensation Committee meeting or an action by unanimous written consent with resolutions approving achievement constitute written certification.

 

Service-Based Conditions

 

Subject to achievement of the performance-based conditions described above, the service-based conditions applicable to a Payment will be satisfied if you remain in continuous Service from the Date of Grant until the following date:

 

·                  First Payment — The first Company Vesting Date on or after the «First Payment Service Condition».

 

·                  Second Payment — The first Company Vesting Date on or after «Second Payment Service Condition».

 

·                  Third Payment - The first Company Vesting Date on or after «Third Payment Service Condition».

 

9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00188-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00188-of-00352.parquet"}]]