Theravance Biopharma, Inc. Stock Compensation Disclosure

11. Share-Based Compensation

Theravance Biopharma Equity Plans

The Company has three equity compensation plans — the 2013 Equity Incentive Plan (the “2013 EIP”), the 2013 Employee Share Purchase Plan (the “2013 ESPP”) and the 2014 New Employee Equity Incentive Plan (the “2014 NEEIP”).

The 2013 EIP provides for the issuance of share-based awards, including restricted shares, restricted share units (“RSUs), options, share appreciation rights (“SARs”) and other equity-based awards, to Company employees, officers, directors, and consultants. Options may be granted with an exercise price not less than the fair market value of the ordinary shares on the grant date. Under the terms of the 2013 EIP, options granted to employees generally have a maximum term of 10 years and vest over a four-year period from the date of grant; 25% vest at the end of one year, and 75% vest monthly over the remaining three years. The Company may grant options with different vesting terms from time to time. Unless an employee’s termination of service is due to disability or death, upon termination of service, any unexercised vested options will generally be forfeited at the end of three months or the expiration of the option, whichever is earlier.

At the Company’s Annual General Meeting of Shareholders on May 2, 2023, the Company’s shareholders approved an amendment and restatement of the 2013 EIP to effect the following material changes to the existing plan: (i) extend the term of the 2013 EIP by an additional ten years to February 14, 2033; (ii) eliminate the provision that provided for automatic annual increases in the number of shares available for issuance under the 2013 EIP; (iii) reduce the number of shares reserved for issuance by 3,808,287 shares; (iv) eliminate the Company’s ability to reprice options and share appreciation rights without first obtaining shareholder approval; and (v) remove certain provisions no longer necessary since the repeal of the exemption from the annual deduction limitation imposed by Section 162(m) of the Internal Revenue Code for performance-based compensation.

Under the 2013 ESPP, the Company’s officers and employees may purchase ordinary shares through payroll deductions at a price equal to 85% of the lower of the fair market value of the ordinary share at the beginning of the offering period or at the end of each applicable purchase period. As of January 1 of each year, commencing on January 1, 2015 and ending on (and including) January 1, 2033, the aggregate number of ordinary shares that may be issued under the 2013 ESPP shall automatically increase by a number equal to the least of 1% of the total number of ordinary shares outstanding on December 31 of the prior year, 571,428 ordinary shares or a number of ordinary shares determined by the Company’s board of directors. The 2013 ESPP generally provides for consecutive and overlapping offering periods of 24 months in duration, with each offering period generally composed of four consecutive six-month purchase periods. The purchase periods end on either May 15 or November 15. 2013 ESPP contributions are limited to a maximum of 15% of an employee’s eligible compensation, up to applicable regulatory limits. The 2013 ESPP also includes a feature that provides for the existing offering period to terminate and for participants in that offering period to automatically be enrolled in a new offering period when the fair market value of an ordinary share at the beginning of a subsequent offering period falls below the fair market value of an ordinary share on the first day of such offering period.

Effective as of December 31, 2024, the 2013 ESPP was suspended. All offering periods in progress were terminated, and no new offering periods will commence under the 2013 ESPP unless and until approved by the Company’s board of directors. The suspension resulted in the acceleration of previously unamortized share-based compensation expense of $0.5 million for the year ended December 31, 2024.

The 2014 NEEIP provides for the issuance of share-based awards, including restricted shares, RSUs, non-qualified options and SARs to the Company’s employees. Options may be granted with an exercise price not less than the fair market value of the ordinary shares on the grant date. Under the terms of the 2014 NEEIP, options granted to employees generally have a maximum term of 10 years and vest over a four-year period from the date of grant; 25% vest at the end of one year, and 75% vest monthly over the remaining three years. The Company may grant options with different vesting terms from time to time. Unless an employee’s termination of service is due to disability or death, upon termination of service, any unexercised vested options will generally be forfeited at the end of three months or the expiration of the option, whichever is earlier. Pursuant to its terms, the 2014 NEEIP expired in October 2024 upon reaching the end of its 10-year term. As a result, no additional shares will be issued under the 2014 NEEIP, though awards previously granted under the 2014 NEEIP will remain outstanding in accordance with their terms.

As of December 31, 2025, the total number of shares available for future issuance under each of the plans were:

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Market-Based and Performance-Contingent Awards

The Company periodically grants market-based share awards to employees that vest upon the Company’s ordinary shares meeting certain market-based price targets followed by a service period. For the year ended December 31, 2024, the Company granted 337,500 market-based RSUs. The Company did not grant any market-based RSUs for the year ended December 31, 2025. The market-based RSUs have a remaining fair value of $0.6 million as of December 31, 2025. The fair value of these market-based RSUs is being recognized through February 2028. For the year ended December 31, 2025 and 2024, the Company recognized $1.0 million and $1.6 million, respectively, of share-based compensation expense related to the market-based RSUs.

Separate from the market-based RSUs described above, the Company granted 421,300 of performance-contingent RSUs (“PSUs”) for the year ended December 31, 2024. The Company did not grant any PSUs for the year ended December 31, 2025. The PSUs have a remaining fair value of $3.0 million as of December 31, 2025. The fair value of these PSUs is being recognized through February 2027. For the year ended December 31, 2025, the Company did not recognize any share-based compensation expense related to PSUs, and for the year ended December 31, 2024, the Company recognized $0.2 million of share-based compensation expense related to the PSUs.

Share-Based Compensation Expense

Share-based compensation expense included in the consolidated statements of operations was recognized as follows:

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Share-based compensation expense included in the consolidated statements of operations by award type was as follows:

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As of December 31, 2025, the unrecognized share-based compensation cost, net of actual forfeitures, and the estimated weighted-average amortization period, using the straight-line attribution method, was as follows:

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Compensation Awards

The following table summarizes option activity under the 2013 EIP and 2014 NEEIP for the year ended December 31, 2025:

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The following table summarizes total RSU activity (including market-based and performance-contingent RSUs) for the year ended December 31, 2025:

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The weighted average grant date fair value of the RSUs granted in 2025 and 2024 was $9.40 and $9.15, respectively. The total estimated fair value of RSUs vested was $22.8 million and $14.9 million in 2025 and 2024, respectively.

Valuation Assumptions

The range of assumptions used to estimate the fair value of options granted was as follows:

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