Exhibit 10.1


 





XOMA CORPORATION


AMENDED AND RESTATED


2010 LONG TERM INCENTIVE AND STOCK AWARD
PLAN


 


	1.	Purposes.


 


The purposes of the XOMA Corporation Amended and Restated 2010
Long Term Incentive and Stock Award Plan are to advance the interests of XOMA Corporation and its stockholders by providing a means
to attract, retain, and motivate employees, consultants and directors of the Company, its Subsidiaries and Affiliates, to provide
for competitive compensation opportunities, to encourage long term service, to recognize individual contributions and reward achievement
of performance goals, and to promote the creation of long term value for stockholders by aligning the interests of such persons
with those of stockholders.


 


	2.	Definitions.


 


For purposes of this Plan, the following terms shall be defined
as set forth below:


 


(a) “Affiliate” means any entity other than the
Company and its Subsidiaries that is designated by the Board or the Committee as a participating employer under this Plan; provided, however,
that the Company directly or indirectly owns at least 20% of the combined voting power of all classes of stock of such entity or
at least 20% of the ownership interests in such entity.


 


(b) “Award” means any Option, SAR, Restricted Share,
Restricted Stock Unit, Performance Share, Performance Unit, Dividend Equivalent, or Other Stock-Based Award granted to an Eligible
Person under this Plan.


 


(c) “Award Agreement” means any written agreement,
contract, or other instrument or document evidencing an Award.


 


(d) “Beneficiary” means the person, persons, trust
or trusts which have been designated by an Eligible Person in his or her most recent written beneficiary designation filed with
the Company to receive the benefits specified under this Plan upon the death of the Eligible Person, or, if there is no designated
Beneficiary or surviving designated Beneficiary, then the person, persons, trust or trusts entitled by will or the laws of descent
and distribution to receive such benefits.


 


(e) “Board” means the Board of Directors of the
Company.


 


(f) “Change in Control” means the occurrence of
any of the following events:


 


(i) a merger, consolidation or acquisition in which
the Company is not the surviving or continuing entity, except for a transaction the principal purpose of which is to change the
jurisdiction of the Company’s organization;


 


(ii) the sale, transfer or other disposition of
all or substantially all of the assets of the Company;


 


(iii) any other reorganization or business combination
in which fifty percent (50%) or more of the Company’s outstanding voting securities are transferred to different holders
in a single transaction or series of related transactions;


 


(iv) any approval by the stockholders of the Company
of a plan of complete liquidation of the Company;


 


(v) any “person” (as such term is used
in Sections 13(d) and 14(d) of the Exchange Act) becoming the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of
the total voting power represented by the Company’s then outstanding voting securities; or


 


(vi) a change in the composition of the Board, as
a result of which fewer than a majority of the directors are Incumbent Directors.


 


(g) “Code” means the Internal Revenue Code of 1986,
as amended from time to time. References to any provision of the Code shall be deemed to include successor provisions thereto and
regulations thereunder.






    

     

    

(h) “Committee” means the Compensation Committee
of the Board, or such other Board committee or committees (which may include the entire Board) as may be designated by the Board
to administer all or any portion of this Plan; provided , however , that, unless otherwise determined
by the Board, a Committee shall consist of two or more directors of the Company, each of whom is a “non-employee director”
within the meaning of Rule 16b-3 under the Exchange Act, to the extent applicable, and each of whom is an “outside director”
within the meaning of Section 162(m) of the Code, to the extent applicable; provided, further, that
the mere fact that a Committee shall fail to qualify under either of the foregoing requirements shall not invalidate any Award
made by such Committee which Award is otherwise validly made under this Plan. Different Committees may administer this Plan with
respect to different groups of Eligible Persons. As used herein, the singular “Committee” shall include the plural
“Committees” if applicable, except where the context requires otherwise.


 


(i) “Company” means XOMA Corporation, a Delaware
corporation, or any successor company.


 


(j) “Director” means a member of the Board who is
not an employee of the Company, a Subsidiary or an Affiliate.


 


(k) “Dividend Equivalent” means a right, granted
under Section 5(g), to receive cash, Shares, or other property equal in value to dividends paid with respect to a specified
number of Shares. Dividend Equivalents may be awarded on a free-standing basis or in connection with another Award, and may be
paid currently or on a deferred basis.


 


(l) “Effective Date” means July 21, 2010, contingent
on shareholder approval of this Plan on such date.


 


(m) “Eligible Person” means (i) an employee
or consultant of the Company, a Subsidiary or an Affiliate, including any director who is an employee, or (ii) a Director.
Notwithstanding any provisions of this Plan to the contrary, an Award may be granted to an employee or consultant in connection
with his or her hiring or retention prior to the date the employee or consultant first performs services for the Company, a Subsidiary
or an Affiliate; provided, however, that any such Award shall not become vested or exercisable prior to the
date the employee or consultant first performs such services.


 


(n) “Exchange Act” means the Securities Exchange
Act of 1934, as amended from time to time. References to any provision of the Exchange Act shall be deemed to include successor
provisions thereto and regulations thereunder.


 


(o) “Fair Market Value” means:


 


(i) if the Shares are not at the time listed or
admitted to trading on any stock exchange but are traded in the over-the-counter market, the fair market value shall be the closing
selling price per Share on the date in question, as such price is reported on The NASDAQ Global Market or any successor system; provided that
if there is no reported closing selling price for Shares on the date in question, then the closing selling price on the last preceding
date for which such quotation exists shall be determinative of fair market value;


 


(ii) if the Shares are at the time listed or admitted
to trading on any stock exchange, then the fair market value shall be the closing selling price per Share on the date in question
on the stock exchange determined by the Committee to be the primary market for the Shares, as such price is officially quoted on
such exchange; provided that if there is no reported sale of Shares on such exchange on the date in question,
then the fair market value shall be the closing selling price on the exchange on the last preceding date for which such quotation
exists; or


 


(iii) if the Shares are at the time neither listed
nor admitted to trading on any stock exchange nor traded in the over-the-counter market (or if the Committee determines that the
value as determined pursuant to subsection (i) or (ii) above does not reflect fair market value), then the Committee
shall determine fair market value after taking into account such factors as it deems appropriate, including one or more independent
professional appraisals.


 


(p) “Incumbent Directors” means directors who (i) are
directors of the Company as of the date hereof, (ii) are elected, or nominated for election, to the Board with the affirmative
votes of the directors of the Company as of the date hereof, or (iii) are elected, or nominated for election, to the Board
with the affirmative votes of at least a majority of those directors whose election or nomination was not in connection with any
transaction described in subsections (i) through (v) of the definition of Change in Control or in connection with an
actual or threatened proxy contest relating to the election of directors of the Company.






    

     

    

(q) “ISO” means any Option intended to be and designated
as an incentive stock option within the meaning of Section 422 of the Code.


 


(r) “NQSO” means any Option that is not an ISO.


 


(s) “Option” means a right, granted under Section 5(b),
to purchase Shares.


 


(t) “Other Stock-Based Award” means a right, granted
under Section 5(h) that relates to or is valued by reference to Shares.


 


(u) “Participant” means an Eligible Person who has
been granted an Award under this Plan.


 


(v) “Performance Award” shall have the meaning set
forth in Section 7(a).


 


(w) “Performance Period” shall have the meaning
set forth in Section 5(f)(i).


 


(x) “Performance Share” means a performance share
granted under Section 5(f).


 


(y) “Performance Unit” means a performance unit
granted under Section 5(f).


 


(z) “Plan” means this XOMA Corporation Amended and
Restated 2010 Long Term Incentive and Stock Award Plan.


 


(aa) “Restricted Shares” means an Award of Shares
under Section 5(d) that may be subject to certain restrictions and to a risk of forfeiture.


 


(bb) “Restricted Stock Unit” means a right, granted
under Section 5(e), to receive Shares or cash at the end of a specified deferral period.


 


(cc) “Rule 16b-3” means Rule 16b-3, as from time
to time in effect and applicable to this Plan and Participants, promulgated by the Securities and Exchange Commission under Section 16
of the Exchange Act.


 


(dd) “SAR” or “Stock Appreciation Right”
means the right, granted under Section 5(c), to be paid an amount measured by the difference between the exercise price of
the right and the Fair Market Value of Shares on the date of exercise of the right, with payment to be made in cash, Shares, or
property as specified in the Award or determined by the Committee.


 


(ee) “Shares” means shares of common stock of the
Company, and such other securities as may be substituted for Shares pursuant to Section 4(c) hereof.


 


(ff) “Subsidiary” means any company (other than
the Company) in an unbroken chain of companies beginning with the Company if each of the companies (other than the last company
in the unbroken chain) owns shares possessing 50% or more of the total combined voting power of all classes of stock in one of
the other companies in the chain.


 


(gg) “Termination of Service” means the termination
of the Participant’s employment, consulting services or directorship with the Company, its Subsidiaries and its Affiliates,
as the case may be. A Participant employed by a Subsidiary of the Company or one of its Affiliates shall also be deemed to incur
a Termination of Service if the Subsidiary of the Company or Affiliate ceases to be such a Subsidiary or an Affiliate, as the case
may be, and the Participant does not immediately thereafter become an employee or director of, or a consultant to, the Company,
another Subsidiary of the Company or an Affiliate. In the event that a Participant who is an employee of the Company, a Subsidiary
or an Affiliate becomes a Director or a consultant to the Company, a Subsidiary or an Affiliate upon the Participant’s termination
of employment, unless otherwise determined by the Committee in its sole discretion, no Termination of Service shall be deemed to
occur until such time as such Participant is no longer an employee of, or consultant to, the Company, a Subsidiary or an Affiliate
or a Director, as the case may be. If a Participant who is a Director becomes an employee of, or a consultant to, the Company,
a Subsidiary or an Affiliate upon such Participant ceasing to be a Director, unless otherwise determined by the Committee in its
sole discretion, such termination of the Participant’s directorship shall not be treated as a Termination of Service unless
and until the Participant’s employment or consultancy, as the case may be, terminates. Temporary absences from employment
because of illness, vacation or leave of absence and transfers among the Company and its Subsidiaries and Affiliates shall not
be considered a Termination of Service.






    

     

    

 


	3.	Administration.


 


(a)  Authority of the Committee. This Plan
shall be administered by the Committee, and the Committee shall have full and final authority to take the following actions, in
each case subject to and consistent with the provisions of this Plan:


 


(i) to select Eligible Persons to whom Awards may
be granted;


 


(ii) to designate Affiliates;


 


(iii) to determine the type or types of Awards to
be granted to each Eligible Person;


 


(iv) to determine the type and number of Awards
to be granted, the number of Shares to which an Award may relate, the terms and conditions of any Award granted under this Plan
(including, but not limited to, any exercise price, grant price, or purchase price, any restriction or condition, any schedule
for lapse of restrictions or conditions relating to transferability or forfeiture, exercisability, or settlement of an Award, and
waiver or accelerations thereof, and waivers of performance conditions relating to an Award, based in each case on such considerations
as the Committee shall determine), and all other matters to be determined in connection with an Award;


 


(v) to determine whether, to what extent, and under
what circumstances an Award may be settled, or the exercise price of an Award may be paid, in cash, Shares, other Awards, or other
property, or an Award may be canceled, forfeited, exchanged, or surrendered;


 


(vi) to determine whether, to what extent, and under
what circumstances cash, Shares, other Awards, or other property payable with respect to an Award will be deferred either automatically,
at the election of the Committee, or at the election of the Eligible Person, provided that such deferral shall
be intended to be in compliance with Section 409A of the Code;


 


(vii) to prescribe the form of each Award Agreement,
which need not be identical for each Eligible Person;


 


(viii) to adopt, amend, suspend, waive, and rescind
such rules and regulations and appoint such agents as the Committee may deem necessary or advisable to administer this Plan;


 


(ix) to correct any defect or supply any omission
or reconcile any inconsistency in this Plan and to construe and interpret this Plan and any Award, rules and regulations, Award
Agreement, or other instrument hereunder;


 


(x) to accelerate the exercisability or vesting
of all or any portion of any Award or to extend the period during which an Award is exercisable;


 


(xi) to determine whether uncertificated Shares
may be used in satisfying Awards and otherwise in connection with this Plan; and


 


(xii) to make all other decisions and determinations
as may be required under the terms of this Plan or as the Committee may deem necessary or advisable for the administration of this
Plan.


 


(b)  Manner of Exercise of Committee Authority.
The Committee shall have sole discretion in exercising its authority under this Plan. Any action of the Committee with respect
to this Plan shall be final, conclusive, and binding on all persons, including the Company, Subsidiaries, Affiliates, Eligible
Persons, any person claiming any rights under this Plan from or through any Eligible Person, and stockholders. The express grant
of any specific power to the Committee, and the taking of any action by the Committee, shall not be construed as limiting any power
or authority of the Committee. The Committee may delegate to other members of the Board or officers or managers of the Company
or any Subsidiary or Affiliate the authority, subject to such terms as the Committee shall determine, to perform administrative
functions and, with respect to Awards granted to persons not subject to Section 16 of the Exchange Act, to perform such other
functions as the Committee may determine, to the extent permitted under Rule 16b-3 (if applicable) and applicable law.


 


(c)  Limitation of Liability. Each member of
the Committee shall be entitled to, in good faith, rely or act upon any report or other information furnished to him or her by
any officer or other employee of the Company or any Subsidiary or Affiliate, the Company’s independent certified public accountants,
or other professional retained by the Company to assist in the administration of this Plan. No member of the Committee, and no
officer or employee of the Company acting on behalf of the Committee, shall be personally liable for any action, determination,
or interpretation taken or made in good faith with respect to this Plan, and all members of the Committee and any officer or employee
of the Company acting on their behalf shall, to the extent permitted by law, be fully indemnified and protected by the Company
with respect to any such action, determination, or interpretation.






    

     

    

(d)  Limitation on Committee’s Discretion.
Anything in this Plan to the contrary notwithstanding, in the case of any Award which is intended to qualify as “performance-based
compensation” within the meaning of Section 162(m)(4)(C) of the Code, the Committee shall have no discretion to increase
the amount of compensation payable under the Award to the extent such an increase would cause the Award to lose its qualification
as such performance-based compensation.


 


(e)  No Option or SAR Repricing Without Stockholder
Approval. Except as provided in the first sentence of Section 4(c) hereof relating to certain anti-dilution adjustments,
unless the approval of stockholders of the Company is obtained, (i) Options and SARs shall not be amended to lower their exercise
price, (ii) Options and SARs will not be exchanged for other Options or SARs with lower exercise prices, (iii) Options
and SARs with an exercise price in excess of the Fair Market Value of the underlying Shares will not be exchanged for cash or other
property and (iii) no other action shall be taken with respect to Options or SARs that would be treated as a repricing under
the rules of the principal stock exchange on which the Shares are listed.


 


(f)  Limitation
on Committee’s Authority under 409A. Anything
in this Plan to the contrary notwithstanding, the Committee’s authority to modify outstanding Awards shall be limited to
the extent necessary so that the existence of such authority does not (i) cause an Award that is not otherwise deferred compensation
subject to Section 409A of the Code to become deferred compensation subject to Section 409A of the Code or (ii) cause
an Award that is otherwise deferred compensation subject to Section 409A of the Code to fail to meet the requirements prescribed
by Section 409A of the Code.


 


	4.	Shares Subject to this Plan.


 


(a) Subject to adjustment as provided in Section 4(c) hereof,
the total number of Shares reserved for issuance in connection with Awards under this Plan shall be (i) 22,171,206 plus (ii) the
number of Shares subject to awards granted prior to the Effective Date of this Plan under the Company’s 1981 Share Option
Plan, its Restricted Share Plan or its 1992 Directors Share Option Plan (the “Prior Plans”) which awards are, after
the Effective Date, forfeited, canceled, surrendered or otherwise terminated without a distribution of Shares to the holder of
the award; provided ,  however , that, subject to adjustment as provided in Section 4(c)
hereof, no more than 11,5000,000 Shares may be issued as ISOs under this Plan; and, provided ,further ,
that for each Restricted Share, Restricted Stock Unit, Performance Share, Performance Unit, Dividend Equivalent or Other Stock-Based
Award issued, such total number of available Shares shall be reduced by 1.08 Shares. No Award may be granted if the number of Shares
to which such Award relates, when added to the number of Shares previously issued under this Plan, exceeds the number of Shares
reserved under the applicable provisions of the preceding sentence. If any Awards are forfeited, canceled, terminated, exchanged
or surrendered or such Award is settled in cash or otherwise terminates without a distribution of Shares to the Participant, any
Shares counted against the number of Shares reserved and available under this Plan with respect to such Award shall, to the extent
of any such forfeiture, repurchase, settlement, termination, cancellation, exchange or surrender, again be available for Awards
under this Plan. Further, for each share underlying an Award that was granted under this Plan and is a Restricted Share, Restricted
Stock Unit, Performance Share, Performance Unit, Dividend Equivalent or Other Stock-Based Award and for each share underlying an
award other than an option or stock appreciation right that was granted under a Prior Plan, in each case, that is forfeited, cancelled,
terminated, exchanged or surrendered, such forfeiture, cancellation, termination, exchange or surrender will result in the addition
of 1.08 shares to the share reserve of this Plan. Upon the exercise of any Award granted in tandem with any other Awards, such
related Awards shall be canceled to the extent of the number of Shares as to which the Award is exercised. If any shares subject
to an Award are not delivered to a participant because the Award is exercised through a reduction of shares subject to the Award
(i.e., “net exercised”), the number of shares that are not delivered to the participant shall not remain available
for issuance under the Long Term Incentive Plan. Also, any shares withheld or reacquired by the Company pursuant to the exercise
of an option or SAR or as consideration for the exercise of an option or SAR, and any shares withheld or reacquired by the Company
in satisfaction of the Company’s tax withholding obligation on an Award shall not again become available for issuance under
the Plan






    

     

    

(b) Subject to adjustment as provided in Section 4(c) hereof,
the maximum number of Shares (i) with respect to which Options or SARs may be granted during a calendar year to any Eligible
Person under this Plan shall be 466,666 Shares, and (ii) with respect to which Performance Shares, Performance Units, Restricted
Shares or Restricted Stock Units intended to qualify as performance-based compensation within the meaning of Section 162(m)(4)(C)
of the Code may be granted during a calendar year to any Eligible Person under this Plan shall be 466,666 Shares.


 


(c) In the event that the Committee shall determine that any
dividend in Shares, recapitalization, Share split, reverse split, reorganization, merger, consolidation, spin-off, combination,
repurchase, share exchange, extraordinary distribution or other similar corporate transaction or event, affects the Shares such
that an adjustment is appropriate in order to prevent dilution or enlargement of the rights of Eligible Persons under this Plan,
then the Committee shall make such equitable changes or adjustments as it deems appropriate and, in such manner as it may deem
equitable, (i) adjust any or all of (x) the number and kind of shares which may thereafter be issued under this Plan,
(y) the number and kind of shares, other securities or other consideration issued or issuable in respect of outstanding Awards,
and (z) the exercise price, grant price, or purchase price relating to any Award, or (ii) provide for a distribution
of cash or property in respect of any Award; provided , however , in each case that, with respect
to ISOs, such adjustment shall be made in accordance with Section 424(a) of the Code, unless the Committee determines otherwise; provided , further ,
that no adjustment shall be made pursuant to this Section 4(c) that causes any Award that is not otherwise deferred compensation
subject to Section 409A of the Code to be treated as deferred compensation pursuant to Section 409A of the Code. In addition,
the Committee is authorized to make adjustments in the terms and conditions of, and the criteria and performance objectives, if
any, included in, Awards in recognition of unusual or non-recurring events (including, without limitation, events described in
the preceding sentence) affecting the Company or any Subsidiary or Affiliate or the financial statements of the Company or any
Subsidiary or Affiliate, or in response to changes in applicable laws, regulations, or accounting principles; provided , however ,
that the Committee shall not have discretion to increase the amount of compensation payable under any Award intended to qualify
as performance-based compensation for purposes of Section 162(m)(4)(C) of the Code to the extent such an increase would cause
the Award to lose its qualification as performance-based compensation for purposes of Section 162(m)(4)(C) of the Code and
the regulations thereunder.


 


(d) Any Shares distributed pursuant to an Award may consist,
in whole or in part, of authorized and unissued Shares or treasury Shares including Shares acquired by purchase in the open market
or in private transactions.


 


	5.	Specific Terms of Awards.


 


(a)  General. Awards may be granted on
the terms and conditions set forth in this Section 5. In addition, the Committee may impose on any Award or the exercise thereof,
at the date of grant or thereafter (subject to Section 9(d)), such additional terms and conditions, not inconsistent with
the provisions of this Plan, as the Committee shall determine, including terms regarding forfeiture of Awards or continued exercisability
of Awards in the event of Termination of Service by the Eligible Person.


 


(b)  Options. The Committee is authorized
to grant Options, which may be NQSOs or ISOs, to Eligible Persons on the following terms and conditions:


 


(i)  Exercise Price. The exercise
price per Share purchasable under an Option shall be determined by the Committee; provided, however, that
the exercise price per Share of an Option shall not be less than the Fair Market Value of a Share on the date of grant of the Option.
The Committee may, without limitation, set an exercise price that is based upon achievement of performance criteria if deemed appropriate
by the Committee.


 


(ii)  Option Term. The term
of each Option shall be determined by the Committee; provided, however, that such term shall not be longer
than ten years from the date of grant of the Option.


 


(iii)  Time and Method of Exercise. The
Committee shall determine at the date of grant or thereafter the time or times at which an Option may be exercised in whole or
in part (including, without limitation, upon achievement of performance criteria if deemed appropriate by the Committee), the methods
by which such exercise price may be paid or deemed to be paid (including, without limitation, broker-assisted exercise arrangements),
the form of such payment (including, without limitation, cash, Shares or other property), and the methods by which Shares will
be delivered or deemed to be delivered to Eligible Persons.






    

     

    

(iv)  ISOs. The terms of any
ISO granted under this Plan shall comply in all respects with the provisions of Section 422 of the Code, including but not
limited to the requirement that the ISO shall be granted within ten years from the earlier of the date of adoption or stockholder
approval of this Plan. ISOs may only be granted to employees of the Company or a Subsidiary.


 


(c)  SARs. The Committee is authorized
to grant SARs (Stock Appreciation Rights) to Eligible Persons on the following terms and conditions:


 


(i)  Right to Payment . A
SAR shall confer on the Eligible Person to whom it is granted a right to receive with respect to each Share subject thereto, upon
exercise thereof, the excess of (1) the Fair Market Value of one Share on the date of exercise over (2) the exercise
price per Share of the SAR, as determined by the Committee as of the date of grant of the SAR (which shall not be less than the
Fair Market Value per Share on the date of grant of the SAR and, in the case of a SAR granted in tandem with an Option, shall be
equal to the exercise price of the underlying Option).


 


(ii)  Other Terms. The Committee
shall determine, at the time of grant or thereafter, the time or times at which a SAR may be exercised in whole or in part (which
shall not be more than ten years after the date of grant of the SAR), the method of exercise, method of settlement, form of consideration
payable in settlement, method by which Shares will be delivered or deemed to be delivered to Eligible Persons, whether or not a
SAR shall be in tandem with any other Award, and any other terms and conditions of any SAR. Unless the Committee determines otherwise,
a SAR (1) granted in tandem with an NQSO may be granted at the time of grant of the related NQSO or at any time thereafter
and (2) granted in tandem with an ISO may only be granted at the time of grant of the related ISO.


 


(d)  Restricted Shares. The Committee
is authorized to grant Restricted Shares to Eligible Persons on the following terms and conditions:


 


(i)  Issuance and Restrictions. Restricted
Shares shall be subject to such restrictions on transferability and other restrictions, if any, as the Committee may impose at
the date of grant or thereafter, which restrictions may lapse separately or in combination at such times, under such circumstances
(including, without limitation, upon achievement of performance criteria if deemed appropriate by the Committee), in such installments,
or otherwise, as the Committee may determine. Except to the extent restricted under the Award Agreement relating to the Restricted
Shares, an Eligible Person granted Restricted Shares shall have all of the rights of a stockholder including, without limitation,
the right to vote Restricted Shares and the right to receive dividends thereon.


 


(ii)  Forfeiture. Except as
otherwise determined by the Committee, at the date of grant or thereafter, upon Termination of Service during the applicable restriction
period, Restricted Shares shall be repurchased by the Company for a nominal amount equal to their par value and any accrued but
unpaid dividends or Dividend Equivalents that are at that time subject to restrictions shall be forfeited; provided , however ,
that the Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that
restrictions or forfeiture conditions relating to Restricted Shares will be waived in whole or in part in the event of Termination
of Service resulting from specified causes, and the Committee may in other cases waive in whole or in part the forfeiture of Restricted
Shares.


 


(iii)  Certificates for Shares. Restricted
Shares granted under this Plan may be evidenced in such manner as the Committee shall determine. If certificates representing Restricted
Shares are registered in the name of the Eligible Person, such certificates shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Restricted Shares, and, unless otherwise determined by the Committee, the Company
shall retain physical possession of the certificate and the Participant shall deliver a stock power to the Company, endorsed in
blank, relating to the Restricted Shares.


 


(iv)  Dividends. Dividends
paid on Restricted Shares shall be either paid at the dividend payment date, or deferred for payment to such date, and subject
to such conditions, as determined by the Committee, in cash or in restricted or unrestricted Shares having a Fair Market Value
equal to the amount of such dividends. Unless otherwise determined by the Committee, Shares distributed in connection with a Share
split or dividend in Shares, and other property distributed as a dividend, shall be subject to restrictions and a risk of forfeiture
to the same extent as the Restricted Shares with respect to which such Shares or other property has been distributed.


 


(e)  Restricted Stock Units. The Committee
is authorized to grant Restricted Stock Units to Eligible Persons, subject to the following terms and conditions:






    

     

    

(i)  Award and Restrictions. Delivery
of Shares or cash, as the case may be, will occur upon expiration of the deferral period specified for Restricted Stock Units by
the Committee (or, if permitted by the Committee, as elected by the Eligible Person). In addition, Restricted Stock Units shall
be subject to such restrictions as the Committee may impose, if any (including, without limitation, the achievement of performance
criteria if deemed appropriate by the Committee), at the date of grant or thereafter, which restrictions may lapse at the expiration
of the deferral period or at earlier or later specified times, separately or in combination, in installments or otherwise, as the
Committee may determine.


 


(ii)  Forfeiture. Except as
otherwise determined by the Committee at the date of grant or thereafter, upon Termination of Service during the applicable deferral
period or portion thereof to which forfeiture conditions apply (as provided in the Award Agreement evidencing the Restricted Stock
Units), or upon failure to satisfy any other conditions precedent to the delivery of Shares or cash to which such Restricted Stock
Units relate, all Restricted Stock Units that are at that time subject to deferral or restriction shall be forfeited; provided, however ,
that the Committee may provide, by rule or regulation or in any Award Agreement, or may determine in any individual case, that
restrictions or forfeiture conditions relating to Restricted Stock Units will be waived in whole or in part in the event of Termination
of Service resulting from specified causes, and the Committee may in other cases waive in whole or in part the forfeiture of Restricted
Stock Units.


 


(iii)  Dividend Equivalents. Unless
otherwise determined by the Committee at the date of grant, Dividend Equivalents on the specified number of Shares covered by a
Restricted Stock Unit shall be either (A) paid with respect to such Restricted Stock Unit at the dividend payment date in
cash or in restricted or unrestricted Shares having a Fair Market Value equal to the amount of such dividends, or (B) deferred
with respect to such Restricted Stock Unit and the amount or value thereof automatically deemed reinvested in additional Restricted
Stock Units or other Awards, as the Committee shall determine.


 


(f)  Performance Shares and Performance Units. The
Committee is authorized to grant Performance Shares or Performance Units or both to Eligible Persons on the following terms and
conditions:


 


(i)  Performance Period. The
Committee shall determine a performance period (the “Performance Period”) of one or more years or other periods and
shall determine the performance objectives for grants of Performance Shares and Performance Units. Performance objectives may vary
from Eligible Person to Eligible Person and shall be based upon the performance criteria as the Committee may deem appropriate.
The performance objectives may be determined by reference to the performance of the Company, or of a Subsidiary or Affiliate, or
of a division or unit of any of the foregoing. Performance Periods may overlap and Eligible Persons may participate simultaneously
with respect to Performance Shares and Performance Units for which different Performance Periods are prescribed.


 


(ii)  Award Value. At the
beginning of a Performance Period, the Committee shall determine for each Eligible Person or group of Eligible Persons with respect
to that Performance Period the range of number of Shares, if any, in the case of Performance Shares, and the range of dollar values,
if any, in the case of Performance Units, which may be fixed or may vary in accordance with such performance or other criteria
specified by the Committee, which shall be paid to an Eligible Person as an Award if the relevant measure of Company performance
for the Performance Period is met.


 


(iii)  Significant Events. If
during the course of a Performance Period there shall occur significant events as determined by the Committee which the Committee
expects to have a substantial effect on a performance objective during such period, the Committee may revise such objective; provided , however ,
that, in the case of any Award intended to qualify as performance-based compensation for purposes of Section 162(m)(4)(C)
of the Code, the Committee shall not have any discretion to increase the amount of compensation payable under the Award to the
extent such an increase would cause the Award to lose its qualification as performance-based compensation for purposes of Section 162(m)(4)(C)
of the Code and the regulations thereunder.


 


(iv)  Forfeiture. Except as
otherwise determined by the Committee at the date of grant or thereafter, upon Termination of Service during the applicable Performance
Period, Performance Shares and Performance Units for which the Performance Period was prescribed shall be forfeited; provided , however ,
that the Committee may provide, by rule or regulation or in any Award Agreement, or may determine in an individual case, that restrictions
or forfeiture conditions relating to Performance Shares and Performance Units will be waived in whole or in part in the event of
Terminations of Service resulting from specified causes, and the Committee may in other cases waive in whole or in part the forfeiture
of Performance Shares and Performance Units.






    

     

    

(v)  Payment. Each Performance
Share or Performance Unit may be paid in whole Shares, or cash, or a combination of Shares and cash either as a lump sum payment
or in installments, all as the Committee shall determine, at the time of grant of the Performance Share or Performance Unit or
otherwise, commencing at the time determined by the Committee.


 


(vi)  Restriction on Dividends. No
dividends or Dividend Equivalents shall be paid on any Performance Share or Performance Unit until such time (if ever) as the performance
criteria associated therewith have been met.


 


(g)  Dividend Equivalents. The Committee
is authorized to grant Dividend Equivalents to Eligible Persons. The Committee may provide, at the date of grant or thereafter,
that Dividend Equivalents shall be paid or distributed when accrued or shall be deemed to have been reinvested in additional Shares,
or other investment vehicles as the Committee may specify; provided, however , that, unless otherwise determined
by the Committee, Dividend Equivalents (other than freestanding Dividend Equivalents) shall be subject to all conditions and restrictions
of any underlying Awards to which they relate.


 


(h)  Other Stock-Based Awards. The Committee
is authorized, subject to limitations under applicable law, to grant to Eligible Persons such other Awards that may be denominated
or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Shares, as deemed by the Committee
to be consistent with the purposes of this Plan, including, without limitation, unrestricted shares awarded purely as a “bonus”
and not subject to any restrictions or conditions, other rights convertible or exchangeable into Shares, purchase rights for Shares,
Awards with value and payment contingent upon performance of the Company or any other factors designated by the Committee, and
Awards valued by reference to the performance of specified Subsidiaries or Affiliates. The Committee shall determine the terms
and conditions of such Awards at date of grant or thereafter. Shares delivered pursuant to an Award in the nature of a purchase
right granted under this Section 5(h) shall be purchased for such consideration, paid for at such times, by such methods,
and in such forms, including, without limitation, cash, Shares, notes or other property, as the Committee shall determine. Cash
awards, as an element of or supplement to any other Award under this Plan, shall also be authorized pursuant to this Section 5(h).


 


	6.	Certain Provisions Applicable to Awards.


 


(a)  Stand-Alone, Additional, Tandem and Substitute
Awards. Awards granted under this Plan may, in the discretion of the Committee, be granted to Eligible Persons either
alone or in addition to, in tandem with, or in exchange or substitution for, any other Award granted under this Plan or any award
granted under any other plan or agreement of the Company, any Subsidiary or Affiliate, or any business entity to be acquired by
the Company or a Subsidiary or Affiliate, or any other right of an Eligible Person to receive payment from the Company or any Subsidiary
or Affiliate. Awards may be granted in addition to or in tandem with such other Awards or awards, and may be granted either as
of the same time as, or a different time from, the grant of such other Awards or awards. Subject to the provisions of Section 3(e)
hereof prohibiting Option and SAR repricing without stockholder approval, the per Share exercise price of any Option, or grant
price of any SAR, which is granted in connection with the substitution of awards granted under any other plan or agreement of the
Company or any Subsidiary or Affiliate, or any business entity to be acquired by the Company or any Subsidiary or Affiliate, shall
be determined by the Committee, in its discretion.


 


(b)  Term of Awards. The term of each
Award granted to an Eligible Person shall be for such period as may be determined by the Committee; provided, however,
that in no event shall the term of any Option or SAR exceed a period of ten years from the date of its grant (or, in the case of
ISOs, such shorter period as may be applicable under Section 422 of the Code).


 


(c)  Form of Payment Under Awards. Subject
to the terms of this Plan and any applicable Award Agreement, payments to be made by the Company or a Subsidiary or Affiliate upon
the grant, maturation, or exercise of an Award may be made in such forms as the Committee shall determine at the date of grant
or thereafter, including, without limitation, cash, Shares, notes or other property, and may be made in a single payment or transfer,
in installments, or on a deferred basis, provided that any such deferral shall be intended to be in compliance
with Section 409A of the Code. The Committee may make rules relating to installment or deferred payments with respect to Awards,
including the rate of interest to be credited with respect to such payments, and the Committee may require deferral of payment
under an Award if, in the sole judgment of the Committee, it may be necessary in order to avoid nondeductibility of the payment
under Section 162(m) of the Code.






    

     

    

(d)  Nontransferability. Awards shall
not be transferable by an Eligible Person except by will or the laws of descent and distribution (except pursuant to a Beneficiary
designation) and shall be exercisable during the lifetime of an Eligible Person only by such Eligible Person or his or her guardian
or legal representative, provided that Awards that are NQSOs may be transferred or assigned by the optionee to
the optionee’s spouse or descendent (any such spouse or descendent, an “Immediate Family Member”) or a corporation,
partnership, limited liability company or trust so long as all of the stockholders, partners, members or beneficiaries thereof,
as the case may be, are either the optionee or the optionee’s Immediate Family Member, provided , further ,
that (i) there may be no consideration for any such transfer and (ii) subsequent transfers of the transferred NQSO will
be prohibited other than by will or the laws of descent and distribution. An Eligible Person’s rights under this Plan may
not be pledged, mortgaged, hypothecated, or otherwise encumbered, and shall not be subject to claims of the Eligible Person’s
creditors.


 


(e)  Noncompetition. The Committee may,
by way of the Award Agreements or otherwise, establish such other terms, conditions, restrictions and/or limitations, if any, of
any Award, provided they are not inconsistent with this Plan, including, without limitation, the requirement that the Participant
not engage in competition with, solicit customers or employees of, or disclose or use confidential information of the Company or
its Affiliates.


 


	7.	Performance Awards.


 


(a)  Performance Awards Granted to Covered Employees. If
the Committee determines that an Award (other than an Option or SAR) to be granted to an Eligible Person should qualify as “performance-based
compensation” for purposes of Section 162(m) of the Code, the grant, vesting, exercise and/or settlement of such Award
(each, a “Performance Award”) shall be contingent upon achievement of pre-established performance goals and other terms
set forth in this Section 7(a).


 


(i)  Performance Goals Generally. The
performance goals for such Performance Awards shall consist of one or more business criteria and a targeted level or levels of
performance with respect to each of such criteria, as specified by the Committee consistent with this Section 7(a). The performance
goals shall be objective and shall otherwise meet the requirements of Section 162(m) of the Code and regulations thereunder
(including Treasury Regulation 1.162-27 and successor regulations thereto), including the requirement that the level or levels
of performance targeted by the Committee result in the achievement of performance goals being “substantially uncertain.”
The Committee may determine that such Performance Awards shall be granted, vested, exercised and/or settled upon achievement of
any one performance goal or that two or more of the performance goals must be achieved as a condition to grant, vesting, exercise
and/or settlement of such Performance Awards. Performance goals may differ for Performance Awards granted to any one Participant
or to different Participants.


 


(ii)  Business Criteria. One
or more of the following business criteria for the Company, on a consolidated basis, and/or for specified Subsidiaries or Affiliates
or other business units or lines of business of the Company shall be used by the Committee in establishing performance goals for
such Performance Awards: (1) earnings per share (basic or fully diluted); (2) revenues; (3) earnings, before or
after taxes, from operations (generally or specified operations), or before or after interest expense, depreciation, amortization,
incentives, or extraordinary or special items; (4) cash flow, free cash flow, cash flow return on investment (discounted or
otherwise), net cash provided by operations, or cash flow in excess of cost of capital; (5) return on net assets, return on
assets, return on investment, return on capital, return on equity; (6) economic value added; (7) operating margin or
operating expense; (8) net income; (9) Share price or total stockholder return; (10) book value; (11) expense
ratio; (12) operating income; and (13) strategic business criteria, consisting of one or more objectives based on meeting
specified market penetration, geographic business expansion goals, cost targets, customer satisfaction, supervision of litigation
and information technology, and goals relating to acquisitions or divestitures of Subsidiaries, Affiliates or joint ventures. The
targeted level or levels of performance with respect to such business criteria may be established at such levels and in such terms
as the Committee may determine, in its discretion, including in absolute terms, as a goal relative to performance in prior periods,
or as a goal compared to the performance of one or more comparable companies or an index covering multiple companies.


 


(iii)  Performance Period; Timing for
Establishing Performance Goals; Per-Person Limit. Achievement of performance goals in respect of such Performance Awards
shall be measured over a performance period, as specified by the Committee. A performance goal shall be established not later than
the earlier of (A) 90 days after the beginning of any performance period applicable to such Performance Award or (B) the
time 25% of such performance period has elapsed. In all cases, the maximum Performance Award of any Participant shall be subject
to the limitation set forth in Section 4(b) or 7(a)(v), as applicable.






    

     

    

(iv)  Settlement of Performance Awards;
Other Terms. Settlement of such Performance Awards shall be in cash, Shares, other Awards or other property, in the discretion
of the Committee. The Committee may, in its discretion, reduce the amount of a settlement otherwise to be made in connection with
such Performance Awards, but may not exercise discretion to increase any such amount payable to the Participant in respect of a
Performance Award subject to this Section 7(a). Any settlement which changes the form of payment from that originally specified
shall be implemented in a manner such that the Performance Award and other related Awards do not, solely for that reason, fail
to qualify as “performance-based compensation” for purposes of Section 162(m) of the Code. The Committee shall
specify the circumstances in which such Performance Awards shall be paid or forfeited in the event of Termination of Service of
the Participant or other event (including a Change in Control) prior to the end of a performance period or settlement of such Performance
Awards.


 


(v)  Maximum Annual Cash Award . The
maximum amount payable upon settlement of a cash-settled Performance Unit (or other cash-settled Award) granted under this Plan
that is intended to satisfy the requirements for “performance-based compensation” under Section 162(m) of the
Code for any calendar year to any Eligible Person shall not exceed $3,000,000.


 


(b)  Written Determinations. Determinations
by the Committee as to the establishment of performance goals, the amount potentially payable in respect of Performance Awards,
the level of actual achievement of the specified performance goals relating to Performance Awards and the amount of any final Performance
Award shall be recorded in writing in the case of Performance Awards intended to qualify under Section 162(m) of the Code.
Specifically, the Committee shall certify in writing, in a manner conforming to applicable regulations under Section 162(m),
prior to settlement of each such Award, that the performance objective relating to the Performance Award and other material terms
of the Award upon which settlement of the Award was conditioned have been satisfied.


 


8. Change in Control Provisions. Unless otherwise
provided by the Committee at the time of the Award grant, in the event of a Change in Control, each outstanding Award shall either
be assumed by the successor company or parent thereof or to be replaced with comparable awards with respect to capital stock of
the successor company or parent thereof, such comparability to be determined by the Committee; provided, however , that
notwithstanding the foregoing, if an outstanding Award is not so assumed or replaced, then (i) such outstanding Award pursuant
to which the Participant may have rights the exercise of which is restricted or limited, shall become fully exercisable at the
time of the Change in Control, and (ii) unless the right to lapse of restrictions or limitations is waived or deferred by
a Participant prior to such lapse, all restrictions or limitations (including risks of forfeiture and deferrals) on such outstanding
Award subject to restrictions or limitations under this Plan shall lapse, and all performance criteria and other conditions to
payment of Awards under which payments of cash, Shares or other property are subject to conditions shall be deemed to be achieved
or fulfilled at target (if applicable) and shall be waived by the Company at the time of the Change in Control.


 


	9.	General Provisions.	 


 


(a)  Compliance with Legal and Trading Requirements. This
Plan, the granting and exercising of Awards thereunder, and the other obligations of the Company under this Plan and any Award
Agreement, shall be subject to all applicable federal, state and foreign laws, rules and regulations, and to such approvals by
any stock exchange, regulatory or governmental agency as may be required. The Company, in its discretion, may postpone the issuance
or delivery of Shares under any Award until completion of such stock exchange or market system listing or registration or qualification
of such Shares or any required action under any state, federal or foreign law, rule or regulation as the Company may consider appropriate,
and may require any Participant to make such representations and furnish such information as it may consider appropriate in connection
with the issuance or delivery of Shares in compliance with applicable laws, rules and regulations. No provisions of this Plan shall
be interpreted or construed to obligate the Company to register any Shares under federal, state or foreign law. The Shares issued
under this Plan may be subject to such other restrictions on transfer as determined by the Committee.


 


(b)  No Right to Continued Employment or Service. Neither
this Plan nor any action taken thereunder shall be construed as giving any employee, consultant or director the right to be retained
in the employ or service of the Company or any of its Subsidiaries or Affiliates, nor shall it interfere in any way with the right
of the Company or any of its Subsidiaries or Affiliates to terminate any employee’s, consultant’s or director’s
employment or service at any time.






    

     

    

(c)  Taxes. The Company or any Subsidiary
or Affiliate is authorized to withhold from any Award granted, any payment relating to an Award under this Plan, including from
a distribution of Shares, or any payroll or other payment to an Eligible Person, amounts of withholding and other taxes due in
connection with any transaction involving an Award, and to take such other action as the Committee may deem advisable to enable
the Company and Eligible Persons to satisfy obligations for the payment of withholding taxes and other tax obligations relating
to any Award. This authority shall include authority to withhold or receive Shares or other property and to make cash payments
in respect thereof in satisfaction of an Eligible Person’s tax obligations; provided, however ,
that the amount of tax withholding to be satisfied by withholding Shares shall be limited to the minimum amount of taxes, including
employment taxes, required to be withheld under applicable Federal, state and local law.


 


(d)  Changes to this Plan and Awards. The
Board may amend, alter, suspend, discontinue, or terminate this Plan or the Committee’s authority to grant Awards under this
Plan without the consent of stockholders of the Company or Participants, except that any such amendment or alteration shall be
subject to the approval of the Company’s stockholders (i) to the extent such stockholder approval is required under
the rules of any stock exchange or automated quotation system on which the Shares may then be listed or quoted, or (ii) as
it applies to ISOs, to the extent such stockholder approval is required under Section 422 of the Code; provided , however ,
that, without the consent of an affected Participant, no amendment, alteration, suspension, discontinuation, or termination of
this Plan may materially and adversely affect the rights of such Participant under any Award theretofore granted to him or her.
The Committee may waive any conditions or rights under, amend any terms of, or amend, alter, suspend, discontinue or terminate,
any Award theretofore granted, prospectively or retrospectively; provided, however, that, without the consent
of a Participant, no amendment, alteration, suspension, discontinuation or termination of any Award may materially and adversely
affect the rights of such Participant under any Award theretofore granted to him or her.


 


(e)  No Rights to Awards; No Stockholder Rights. No
Eligible Person or employee shall have any claim to be granted any Award under this Plan, and there is no obligation for uniformity
of treatment of Eligible Persons and employees. No Award shall confer on any Eligible Person any of the rights of a stockholder
of the Company unless and until Shares are duly issued or transferred to the Eligible Person in accordance with the terms of the
Award.


 


(f)  Unfunded Status of Awards. This Plan
is intended to constitute an “unfunded” plan for incentive compensation. With respect to any payments not yet made
to a Participant pursuant to an Award, nothing contained in this Plan or any Award shall give any such Participant any rights that
are greater than those of a general creditor of the Company; provided, however, that the Committee may authorize
the creation of trusts or make other arrangements to meet the Company’s obligations under this Plan to deliver cash, Shares,
other Awards, or other property pursuant to any Award, which trusts or other arrangements shall be consistent with the “unfunded”
status of this Plan unless the Committee otherwise determines with the consent of each affected Participant.


 


(g)  Nonexclusivity of this Plan. Neither
the adoption of this Plan by the Board nor its submission to the stockholders of the Company for approval shall be construed as
creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including,
without limitation, the granting of options and other awards otherwise than under this Plan, and such arrangements may be either
applicable generally or only in specific cases.


 


(h)  Not Compensation for Benefit Plans. No
Award payable under this Plan shall be deemed salary or compensation for the purpose of computing benefits under any benefit plan
or other arrangement of the Company for the benefit of its employees, consultants or directors unless the Company shall determine
otherwise.


 


(i)  No Fractional Shares. No fractional
Shares shall be issued or delivered pursuant to this Plan or any Award. The Committee shall determine whether cash, other Awards,
or other property shall be issued or paid in lieu of such fractional Shares or whether such fractional Shares or any rights thereto
shall be forfeited or otherwise eliminated.


 


(j)  Governing Law. The validity, construction,
and effect of this Plan, any rules and regulations relating to this Plan, and any Award Agreement shall be determined in accordance
with the laws of the State of Delaware without giving effect to principles of conflict of laws thereof.


 


(k)  Effective Date; Plan Termination. This
Plan became effective as of the Effective Date. This Plan shall terminate as to future awards on May 25, 2020 unless earlier
terminated or extended by amendment.






    

     

    

(l)  Section 409A. Awards under this
Plan are intended to comply with, or be exempt from, the applicable requirements of Section 409A of the Code and shall be
limited, construed and interpreted in accordance with such intent. Although the Company does not guarantee any particular tax treatment,
to the extent that any Award is subject to Section 409A of the Code, it shall be paid in a manner that is intended to comply
with Section 409A of the Code, including regulations and any other guidance issued by the Secretary of the Treasury and the
Internal Revenue Service with respect thereto. In no event whatsoever shall the Company be liable for any additional tax, interest
or penalties that may be imposed on a Participant by Section 409A of the Code or any damages for failing to comply with Section 409A
of the Code.


 


(m)  Change of Domicile. This Plan has
been amended and restated to give effect to the Company’s change of its jurisdiction of incorporation from Bermuda to Delaware
(the “Domestication”), effective December 31, 2011 (the “Domestication Effective Date”). To the extent
that Shares are required to, or may, be issued pursuant to an Award, shares of common stock of XOMA Corporation, a Delaware corporation,
will be issued upon exercise or payment of any such Award previously or hereafter granted under this Plan, including Awards that
were outstanding prior to the Domestication Effective Date. Until surrendered and exchanged, each certificate delivered to a Participant
pursuant to this Plan and evidencing outstanding Shares immediately prior to the Domestication Effective Date shall, for all purposes
of this Plan and the Shares, continue to evidence the identical amount and number of outstanding Shares at and after the Domestication
Effective Date. After the Domestication Effective Date, the Company may make such modifications in the certificates evidencing
(and the form of) the Shares as it deems necessary to reflect the substance of the changes to this Plan relating to the Domestication,
but no such modifications shall be necessary to reflect the substance thereof.


 


(n)  Titles and Headings. The titles and
headings of the sections in this Plan are for convenience of reference only. In the event of any conflict, the text of this Plan,
rather than such titles or headings, shall control.