Document:

Amendment No. 1 to 1992 Directors Share Option Plan

 Exhibit 10.3A 
 XOMA LTD. 
 1992 DIRECTORS SHARE OPTION PLAN 
 (As Amended and Restated Through May 13, 2008) 
 1. General. The XOMA Ltd. 1992 Directors Share Option Plan (the “Plan”) was adopted on February 20, 1992 (the “Adoption Date”) by the Board of Directors of XOMA Ltd. (the “Company”), subject to the
approval of the Company’s shareholders at its 1992 annual meeting. A total of 1,350,000 of the Company’s Common Shares, par value $.0005 per share (“Common Shares”), have been reserved for issuance hereunder. The Plan provides
for the granting to non-employee directors of the Company of non-qualified options (“Options” or “Option”) to purchase Common Shares. 
 2. Purposes. The purposes of the Plan are to increase the proprietary interest of non-employee directors in the Company by granting them non-qualified options to purchase Common Shares, to promote long-term
shareholder value through the potential for increased ownership of Common Shares by non-employee directors, and to encourage the continued service on the Board of Directors (the “Board”) of non-employee directors. 
 3. Administration. Except as provided in Section 6(c), the Plan is designed to operate automatically and not require administration. However,
to the extent that administration is necessary, the Plan shall be administered by those members of the Board who are not eligible to participate in the Plan (the “Plan Administrators”). Since it is intended that this Plan provide for
grants of Options to non-employee directors of the Company, this function will be limited to matters of administrative oversight. Decisions and determinations of the Plan Administrators shall be final and binding upon all persons having an interest
in the Plan. The Plan Administrators will have no discretion with respect to the selection of optionees or the determination of the exercise price, the timing of grants or the number of shares covered by the Options granted hereunder. The Plan
Administrators will receive no additional compensation for their services in connection with the administration of the Plan. 
 4.
Eligibility. Each member of the Board who is not a full or part-time employee of the Company or of any subsidiary or affiliate of the Company (“Director”) shall be entitled to participate in the Plan. 
 5. Grants under the Plan. All Options granted under the Plan shall be non-statutory options, not entitled to special tax treatment under
Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). The number of Common Shares available for grants under the Plan shall not exceed 1,350,000 shares, subject to adjustment as provided in Section 7. The
shares with respect to which a particular Option has been granted are hereinafter referred to as “Optioned Shares.” The written agreement evidencing each Option granted under the Plan (the “Agreement”) shall be dated as of the
applicable date of grant. Each Director accepting an Option grant shall execute and return a copy of the Agreement to the Company. If any outstanding Option shall terminate for any reason without having been exercised in full, the shares applicable
to the unexercised portion of such Option shall again become available under the Plan. 

 6. Share Options. 
 (a) Initial Grants. On the Adoption Date (which shall be the date of grant for purposes of Sections 6(d), (e) and (f)) of the
Plan, each Director shall be granted an Option to purchase that number of Common Shares equal to 10,000 minus the number of Common Shares with respect to which options have been previously granted to such Director (without regard to the status of
such Director at the time of any such prior grant, whether any such prior grant was made pursuant to another plan of the company or any other circumstances of any such prior grant), subject to the approval of the Plan by the Company’s
shareholders at the 1992 Annual Meeting. Each person who becomes a Director for the first time after the Effective Date (as defined below) through calendar year 1997 shall be granted an Option on the six-month anniversary of the date such person
becomes a Director to purchase that number of Common Shares equal to 10,000 minus the number of Common Shares with respect to which options have been previously granted to such Director (without regard to the status of such Director at the time of
any such prior grant, whether any such prior grant was made pursuant to another plan of the Company or any other circumstances of any such prior grant). Each person who becomes a Director for the first time beginning calendar year 1998 through
calendar year 2003 shall be granted an Option on the six-month anniversary of the date such person becomes a Director to purchase that number of Common Shares equal to 15,000 minus the number of Common Shares with respect to which options have been
previously granted to such Director (without regard to the status of such Director at the time of any such prior grant, whether any such prior grant was made pursuant to another plan of the Company or any other circumstances of any such prior
grant). Each person who becomes a Director for the first time beginning calendar year 2004 through calendar year 2006 shall be granted an Option on the date such person becomes a Director to purchase that number of Common Shares equal to 20,000
minus the number of Common Shares with respect to which options have been previously granted to such Director (without regard to the status of such Director at the time of any such prior grant, whether any such prior grant was made pursuant to
another plan of the Company or any other circumstances of any such prior grant). Each person who becomes a Director for the first time beginning calendar year 2007 shall be granted an Option on the date such person becomes a Director to purchase
that number of Common Shares equal to 40,000 minus the number of Common Shares with respect to which options have been previously granted to such Director (without regard to the status of such Director at the time of any such prior grant, whether
any such prior grant was made pursuant to another plan of the Company or any other circumstances of any such prior grant). 
 (b) Regular Annual Grants. On each date that the Company holds its annual meeting of shareholders commencing with the 1993 and ending with the 1997 calendar years, immediately after the annual election of directors, each Director
then in office (other than those Directors first elected at such meeting) will 

  

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receive a grant of an Option to purchase 1,000 shares, provided that no Director will receive under this Plan Options to purchase a total of more than 25,000
shares. On each date that the Company holds its annual meeting of shareholders commencing with the 1998 and ending with the 2003 calendar years, immediately after the annual election of directors, each Director then in office (other than those
Directors first elected at such meeting) will receive a grant of an Option to purchase 7,500 shares, provided that no Director will receive under this Plan Options to purchase a total of more than 75,000 shares. On each date that the Company holds
its annual meeting of shareholders commencing with the 2004 and ending with the 2006 calendar years, immediately after the annual election of directors, each Director then in office (other than those Directors first elected at such meeting) will
receive a grant of an Option to purchase 10,000 shares. On the date that the Company holds its annual meeting of shareholders for the 2007 calendar year, immediately after the annual election of directors, each Director then in office (other than
those Directors first elected at such meeting) will receive a grant of an Option to purchase 12,000 shares. On each date that the Company holds its annual meeting of shareholders commencing with the 2008 calendar year, immediately after the annual
election of directors, each Director then in office (other than those Directors first elected at such meeting) will receive a grant of an Option to purchase 25,000 shares; provided, that any such Director who then serves in the capacity of
(i) chairman of any of the following committees of the Board (or, in each case, another committee or group performing similar functions): the audit committee, the compensation committee or the nominating & governance committee, and/or
(ii) lead independent director will instead receive a grant of an Option to purchase the number of shares equal to the product of 25,000 times the Applicable Multiple. “Applicable Multiple” means (A) 1.3, in the case of the
chairman of the audit committee, (B) 1.2, in the case of the chairman of the compensation committee or the nominating & governance committee, and (C) 1.5, in the case of the lead independent director, except that if an individual
Director is serving in more than one of the foregoing capacities, then the Applicable Multiple shall be cumulative, such that, for example, the Applicable Multiple for a Director serving as both chairman of the compensation committee and as lead
independent director shall be 1.7. 
 (c) Discretionary Grants. In addition to the initial grants and regular annual
grants described above and notwithstanding the provisions of Section 3, the Board, acting on the recommendation of its nominating & governance committee (or another committee or group performing similar functions), shall have full
authority to grant Options under the Plan from time to time to one or more Directors and to determine the number of shares to be covered by each such grant, the time or times at which each granted option is to become exercisable and the maximum term
for which the option may remain outstanding. 
  

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 (d) Option Exercise Price. The per share price to be paid by the Director at the
time an Option is exercised shall be 100% of the fair market value of the Common Shares on the date of grant. “Fair market value” shall be determined as follows: 
 (i) If the Common 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 Common Share on the date in question, as such price is reported on the OTC Bulletin Board or any successor system. If there is no reported closing selling price for Common 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 Common 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 Common Share on the date in question on the stock exchange which is the primary market for the Common Shares, as such price is officially quoted on such exchange. If there is no reported sale of Common 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. 
 (e) Maximum Term of Option. Each Option granted in Section 6(a) or Section 6(b) shall have a maximum term of ten
(10) years from the date of grant. The maximum term for which any Option granted under Section 6(c) may remain outstanding shall be determined by the Board, as provided in Section 6(c). 
 (f) Date of Exercise. Provided that an optionee hereunder (an “Optionee”) remains a Director, and except as otherwise
provided in Section 8(a), 
 (i) the Options granted in Section 6(a) hereof commencing with the 1992 and ending with
the 2003 calendar years shall become exercisable in accordance with the following schedule: 
  

	 	(A)	with respect to Options granted pursuant to the first sentence of Section 6(a) hereof, each such Option shall become exercisable with respect to 20% of the Optioned Shares on
the date of grant; 

  

	 	(B)	each Option shall become exercisable with respect to 20% (or, in the case of Options referred to in clause (A) above, an additional 20%) of the Optional Shares after the
expiration of one year from the date of grant; 

  

	 	(C)	each Option shall become exercisable with respect to an additional 20% of the Optional Shares after the expiration of two years from the date of grant; 

  

	 	(D)	each Option shall become exercisable with respect to an additional 20% of the Optioned Shares after the expiration of three years from the date of grant; 

 

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	 	(E)	each Option shall become exercisable with respect to an additional 20% (or, in the case of Options referred to in clause (A) above, the remaining 20%) of the Optional Shares
after the expiration of four years from the date of grant; 

  

	 	(F)	with respect to Options other than those referred to in clause (A) above, each such Option shall become exercisable with respect to the remaining 20% of the Optioned Shares
after the expiration of five years from the date of grant; and 

 (ii) the Options granted in Section 6(a)
hereof commencing with the 2004 calendar years shall become exercisable after the expiration of one year from the date of grant; 
 (iii) the Options granted in Section 6(b) hereof shall become exercisable on the date of grant; and 
 (iv) any
Options granted under Section 6(c) hereof shall become exercisable at the time or times determined by the Board, as provided in Section 6(c). 
 Exercisable installments may be exercised in whole or in part and, to the extent not exercised, shall accumulate and be exercisable at any time on or before the Expiration Date or sooner termination of the Option
term. 
 (g) Accelerated Termination of Option Term. The option term with respect to a particular Option granted
hereunder shall terminate (and such Option shall cease to be exercisable) prior to the specified expiration date thereof (the “Expiration Date”) should one of the following provisions become applicable: 
 (i) Except as otherwise provided in subsections (ii), (iii) and (iv) below, should Optionee cease to be a Director at any time
during the option term, then Optionee shall have up to a three (3) month period commencing with the date of such cessation of Director status in which to exercise this Option, but in no event shall this Option be exercisable at any time after
the Expiration Date. During such limited period of exercisability, the Option may not be exercised for more than the number of Optioned Shares (if any) for which it is exercisable at the date of Optionee’s cessation of Director status. Upon the
expiration of such limited period of exercisability or (if earlier) upon the Expiration Date, the Option shall terminate and cease to be outstanding. 
 (ii) Should Optionee die while such Option is outstanding, then the personal representative of Optionee’s estate or the person or persons to whom the Option is transferred shall have the right to exercise this
Option, but only with respect to that number of Optioned shares (if any) for which Option is exercisable on the date of Optionee’s death. Such right shall lapse and the Option shall cease to be exercisable upon the earlier of
(A) the expiration of the one (1) year period measured from the date of Optionee’s death or (B) the specified Expiration Date of the Option term. 
  

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 (iii) Should Optionee become permanently disabled and cease by reason thereof to be a
Director at any time during the Option term, then Optionee shall have a period of twelve (12) months (commencing with the date of such cessation of Director status) during which to exercise such Option; provided, however, that in no event shall
the Option be exercisable at any time after the Expiration Date. During such limited period of exercisability, the Option may not be exercised for more that the number of Optioned Shares (if any) for which this Option is exercisable at the date of
Optionee’s cessation of Director status. Upon the expiration of such limited period of exercisability or (if earlier) upon the Expiration Date, the Option shall terminate and cease to be outstanding. Optionee shall be deemed to be permanently
disabled if Optionee is, by reason of any medically determinable physical or mental impairment expected to result in death or to be of continuous duration of not less than 12 consecutive months or more, unable to perform his/her usual duties as a
director of the Company. 
 (iv) Should Optionee’s status as a Director be terminated on account of any act of
(A) fraud or intentional misrepresentation, or (B) embezzlement, misappropriation or conversion of assets or opportunities of the Company, or any unauthorized disclosure of confidential information or trade secrets of the Company, such
Option shall terminate and cease to be exercisable immediately upon the date of such termination of Director status. 
 (h)
Method of Exercise. An Option may be exercised with respect to all or any part of the shares of Common Shares for which such Option is at the time exercisable. Each notice of exercise shall be accompanied by the full purchase price of the
shares being purchased, with such payment to be made in cash or by check. 
 (i) Transferability. Options are
transferable and assignable to the spouse of the Optionee or a descendent of the Optionee (any such spouse or descendent, an “Immediate Family Member”) or a corporation, partnership, limited liability company or trust so long as all of the
shareholders, partners, members or beneficiaries thereof, as the case may be, are either the Optionee or an Immediate Family Member of the Optionee, provided that (i) there may be no consideration for any such transfer and (ii) subsequent
transfers or transferred options will be prohibited other than by will, by the laws of descent and distribution or pursuant to a “qualified domestic relations order” as such term is defined by the Code or the Employee Retirement Income
Security Act of 1974 (“ERISA”). Following transfer, any such options will continue to be subject to the same terms and conditions as were applicable immediately prior to transfer, provided that for purposes of the option agreement the term
“Optionee” will refer to the transferee. 
  

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 7. Adjustment Upon Changes in Capitalization. 
 (a) If the number of shares of the Company as a whole are increased, decreased or changed into, or exchanged for, a different number or
kind of shares or securities of the Company, whether through reclassification, share dividend, share split, combination of shares, exchange of shares, change in corporate structure or the like, an appropriate and proportionate adjustment shall be
made in the number and kind of shares subject to the Plan, and in the number, kind and per share exercise price of shares subject to unexercised Options or portions thereof granted prior to any such change. Any such adjustment in an outstanding
Option, however, shall be made without a change in the total price applicable to the unexercised portion of the Option but with a corresponding adjustment in the price for each share covered by the Option. 
 (b) If the Company is the surviving or continuing entity in any merger, amalgamation or other business combination, then an Option shall
be appropriately adjusted to apply and pertain to the number and class of securities which the holder of the number of Common Shares subject to an Option immediately prior to such merger, amalgamation or other business combination would have been
entitled to receive in the consummation of such merger, amalgamation or other business combination, and appropriate adjustment shall be made to the option price payable per share, provided the aggregate option price shall remain the same.

 8. Corporate Transaction. 
 (a) In the event of one or more of the following transactions (“Corporate Transaction”): 
 (i) a merger, amalgamation 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 incorporation, 

(ii) the sale, transfer or other disposition of all or substantially all of the assets of the Company, or 
 (iii) any other business combination in which fifty percent (50%) or more of the Company’s outstanding voting shares are
transferred to different holders in a single transaction or a series of related transactions, 
 then the exercisability of an Option shall
automatically be accelerated so that such Option may be exercised for any or all of the Common Shares subject to such Option. No such acceleration of exercise dates shall occur, however, if and to the extent the terms of any agreement relating to
such Corporate Transaction provide as a prerequisite to the consummation of such Corporate Transaction that outstanding options purchase Common Shares (including an Option issued 

  

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pursuant to this Plan) are to be assumed by the successor corporation or parent thereof or are to be replaced with options to purchase capital shares of the
successor corporation or parent thereof. In any such case, an appropriate adjustment as to the number and kind of shares and the per share exercise prices shall be made. No fractional shares shall be issued under the Plan on account of any
adjustment specified above. Upon the consummation of the Corporate Transaction, an Option shall, to the extent not previously exercised or assumed by the successor corporation or its parent company, terminate and cease to be exercisable. 

(b) This Plan shall not in any way affect the right of the company to adjust, reclassify, reorganize or otherwise make changes in its
capital or business structure or to merge, amalgamate, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets. 
 9. Amendment and Termination of Plan. The Board may make such amendments to the Plan and to any Agreements hereunder as it shall deem advisable; provided, however, that the Board may not, without further
approval by the affirmative votes of the holders of a majority of the securities of the Company present, or represented, and entitled to vote at a shareholders meeting duly held in accordance with applicable laws, increase the number of shares as to
which Options may be granted under this Plan (except as otherwise permitted in Section 8(a) hereof), materially increase the benefits accruing to participants under this Plan or materially modify the requirements as to eligibility for
participation under this Plan. In addition, the Board may not amend the Plan or Agreement hereunder more than once every six months, other than to comport with changes in the Code or the rules thereunder. The Board may terminate the Plan at any time
within its absolute discretion. No such termination, other than that provided in Section 8(a) hereof, shall in any way affect any Option then outstanding. 
 10. Miscellaneous Provisions. Neither the Plan nor any action taken hereunder shall be construed as giving any Director any right to be nominated for re-election to the Board. The Plan shall be governed by the
laws of the State of California. 
 11. Effective Date. The Plan was initially adopted by the Board on February 20, 1992 and
approved by the Company shareholders at the 1992 Annual Meeting, to be effective as of February 20, 1992 (the “Effective Date”). Amendments to the Plan regarding transfer provisions were adopted by the Board on October 30, 1996
and approved by the shareholders at the 1997 Annual Meeting. Further amendments to the amended and restated Plan to increase the number of shares issuable under the Plan were adopted by the Board on February 25, 1998 and approved by the
shareholders at the 1998 Annual Meeting. The Plan was further amended to reflect the Company’s change of domicile from Delaware to Bermuda and the new restatement of the Plan, effective December 31, 1998, was adopted by the Board in
February of 1999. An amendment and restatement of the Plan was adopted by the Board on February 25, 2004 and approved by the shareholders at the 2004 Annual Meeting. Further amendments to the amended and restated Plan were adopted by the Board
on October 31, 2007 and approved by the shareholders at the 2008 Annual Meeting. 
  

 -8-Form of Employment Agreement

 Exhibit 10.7 
 FORM OF 
 AMENDED AND RESTATED 
 EMPLOYMENT AGREEMENT 
 This Amended and Restated Employment Agreement
(“Agreement”), effective as of this 30th day of December, 2008, by and between XOMA (US) LLC (“XOMA” or the “Company”), a Delaware limited liability company with its principal office at 2910 Seventh Street, Berkeley,
California, and
                                        
(“Employee”), an individual residing at
                                        
                                        .

 WHEREAS, the Company and Employee entered into an Employment Agreement effective as of
            , 200   (the “Original Agreement”) to assure the Company of the continued services of Employee; 
 WHEREAS, the Company wishes to enter into this Agreement to amend and restate the Original Agreement; and 
 WHEREAS, Employee is willing to enter into this Agreement and to continue to serve in the employ of the Company upon the terms and conditions hereinafter
provided; 
 NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto hereby agree as follows:

 1. Employment. The Company agrees to continue to employ Employee, and Employee agrees to continue to be employed by
the Company, for the period referred to in Section 3 hereof and upon the other terms and conditions herein provided. 
 2. Position and Responsibilities. The Company agrees to employ Employee in the position of
                                         
               , and Employee agrees to serve as
                                         
                   , for the term and on the conditions hereinafter set forth. Employee agrees to perform such services not inconsistent with her/his
position as shall from time to time be assigned to her/him by the Chairman of the Board, President and Chief Executive Officer of the Company (the “Chairman”). 
 3. Term and Duties. 
 (a) Term of Employment. This Agreement shall become effective and the term of employment pursuant to this Agreement shall commence on
                , 2006 and will continue until
                                    ,
            , and will be automatically extended (without further action by the parties) for one year thereafter and again on each subsequent anniversary thereof unless notice of
nonextension of the term is given by either the Employee or the Company more than 90 days prior to the next scheduled expiration date or unless Employee’s employment is terminated by the Company or he/she resigns from the Company’s employ
as described herein.

 (b) Duties. During the period of her/his employment hereunder Employee shall serve
the Company as its
                                         
               , and except for illnesses, vacation periods and reasonable leaves of absence, Employee shall devote all of her/his business time, attention, skill and
efforts to the faithful performance of her/his duties hereunder. So long as Employee is
                                         
                        of the Company, he/she will discharge all duties incidental to such office and such further duties as may
be reasonably assigned to her/him from time to time by the Chairman. 
 4. Compensation and Reimbursement of Expenses.

 (a) Compensation. For all services rendered by Employee as
             during her/his employment under this Agreement, the Company shall pay Employee as compensation a base salary at a rate of not less than
$             per annum. All taxes and governmentally required withholding shall be deducted in conformity with applicable laws. 
 (b) Reimbursement of Expenses. The Company shall pay or reimburse Employee for all reasonable travel and other expenses incurred by
Employee in performing her/his obligations under this Agreement in a manner consistent with past Company practice. The Company further agrees to furnish Employee with such assistance and accommodations as shall be suitable to the character of
Employee’s position with the Company, adequate for the performance of her/his duties and consistent with past Company practice. 
 5. Participation in Benefit Plans. The payments provided in Section 4 hereof are in addition to benefits Employee is entitled to under any group hospitalization, health, dental care, disability insurance, surety bond, death
benefit plan, travel and/or accident insurance, other allowance and/or executive compensation plan, including, without limitation, any senior staff incentive plan, capital accumulation programs, restricted or non-restricted share purchase plan,
share option plan, retirement income or pension plan or other present or future group employee benefit plan or program of the Company for which key executives are or shall become eligible, and Employee shall be eligible to receive during the period
of her/his employment under this Agreement, all benefits and emoluments for which key executives are eligible under every such plan or program to the extent permissible under the general terms and provisions of such plans or programs and in
accordance with the provisions thereof. 
 6. Payments to Employee Upon Termination of Employment. 
 (a) Termination. Upon the occurrence of an event of termination (as hereinafter defined) during the period of Employee’s
employment under this Agreement, the provisions of this paragraph 6(a) and paragraph 6(b) shall apply. As used in this Agreement, an “event of termination” shall mean and include any one or more of the following: 
 (i) The termination by the Company of Employee’s employment hereunder for any reason other than pursuant to paragraph 6(c) and shall
include any termination of the Employee’s employment upon expiration of the term of this Agreement due to the Company giving written notice of its intention not to extend the term of this Agreement as provided in paragraph 3(a); or 

 

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 (ii) Employee’s resignation from the Company’s employ for Good Reason in
accordance with the terms hereof. “Good Reason” shall mean, unless remedied by the Company within thirty (30) days after the receipt of written notice from the Employee as provided below or consented to in writing by the Employee,
(A) the material diminution of any material duties or responsibilities of the Employee; or (B) a material reduction in the Employee’s base salary; provided, however, that the Employee must have given written notice to
the Company of the existence of any such condition within ninety (90) days after the initial existence thereof (and the failure to provide such timely notice will constitute a waiver of the Employee’s ability to terminate employment for
Good Reason as a result of such condition), and the Company will have a period of thirty (30) days from receipt of such written notice during which it may remedy the condition; provided further, however, that any
termination of employment by the Employee for Good Reason must occur not later than one hundred eighty (180) days following the initial existence of the condition giving rise to such Good Reason. 
 (b) Severance Pay and Other Benefits. The following provisions of this Section 6(b) shall apply upon the occurrence of an
event of termination under paragraph 6(a). 
 (i) Cash Severance Pay. Upon the occurrence of an event of termination
under paragraph 6(a), the Company shall, subject to the provisions of Section 7 below, pay Employee, or in the event of her/his subsequent death, her/his beneficiary or beneficiaries of her/his estate, as the case may be, as severance pay or
liquidated damages, or both, (A) a severance payment in an amount equal to          times the Employee’s annual base salary as in effect immediately prior to the termination, and (B) a
severance payment equal to the sum of (1)          times the Employee’s annual target bonus as in effect for the fiscal year in which the termination occurs, and (2) an amount equal to a
pro-rated portion of the Employee’s annual target bonus as in effect for the fiscal year in which the termination occurs calculated by multiplying the annual target bonus by a fraction, the numerator of which shall be the number of calendar
months (including a portion of any such month) that the Employee was employed with the Company prior to the occurrence of the termination during such fiscal year, and the denominator of which shall be 12. Such severance payments shall be in lieu of
any other severance payment to which the Employee shall be entitled as a result of such termination pursuant to this Agreement, any other employment agreement with or offer letter from the Company or any of its affiliates or the Company’s or
any of its affiliate’s then existing severance plans and policies, except in those circumstances where the provisions of the Amended and Restated Change of Control Severance Agreement, effective as of
            , 200  , between Employee and XOMA Ltd., by such agreement’s express terms, apply, in which case the provisions of such agreement providing for
severance payment(s) to Employee as a result of such termination shall apply in lieu of the provisions of this Agreement relating thereto. The severance payment described in Section 6(b)(i)(A) shall be paid in 

  

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monthly installments over [    ] months (the “Severance Payment Period”), with the first two (2) of such monthly
installments being paid sixty (60) days after the date of termination and the remaining monthly installments being paid monthly thereafter until fully paid, and the severance payments described in Section 6(b)(i)(B) shall be paid in a lump
sum sixty (60) days after the date of termination; provided, however, that all of such severance payments shall be subject to the requirements of Section 6(b)(iii) and Section 6(b)(v) below. 
 (ii) Group Health Coverage and Certain Other Benefits. In addition, during a period of
             months following an event of termination under paragraph 6(a), (A) the Company shall pay for the full cost of the coverage (plus an additional amount to pay for the
taxes on such payments, if any, plus any taxes on such additional amount, such amount to be paid no later than ten (10) days prior to the date such taxes are due) of the Employee and Employee’s spouse and eligible dependents under any
group health plans of the Company on the date of such termination of employment at the same level of health (i.e., medical, vision and dental) coverage and benefits as in effect for the Employee or such covered dependents on the date immediately
preceding the date of the Employee’s termination; provided, however, that (1) the Employee and Employee’s spouse and eligible dependents each constitutes a qualified beneficiary, as defined in Section 4980B(g)(1) of
the Internal Revenue Code of 1986, as amended (the “Code”); and (2) the Employee elects continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), within the time
period prescribed pursuant to COBRA; and (B) if Employee is, at the time of such termination, an eligible participant in the Company’s mortgage differential program, the Company shall continue to make mortgage assistance payments to
Employee pursuant to such program as in effect at the time of such termination. Notwithstanding the foregoing, the payments by the Company for such group health coverage and/or mortgage assistance, as applicable, shall cease prior to the expiration
of the              month period in this Section 6(b)(ii) upon the employment of the Employment by another employer. Furthermore, if, at the time of the termination of
Employee’s employment under paragraph 6(a), Employee is the obligor of a “forgivable” loan (i.e., a loan which by its terms is to be considered forgiven by the Company and paid by the obligor in circumstances other than actual
repayment) from the Company, then, notwithstanding any provisions of such loan to the contrary, such loan shall remain outstanding, and the forgiveness thereof shall continue, for a period of
             months following such termination in accordance with the terms of such loan in effect at the time of such termination; provided, however, that at the end of such
period of              months, the outstanding balance of such loan shall be immediately due and payable, together with any accrued and unpaid interest thereon. 
 (iii) Section 409A of the Code. Notwithstanding any provision to the contrary in this Agreement, if the Employee is deemed on
the date of his or her “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company to be a “specified employee” (within the meaning of Treas. Reg. Section 1.409A-1(i)), then with
regard to any payment or benefit (including, 

  

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without limitation, any mortgage assistance payment or loan forgiveness referred to above) that is considered deferred compensation under Section 409A
payable on account of a “separation from service” that is required to be delayed pursuant to Section 409A(a)(2)(B) of the Code (after taking into account any applicable exceptions to such requirement), such payment or benefit shall be
made or provided on the date that is the earlier of (i) the expiration of the six (6)-month period measured from the date of the Employee’s “separation from service,” or (ii) the date of the Employee’s death (the
“Delay Period”). Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section 9(c) (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay)
shall be paid or reimbursed to the Employee in a lump sum and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein. Notwithstanding any provision
of this Agreement to the contrary, for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment, references to the Employee’s “termination of
employment” (and corollary terms) with the Company shall be construed to refer to Employee’s “separation from service” (within the meaning of Treas. Reg. Section 1.409A-1(h)) with the Company. 
 (iv) Outplacement Program. Upon the occurrence of an event of termination under paragraph 6(a), the Employee will immediately
become entitled to participate in a              month executive outplacement program provided by an executive outplacement service, at the Company’s expense not to exceed
            . 
 (v) Release of Claims. As a
condition of entering into this Agreement and receiving the severance benefits under this Section 6(b), the Employee agrees to execute, on or before the date that is fifty (50) days following the date of termination, and not revoke a
release of claims agreement substantially in the form attached hereto as Exhibit A upon the termination of the Employee’s employment with the Company. Such release shall not, however, apply to the rights and claims of the Employee
under this Agreement, any indemnification agreement between the Employee and XOMA Ltd. (or its successor or acquirer), the bye-laws of XOMA Ltd. (or its successor or acquirer), the share award agreements between the Employee and XOMA Ltd. (or its
successor or acquirer), or any employee benefit plan of which the Employee is a participant and under which all benefits due under such plan have not yet been paid or provided. 
 (c) Other Termination of Employment. Notwithstanding paragraphs 6(a) and (b) or any other provision of this Agreement to the
contrary, if on or after the date of this Agreement and prior to the end of the term hereof: 
 (i) Employee has been
convicted of any crime or offense constituting a felony under applicable law, including, without limitation, any act of dishonesty such as embezzlement, theft or larceny; 
  

 -5- 

 (ii) Employee shall act or refrain from acting in respect of any of the duties and
responsibilities which have been assigned to her/him in accordance with this Agreement and shall fail to desist from such action or inaction within thirty (30) days after Employee’s receipt of notice from the Company of such action or
inaction and the Board of Directors determines that such action or inaction constituted gross negligence or a willful act of malfeasance or misfeasance of Employee in respect of such duties; or 
 (iii) Employee shall breach any material term of this Agreement and shall fail to correct such breach within thirty (30) days after
Employee’s receipt of notice from the Company of such breach (provided such breach can be cured); 
 then, and in each such case, the
Company shall have the right to give notice of termination of Employee’s services hereunder (or pay Employee in lieu of notice) as of a date (not earlier than fourteen (14) days from such notice) to be specified in such notice and this
Agreement (other than the provisions of Section 7 hereof) shall terminate on such date. 
 7. Post-Termination
Obligations. All payments and benefits to Employee under this Agreement shall be subject to Employee’s compliance with the following provisions during the term of her/his employment and for the Severance Payment Period: 
 (a) Confidential Information and Competitive Conduct. Employee shall not, to the detriment of the Company, disclose or reveal to
any unauthorized person any trade secret or other confidential information relating to the Company or its affiliates or to any businesses operated by them, and Employee confirms that such information constitutes the exclusive property of the
Company. Employee shall not otherwise act or conduct her/himself to the material detriment of the Company or its affiliates, or in a manner which is inimical or contrary to the interests thereof, and, for a period of twelve (12) months
following an event of termination under paragraph 6(a), shall not, directly or indirectly, engage in or render any service (whether to a person, firm or business) in direct competition with the Company; provided, however, that
Employee’s ownership of less than five percent (5%) of the outstanding stock of a corporation shall not be itself be deemed to constitute such competition. Employee recognizes that the possible restrictions on her/his activities which may
occur as a result of her/his performance of her/his obligations under this paragraph 7(a) are required for the reasonable protection of the Company and its investments. For purposes hereof, “in direct competition” means engaged in the
research, development and/or production of biological materials intended for use as therapeutic, prophylactic or diagnostic products in one or more of the same indications, and that utilize one or more of the same scientific bases (e.g., in the case
of a therapeutic antibody, targets the same signal initiating pathway), as a product or product candidate the research, development and/or production of which is an active part of the Company’s business plan at the time of Employee’s
termination. 
 (b) Non-Disparagement. The Employee and the Company agree to refrain from any defamation, libel or
slander of the other and its respective officers, directors, employees, representatives, investors, shareholders, administrators, affiliates, divisions, 

  

 -6- 

 
subsidiaries, predecessor and successor corporations and assigns or tortious interference with the contracts and relationships of the other and its
respective officers, directors, employees, representatives, investors, shareholders, administrators, affiliates, divisions, subsidiaries, predecessor and successor corporations and assigns. 
 (c) Failure of Employee to Comply. If, for any reason other than death or disability, Employee shall, without written consent of
the Company, fail to comply with the provisions of paragraphs 7(a) or 7(b) above, her/his rights to any future payments or other benefits hereunder shall terminate, and the Company’s obligations to make such payments and provide such benefits
shall cease. 
 (d) Remedies. Employee agrees that monetary damages would not be adequate compensation for any loss
incurred by the Company by reason of a breach of the provisions of this Section 7 and hereby agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. 
 8. Effect of Prior Agreements. This Agreement contains the entire understanding between the parties hereto and supersedes any prior
employment agreements between the Company and Employee, but shall not supersede the Change of Control Severance Agreement referred to above, any indemnification agreement between the Employee and XOMA Ltd. (or its successor or acquirer), the share
award agreements between the Employee and XOMA Ltd. (or its successor or acquirer), or any employee benefit plan of which the Employee is a participant and under which all benefits due under such plan have not yet been paid or provided. 

9. General Provisions. 
 (a) Binding Agreement. This Agreement shall be binding upon, and inure to the benefit of, Employee and the Company and their respective permitted successors and assigns. 
 (b) Legal Expenses. In the event that Employee incurs legal expenses in contesting any provision of this Agreement and such contest
results in a determination that the Company has breached any of its obligations hereunder, Employee shall be reimbursed by the Company for such legal expenses. 
 (c) Compliance with Section 409A of the Code. 
 (i) It is intended that this Agreement will comply with Section 409A of the Code and any regulations and guidelines promulgated
thereunder (collectively, “Section 409A”), to the extent the Agreement is subject thereto, and the Agreement shall be interpreted on a basis consistent with such intent. If an amendment of the Agreement is necessary in order for it to
comply with Section 409A of the Code, the parties hereto will negotiate in good faith to amend the Agreement in a manner that preserves the original intent of the parties to the extent reasonably possible. No action or failure to act pursuant
to this Section 9(c) shall subject the Company to any claim, liability, or expense, and the Company shall not have any obligation to indemnify or otherwise protect the Employee from the obligation to pay any taxes, interest or penalties
pursuant to Section 409A of the Code. 
  

 -7- 

 (ii) With respect to any reimbursement or in-kind benefit arrangements of the Company
and its subsidiaries that constitute deferred compensation for purposes of Section 409A, except as otherwise permitted by Section 409A, the following conditions shall be applicable: (A) the amount eligible for reimbursement, or
in-kind benefits provided, under any such arrangement in one calendar year may not affect the amount eligible for reimbursement, or in-kind benefits to be provided, under such arrangement in any other calendar year (except that the health and dental
plans may impose a limit on the amount that may be reimbursed or paid), (B) any reimbursement must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred, and (C) the right to
reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit. Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within
thirty (30) days after termination of employment”), the actual date of payment within the specified period shall be within the sole discretion of the Company. Whenever payments under this Agreement are to be made in installments, each such
installment shall be deemed to be a separate payment for purposes of Section 409A. 
 10. Successors and Assigns.

 (a) Assignment by the Company. This Agreement shall be binding upon and inure to the benefit of the successors and
assigns of the Company and, unless clearly inapplicable, reference herein to the Company shall be deemed to include its successors and assigns. 
 (b) Assignment by Employee. Employee may not assign this Agreement in whole or in part. 
 11. Modification and Waiver. 
 (a) Amendment of Agreement. This Agreement may not be modified or
amended except by an instrument in writing signed by the parties hereto. 
 (b) Waiver. No term or condition of this
Agreement shall be deemed to have been waived except by written instrument of the party charged with such waiver. No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only
as to the specific term or condition waived. 
 12. Severability. In the event any provision of this Agreement or any
part hereof is held invalid, such invalidity shall not affect any remaining part of such provision or any other provision. If any court construes any provision of this Agreement to be illegal, void or unenforceable because of the duration or the
area or matter covered thereby, such court shall reduce the duration, area or matter of such provision, and, in its reduced form, such provision shall then be enforceable and shall be enforced. 
 13. Governing Law. This Agreement has been executed and delivered in the State of California, and its validity interpretation,
performance, and enforcement shall be governed by the laws of said State. 
  

 -8- 

 IN WITNESS WHEREOF, XOMA has caused this Agreement to be executed by its duly authorized officer, and
Employee has signed this Agreement, all as of the day and year first above written. 
  

			
	XOMA (US) LLC
	
	 
	By:	 	Steven Engle
		 	Chairman of the Board, Chief Executive Officer and President
	
	 
	Employee

  

 -9- 

 EXHIBIT A 
 FORM RELEASE OF CLAIMS AGREEMENT 
 This Release of Claims Agreement (this “Agreement”) is
made and entered into by and between XOMA (US) LLC (the “Company”) and              (the “Employee”). 
 WHEREAS, the Employee was employed by the Company; and 
 WHEREAS, the Company and the Employee have entered into an employment agreement effective as of             , 200   (the
“Employment Agreement”). 
 NOW THEREFORE, in consideration of the mutual promises made herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Employee (collectively referred to as the “Parties”) desiring to be legally bound do hereby agree as follows: 
 1. Termination. The Employee’s employment with the Company terminated on
            , 20    . 
 2.
Consideration. Subject to and in consideration of the Employee’s release of claims as provided herein, the Company has agreed to pay the Employee certain benefits and the Employee has agreed to provide certain benefits to the Company,
both as set forth in the Employment Agreement. 
 3. Release of Claims. The Employee agrees that the foregoing consideration
represents settlement in full of all currently outstanding obligations owed to the Employee by the Company. The Employee, on the Employee’s own behalf and the Employee’s respective heirs, family members, executors and assigns, hereby fully
and forever releases the Company and its past, present and future officers, agents, directors, employees, investors, shareholders, administrators, affiliates, divisions, subsidiaries, parents, predecessor and successor corporations, and assigns,
from, and agrees not to sue or otherwise institute or cause to be instituted any legal or administrative proceedings concerning any claim, duty, obligation or cause of action relating to any matters of any kind, whether presently known or unknown,
suspected or unsuspected, that the Employee may possess arising from any omissions, acts or facts that have occurred up until and including the Effective Date (as defined below) of this Agreement including, without limitation: 
 (a) any and all claims relating to or arising from the Employee’s employment relationship with the Company and the termination of
that relationship; 
 (b) any and all claims relating to, or arising from, the Employee’s right to purchase, or actual
purchase of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law and securities fraud under any state or federal law;

 (c) any and all claims for wrongful discharge of employment, termination in violation of public policy, discrimination,
breach of contract (both express and implied), breach of a covenant of good faith and fair dealing (both express and implied), promissory estoppel, negligent 

  

 -10- 

 
or intentional infliction of emotional distress, negligent or intentional misrepresentation, negligent or intentional interference with contract or
prospective economic advantage, unfair business practices, defamation, libel, slander, negligence, personal injury, assault, battery, invasion of privacy, false imprisonment and conversion; 
 (d) any and all claims for violation of any federal, state or municipal statute, including, but not limited to, Title VII of the
Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, the Fair Labor Standards Act, the Employee Retirement Income Security Act of 1974, The Worker
Adjustment and Retraining Notification Act, the California Fair Employment and Housing Act, and Labor Code Section 201, et seq. and Section 970, et seq. and all amendments to each such Act as well as the regulations issued
thereunder; 
 (e) any and all claims for violation of the federal or any state constitution; 
 (f) any and all claims arising out of any other laws and regulations relating to employment or employment discrimination; and 

(g) any and all claims for attorneys’ fees and costs. 
 The Employee agrees that the release set forth in this Section 4 shall be and remain in effect in all respects as a complete general
release as to the matters released. Notwithstanding the foregoing, this release does not extend to any obligations now or subsequently incurred under this Agreement, the Employment Agreement, the Indemnification Agreement between the Employee and
the Company (or its successor or acquirer), the outstanding stock award agreements between the Employee and the Company (or its successor or acquirer), or any employee benefit plan of which the Employee is a participant and under which all benefits
due under such plan have not yet been paid or provided. 
 4. Acknowledgment of
Waiver of Claims under ADEA. The Employee acknowledges that the Employee is waiving and releasing any rights the Employee may have under the Age Discrimination in Employment Act of 1967 (“ADEA”) and that this waiver and release is
knowing and voluntary. The Employee and the Company agree that this waiver and release does not apply to any rights or claims that may arise under the ADEA after the Effective Date of this Agreement. The Employee acknowledges that the consideration
given for this waiver and release agreement is in addition to anything of value to which the Employee was already entitled. The Employee further acknowledges that the Employee has been advised by this writing that (a) the Employee should
consult with an attorney prior to executing this Agreement; (b) the Employee has at least twenty-one (21) days within which to consider this Agreement; (c) the Employee has seven (7) days following the execution of this
Agreement by the Parties to revoke the Agreement; and (d) this Agreement shall not be effective until the revocation period has expired. Any revocation should be in writing and delivered to the Company by the close of business on the seventh (7
th) day from the date that the Employee signs this Agreement. 
  

 -11- 

 5. Civil Code Section 1542. The Employee represents that the Employee is not aware of any
claims against the Company other than the claims that are released by this Agreement. The Employee acknowledges that the Employee has been advised by legal counsel and is familiar with the provisions of California Civil Code Section 1542, which
provides as follows: 
 A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HER OR HIS
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HER OR HIM MUST HAVE MATERIALLY AFFECTED HER OR HIS SETTLEMENT WITH THE DEBTOR. 
 The Employee, being aware of said code section, agrees to expressly waive any rights the Employee may have thereunder, as well as under any other statute or common law principles of similar effect. 
 6. No Pending or Future Lawsuits. The Employee represents that the Employee has no lawsuits, claims or actions pending in the Employee’s
name, or on behalf of any other person or entity, against the Company or any other person or entity referred to herein. The Employee also represents that the Employee does not intend to bring any claims on the Employee’s own behalf or on behalf
of any other person or entity against the Company or any other person or entity referred to herein except, if necessary, with respect to the agreements listed in the last sentence of Section 4 of this Agreement. 
 7. Confidentiality. The Employee agrees to use the Employee’s best efforts to maintain in confidence the existence of this Agreement, the
contents and terms of this Agreement, and the consideration for this Agreement (hereinafter collectively referred to as “Release Information”). The Employee agrees to take every reasonable precaution to prevent disclosure of any Release
Information to third parties and agrees that there will be no publicity, directly or indirectly, concerning any Release Information. The Employee agrees to take every precaution to disclose Release Information only to those attorneys, accountants,
governmental entities and family members who have a reasonable need to know of such Release Information. 
 8. No Adverse Cooperation.
The Employee agrees the Employee will not act in any manner that might damage the business of the Company. The Employee agrees that the Employee will not counsel or assist any attorneys or their clients in the presentation or prosecution of any
disputes, differences, grievances, claims, charges or complaints by any third party against the Company and/or any officer, director, employee, agent, representative, shareholder or attorney of the Company, unless compelled under a subpoena or other
court order to do so. 
 9. Costs. The Parties shall each bear their own costs, expert fees, attorneys’ fees and other fees
incurred in connection with this Agreement. 
 10. Authority. The Company represents and warrants that the undersigned has the
authority to act on behalf of the Company and to bind the Company and all who may claim through it to the terms and conditions of this Agreement. The Employee represents and warrants that the Employee has the capacity to act on the Employee’s
own behalf and on behalf of all who might claim through the Employee to bind them to the terms and conditions of this Agreement. 
  

 -12- 

 11. No Representations. The Employee represents that the Employee has had the opportunity to
consult with an attorney, and has carefully read and understands the scope and effect of the provisions of this Agreement. Neither party has relied upon any representations or statements made by the other party hereto which are not specifically set
forth in this Agreement. 
 12. Severability. In the event that any provision hereof becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision. 
 13.
Entire Agreement. This Agreement and the Employment Agreement and the agreements and plans referenced therein represent the entire agreement and understanding between the Company and the Employee concerning the Employee’s separation from
the Company, and supersede and replace any and all prior agreements and understandings concerning the Employee’s relationship with the Company and the Employee’s compensation by the Company. This Agreement may only be amended in writing
signed by the Employee and an executive officer of the Company. 
 14. Governing Law. This Agreement shall be governed by the internal
substantive laws, but not the choice of law rules, of the State of California. 
 15. Effective Date. This Agreement is effective
eight (8) days after it has been signed by the Parties (the “Effective Date”) unless it is revoked by the Employee within seven (7) days of the execution of this Agreement by the Employee. 
 16. Counterparts. This Agreement may be executed in counterparts, and each counterpart shall have the same force and effect as an original and
shall constitute an effective, binding agreement on the part of each of the undersigned. 
 17. Voluntary Execution of Agreement. This
Agreement is executed voluntarily and without any duress or undue influence on the part or behalf of the Parties hereto, with the full intent of releasing all claims. The Parties acknowledge that: 
 (a) they have read this Agreement; 
 (b) they have been represented in the preparation, negotiation and execution of this Agreement by legal counsel of their own choice or that they have voluntarily declined to seek such counsel; 
 (c) they understand the terms and consequences of this Agreement and of the releases it contains; and 
 (d) they are fully aware of the legal and binding effect of this Agreement. 
  

 -13- 

 IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below.

  

			
	XOMA (US) LLC
		
	By:	 	 
		
	Title:	 	 
		
	Date:	 	 
	
	EMPLOYEE
	
	 
	Name
		
	Date:	 	 

  

 -14-

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