Document:

EXHIBIT 10.38

 

Initial Director Auto Grant

 

THERAVANCE, INC. 2004
EQUITY INCENTIVE PLAN

 

NOTICE OF RESTRICTED
STOCK UNIT AWARD

 

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

 

Name:                                     «Name»

 

Restricted Stock Unit Award Details:

 

	
  Date of Grant:

  	
  «DateGrant»

  
	
  Restricted Stock Units:

  	
  «Shares»

  

 

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

 

Vesting Schedule:

 

Vesting is dependent upon continuous service
as a member of the Board (“Service”)
throughout the vesting period.  The units
will vest in twenty-four (24) equal monthly installments, provided that you
remain in continuous Service through each such date. In addition, all of the
restricted stock units subject to this award will vest immediately if the Company
is subject to a Change in Control (as defined in the Plan) before your continuous
Service terminates and upon your death.

 

You and the Company agree that your right to receive the units is
granted under and governed by the terms and conditions of the Plan and of the
Restricted Stock Unit 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.

 

	
  RECIPIENT:

  	
   

  	
  THERAVANCE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title: 

  	
   

  
	
  Print Name

  	
   

  	
   

  
					

 

 

THERAVANCE, INC. 2004
EQUITY INCENTIVE PLAN:

RESTRICTED STOCK UNIT AGREEMENT

 

	
  Payment for Shares

  	
   

  	
  No payment is required for the restricted
  stock units you are receiving.

  
	
   

  	
   

  	
   

  
	
  Nature
  of Units

  	
   

  	
  Your units are
  bookkeeping entries. They represent only the Company’s unfunded and unsecured
  promise to issue shares of Common Stock on a future date. As a holder of
  units, you have no rights other than the rights of a general creditor of the
  Company.

  
	
   

  	
   

  	
   

  
	
  Vesting

  	
   

  	
  The restricted stock units that you are
  receiving will vest as shown in the Notice of Restricted Stock Unit Award.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  No additional units vest after your Service has terminated for any reason, except as
  set forth on the Notice of Restricted Stock Unit Award.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The restricted stock units
  will vest in full
  if not assumed or substituted with a new award as set forth in
  Section 11.3 of the Plan.

  
	
   

  	
   

  	
   

  
	
  Time of Settlement

  	
   

  	
  A vested unit will be settled on the fourth
  anniversary of the Date of Grant or, if earlier, 60 days following the
  cessation of your Service for any reason.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If a unit vests on an accelerated basis as the
  result of a Change in Control, then it will be settled immediately prior to
  the closing of the transaction that constitutes a Change in Control.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If a unit vests on an accelerated basis as the
  result of your death, then it will be settled 60 days following the cessation
  of your Service due to your death.

  
	
   

  	
   

  	
   

  
	
  Form of Settlement

  	
   

  	
  At the time of settlement, you will receive one
  share of the Company’s Common Stock for each vested unit.

  
	
   

  	
   

  	
   

  
	
  Forfeiture

  	
   

  	
  If your Service terminates
  for any reason, then your restricted stock 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 Stock Unit
  Award, will be forfeited immediately. This means that the restricted stock
  units will immediately revert to the Company. You receive no payment for
  restricted stock units that are forfeited. The Company determines when your
  Service terminates for this purpose.

  
	
   

  	
   

  	
   

  
	
  Stock Certificates

  	
   

  	
  No shares of Common Stock shall be issued
  to you prior to the date on

  

 

 

	
   

  	
   

  	
  which the restricted stock units are settled.  At the time of
  settlement, a stock certificate for the shares representing your vested
  restricted stock units shall be released to you or the Company shall 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, the number
  of shares of Common Stock representing your vested restricted stock units. No
  fractional shares shall be issued.

  
	
   

  	
   

  	
   

  
	
  Stockholder Rights

  	
   

  	
  The restricted stock units
  do not entitle you to any of the rights of a stockholder of Common Stock.
  Upon settlement of the restricted stock units into shares of Common Stock,
  you will obtain full voting and other rights as a stockholder of the Company.

  
	
   

  	
   

  	
   

  
	
  Units
  Restricted

  	
   

  	
  You
  may not sell, transfer, pledge or otherwise dispose of any restricted stock
  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 stock units upon your death.

  
	
   

  	
   

  	
   

  
	
  Withholding Taxes

  	
   

  	
  No shares will be distributed to you unless you have
  made arrangements acceptable to the Company to pay any withholding taxes that
  may be due as a result of the settlement of this award.

  
	
   

  	
   

  	
   

  
	
  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 shares of Common Stock 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 retained by the Company
  or a subsidiary of the Company in any capacity. The Company and its
  subsidiaries reserve the right to terminate your Service at any time, with or
  without cause. 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 the stockholders to
  remove you from the Board at any time in accordance with the provisions of
  applicable law.

  
	
   

  	
   

  	
   

  
	
  Adjustments

  	
   

  	
  In the event of a stock
  split, a stock dividend or a similar change in Common Stock, the number of
  restricted stock units that will vest in any future installments will be
  adjusted accordingly.

  

 

2

 

	
  Applicable Law

  	
   

  	
  This
  Agreement will be interpreted and enforced with respect to issues of contract
  law under the laws of the State of Delaware.

  
	
   

  	
   

  	
   

  
	
  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, the Notice of Restricted Stock Unit Award, 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 UNIT AWARD, YOU AGREE TO

 

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

 

3EXHIBIT 10.39

 

Annual Director Auto Grant

 

THERAVANCE, INC. 2004
EQUITY INCENTIVE PLAN

 

NOTICE OF RESTRICTED
STOCK UNIT AWARD

 

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

 

Name:                                     «Name»

 

Restricted Stock Unit Award Details:

 

	
  Date of Grant:

  	
  «DateGrant»

  
	
  Restricted Stock Units:

  	
  «Shares»

  

 

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

 

Vesting Schedule:

 

Vesting is dependent upon continuous service
as a member of the Board (“Service”)
throughout the vesting period.  The units
will vest in twelve (12) equal monthly installments, provided that you remain
in continuous Service through each such date. In addition, all of the
restricted stock units subject to this award will vest immediately if the Company
is subject to a Change in Control (as defined in the Plan) before your continuous
Service terminates and upon your death.

 

You and the Company agree that your right to receive the units is
granted under and governed by the terms and conditions of the Plan and of the
Restricted Stock Unit 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.

 

	
  RECIPIENT:

  	
   

  	
  THERAVANCE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title: 

  	
   

  
	
  Print Name

  	
   

  	
   

  
					

 

 

THERAVANCE, INC. 2004
EQUITY INCENTIVE PLAN:

RESTRICTED STOCK UNIT AGREEMENT

 

	
  Payment for Shares

  	
   

  	
  No payment is required for the restricted
  stock units you are receiving.

  
	
   

  	
   

  	
   

  
	
  Nature
  of Units

  	
   

  	
  Your units are
  bookkeeping entries. They represent only the Company’s unfunded and unsecured
  promise to issue shares of Common Stock on a future date. As a holder of
  units, you have no rights other than the rights of a general creditor of the
  Company.

  
	
   

  	
   

  	
   

  
	
  Vesting

  	
   

  	
  The restricted stock units that you are
  receiving will vest as shown in the Notice of Restricted Stock Unit Award.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  No additional units vest after your Service has terminated for any reason, except as
  set forth on the Notice of Restricted Stock Unit Award.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The restricted stock units
  will vest in full
  if not assumed or substituted with a new award as set forth in
  Section 11.3 of the Plan.

  
	
   

  	
   

  	
   

  
	
  Time of Settlement

  	
   

  	
  A vested unit will be settled on the fourth
  anniversary of the Date of Grant or, if earlier, 60 days following the
  cessation of your Service for any reason.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If a unit vests on an accelerated basis as the
  result of a Change in Control, then it will be settled immediately prior to
  the closing of the transaction that constitutes a Change in Control.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  If a unit vests on an accelerated basis as the
  result of your death, then it will be settled 60 days following the cessation
  of your Service due to your death.

  
	
   

  	
   

  	
   

  
	
  Form of Settlement

  	
   

  	
  At the time of settlement, you will receive one share
  of the Company’s Common Stock for each vested unit.

  
	
   

  	
   

  	
   

  
	
  Forfeiture

  	
   

  	
  If your Service terminates
  for any reason, then your restricted stock 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 Stock Unit
  Award, will be forfeited immediately. This means that the restricted stock
  units will immediately revert to the Company. You receive no payment for
  restricted stock units that are forfeited. The Company determines when your
  Service terminates for this purpose.

  
	
   

  	
   

  	
   

  
	
  Stock Certificates

  	
   

  	
  No shares of Common Stock shall be issued
  to you prior to the date on

  

 

 

	
   

  	
   

  	
  which the restricted stock units are settled.  At the time of
  settlement, a stock certificate for the shares representing your vested
  restricted stock units shall be released to you or the Company shall 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, the number
  of shares of Common Stock representing your vested restricted stock units No
  fractional shares shall be issued.

  
	
   

  	
   

  	
   

  
	
  Stockholder Rights

  	
   

  	
  The restricted stock units
  do not entitle you to any of the rights of a stockholder of Common Stock.
  Upon settlement of the restricted stock units into shares of Common Stock,
  you will obtain full voting and other rights as a stockholder of the Company.

  
	
   

  	
   

  	
   

  
	
  Units
  Restricted

  	
   

  	
  You
  may not sell, transfer, pledge or otherwise dispose of any restricted stock
  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 stock units upon your death.

  
	
   

  	
   

  	
   

  
	
  Withholding Taxes

  	
   

  	
  No shares will be distributed to you unless you have
  made arrangements acceptable to the Company to pay any withholding taxes that
  may be due as a result of the settlement of this award.

  
	
   

  	
   

  	
   

  
	
  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 shares of Common Stock 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 retained by the
  Company or a subsidiary of the Company in any capacity. The Company and its
  subsidiaries reserve the right to terminate your Service at any time, with or
  without cause. 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 the stockholders to
  remove you from the Board at any time in accordance with the provisions of
  applicable law.

  
	
   

  	
   

  	
   

  
	
  Adjustments

  	
   

  	
  In the event of a stock
  split, a stock dividend or a similar change in Common Stock, the number of
  restricted stock units that will vest in any future installments will be
  adjusted accordingly.

  

 

2

 

	
  Applicable Law

  	
   

  	
  This
  Agreement will be interpreted and enforced with respect to issues of contract
  law under the laws of the State of Delaware.

  
	
   

  	
   

  	
   

  
	
  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, the Notice of Restricted Stock Unit Award, 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 UNIT AWARD, YOU AGREE TO

 

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

 

3

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