Exhibit 10.7

PDL BIOPHARMA, INC.

NOTICE OF GRANT OF STOCK OPTION

The Participant has been granted an option (the “Option”) to purchase certain
shares of Stock of PDL BioPharma, Inc. pursuant to the PDL BioPharma, Inc. 2005
Equity Incentive Plan (the “Plan”), as follows:

 

Participant:

   _____________

Date of Grant:

   _____________

Number of Option Shares:

   _____________

Exercise Price:

   $                        

Initial Vesting Date:

   The date one (1) year after <<insert vesting commencement date>>

Option Expiration Date:

   The date seven (7) years after the Date of Grant

Tax Status of Option:

   Nonstatutory Stock Option

Vested Shares:

   Except as provided in the Stock Option Agreement, the number of Vested Shares
(disregarding any resulting fractional share) as of any date is determined by
multiplying the Number of Option Shares by the “Vested Ratio” determined as of
such date as follows:    Vested Ratio    Prior to Initial Vesting Date    On
Initial Vesting Date, provided the Participant’s Service has not terminated
prior to such date   

Plus

   For each additional full month of the Participant’s continuous Service from
Initial Vesting Date until the Vested Ratio equals 1/1, an additional

Adjustments to Vested Ratio:

   The Company may adjust the Vested Ratio to account for any periods of
part-time Service as an Employee.

Termination of Unvested

Option:

   Except as may otherwise be provided by the Board, upon termination of the
Participant’s Service as an Employee, the Option shall terminate immediately
with respect to shares that are not Vested Shares. However, provided the
Participant’s Service continues uninterrupted in a capacity other than as an
Employee, the Option shall continue in accordance with the terms of the Stock
Option Agreement with respect to any Vested Shares. Upon termination of the
Participant’s Service, the Option shall terminate in accordance with the terms
of the Stock Option Agreement.

By their signatures below or by electronic acceptance or authentication in a
form authorized by the Company, the Company and the Participant agree that the
Option is governed by this Grant Notice and by the provisions of the Plan and
the Stock Option Agreement, both of which are made a part of this document. The
Participant acknowledges that copies of the Plan, the Stock Option Agreement and
the prospectus for the Plan are available on the Company’s internal web site and
may be viewed and printed by the Participant for attachment to the Participant’s
copy of this Grant Notice. The Participant represents that the Participant has
read and is familiar with the provisions of the Plan and the Stock Option
Agreement, and hereby accepts the Option subject to all of their terms and
conditions.

 

PDL BIOPHARMA, INC.

    PARTICIPANT

By:

 

 

   

 

      Signature

Its:

 

 

   

 

      Date

Address:

 

34801 Campus Drive

   

 

 

Fremont, California 94555

    Address      

 

 

ATTACHMENTS:

  2005 Equity Incentive Plan, as amended to the Date of Grant; Stock Option
Agreement, Exercise Notice and Plan Prospectus