Document:

Exhibit
10.31

Theravance, Inc. 2004
Equity Incentive Plan

Notice of Restricted Stock Award

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

	
  

  	
  Name of Recipient:

  	
  «Name»

  
	
   

  	
   

  	
   

  
	
   

  	
  Total Number of Shares Granted:

  	
  «TotalShares»

  
	
   

  	
   

  	
   

  
	
   

  	
  Fair Market Value per Share:

  	
  $«ValuePerShare»

  
	
   

  	
   

  	
   

  
	
   

  	
  Total Fair Market Value of Award:

  	
  $«TotalValue»

  
	
   

  	
   

  	
   

  
	
   

  	
  Date of Grant:

  	
  «DateGrant»

  
	
   

  	
   

  	
   

  
	
   

  	
  Vesting Commencement Date:

  	
  «VestDay»

  
	
   

  	
   

  	
   

  
	
   

  	
  Vesting Schedule:

  	
  «VestSchedule»

  

 

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

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

	
  Recipient:

  	
  Theravance, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

THERAVANCE,
INC. 2004 EQUITY INCENTIVE PLAN:

RESTRICTED STOCK AGREEMENT

	
  Payment for Shares

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Transfer

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Vesting

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Change in Control

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Involuntary Termination

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  

 

 

	
  

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Shares Restricted

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Forfeiture

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Leaves of Absence and Part-Time Work

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Stock Certificates

  	
   

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

  

 

 2
 

 

	
  

  	
   

  	
  certificate for your vested shares.

  
	
   

  	
   

  	
   

  
	
  Voting Rights

  	
   

  	
  You may vote your shares even before they vest.

  
	
   

  	
   

  	
   

  
	
  Withholding Taxes

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Restrictions on Resale

  	
   

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

  
	
   

  	
   

  	
   

  
	
  No Retention Rights

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Adjustments

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Applicable Law

  	
   

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

  
	
   

  	
   

  	
   

  
	
  The Plan and Other Agreements

  	
   

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

   

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

  

 

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

TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.

 3Exhibit 10.39

THERAVANCE, INC. 2004 EQUITY
INCENTIVE PLAN

NOTICE OF
STOCK OPTION GRANT

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

	
  Name of Optionee:

  	
   

  	
  «First» «Last»

  
	
   

  	
   

  	
   

  
	
  ID Number:

  	
   

  	
  «ID»

  
	
   

  	
   

  	
   

  
	
  Total Number of
  Shares:

  	
   

  	
  «Shares»

  
	
   

  	
   

  	
   

  
	
  Type of Option:

  	
   

  	
  Nonstatutory Stock Option

  
	
   

  	
   

  	
   

  
	
  Grant Number:

  	
   

  	
  «Number»

  
	
   

  	
   

  	
   

  
	
  Exercise Price
  Per Share:

  	
   

  	
  «Price»

  
	
   

  	
   

  	
   

  
	
  Date of Grant:

  	
   

  	
  «Grant_Date»

  
	
   

  	
   

  	
   

  
	
  Vesting
  Schedule:

  	
   

  	
  «VestSchedule»

  
	
   

  	
   

  	
   

  
	
  Expiration Date:

  	
   

  	
  «Expiration_Date». This option expires earlier if
  your Service terminates earlier, as described in the Stock Option Agreement.

  

 

You
and the Company agree that this option is granted under and governed by the
terms and conditions of the Stock Option Agreement, which is attached to and
made a part of this document, and the 2004 Equity Incentive Plan (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, Inc. 2004 Equity Incentive Plan

Stock Option Agreement

	
  Tax Treatment

  	
  This option is a nonstatutory stock option.

  
	
   

  	
   

  
	
  Vesting

  	
  This option becomes exercisable in installments, as
  shown in the Notice of Stock Option Grant.

   

  This option shall become exercisable in full if not
  assumed or a new option substituted pursuant to Section 11.3 of the
  Plan. In addition, this option becomes exercisable in full if the Company is
  subject to a “Change in Control” (as defined
  in the Plan) before your Service terminates, and you are subject to an
  Involuntary Termination (as defined below) within three months prior or 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, which use causes material harm
  to the Company, (ii) conviction of a felony under the laws of the United
  States or any state thereof, (iii) gross negligence or (iv) repeated failure
  to perform lawful assigned duties for thirty days after receiving written
  notification from the Board of Directors.

   

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

   

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

   

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

   

  For purposes of this
  Agreement, “Service” means your service as
  an Employee, Outside Director or Consultant.

  

 

 

	
  

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

  
	
   

  	
   

  
	
  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 Stock Option Grant. (It will expire earlier if your Service
  terminates, as described below.) You may exercise this option at any time
  before its expiration under the preceding sentence, but only to the extent
  that this option had become exercisable before your Service terminated.

  
	
   

  	
   

  
	
  Regular

  Termination

  	
  If your Service terminates for any reason except
  death or total and permanent disability, then this option will expire at the
  close of business at Company headquarters on the date three months after your
  termination date. The Company determines when your Service terminates for
  this purpose.

  
	
   

  	
   

  
	
  Death

  	
  If you die before your Service terminates, then this
  option will expire at the close of business at Company headquarters on the
  date that is 12 months after the date of death.

  
	
   

  	
   

  
	
  Disability

  	
  If your Service terminates because of your total and
  permanent disability, then this option 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 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 Stock Option Grant may be adjusted in
  accordance with the Company’s leave of absence policy or the terms of your
  leave. If you commence working on a part-time basis, then the vesting
  schedule specified in the Notice of Stock Option Grant may be adjusted in
  accordance with the Company’s part-time work policy or the terms of an
  agreement between you and the Company pertaining to your part-time

  

 

 3
 

 

	
  

  	
  schedule.

  
	
   

  	
   

  
	
  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. 

   

  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.

  
	
   

  	
   

  
	
  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 or a money order.

  
	
   

  	
   

  
	
   

  	
  ·         Certificates for shares
  of Company stock 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 shares of Company stock, 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. However, you may not surrender, or attest to the ownership of, shares
  of Company stock in payment of the exercise price if your action would cause
  the Company to recognize compensation expense (or additional compensation
  expense) with respect to this option for financial reporting purposes.

   

  ·         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 by signing a special “Notice
  of Exercise” form provided by the Company.

   

  ·         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

  

 

 4
 

 

	
  

  	
  must
  be given by signing a special “Notice of Exercise” form provided by the
  Company.

  
	
   

  	
   

  
	
  Withholding

  Taxes and Stock

  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. With the Company’s
  consent, these arrangements may include withholding shares of Company stock
  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 withholding taxes.

  
	
   

  	
   

  
	
  Restrictions on

  Resale

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

  
	
   

  	
   

  
	
  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.

  
	
   

  	
   

  
	
   

  	
  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.

  
	
   

  	
   

  
	
  Retention Rights

  	
  Your option 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.

  
	
   

  	
   

  
	
  Stockholder

  Rights

  	
  You, or your estate or heirs, have no rights as a
  stockholder of the Company until you have exercised this option by giving the
  required notice to the Company and paying the exercise price. No adjustments
  are made for dividends or other rights if the applicable record date occurs
  before you exercise this option, except as described in the Plan.

  
	
   

  	
   

  
	
  Adjustments

  	
  In the event of a stock split, a stock dividend or a
  similar change in Company stock, the number of shares covered by this option
  and the exercise price per share may be adjusted pursuant to the Plan.

  
	
   

  	
   

  
	
  Applicable Law

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

  

 5
 

 

	
  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 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 stock option
grant, you agree to all of the terms and conditions described above and in the
Plan.

 6

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