Document:

Exhibit
10.8

 

FACET
BIOTECH CORPORATION

RETENTION
AND SEVERANCE PLAN

 

1.             ESTABLISHMENT AND PURPOSE OF PLAN

 

1.1           Establishment. 
The Facet Biotech Corporation Retention and Severance Plan (the “Plan”) is hereby established
by the Board of Directors of Facet Biotech Corporation, effective October 22,
2008 (the “Effective Date”).

 

1.2           Purpose. 
The Company draws upon the knowledge, experience and advice of its
officers and key employees in order to manage its business for the benefit of
the Company’s stockholders.  Due to the
widespread awareness of the possibility of mergers, acquisitions and other
strategic alliances in the Company’s industry, the topics of compensation and
other employee benefits in the event of a Change in Control or other
circumstances that may result in termination of employment are issues in
competitive recruitment and retention efforts. 
The Committee recognizes that the possibility or pending occurrence of a
Change in Control could lead to uncertainty regarding the consequences of such an
event and could adversely affect the Company’s ability to attract, retain and
motivate present and future officers and key employees.  The Committee has therefore determined that
it is in the best interests of the Company and its stockholders to provide for
the continued dedication of its officers and key employees notwithstanding the
possibility or occurrence of circumstances that may result in termination of
employment by establishing this Plan to provide designated officers and
designated key employees with enhanced financial security in the event of a
termination of employment.  The purpose
of this Plan is to provide its Participants with specified compensation and
benefits in the event of termination of employment under circumstances
specified herein.

 

2.             DEFINITIONS AND CONSTRUCTION

 

2.1           Definitions. 
Whenever used in this Plan, the following terms shall have the meanings
set forth below:

 

(a)           “Applicable Benefit Period” means:

 

(1)           with respect to a Participant’s
Involuntary Termination Absent a Change in Control:

 

(i)            a period of eighteen (18) months if the
Participant is the Chief Executive Officer; or

 

(ii)           a period of twelve (12) months if the
Participant is an Executive Officer; or

 

(iii)          a
period of nine (9) months if the Participant is an Officer; or

 

1

 

(iv)          a period of six (6) months if the
Participant is a Key Employee;

 

(2)           with respect to a Participant’s
Involuntary Termination Following a Change in Control:

 

(i)            a period of twenty-four (24) months if
the Participant is the Chief Executive Officer; or

 

(ii)           a period of eighteen (18) months if the
Participant is an Executive Officer; or

 

(iii)          a
period of twelve (12) months if the Participant is an Officer; or

 

(iv)          a period of nine (9) months if the
Participant is a Key Employee.

 

(b)           “Base Salary
Rate”
means, as applicable, either:

 

(1)           with respect to a Participant’s
Involuntary Termination Absent a Change in Control, the Participant’s monthly
base salary rate in effect immediately prior to such termination of employment
(without giving effect to any reduction in the Participant’s base salary rate
constituting Good Reason); or

 

(2)           with respect to a Participant’s
Involuntary Termination Following a Change in Control, the greater of (i) the
Participant’s monthly base salary rate in effect immediately prior to such
termination of employment (without giving effect to any reduction in the
Participant’s base salary rate constituting Good Reason) or (ii) the
Participant’s monthly base salary rate in effect immediately prior to the
applicable Change in Control.

 

For this purpose, base salary does not include any bonuses,
commissions, fringe benefits, car allowances, other irregular payments or any
other compensation except base salary.

 

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

 

(d)           “Bonus Rate” means the quotient determined by
dividing whichever of the following amounts is the greatest by twelve (12):

 

(1)           the aggregate of all annual incentive
bonuses earned by the Participant (whether or not actually paid) under the
terms of the programs, plans or agreements providing for such bonuses for the
fiscal year of the Company immediately preceding the fiscal year of the Change
in Control; or

 

(2)           the aggregate of all annual incentive
bonuses earned by the Participant (whether or not actually paid) under the
terms of the programs, plans or agreements providing for such bonuses for the
fiscal year of the Company immediately preceding the fiscal year of the
Participant’s Involuntary Termination Following a Change in Control; or

 

2

 

(3)           the aggregate of all annual incentive
bonuses that would be earned by the Participant at the Participant’s annual
incentive bonus target rate (assuming attainment of 100% of all applicable
performance goals) under the terms of the programs, plans or agreements
providing for such bonuses in which the Participant was participating for the
fiscal year of the Participant’s Involuntary Termination Following a Change in
Control (without giving effect to any reduction in the Participant’s annual
incentive bonus target rate constituting Good Reason);

 

provided, however, that for the purposes of this
definition, “annual incentive bonuses” shall not include signing bonuses,
retention bonuses or other nonrecurring cash awards that are not part of an
annual incentive bonus program.

 

(e)           “Cause” means the occurrence of any of the
following:

 

(1)           the Participant’s intentional theft,
dishonesty, willful misconduct, breach of fiduciary duty for personal profit,
or falsification of any Company Group documents or records; or

 

(2)           the Participant’s material failure to
abide by the Company’s code of conduct or other written policies (including,
without limitation, policies relating to confidentiality and reasonable
workplace conduct); or

 

(3)           the Participant’s material and
intentional unauthorized use, misappropriation, destruction or diversion of any
tangible or intangible asset or corporate opportunity of the Company Group
(including, without limitation, the Participant’s improper use or disclosure of
Company Group confidential or proprietary information); or

 

(4)           any intentional act by the Participant
which has a material detrimental effect on the Company Group’s reputation or
business; or

 

(5)           the Participant’s repeated failure or
inability to perform any reasonable assigned duties after written notice from a
member of the Company Group of, and a reasonable opportunity to cure, such
failure or inability; or

 

(6)           any material breach by the Participant of
any employment, service, non-disclosure, non-competition, non-solicitation or
other similar agreement between the Participant and a member of the Company
Group, which breach is not cured pursuant to the terms of such agreement or
within twenty (20) days of receiving written notice of such breach; or

 

(7)           the Participant’s conviction (including
any plea of guilty or nolo contendere) of any criminal act involving fraud,
dishonesty, misappropriation or moral turpitude, or which impairs the Participant’s
ability to perform his or her duties with the Company Group.

 

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

 

3

 

(1)           any “person” (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial
owner” (as such term is defined in Rule 13d-3 promulgated under the
Exchange Act), directly or indirectly, of securities of the Company
representing more than fifty percent (50%) of the total fair market value or
total combined voting power of the Company’s then-outstanding securities
entitled to vote generally in the election of directors of the Company;
provided, however, that a Change in Control shall not be deemed to have
occurred if such degree of beneficial ownership results from any of the
following: (i) an acquisition by any person who on the Effective Date is
the beneficial owner of more than fifty percent (50%) of such voting power, (ii) any
acquisition directly from the Company, including, without limitation, pursuant
to or in connection with a public offering of securities, (iii) any
acquisition by the Company, (iv) any acquisition by a trustee or other
fiduciary under an employee benefit plan of a member of the Company Group or (v) any
acquisition by an entity owned directly or indirectly by the stockholders of
the Company in substantially the same proportions as their ownership of the
voting securities of the Company; or

 

(2)           the Company is party to a merger,
consolidation or similar corporate transaction, or series of related
transactions, which results in the holders of the voting securities of the
Company outstanding immediately prior to such transaction(s) failing to
retain immediately after such transaction(s) direct or indirect beneficial
ownership of more than fifty percent (50%) of the total combined voting power
of the securities entitled to vote generally in the election of directors of
the Company or the surviving entity outstanding immediately after such
transaction(s); or

 

(3)           the sale, exchange or transfer of all or
substantially all of the assets of the Company or consummation of any
transaction, or series of related transactions, having similar effect (other
than a sale or disposition to one or more subsidiaries of the Company); or

 

(4)           a change in the composition of the Board
within any consecutive twelve-month period as a result of which fewer than a
majority of the directors are Incumbent Directors;

 

provided, however, that a Change in Control shall be deemed not to
include (i) a transaction described in subsections (1) or (2) of
this Section in which a majority of the members of the board of directors
of the continuing, surviving or successor entity, or parent thereof,
immediately after such transaction is comprised of Incumbent Directors, or (ii) a
transaction described in subsection (3) of this Section in which the
holders of the voting securities of the Company outstanding immediately prior
to such transaction(s) retain immediately after such transaction(s) direct
or indirect beneficial ownership of more than fifty percent (50%) of the total
combined voting power of the securities entitled to vote generally in the
election of directors of the entity to which the assets of the Company were
transferred.

 

(g)           “Change in
Control Period” means a period commencing upon the consummation of a
Change in Control and ending on the date occurring eighteen (18) months
thereafter.

 

4

 

(h)           “Chief
Executive Officer” means the individual appointed by the Board as the
Chief Executive Officer of the Company and who is serving in such capacity
immediately prior to the first to occur of: (1) a condition constituting
Good Reason with respect to such individual, (2) such individual’s
termination of employment with the Company Group, or (3) the commencement
of the applicable Change in Control Period.

 

(i)            “COBRA” means the group health plan continuation coverage
provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 and
any applicable regulations promulgated thereunder.

 

(j)            “Code” means the Internal Revenue Code
of 1986, as amended, and any applicable regulations or administrative
guidelines promulgated thereunder.

 

(k)           “Committee” means the Compensation Committee of the
Board.

 

(l)            “Company” means Facet Biotech Corporation, a
Delaware corporation, and, following a Change in Control, a Successor that
agrees to assume all of the rights and obligations of the Company under this
Plan or a Successor which otherwise becomes bound by operation of law under
this Plan.

 

(m)          “Company
Group”
means the group consisting of the Company and each present or future parent and
subsidiary corporation or other business entity thereof.

 

(n)           “Equity Award” means any stock option (excluding,
however, an option described in Section 423 of the Code), stock
appreciation right, stock bonus, stock purchase, restricted stock, restricted
stock unit, performance share, performance unit, phantom stock or other
stock-based compensation award of any kind granted by any member of the Company
Group and held by a Participant, including any such award which is assumed by,
or for which a replacement award is substituted by, the Successor or any other
member of the Company Group in connection with a Change in Control.

 

(o)           “Exchange Act” means the Securities Exchange Act
of 1934, as amended.

 

(p)           “Executive Officer” means an individual appointed by the
Board as an officer of the Company having a title of Executive Vice President
or Senior Vice President and who is serving in such capacity immediately prior
to the first to occur of: (1) a condition constituting Good Reason with
respect to such individual, (2) such individual’s termination of
employment with the Company Group, or (3) the commencement of the
applicable Change in Control Period.

 

(q)           “Good Reason” means the occurrence of any of the
following conditions without the Participant’s informed written consent:

 

(1)           a material diminution in the Participant’s
authority, duties or responsibilities, causing the Participant’s position to be
of materially lesser rank or responsibility within the Company Group; or

 

5

 

(2)           a material diminution in the authority,
duties or responsibilities of the supervisor to whom the Participant is
required to report, causing such supervisor’s position to be of materially
lesser rank or responsibility within the Company Group; or, if the Participant
reported directly to the Board at or following the time of becoming a
Participant, a requirement that the Participant report to a corporate officer
or other employee rather than directly to the Board or the board of directors
of the Company’s parent; or

 

(3)           a material reduction in the Participant’s
Base Salary Rate or annual incentive bonus target rate, unless reductions
comparable in amount and duration are concurrently made for all other officers
and key employees of the Company Group; or

 

(4)           a change in the Participant’s work
location that increases the regular one-way commute distance between the
Participant’s residence prior to such change and work location by more than
thirty (30) miles; or

 

(5)           any action or inaction by a member of the
Company Group that constitutes, with respect to the Participant, a material
breach of this Plan or an employment agreement under which the Participant
provides services to the Company Group, including a breach described in Section 14.2.

 

(r)            “Incumbent
Director”
means a director who either (1) is a member of the Board as of the
Effective Date, or (2) is elected, or nominated for election, to the Board
with the affirmative votes of at least a majority of the Incumbent Directors at
the time of such election or nomination, but (3) who was not elected or
nominated in connection with an actual or threatened proxy contest relating to
the election of directors of the Company.

 

(s)           “Involuntary Termination” means the occurrence of any of the
following events:

 

(1)           termination by the Company Group of the
Participant’s employment for any reason other than Cause, the Participant’s
death, or the Participant’s Permanent Disability; or

 

(2)           failure by the Company Group to renew an
employment agreement under which the Participant provides services to the
Company Group, provided that the Participant was willing and able to execute a
new employment agreement providing terms and conditions substantially similar
to those of the expiring employment agreement and to continue providing such
services; or

 

(3)           the Participant’s resignation for Good
Reason from employment with the Company Group within one hundred eighty (180)
days following the initial existence of a condition constituting Good Reason,
provided that the Participant delivered written notice to the Company of such
condition within ninety (90) days after its initial existence and the Company
failed to cure such condition within thirty (30) days following such written
notice;

 

provided, however, that Involuntary Termination shall not include any
voluntary resignation from employment by the Participant for any reason other
than Good Reason.

 

6

 

(t)            “Involuntary
Termination Absent a Change in Control” means an Involuntary Termination that
does not occur during a Change in Control Period.

 

(u)           “Involuntary
Termination Following a Change in Control” means an Involuntary Termination that
occurs during a Change in Control Period.

 

(v)           “Key Employee” means an individual, other than the
Chief Executive Officer, an Executive Officer or an Officer, who is so
designated by the Committee and who is employed by a member of the Company
Group immediately prior to the first to occur of: (1) a condition
constituting Good Reason with respect to such individual, (2) such
individual’s termination of employment with the Company Group, or (3) the
commencement of the applicable Change in Control Period.

 

(w)          “Officer” means an individual appointed by the Board as an
officer of the Company (other than as the Chief Executive Officer or an
Executive Officer) having a title of Vice President and who is serving in such
capacity immediately prior to the first to occur of: (1) a condition
constituting Good Reason with respect to such individual, (2) such
individual’s termination of employment with the Company Group, or (3) the
commencement of the applicable Change in Control Period.

 

(x)            “Participant” means each individual designated by the
Committee to participate in the Plan and who has executed a Participation
Agreement.

 

(y)           “Participation
Agreement” means an Agreement to Participate in the Facet Biotech Corporation
Retention and Severance Plan in the form attached hereto as Exhibit A
or in such other form as the Committee may approve from time to time; provided,
however, that, after a Participation Agreement has been entered into between a
Participant and the Company, it may be modified only by a supplemental written
agreement executed by both the Participant and the Company.  The terms of such forms of Participation
Agreement need not be identical with respect to each Participant.

 

(z)            “Performance-Based
Equity Award” means an Equity Award the vesting or earning of which is conditioned
in whole or in part upon the achievement of one or more performance goals
(e.g., the attainment of a target stock price, achievement of a corporate
financial goal or achievement of an individual goal other than continued
performance of services for a specified period of time), notwithstanding that
the vesting or earning of such Equity Award may also be conditioned upon the
continued performance of services for the Company Group.

 

(aa)         “Permanent Disability” means a Participant’s incapacity due to
bodily injury or physical or mental illness which (1) prevents the
Participant from engaging in the full-time performance of the Participant’s
duties for a period of six (6) consecutive months and (2) will, in
the opinion of a qualified physician, be permanent and continuous during the
remainder of the Participant’s life.

 

(bb)         “Release” means a general release of all known and
unknown claims against the Company and its affiliates and their stockholders,
directors, officers, employees, agents, successors and assigns substantially in
the form attached hereto as Exhibit B (“General Release of Claims
[Age 40 and over]”) or Exhibit C (“General Release of Claims

 

7

 

[Under age 40]”), whichever is applicable, with any modifications
thereto determined by legal counsel to the Company to be necessary or advisable
to comply with applicable law or to accomplish the intent of Section 8
(Exclusive Remedy) hereof.

 

(cc)         “Section 409A” means Section 409A
of the Code.

 

(dd)         “Section 409A Deferred Compensation”
means compensation, benefits or arrangements provided by the Plan or otherwise
that constitute or would give rise to deferred compensation subject to and not
exempted from the requirements of Section 409A.

 

(ee)         “Separation from Service”
means a separation from service within the meaning of Section 409A.

 

(ff)           “Service-Based Equity Award”
means an Equity Award the vesting or earning of which is conditioned solely
upon the continued performance of services for the Company Group.

 

(gg)         “Specified Employee” means a
specified employee within the meaning of Section 409A.

 

(hh)         “Successor” means any
successor in interest to substantially all of the business and/or assets of the
Company.

 

(ii)           “Target Bonus Rate” means,
with respect to the Participant’s Involuntary Termination Absent a Change in
Control, the quotient determined by dividing the following amount by twelve
(12):  the aggregate of all annual
incentive bonuses that would be earned by the Participant at the Participant’s
annual incentive bonus target rate (assuming attainment of 100% of all
applicable performance goals) under the terms of the programs, plans or
agreements providing for such bonuses in which the Participant was
participating for the fiscal year of the Participant’s Involuntary Termination
Absent a Change in Control (without giving effect to any reduction in the
Participant’s annual incentive bonus target rate constituting Good Reason);
provided, however, that for the purposes of this definition, “annual incentive
bonuses” shall not include signing bonuses, retention bonuses or other
nonrecurring cash awards that are not part of an annual incentive bonus
program.

 

2.2           Construction.  The
Company intends that all payments and benefits provided by this Plan be exempt
from or comply with all applicable requirements of Section 409A, and any
ambiguities in the Plan shall be construed in a manner consistent with such
intent.  Captions and titles contained
herein are for convenience only and shall not affect the meaning or
interpretation of any provision of the Plan. 
Except when otherwise indicated by the context, the singular shall
include the plural and the plural shall include the singular.  Use of the term “or” is not intended to be
exclusive, unless the context clearly requires otherwise.

 

3.             ELIGIBILITY AND PARTICIPATION

 

The individuals eligible to be designated to
participate in the Plan shall be the Chief Executive Officer, the Executive
Officers, the Officers and the Key Employees. 
The 

 

8

 

Committee shall designate
from time to time each eligible individual who shall become a Participant upon
such individual’s execution of a Participation Agreement.

 

4.             PAYMENTS AND BENEFITS
UPON TERMINATION OF EMPLOYMENT

 

In the
event of a Participant’s termination of employment with the Company Group, the
Participant shall be entitled to receive the applicable compensation and
benefits described in this Section 4.

 

4.1           Involuntary Termination Absent a Change in Control.  In the event of a Participant’s Involuntary
Termination Absent a Change in Control, the Participant shall be entitled to
receive the following compensation and benefits:

 

(a)           Accrued Obligations.  The Participant shall be entitled
to receive:

 

(1)           all
salary, commissions, bonuses and accrued but unused vacation earned through the
date of the Participant’s termination of employment, which shall be paid at the
time required by applicable law or pursuant to the terms and conditions of the
plans or agreements providing for such payments; and

 

(2)           reimbursement
within ten (10) business days of submission of proper reports, such
submission to be made within thirty (30) days following the Participant’s
termination of employment, of all business expenses reasonably and necessarily
incurred by the Participant in connection with the business of the Company
Group prior to his or her termination of employment in accordance with the
Company Group’s business expense policy; and

 

(3)           the
benefits, if any, under any Company Group retirement plan, nonqualified
deferred compensation plan, Equity Award plan or agreement, welfare benefit
plan or other Company Group compensation or benefit plan to which the
Participant may be entitled pursuant to the terms and conditions of such plans
or agreements.

 

(b)           Severance Benefits.  Provided that the Participant resigns upon
such Involuntary Termination Absent a Change in Control from all capacities in
which the Participant is then rendering service to the Company Group
(including, without limitation, service as a member of the Board), executes the
applicable form of Release and such Release becomes effective in accordance
with its terms on or before the sixtieth (60th) day following the date of the
Participant’s Involuntary Termination Absent a Change in Control, the
Participant shall be entitled to receive the following severance payments and
benefits to which the Participant would not otherwise be entitled:

 

(1)           Cash Severance Payments. 
Subject to Section 6.2, the Company shall pay to the Participant in
a lump sum cash payment on the sixtieth (60th) day following the date of the
Participant’s termination of employment an amount equal to (i) the sum of
the Participant’s applicable Base Salary Rate and the Participant’s Target
Bonus Rate multiplied by (ii) the number of months contained in the
Participant’s Applicable Benefit Period.

 

(2)           Health and Life Insurance Benefits.  Subject to Section 6.2, for the period
commencing immediately following the Participant’s termination of 

 

9

 

employment and
continuing for the duration of the Applicable Benefit Period, the Company shall
arrange to provide the Participant and his or her dependents with health benefits
(including medical and dental) and life insurance benefits substantially
similar to those provided to the Participant and his or her dependents
immediately prior to the date of such termination of employment or shall
reimburse the Participant for the cost of obtaining such benefits to the extent
described below.  Such benefits shall be
provided to the Participant at the same premium cost to the Participant and at
the same coverage level as in effect as of the Participant’s termination of
employment; provided, however, that the Participant shall be subject to any
change in the premium cost and/or level of coverage applicable generally to all
employees holding the position or comparable position with the Company Group
which the Participant held immediately prior to termination of employment.  The Company may satisfy its obligation to
provide a continuation of health benefits by paying that portion of the
Participant’s premiums required under COBRA that exceeds the amount of premiums
that the Participant would have been required to pay for continuing coverage
had he or she continued in employment. 
If the Company is not reasonably able to continue such coverage under
the Company’s health benefit plans, the Company shall provide substantially
equivalent coverage under other sources or will reimburse (without a tax
gross-up) the Participant for premiums (in excess of the Participant’s premium
cost described above) incurred by the Participant to obtain his or her own such
coverage.  If the Participant and/or the
Participant’s dependents become eligible to receive such coverage under another
employer’s health benefit plans during the Applicable Benefit Period, the
Participant shall report such eligibility to the Company, and the Company’s
obligations under this subsection shall be secondary to the coverage provided
by such other employer’s plans.  For the
balance of any period in excess of the Applicable Benefit Period during which
the Participant is entitled to continuation coverage under COBRA, the
Participant shall be entitled to maintain coverage for himself or herself and
the Participant’s eligible dependents at the Participant’s own expense.

 

(3)           Outplacement Benefits. 
Subject to Section 6.2, for the period commencing immediately
following the Participant’s termination of employment and continuing for a
period of six (6) months, the Company will provide the Participant with
reasonable outplacement services from vendors designated by the Company.

 

(4)           Acceleration of Vesting of Equity Awards.

 

(i)            Service-Based Equity Awards. 
Notwithstanding any provision to the contrary contained in any plan or
agreement evidencing a Service-Based Equity Award, but subject to Section 6.2
and subsections (iv) and (v) below, each of the Participant’s
Service-Based Equity Awards outstanding at the time of the Participant’s
termination of employment with the Company Group shall vest effective as of the
time of the Participant’s termination of employment to the same extent that
such Equity Award would have vested in accordance with its terms over the
period of twelve (12) months following the date of the Participant’s
termination of employment had the Participant’s employment with the Company
Group continued throughout such period.

 

(ii)           Performance-Based Equity Awards Other Than Section 162(m) Exempt
Awards.  Notwithstanding any
provision to the contrary contained in any plan or agreement evidencing a
Performance-Based Equity Award, but subject to Section 6.2 

 

10

 

and subsection (iv) below, each of the Participant’s
Performance-Based Equity Awards, other than any such Equity Award intended to
result in “qualified performance-based compensation” within the meaning of Section 162(m) of
the Code (a “Section 162(m) Exempt
Award”), outstanding at the time of the Participant’s
termination of employment with the Company Group shall vest effective as of the
time of the Participant’s termination of employment as follows:

 

(A)          If the
performance period of such award is scheduled to end within twelve (12) months
following the date of the Participant’s termination of employment, such award
shall vest to the same extent that it would have vested had one hundred percent
(100%) of the target level of performance been achieved and had the Participant’s
employment with the Company Group continued through the date on which such
award was to be settled in accordance with its terms.

 

(B)           If the
performance period of such award is scheduled to end more than twelve (12)
months following the date of the Participant’s termination of employment, such
award shall vest in an amount equal to the product of: (1) the amount of
such award that would have vested had one hundred percent (100%) of the target
level of performance been achieved and had the Participant’s employment with
the Company Group continued through the date on which such award was to be
settled in accordance with its terms, and (2) a fraction (not greater than
one), the numerator of which is the number of days from the commencement of the
performance period until the date twelve (12) months following the date of the
Participant’s termination of employment and the denominator of which is the
total number of days contained in the performance period.

 

(iii)          Performance-Based Equity
Awards Which Are Section 162(m) Exempt Awards.  Notwithstanding any provision to the contrary
contained in any plan or agreement evidencing a Performance-Based Equity Award,
but subject to Section 6.2, each of the Participant’s Performance-Based
Equity Awards which is a Section 162(m) Exempt Award and is
outstanding at the time of the Participant’s termination of employment with the
Company Group shall continue to remain outstanding and shall vest and be
settled as follows:

 

(A)          The
Participant shall vest in and be entitled to receive an amount equal to the
product of: (1) the amount of such award that would actually vest based
upon the extent to which the applicable performance goals are actually attained
as of the completion of the applicable performance period and had the Participant’s
employment with the Company Group continued through the date on which such
award was to be settled in accordance with its terms, and (2) a fraction
(not greater than one), the numerator of which is the number of days from the
commencement of the performance period until the date twelve (12) months
following the date of the Participant’s termination of employment and the
denominator of which is the total number of days contained in the performance
period.

 

(B)           Payment
of the amount determined under subsection (A) above shall be made at the same
time payments are made to other participants in the plan or arrangement
governing such award in accordance with its terms, but in any event no later
than the 15th day of the third month following the later of (x) end of the
Participant’s 

 

11

 

taxable year in
which the performance period ends or (y) the end of the Company’s taxable
year in which the performance period ends.

 

(C)           Notwithstanding
the foregoing, in the event of the consummation of a Change in Control prior to
the date on which payment would otherwise be made in accordance with subsection
(B) above, then such award shall vest and be settled as provided by Section 5.2,
but subject in any event to Section 6.2.

 

(iv)          Settlement of Certain Equity Awards Not Subject to Exercise.  Any Equity Award the vesting of which is
accelerated by this Section 4.1(b)(4), other than a Section 162(m) Exempt
Award, which is an award of restricted stock units, performance shares,
performance units, phantom stock or similar stock-based compensation
representing a future right to receive shares or other consideration the
settlement of which is not determined by its holder’s election to exercise such
award shall be settled in full on the first to occur of (A) the sixtieth
(60th) day following the date of the Participant’s termination of employment,
and (B) the effective time of a Change in Control, but subject in either
case to Section 6.2.

 

(v)           Extension of Stock Option Exercise Period.  Notwithstanding any provision to the contrary
contained in the agreement evidencing any Equity Award which is a stock option,
the stock option, to the extent unexercised on the date on which the
Participant’s employment terminated, may be exercised by the Participant (or
the Participant’s guardian or legal representative) at any time prior to the
expiration of one (1) year after the date on which the Participant’s
employment terminated, but in any event no later than the date of expiration of
the stock option’s term as set forth in the agreement evidencing such stock
option.

 

(5)           Forfeiture of Benefits. 
If the Release which is a condition to the Participant’s right to
payments and benefits pursuant to this Section 4.1(b) does not become
effective on or before the sixtieth (60th) day following the date of the
Participant’s termination of employment, then the Company shall have the right
to: (i) terminate any further provision of such severance benefits
pursuant to this Plan, (ii) seek reimbursement from the Participant for
all such severance benefits previously provided to the Participant pursuant to
this Plan, (iii) recover from the Participant all shares of the Company’s
stock owned by the Participant (or the proceeds therefrom, reduced by any exercise
or purchase price paid to acquire such shares) the vesting of which was
accelerated pursuant to this Plan, and (iv) to immediately cancel all
Equity Awards the vesting of which was accelerated pursuant to this Plan.

 

4.2           Involuntary Termination Following a Change in Control.  In the event of a Participant’s Involuntary
Termination Following a Change in Control, the Participant shall be entitled to
receive the following compensation and benefits:

 

(a)           Accrued Obligations.  The Participant shall be entitled
to receive all of the accrued obligations described in Section 4.1(a),
which shall be provided in the same manner as described in such Section.

 

12

 

(b)           Severance Benefits.  Provided that the Participant resigns upon
such Involuntary Termination Following a Change in Control from all capacities
in which the Participant is then rendering service to the Company Group
(including, without limitation, service as a member of the Board), executes the
applicable form of Release and such Release becomes effective in accordance
with its terms on or before the sixtieth (60th) day following the date of the
Participant’s Involuntary Termination Following a Change in Control, the
Participant shall be entitled to receive the following severance payments and
benefits to which the Participant would not otherwise be entitled:

 

(1)           Cash Severance Payments. 
Subject to Section 6.2, the Company shall pay to the Participant in
a lump sum cash payment on the sixtieth (60th) day following the date of the
Participant’s termination of employment an amount equal to (i) the sum of
the Participant’s applicable Base Salary Rate and the Participant’s applicable
Bonus Rate multiplied by (ii) the number of months contained in the
Participant’s Applicable Benefit Period.

 

(2)           Health and Life Insurance Benefits.  Subject to Section 6.2, for the period
commencing immediately following the Participant’s termination of employment
and continuing for the duration of the Applicable Benefit Period, the Company
shall arrange to provide the Participant and his or her dependents with health
benefits (including medical and dental) and life insurance benefits
substantially similar to those provided to the Participant and his or her
dependents immediately prior to the date of such termination of employment or
shall reimburse the Participant for the cost of obtaining such benefits to the
extent described below.  Such benefits
shall be provided to the Participant at the same premium cost to the
Participant and at the same coverage level as in effect as of the Participant’s
termination of employment; provided, however, that the Participant shall be
subject to any change in the premium cost and/or level of coverage applicable
generally to all employees holding the position or comparable position with the
Company Group which the Participant held immediately prior to termination of
employment.  The Company may satisfy its
obligation to provide a continuation of health benefits by paying that portion
of the Participant’s premiums required under COBRA that exceeds the amount of
premiums that the Participant would have been required to pay for continuing
coverage had he or she continued in employment. 
If the Company is not reasonably able to continue such coverage under
the Company’s health benefit plans, the Company shall provide substantially
equivalent coverage under other sources or will reimburse (without a tax
gross-up) the Participant for premiums (in excess of the Participant’s premium
cost described above) incurred by the Participant to obtain his or her own such
coverage.  If the Participant and/or the
Participant’s dependents become eligible to receive such coverage under another
employer’s health benefit plans during the Applicable Benefit Period, the
Participant shall report such eligibility to the Company, and the Company’s
obligations under this subsection shall be secondary to the coverage provided
by such other employer’s plans.  For the
balance of any period in excess of the Applicable Benefit Period during which
the Participant is entitled to continuation coverage under COBRA, the
Participant shall be entitled to maintain coverage for himself or herself and
the Participant’s eligible dependents at the Participant’s own expense.

 

(3)           Outplacement Benefits. 
Subject to Section 6.2, for the period commencing immediately
following the Participant’s termination of employment and 

 

13

 

continuing for a
period of six (6) months, the Company will provide the Participant with
reasonable outplacement services from vendors designated by the Company.

 

(4)           Acceleration of Vesting of Equity Awards; Extension of Stock Option
Exercise Period.

 

(i)            Notwithstanding
any provision to the contrary contained in any plan or agreement evidencing an
Equity Award granted to a Participant, but subject to Section 6.2, the
vesting of each of the Participant’s Equity Awards outstanding at the time of
the Participant’s termination of employment with the Company Group shall be
accelerated in full effective as of the time of the Participant’s termination
of employment.

 

(ii)           In
determining the extent of such acceleration of vesting of any Performance-Based
Equity Award, it shall be assumed that one hundred percent (100%) of the target
level of performance has been achieved.

 

(iii)          Any Equity Awards the vesting of which is
accelerated by this Section 4.2(b)(4) which is an award of restricted
stock units, performance shares, performance units, phantom stock or similar
stock-based compensation representing a future right to receive shares or other
consideration the settlement of which is not determined by its holder’s
election to exercise such award shall be settled in full on the sixtieth (60th)
day following the date of the Participant’s termination of employment, subject
to Section 6.2.

 

(iv)          Notwithstanding
any provision to the contrary contained in the agreement evidencing any Equity
Award which is a stock option, the stock option, to the extent unexercised on
the date on which the Participant’s employment terminated, may be exercised by
the Participant (or the Participant’s guardian or legal representative) at any
time prior to the expiration of one (1) year after the date on which the
Participant’s employment terminated, but in any event no later than the date of
expiration of the stock option’s term as set forth in the agreement evidencing
such stock option.

 

(5)           Forfeiture of Benefits. 
If the Release which is a condition to the Participant’s rights to
payments and benefits pursuant to this Section 4.2(b) does not become
effective on or before the sixtieth (60th) day following the date of the
Participant’s termination of employment, then the Company shall have the right
to: (i) terminate any further provision of such severance benefits pursuant
to this Plan, (ii) seek reimbursement from the Participant for all such
severance benefits previously provided to the Participant pursuant to this
Plan, (iii) recover from the Participant all shares of the Company’s stock
owned by the Participant (or the proceeds therefrom, reduced by any exercise or
purchase price paid to acquire such shares) the vesting of which was
accelerated pursuant to this Plan, and (iv) to immediately cancel all
Equity Awards the vesting of which was accelerated pursuant to this Plan.

 

4.3           Other Termination.  In the event of a Participant’s termination
of employment with the Company Group which is not an Involuntary Termination,
the Participant shall be entitled to receive only the accrued obligations described in Section 4.1(a), which shall be
provided in the same manner as described in such Section.

 

14

 

4.4                                 Indemnification; Insurance.

 

(a)           In addition to any
rights a Participant may have under any indemnification agreement previously
entered into between the Company and such Participant (a “Prior Indemnity Agreement”), from and after the
date of the Participant’s Involuntary Termination Absent a Change in Control or
Involuntary Termination Following a Change in Control, the Company shall
indemnify and hold harmless the Participant against any costs or expenses
(including attorneys’ fees), judgments, fines, losses, claims, damages or
liabilities incurred in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative, by
reason of the fact that the Participant is or was a director, officer, employee
or agent of the Company Group, or is or was serving at the request of the
Company Group as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, whether asserted or
claimed prior to, at or after the date of the Participant’s termination of
employment, to the fullest extent permitted under applicable law, and the
Company shall also advance fees and expenses (including attorneys’ fees) as
incurred by the Participant to the fullest extent permitted under applicable
law.  In the event of a conflict between
the provisions of a Prior Indemnity Agreement and the provisions of this Plan,
the Participant may elect which provisions shall govern.

 

(b)           For a period of six (6) years
from and after the date of the Participant’s Involuntary Termination Following
a Change in Control, the Company shall use its best efforts to maintain a
policy of directors’ and officers’ liability insurance for the benefit of such
Participant which provides him or her with coverage no less favorable than that
provided for the Company’s continuing officers and directors.

 

5.                                       TREATMENT OF EQUITY AWARDS UPON A
CHANGE IN CONTROL

 

5.1           Acceleration of Vesting Upon Non-Assumption of Service-Based Equity
Awards.  Notwithstanding any
provision to the contrary contained in any plan or agreement evidencing a
Service-Based Equity Award held by a Participant, but subject to Section 6.2,
in the event of a Change in Control in which the surviving, continuing,
successor, or purchasing corporation or other business entity or parent
thereof, as the case may be (the “Acquiring
Corporation”), does not assume or continue the Company’s
rights and obligations under such then-outstanding Service-Based Equity Award
or substitute for such then-outstanding Service-Based Equity Award a
substantially equivalent equity award for the Acquiring Corporation’s stock,
then the vesting, exercisability and settlement of such Service-Based Equity
Award which is not assumed, continued or substituted for shall be accelerated
in full effective immediately prior to but conditioned upon the consummation of
the Change in Control, provided that the Participant remains an employee or
other service provider with the Company Group immediately prior to the Change
in Control.

 

5.2           Acceleration of Vesting of Performance-Based Equity Awards.  Notwithstanding any provision to
the contrary contained in any plan or agreement evidencing a Performance-Based
Equity Award held by a Participant, but subject to Section 6.2, in the
event of a Change in Control the vesting, exercisability and settlement of such
then-outstanding Performance-Based Equity Award shall be accelerated in full
immediately prior to but conditioned upon the consummation of the Change in
Control (assuming for the purpose of 

 

15

 

determining the extent of such acceleration, if applicable, that one
hundred percent (100%) of the target level of performance has been achieved),
provided that the Participant remains an employee or other service provider
with the Company Group immediately prior to the Change in Control or as
otherwise provided by Section 4.1(b)(4)(iii)(C).

 

6.                                       CERTAIN FEDERAL TAX
CONSIDERATIONS

 

6.1                                 Federal Excise Tax Under Section 4999 of the Code.

 

(a)           Excess
Parachute Payments.  In the
event that any payment or benefit received or to be received by the Participant
pursuant to this Plan or otherwise (collectively, the “Payments”)
would subject the Participant to any excise tax pursuant to Section 4999
of the Code (the “Excise Tax”) due to the characterization of such
Payments as “excess parachute payments” under Section 280G of the Code,
then, notwithstanding the other provisions of this Plan, the amount of such
Payments shall not exceed the amount which produces the greatest after-tax
benefit to the Participant.

 

(b)           Determination
by Accountants.  Upon the occurrence of any event (the “Event”)
that would give rise to any Payments pursuant to this Plan that may be
reasonably anticipated to resulting in the Participant’s receipt of an excess
parachute payment under Section 280G of the Code, the Company shall
promptly request a determination in writing by independent public accountants
(the “Accountants”)
selected by the Company of the amount and type of such Payments which would
produce the greatest after-tax benefit to the Participant.  For the purposes of such determination, the
Accountants may rely on reasonable, good faith interpretations concerning the
application of Sections 280G and 4999 of the Code.  The Company and the Participant shall furnish
to the Accountants such information and documents as the Accountants may
reasonably request in order to make their required determination.  The Company shall bear all fees and expenses
charged by the Accountants in connection with their services contemplated by
this Section.

 

6.2                                 Compliance with Section 409A. 
Notwithstanding any other provision of the Plan to the
contrary, the provision, time and manner of payment or distribution of all
compensation and benefits provided by the Plan that constitute Section 409A
Deferred Compensation shall be subject to, limited by and construed in
accordance with the requirements of Section 409A, including but not
limited to the following:

 

(a)           Installment
Payments Treated as Series of Separate Payments.  It is the intent of this Plan that any right
of a Participant to receive installment payments hereunder shall, for purposes
of Section 409A, be treated as a right to a series of separate payments.

 

(b)           Separation
from Service.  Payments and
benefits constituting Section 409A Deferred Compensation otherwise payable
or provided pursuant to the Plan as a result of the Participant’s termination
of employment shall be paid or provided only at or following the time that the
Participant has experienced a Separation from Service.

 

(c)           Six-Month
Delay Applicable to Specified Employees.  Payments and benefits constituting Section 409A
Deferred Compensation to be paid or provided pursuant 

 

16

 

to the Plan upon
or following and due to the Separation from Service of a Participant who is a
Specified Employee shall be paid or provided only upon the later of (1) the
date that is six (6) months and one (1) day after the date of such
Separation from Service or, if earlier, the date of death of the Participant
(in either case, the “Delayed
Payment Date”), or (2) the date or dates on which
such Section 409A Deferred Compensation would otherwise be paid or
provided in accordance with the Plan. 
All such amounts that would, but for this Section, become payable prior
to the Delayed Payment Date shall be accumulated and paid on the Delayed
Payment Date.

 

(d)                                 Limitation
on Health and Life Insurance Benefits.  To the extent that all or any portion of the
Company’s payment or reimbursement to the Participant for the cost of the
Company’s obligation to provide health benefits or life insurance benefits
pursuant to Section 4.1(b)(2) or Section 4.2(b)(2) (in
either case, the “Company-Provided Benefits”)
would exceed an amount for which, or continue for a period of time in excess of
which, such Company Provided Benefits would qualify for an exemption from
treatment as Section 409A Deferred Compensation, the Company shall, for
the duration of the Applicable Benefit Period, pay or reimburse the Participant
for the Company-Provided Benefits in an amount not to exceed $150,000 per
calendar year or any portion thereof included in the Applicable Benefit
Period.  The amount of Company-Provided
Benefits furnished in any taxable year of the Participant shall not affect the
amount of Company-Provided Benefits furnished in any other taxable year of the
Participant.  Any right of a Participant
to Company-Provided Benefits shall not
be subject to liquidation or exchange for another benefit.  Any reimbursement for Company-Provided
Benefits to which a Participant is entitled shall be paid no later than the
last day of the Participant’s taxable year following the taxable year in which
the Participant’s expense for such Company-Provided Benefits was incurred.

 

(e)                                  Payment Upon a Change in Control.  Notwithstanding any provision of the Plan to
the contrary, to the extent that any amount constituting Section 409A
Deferred Compensation would become payable under this Plan solely by reason of
a Change in Control, such amount shall become payable only if the event
constituting a Change in Control would also constitute a change in ownership or
effective control of the Company or a change in the ownership of a substantial
portion of the assets of the Company within the meaning of Section 409A.

 

(f)                                    Equity Awards Constituting Section 409A Deferred Compensation.  The following shall apply to any Equity Award
held by a Participant which constitutes Section 409A Deferred
Compensation:

 

(1)           The vesting of any
Equity Award which constitutes Section 409A Deferred Compensation and
which is held by a Participant who is a Specified Employee shall be accelerated
upon the Participant’s Involuntary Termination in accordance with Section 4.1(b)(4) or
4.2(b)(4) to the extent applicable; provided, however, that the payment in
settlement of such Equity Award shall occur on the Delayed Payment Date or on
such later date as provided by such applicable Section.

 

(2)           Any Equity Award
which constitutes Section 409A Deferred Compensation and which would vest
and become payable upon a Change in Control in accordance with Section 5.1
(subject to the requirement of Section 6.2(e)) shall vest in full as 

 

17

 

provided by Section 5.1
but shall be converted automatically at the effective time of such Change in
Control into a right to receive in cash on the date or dates such award would
have been settled in accordance with its then existing settlement schedule (or
on such earlier date as provided in Section 4.2(b)(4) or as required
by Section 6.2(c)) an amount or amounts equal in the aggregate to the
intrinsic value of the Equity Award at the time of the Change in Control.

 

(3)           Equity Awards
constituting Section 409A Deferred Compensation which vest and become
payable upon a Change in Control in accordance with Section 5.2 shall not
be subject to this Section but shall be subject to Section 6.2(e).

 

7.                                       CONFLICT IN BENEFITS;
NONCUMULATION OF BENEFITS

 

7.1           Effect of
Plan.  The terms of this Plan,
when accepted by a Participant pursuant to an executed Participation Agreement,
shall supersede all prior arrangements, whether written or oral, and
understandings regarding the subject matter of this Plan and, subject to Section 7.2,
shall be the exclusive agreement for the determination of any payments and
benefits due to the Participant upon the events described in Section 4 and
Section 5.  It is the express intent
of the Company and the Participant that the provisions of this Plan applicable
to Equity Awards shall be deemed incorporated into any agreement evidencing an
Equity Award granted to the Participant subsequent to the date of the
Participant’s Participation Agreement, notwithstanding any “integration” or
other provision of such Equity Award agreement to the contrary or the failure
of such Equity Award agreement to make reference to this Plan, excluding only
an Equity Award agreement which expressly refers to this Plan and disclaims
such incorporation.

 

7.2           Noncumulation
of Benefits.  Except as
expressly provided in a written agreement between a Participant and the Company
entered into after the date of such Participant’s Participation Agreement and
which expressly disclaims this Section 7.2 and is approved by the Board or
the Committee, the total amount of payments and benefits that may be received
by the Participant as a result of the events described in Section 4 and Section 5
pursuant to (a) the Plan, (b) any agreement between the Participant
and the Company or (c) any other plan, practice or statutory obligation of
the Company, shall not exceed the amount of payments and benefits provided by
this Plan upon such events (plus any payments and benefits provided pursuant to
a Prior Indemnity Agreement, as described in Section 4.4(a)), and the
aggregate amounts payable under this Plan shall be reduced to the extent of any
excess (but to not less than zero).

 

8.                                       EXCLUSIVE REMEDY

 

The payments and benefits provided by Section 4
(plus any payments and benefits provided pursuant to a Prior Indemnity
Agreement, as described in Section 4.4(a)), if applicable, shall
constitute the Participant’s sole and exclusive remedy for any alleged injury
or other damages arising out of the cessation of the employment relationship
between the Participant and the Company in the event of the Participant’s
termination of employment with the Company Group.  The Participant shall be entitled to no other
compensation, benefits, or other payments from the Company Group as a result of
the Participant’s termination of employment with respect to which the payments
and benefits provided by this Plan (plus any payments and benefits 

 

18

 

provided pursuant to a
Prior Indemnity Agreement) have been provided to the Participant, except as
expressly set forth in this Plan or, subject to the provisions of Section 7.2,
in a duly executed employment agreement between Company and the Participant.

 

9.                                       PROPRIETARY AND
CONFIDENTIAL INFORMATION

 

The Participant agrees to continue at all times, during
the Participant’s employment with the Company Group and following the
termination thereof, to abide by the terms and conditions of the
confidentiality and/or proprietary rights agreement between the Participant and
the Company or any other member of the Company Group.

 

10.                                 NONSOLICITATION

 

If the Company performs its obligations to deliver the
payments and benefits set forth in Section 4 (plus any payments and
benefits provided pursuant to an agreement evidencing an Equity Award or a
Prior Indemnity Agreement), then for a period equal to the Applicable Benefit
Period applicable to a Participant following the Participant’s Involuntary
Termination, the Participant shall not, directly or indirectly, recruit,
solicit or invite the solicitation of any employees of any member of the
Company Group to terminate their employment relationship with the Company
Group.

 

11.                                 NO CONTRACT OF EMPLOYMENT

 

Neither the establishment of the Plan, nor any
amendment thereto, nor the payment or provision of any benefits shall be
construed as giving any person the right to be retained by the Company, a
Successor or any other member of the Company Group.  Except as otherwise established in an
employment agreement between the Company and a Participant, the employment
relationship between the Participant and the Company is an “at-will”
relationship.  Accordingly, either the
Participant or the Company may terminate the relationship at any time, with or
without cause, and with or without notice except as otherwise provided by Section 15.  In addition, nothing in this Plan shall in
any manner obligate any Successor or other member of the Company Group to offer
employment to any Participant or to continue the employment of any Participant
which it does hire for any specific duration of time.

 

12.                                 CLAIMS FOR BENEFITS

 

12.1         ERISA Plan. 
This Plan is intended to be (a) an employee welfare plan as defined
in Section 3(1) of Employee Retirement Income Security Act of 1974 (“ERISA”)
and (b) a “top-hat” plan maintained for the benefit of a select group of
management or highly compensated employees of the Company Group.

 

12.2         Application for Benefits.  All applications for payments and/or benefits
under the Plan (“Benefits”) shall be submitted to the Company’s
chief human resources officer (the “Claims Administrator”), with
copies to the Company’s chief legal officer and the Committee.  Applications for Benefits must be in writing
on forms acceptable to the Claims Administrator and must be signed by the
Participant or beneficiary.  The Claims
Administrator reserves the right to require the Participant or beneficiary to
furnish such other proof of the 

 

19

 

Participant’s
expenses, including without limitation, receipts, canceled checks, bills, and
invoices as may be required by the Claims Administrator.

 

12.3                           Appeal of Denial of Claim.

 

(a)                                  If
a claimant’s claim for Benefits is denied, the Claims Administrator shall
provide notice to the claimant in writing of the denial within ninety (90) days
after its submission.  The notice shall
be written in a manner calculated to be understood by the claimant and shall
include:

 

(1)           The specific reason
or reasons for the denial;

 

(2)           Specific references
to the Plan provisions on which the denial is based;

 

(3)           A description of any
additional material or information necessary for the applicant to perfect the
claim and an explanation of why such material or information is necessary; and

 

(4)           An explanation of
the Plan’s claims review procedures and a statement of claimant’s right to
bring a civil action under ERISA Section 502(a) following an adverse
benefit determination.

 

(b)                                 If
special circumstances require an extension of time for processing the initial
claim, a written notice of the extension and the reason therefor shall be
furnished to the claimant before the end of the initial ninety (90) day
period.  In no event shall such extension
exceed ninety (90) days.

 

(c)                                  If
a claim for Benefits is denied, the claimant, at the claimant’s sole expense,
may appeal the denial to the Committee (the “Appeals Administrator”) within
sixty (60) days of the receipt of written notice of the denial.  In pursuing such appeal the applicant or his
duly authorized representative:

 

(1)           may request in
writing that the Appeals Administrator review the denial;

 

(2)           may review pertinent
documents; and

 

(3)           may submit issues
and comments in writing.

 

(d)                                 The
decision on review shall be made within sixty (60) days of receipt of the
request for review, unless special circumstances require an extension of time
for processing, in which case a decision shall be rendered as soon as possible,
but not later than one hundred twenty (120) days after receipt of the request
for review.  If such an extension of time
is required, written notice of the extension shall be furnished to the claimant
before the end of the original sixty (60) day period.  The decision on review shall be made in
writing, shall be written in a manner calculated to be understood by the
claimant, and, if the decision on review is a denial of the claim for Benefits,
shall include:

 

20

 

(1)           The specific reason
or reasons for the denial;

 

(2)           Specific references
to the Plan provisions on which the denial is based;

 

(3)           A description of any
additional material or information necessary for the applicant to perfect the
claim and an explanation of why such material or information is necessary; and

 

(4)           An explanation of
the Plan’s claims review procedures and a statement of claimant’s right to bring
a civil action under ERISA Section 502(a) following an adverse
benefit determination.

 

13.                                 ARBITRATION

 

13.1     Disputes
Subject to Arbitration.  Any
claim, dispute or controversy arising out of this Plan, the interpretation,
validity or enforceability of this Plan or the alleged breach thereof shall be
submitted by the parties to binding arbitration by the American Arbitration
Association or as otherwise required by ERISA; provided, however, that (a) the
arbitrator shall have no authority to make any ruling or judgment that would
confer any rights with respect to trade secrets, confidential and proprietary
information or other intellectual property; and (b) this arbitration
provision shall not preclude the parties from seeking legal and equitable relief
from any court having jurisdiction with respect to any disputes or claims
relating to or arising out of the misuse or misappropriation of intellectual
property.  Judgment may be entered on the
award of the arbitrator in any court having jurisdiction.

 

13.2     Site of
Arbitration.  The site of the
arbitration proceeding shall be in San Mateo County, California or any other
site mutually agreed to by the Company and the Participant.

 

13.3     Costs and Expenses Borne
by Company.  All costs and
expenses of arbitration, including but not limited to reasonable attorneys’
fees and other costs reasonably incurred by the Participant in connection with
arbitration in accordance with this Section 13, shall be paid by the
Company.  Notwithstanding the foregoing,
if the Participant initiates the arbitration, and the arbitrator finds that the
Participant’s claims were totally without merit or frivolous, then the
Participant shall be responsible for the Participant’s own attorneys’ fees and
costs

 

14.                                 SUCCESSORS AND ASSIGNS

 

14.1     Successors of the Company.  The Company shall require any successor or
assign (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company, expressly, absolutely and unconditionally to assume and agree to
perform this Plan in the same manner and to the same extent that the Company
would be required to perform it if no such succession or assignment had taken
place.

 

21

 

14.2         Acknowledgment
by Company.  If, after a
Change in Control, the Company fails to reasonably confirm in writing to the
Participant that it has performed the obligation described in Section 14.1
within twenty (20) days after a written request for such confirmation is
delivered by the Participant to the Company in the manner provided by Section 15.1,
such failure shall constitute a material breach of this Plan and shall entitle
the Participant to resign for Good Reason and to receive the benefits provided
under this Plan upon an Involuntary Termination Following a Change in Control.

 

14.3         Heirs and
Representatives of Participant. 
This Plan shall inure to the benefit of and be enforceable by the
Participant’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devises, legatees or other beneficiaries.  If the Participant should die while any
amount would still be payable to the Participant hereunder (other than amounts
which, by their terms, terminate upon the death of the Participant) if the
Participant had continued to live, then all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Plan to the
executors, personal representatives or administrators of the Participant’s
estate.

 

15.                                 NOTICES

 

15.1                           General.  For purposes
of this Plan, notices and all other communications provided for herein shall be
in writing and shall be deemed to have been duly given when personally
delivered or when mailed by United States certified mail, return receipt
requested, or by overnight courier, postage prepaid, as follows:

 

(a)           if to the Company:

 

Facet Biotech Corporation

1400 Seaport Boulevard

Redwood City, California
94063

Attention: Chief Legal
Officer

 

(b)           if to the Committee:

 

Compensation Committee of
the

Board of Directors of

Facet Biotech Corporation

1400 Seaport Boulevard

Redwood City, California
94063

Attention: Corporate
Secretary

 

(c)           if to the
Participant, at the home address which the Participant most recently
communicated to the Company in writing.

 

Either party may provide
the other with notices of change of address, which shall be effective upon
receipt.

 

15.2                           Notice of Termination. 
Any termination by the Company of the Participant’s employment or any
resignation of employment by the Participant shall be 

 

22

 

communicated by a
notice of termination or resignation to the other party hereto given in
accordance with Section 15.1.  Such
notice shall indicate the specific termination provision in this Plan relied
upon, shall set forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination under the provision so indicated, and shall
specify the termination date.

 

16.                                 TERMINATION AND AMENDMENT OF PLAN

 

This Plan and/or any
Participation Agreement executed by a Participant may not be terminated with
respect to such Participant without the written consent of the Participant and
the approval of the Board or the Committee. 
This Plan and/or any Participation Agreement executed by a Participant
may be modified, amended or superseded with respect to such Participant only by
a supplemental written agreement between the Participant and the Company
approved by the Board or the Committee. 
Notwithstanding any other provision of the Plan to the contrary, the
Committee may, in its sole and absolute discretion and without the consent of
any Participant, amend the Plan or any Participation Agreement, to take effect
retroactively or otherwise, as it deems necessary or advisable for the purpose
of conforming the Plan or such Participation Agreement to any present or future
law relating to plans of this or similar nature (including, but not limited to,
Section 409A of the Code), and to the administrative regulations and
rulings promulgated thereunder.

 

17.                                 MISCELLANEOUS PROVISIONS

 

17.1         Administration.  The Plan shall be administered by the
Committee.  The Committee shall have the
exclusive discretion and authority to establish rules, forms and procedures for
the administration of the Plan, to construe and interpret the Plan, and to
decide all questions of fact, interpretation, definition, computation or
administration arising in connection with the Plan, including, but not limited
to, eligibility to participate in the Plan and the type and amount of benefits
paid under the Plan.  The rules,
interpretations and other actions of the Committee shall be binding and
conclusive on all persons.

 

17.2         Unfunded
Obligation.  Any amounts
payable to Participants pursuant to the Plan are unfunded obligations.  The Company shall not be required to
segregate any monies from its general funds, or to create any trusts, or
establish any special accounts with respect to such obligations.  The Company shall retain at all times
beneficial ownership of any investments, including trust investments, which the
Company may make to fulfill its payment obligations hereunder.  Any investments or the creation or
maintenance of any trust or any Participant account shall not create or
constitute a trust or fiduciary relationship between the Board or the Company
and a Participant, or otherwise create any vested or beneficial interest in any
Participant or the Participant’s creditors in any assets of the Company.

 

17.3         No Duty to
Mitigate; Obligations of Company. 
A Participant shall not be required to mitigate the amount of any
payment or benefit contemplated by this Plan by seeking employment with a new
employer or otherwise, nor shall any such payment or benefit (except for
benefits to the extent described in Section 4.1(b)(2) or Section 4.2(b)(2))
be reduced by any compensation or benefits that the Participant may receive
from employment by another employer. 
Except as otherwise provided by this Plan, including, without
limitation, the 

 

23

 

forfeiture of
benefits provisions contained in Section 4.1(b)(5) and Section 4.2(b)(5),
the obligations of the Company to make payments to the Participant and to make
the arrangements provided for herein are absolute and unconditional and may not
be reduced by any circumstances, including without limitation any set-off,
counterclaim, recoupment, defense or other right which the Company may have
against the Participant or any third party at any time.

 

17.4         No
Representations.  By executing
a Participation Agreement, the Participant acknowledges that in becoming a
Participant in the Plan, the Participant is not relying and has not relied on
any promise, representation or statement made by or on behalf of the Company
which is not set forth in this Plan.

 

17.5         Waiver.  No waiver by the Participant or the Company
of any breach of, or of any lack of compliance with, any condition or provision
of this Plan by the other party shall be considered a waiver of any other
condition or provision or of the same condition or provision at another time.

 

17.6         Choice of
Law.  The validity,
interpretation, construction and performance of this Plan shall be governed by
the substantive laws of the State of California, without regard to its conflict
of law provisions.

 

17.7         Validity.  The invalidity or unenforceability of any
provision of this Plan shall not affect the validity or enforceability of any
other provision of this Plan, which shall remain in full force and effect.

 

17.8         Benefits Not
Assignable.  Except as
otherwise provided herein or by law, no right or interest of any Participant
under the Plan shall be assignable or transferable, in whole or in part, either
directly or by operation of law or otherwise, including, without limitation, by
execution, levy, garnishment, attachment, pledge or in any other manner, and no
attempted transfer or assignment thereof shall be effective.  No right or interest of any Participant under
the Plan shall be liable for, or subject to, any obligation or liability of
such Participant.

 

17.9         Tax
Withholding.  All payments
made pursuant to this Plan will be subject to withholding of applicable income
and employment taxes.

 

17.10       Consultation
with Legal and Financial Advisors. 
By executing a Participation Agreement, the Participant acknowledges
that this Plan confers significant legal rights, and may also involve the
waiver of rights under other agreements; that the Company has encouraged the
Participant to consult with the Participant’s personal legal and financial
advisors; and that the Participant has had adequate time to consult with the
Participant’s advisors before executing the Participation Agreement.

 

17.11       Further Assurances.  From time to time, at the Company’s request
and without further consideration, the Participant shall execute and deliver
such additional documents and take all such further action as reasonably
requested by the Company to be necessary or desirable to make effective, in the
most expeditious manner possible, the terms of the Plan, the Participant’s
Participation Agreement and the Release, and to provide adequate assurance of
the Participant’s due performance thereunder.

 

24

 

18.                                 AGREEMENT

 

By executing a Participation Agreement, the Participant
acknowledges that the Participant has received a copy of this Plan and has
read, understands and is familiar with the terms and provisions of this
Plan.  This Plan shall constitute an
agreement between the Company and the Participant executing a Participation
Agreement.

 

IN WITNESS
WHEREOF, the undersigned Secretary of the Company certifies that the foregoing
sets forth the Plan as duly adopted by the Board on October 22, 2008.

 

	
   

  	
   

  

 

25

 

EXHIBIT A

 

FORM OF

 

AGREEMENT TO
PARTICIPATE IN THE

 

FACET BIOTECH
CORPORATION

 

RETENTION AND
SEVERANCE PLAN

 

 

AGREEMENT
TO PARTICIPATE IN THE

FACET
BIOTECH CORPORATION

RETENTION
AND SEVERANCE PLAN

Effective
                      ,
2008

 

In consideration of the benefits provided by the Facet
Biotech Corporation Retention and Severance Plan (the “Plan”), the undersigned employee of Facet Biotech
Corporation (the “Company”)
or its
                                    
subsidiary and the Company agree that, as of the date written below, the
undersigned shall become a Participant in the Plan and shall be fully bound by
and subject to all of its provisions. 
All references to a “Participant” in the Plan shall be deemed to refer
to the undersigned.

 

The undersigned employee acknowledges that the Plan
confers significant legal rights and may also constitute a waiver of rights
under other agreements with the Company; that the Company has encouraged the
undersigned to consult with the undersigned’s personal legal and financial advisors;
and that the undersigned has had adequate time to consult with the undersigned’s
advisors before executing this agreement.

 

The undersigned employee acknowledges that he or she
has received a copy of the Plan and has read, understands and is familiar with
the terms and provisions of the Plan. 
The undersigned employee further acknowledges that (1) by accepting
the arbitration provision set forth in Section 13 of the Plan, the
undersigned is waiving any right to a jury trial in the event of any dispute
covered by such provision and (2) except as otherwise established in an
employment agreement between a member of the Company Group and the undersigned,
the employment relationship between the undersigned and the Company Group is an
“at-will” relationship.

 

Executed on
                                                  .

 

	
  PARTICIPANT

  	
   

  	
  FACET BIOTECH
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
  Signature

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
  Name Printed

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Address

  	
   

  	
   

  
	
   

  	
   

  	
   

  
					

 

 

EXHIBIT B

 

FORM OF

 

GENERAL RELEASE OF
CLAIMS

[Age 40 and over]

 

 

GENERAL
RELEASE OF CLAIMS

[Age
40 and over]

 

This Agreement is by and
between [Employee Name] (“Employee”)
and [Facet Biotech Corporation or successor
that agrees to assume the Retention and Severance Plan following a Change in
Control] (the “Company”).  This
Agreement will become effective on the eighth (8th) day after it is signed by
Employee (the “Effective Date”), provided that the Company has signed this
Agreement and Employee has not revoked this Agreement (by written notice to [Company Contact Name] at the Company) prior
to that date.

 

RECITALS

 

A.            Employee was employed by the Company or its
                                    
subsidiary as of
                      ,
        .

 

B.            Employee and the Company entered into an Agreement to
Participate in the Facet Biotech Corporation Retention and Severance Plan (such
agreement and plan being referred to herein as the “Plan”) effective as of
                    ,
         wherein Employee is entitled
to receive certain benefits in the event of an Involuntary Termination (as
defined by the Plan), provided Employee signs and does not revoke a Release (as
defined by the Plan).

 

C.            [A Change in Control
(as defined by the Plan) has occurred as a result of [briefly describe change in control]

 

D.            Employee’s employment is being terminated as a result of
an [Involuntary Termination Absent a Change
in Control] [Involuntary Termination Following a Change in Control].  Employee’s last day of work and termination
are effective as of
                              ,
        .  Employee desires to receive the payments and
benefits provided by the Plan by executing this Release.

 

NOW, THEREFORE, the
parties agree as follows:

 

1.             The Company shall provide Employee with the applicable
payments and benefits set forth in the Plan in accordance with the terms of the
Plan.  Employee acknowledges that the
payments and benefits made pursuant to this paragraph are made in full
satisfaction of the Company’s obligations under the Plan.  Employee further acknowledges that Employee
has been paid all wages and accrued, unused vacation that Employee earned
during his or her employment with the Company or its subsidiary.

 

2.             Employee and Employee’s successors release the Company,
its respective subsidiaries, stockholders, investors, directors, officers,
employees, agents, attorneys, insurers, legal successors and assigns of and
from any and all claims, actions and causes of action, whether now known or
unknown, which Employee now has, or at any other time had, or shall or may have
against those released parties based upon or arising out of any matter, cause,
fact, thing, act or omission whatsoever related to Employee’s employment by the
Company or a subsidiary or the termination of such employment and occurring or
existing at any time up to and including the date on which Employee signs this
Agreement, including, but not limited to, any 

 

 

claims of breach of
written, oral or implied contract, wrongful termination, retaliation, fraud,
defamation, infliction of emotional distress, or national origin, race, age,
sex, sexual orientation, disability or other discrimination or harassment under
the Civil Rights Act of 1964, the Age Discrimination In Employment Act of 1967,
the Americans with Disabilities Act, the Fair Employment and Housing Act or any
other applicable law.  Notwithstanding
the foregoing, this release shall not apply to (a) any right of the
Employee pursuant to Section 4.4 of the Plan or pursuant to a Prior
Indemnity Agreement (as such term is defined by the Plan) or (b) any
rights or claims that cannot be released by Employee as a matter of law,
including, but not limited to, any claims for indemnity under California Labor
Code Section 2802.

 

3.             Employee acknowledges that he or she has read Section 1542
of the Civil Code of the State of California, which states in full:

 

A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially affected his
settlement with the debtor.

 

Employee waives any
rights that Employee has or may have under Section 1542 and comparable or
similar provisions of the laws of other states in the United States to the full
extent that he or she may lawfully waive such rights pertaining to this general
release of claims, and affirms that Employee is releasing all known and unknown
claims that he or she has or may have against the parties listed above.

 

4.             Employee and the Company acknowledge and agree that they
shall continue to be bound by and comply with the terms and their obligations
under the following agreements: (i) any proprietary rights or
confidentiality agreements between the Company and Employee, (ii) the
Plan, (iii) any Prior Indemnity Agreement (as such term is defined by the
Plan) to which Employee is a party, and (iv) any agreement between the
Company or its subsidiary and Employee evidencing an Equity Award (as such term
is defined by the Plan), as modified by the Plan.

 

5.             This Agreement shall be binding upon, and shall inure to
the benefit of, the parties and their respective successors, assigns, heirs and
personal representatives.

 

6.             The parties agree that any and all disputes that both (i) arise
out of the Plan, the interpretation, validity or enforceability of the Plan or the
alleged breach thereof and (ii) relate to the enforceability of this
Agreement or the interpretation of the terms of this Agreement shall be subject
to binding arbitration pursuant to Section 13 of the Plan.

 

7.             The parties agree that any and all disputes that (i) do
not arise out of the Plan, the interpretation, validity or enforceability of
the Plan or the alleged breach thereof and (ii) relate to the
enforceability of this Agreement, the interpretation of the terms of this
Agreement or any of the matters herein released or herein described shall be
subject to binding arbitration, to the extent permitted by law, in San Mateo
County, California or any other site mutually agreed to by the Company and
Employee, before the American Arbitration Association, as provided in this
paragraph.  The parties agree to and
hereby waive their rights to jury trial as to such matters to 

 

2

 

the extent permitted by
law; provided however, that (a) the arbitrator shall have no authority to
make any ruling or judgment that would confer any rights with respect to trade
secrets, confidential and proprietary information or other intellectual
property; and (b) this arbitration provision shall not preclude the
parties from seeking legal and equitable relief from any court having
jurisdiction with respect to any disputes or claims relating to or arising out
of the misuse or misappropriation of intellectual property.  The Company shall bear the costs of the
arbitrator, forum and filing fees and each party shall bear its own respective
attorney fees and all other costs, unless otherwise provided by law and awarded
by the arbitrator.

 

8.             This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
negotiations and agreements, whether written or oral, with the exception of any
agreements described in paragraph 4 of this Agreement.  This Agreement may not be modified or amended
except by a document signed by an authorized officer of the Company and
Employee.  If any provision of this
Agreement is deemed invalid, illegal or unenforceable, such provision shall be
modified so as to make it valid, legal and enforceable, and the validity,
legality and enforceability of the remaining provisions of this Agreement shall
not in any way be affected.

 

EMPLOYEE UNDERSTANDS THAT
EMPLOYEE SHOULD CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT AND
THAT EMPLOYEE IS GIVING UP ANY LEGAL CLAIMS EMPLOYEE HAS AGAINST THE PARTIES RELEASED
ABOVE BY SIGNING THIS AGREEMENT. 
EMPLOYEE FURTHER UNDERSTANDS THAT EMPLOYEE MAY HAVE UP TO [Insert as applicable: [45 DAYS] [21
DAYS] TO CONSIDER THIS AGREEMENT, THAT EMPLOYEE MAY REVOKE IT
AT ANY TIME DURING THE 7 DAYS AFTER EMPLOYEE SIGNS IT, AND THAT IT SHALL NOT
BECOME EFFECTIVE UNTIL THAT 7-DAY PERIOD HAS PASSED.  EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE IS
SIGNING THIS AGREEMENT KNOWINGLY, WILLINGLY AND VOLUNTARILY IN EXCHANGE FOR THE
COMPENSATION AND BENEFITS DESCRIBED IN PARAGRAPH 1.

 

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  [Employee Name]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Company]

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  By:

  	
   

  

 

3

 

EXHIBIT C

 

FORM OF

 

GENERAL RELEASE OF
CLAIMS

[Under age 40]

 

 

GENERAL
RELEASE OF CLAIMS

[Under
age 40]

 

This Agreement is by and
between [Employee Name] (“Employee”)
and [Facet Biotech Corporation or successor
that agrees to assume the Retention and Severance Plan following a Change in
Control] (the “Company”). 
This Agreement is effective on the day it is signed by Employee (the “Effective
Date”).

 

RECITALS

 

A.            Employee was employed by the Company or its
                                    subsidiary
as of
                        ,
        .

 

B.            Employee and the Company entered into an Agreement to
Participate in the Facet Biotech Corporation Retention and Severance Plan (such
agreement and plan being referred to herein as the “Plan”) effective as of
                      ,
         wherein Employee is entitled
to receive certain benefits in the event of an Involuntary Termination (as
defined by the Plan), provided Employee signs a Release (as defined by the
Plan).

 

C.            [A Change in Control (as
defined by the Plan) has occurred as a result of [briefly describe change in control]

 

D.            Employee’s employment is being terminated as a result of
an [Involuntary Termination Absent a Change
in Control] [Involuntary Termination Following a Change in Control].  Employee’s last day of work and termination
are effective as of
                            ,
         (the “Termination Date”).  Employee desires to receive the payments and
benefits provided by the Plan by executing this Release.

 

NOW, THEREFORE, the
parties agree as follows:

 

1.             The Company shall provide Employee with the applicable
payments and benefits set forth in the Plan in accordance with the terms of the
Plan.  Employee acknowledges that the
payments and benefits made pursuant to this paragraph are made in full
satisfaction of the Company’s obligations under the Plan.  Employee further acknowledges that Employee
has been paid all wages and accrued, unused vacation that Employee earned
during his or her employment with the Company or its subsidiary.

 

2.             Employee and Employee’s successors release the Company,
its respective subsidiaries, stockholders, investors, directors, officers,
employees, agents, attorneys, insurers, legal successors and assigns of and
from any and all claims, actions and causes of action, whether now known or
unknown, which Employee now has, or at any other time had, or shall or may have
against those released parties based upon or arising out of any matter, cause,
fact, thing, act or omission whatsoever related to Employee’s employment by the
Company or a subsidiary or the termination of such employment and occurring or
existing at any time up to and including the date on which Employee signs this
Agreement, including, but not limited to, any claims of breach of written, oral
or implied contract, wrongful termination, retaliation, fraud, defamation,
infliction of emotional distress, or national origin, race, age, sex, sexual orientation,

 

 

disability or other
discrimination or harassment under the Civil Rights Act of 1964, the Age
Discrimination In Employment Act of 1967, the Americans with Disabilities Act,
the Fair Employment and Housing Act or any other applicable law.  Notwithstanding the foregoing, this release
shall not apply to (a) any right of the Employee pursuant to Section 4.4
of the Plan or pursuant to a Prior Indemnity Agreement (as such term is defined
by the Plan) or (b) any rights or claims that cannot be released by
Employee as a matter of law, including, but not limited to, any claims for
indemnity under California Labor Code Section 2802.

 

3.             Employee acknowledges that he or she has read Section 1542
of the Civil Code of the State of California, which states in full:

 

A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially affected his
settlement with the debtor.

 

Employee waives any
rights that Employee has or may have under Section 1542 and comparable or
similar provisions of the laws of other states in the United States to the full
extent that he or she may lawfully waive such rights pertaining to this general
release of claims, and affirms that Employee is releasing all known and unknown
claims that he or she has or may have against the parties listed above.

 

4.             Employee and the Company acknowledge and agree that they
shall continue to be bound by and comply with the terms and their obligations
under the following agreements: (i) any proprietary rights or
confidentiality agreements between the Company and Employee, (ii) the
Plan, (iii) any Prior Indemnity Agreement (as such term is defined by the
Plan) to which Employee is a party, and (iv) any agreement between the
Company or its subsidiary and Employee evidencing an Equity Award (as such term
is defined by the Plan), as modified by the Plan.

 

5.             This Agreement shall be binding upon, and shall inure to
the benefit of, the parties and their respective successors, assigns, heirs and
personal representatives.

 

6.             The parties agree that any and all disputes that both (i) arise
out of the Plan, the interpretation, validity or enforceability of the Plan or
the alleged breach thereof and (ii) relate to the enforceability of this
Agreement or the interpretation of the terms of this Agreement shall be subject
to binding arbitration pursuant to Section 13 of the Plan.

 

7.             The parties agree that any and all disputes that (i) do
not arise out of the Plan, the interpretation, validity or enforceability of
the Plan or the alleged breach thereof and (ii) relate to the
enforceability of this Agreement, the interpretation of the terms of this
Agreement or any of the matters herein released or herein described shall be
subject to binding arbitration, to the extent permitted by law, in San Mateo
County, California or any other site mutually agreed to by the Company and
Employee, before the American Arbitration Association, as provided in this paragraph.  The parties agree to and hereby waive their
rights to jury trial as to such matters to the extent permitted by law;
provided however, that (a) the arbitrator shall have no authority to make
any ruling or judgment that would confer any rights with respect to trade
secrets, 

 

 

confidential and
proprietary information or other intellectual property; and (b) this
arbitration provision shall not preclude the parties from seeking legal and
equitable relief from any court having jurisdiction with respect to any
disputes or claims relating to or arising out of the misuse or misappropriation
of intellectual property.  The Company
shall bear the costs of the arbitrator, forum and filing fees and each party
shall bear its own respective attorney fees and all other costs, unless
otherwise provided by law and awarded by the arbitrator.

 

8.             This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
negotiations and agreements, whether written or oral, with the exception of any
agreements described in paragraph 4 of this Agreement.  This Agreement may not be modified or amended
except by a document signed by an authorized officer of the Company and
Employee.  If any provision of this
Agreement is deemed invalid, illegal or unenforceable, such provision shall be
modified so as to make it valid, legal and enforceable, and the validity,
legality and enforceability of the remaining provisions of this Agreement shall
not in any way be affected.

 

EMPLOYEE UNDERSTANDS THAT
EMPLOYEE SHOULD CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT AND
THAT EMPLOYEE IS GIVING UP ANY LEGAL CLAIMS EMPLOYEE HAS AGAINST THE PARTIES
RELEASED ABOVE BY SIGNING THIS AGREEMENT. 
EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE IS SIGNING THIS AGREEMENT KNOWINGLY,
WILLINGLY AND VOLUNTARILY IN EXCHANGE FOR THE COMPENSATION AND BENEFITS
DESCRIBED IN PARAGRAPH 1.

 

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  [Employee Name]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Company]

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  By:Exhibit 10.16

 

CONFIDENTIAL PROVISIONS REDACTED

 

LICENSE
AGREEMENT

 

BY AND
BETWEEN

 

PROTEIN
DESIGN LABS, INC.

 

AND

 

HUMAN GENOME
SCIENCES, INC.

 

December 15,
2005

 

 

CONFIDENTIAL
TREATMENT REQUESTED

 

 

LICENSE
AGREEMENT

 

This
License Agreement (“Agreement”) is
entered into as of December 15, 2005 (the “Effective Date”) by and between PROTEIN DESIGN LABS, INC.,
having its principal offices at 34801 Campus Drive, Fremont, CA 94555 USA (“PDL”), and HUMAN GENOME SCIENCES, INC.,
having its principal offices at 14200 Shady Grove Road, Rockville, MD 20850 USA
(“HGS”). PDL and HGS are each
individually referred to as a “Party,”
and collectively as the “Parties.”

 

RECITALS

 

WHEREAS, HGS owns certain intellectual
property rights in inventions related to the receptor to the Tumor necrosis
factor-like weak inducer of apoptosis (“Tweak-R”);

 

WHEREAS, PDL desires to obtain, and HGS
wishes to grant to PDL, a license under such intellectual property rights to
practice such inventions for the purposes of research, development and
commercialization of products, all on the terms set forth below in this
Agreement;

 

WHEREAS, PDL owns or controls certain
patents and patent applications concerning humanized antibodies and antibody
humanization technology including certain patents and patent applications that
are sometimes referred to as the “Queen
Patents”;

 

WHEREAS, HGS desires to generate humanized
antibodies directed against up to [****]* HGS Antigens and to conduct research,
development and commercial activities on these humanized antibodies that would
be claimed in, or would involve the use of certain antibody humanization
technologies claimed in the Queen Patents; and

 

WHEREAS, PDL is interested in granting to
HGS a non-exclusive license under the Queen Patents for the purpose of
conducting research, development and commercial activities on humanized
antibodies directed against up to [****]* HGS Antigens.

 

NOW, THEREFORE, in consideration of the
foregoing premises and the covenants and promises contained in this Agreement,
the Parties agree as follows:

 

Article 1.  DEFINITIONS

 

As
used herein, the following initially capitalized terms shall have the following
meanings:

 

1.1                               “Affiliate” shall mean any
individual, corporation, association or other business entity which directly or
indirectly controls, is controlled by or is under common control with the Party
in question. As used in this definition of “Affiliate,” the term “control”
means the direct or indirect ownership of more than fifty percent (50%) of the
stock having the right to vote for directors thereof or the ability to
otherwise control the management of the corporation or other business entity
whether through the ownership of voting securities, by contract, resolution,
regulation or otherwise; provided, however,
that the term “Affiliate” shall not include subsidiaries or other entities in
which a Party or its Affiliates owns a majority of the ordinary voting power necessary to elect a majority of
the board of directors or other governing body, but is restricted from electing
such majority by contract or otherwise until the time such restrictions are no
longer in effect.

 

*
Certain information on this page has been omitted and filed separately
with the SEC. Confidential treatment has been requested with respect to the
omitted portions.

 

2

 

1.2                               “Antibody”  shall mean a molecule comprising or
containing one or more immunoglobulin variable domains or parts of such
domains, fragments, variants, modifications or derivatives thereof.

 

1.3                               “Bulk
Product” means Royalty Product or Developed Drug Product, as the case may
be, supplied in a form other than Finished Product which can be converted into
Finished Product.

 

1.4                               “Commercially Reasonable and Diligent Efforts”
shall mean efforts and resources commonly used in the research-based
pharmaceutical industry for a product at a similar stage in its product life of
similar market potential taking into account efficacy, the competitiveness of
alternative products in the marketplace, the patent and other proprietary
position of the product, the likelihood of regulatory approval given the
regulatory structure involved, the profitability of the product including the
royalties payable to licensors of patent rights, alternative products and other
relevant factors. Commercially Reasonable Efforts shall be determined on a
market-by-market basis for a particular product, and it is anticipated that the
level of effort will change over time, reflecting changes in the status of the
product and the market involved.

 

1.5                               “Confidential Information” is defined in Section 9.1.

 

1.6                               “Controlled”
shall mean with respect to any know-how, patent, other intellectual
property right, data, or regulatory filing, the possession of the right,
whether directly or indirectly, and whether by ownership, license or otherwise,
to assign, or grant a license, sublicense or other right to or under, such
know-how, patent, other intellectual property right, data, or regulatory filing
as provided for herein without violating the terms of any agreement or other
arrangements with any Third Party.

 

1.7                               “Developed
Drug Product” shall mean any therapeutic product that is not a Licensed
Biologic Product, that was discovered through the use of a drug screening
method, which screening method or material employed in such method would, but
for the license granted herein, infringe a Valid Royalty Claim of the Licensed
Intellectual Property.

 

1.8                               “Diagnostic
Field” shall mean any use for the diagnosis, prognosis, or monitoring of a
human disease or disorder.

 

1.9                               “Finished
Product(s)” means any and all Royalty Products or Developed Drug Products,
as the case may be, in a form for use by an end user and not intended for
further chemical or genetic manipulation or transformation.

 

1.10                        “HGS
Antigens” shall mean an antigen selected by HGS and approved by PDL for the
grant by PDL to HGS of a license to its PDL Antibody Humanization Patent Rights
as provided by Section 2.7 of this Agreement up to a limit of [****]*
antigens. HGS shall identify each such HGS Antigen after the Effective Date,
but no later than the [****]* date for each associated Licensed Queen Product.

 

1.11                        “Licensed
Biologic Product(s)” shall mean any product that contains (a) an
Antibody, or (b) a protein or peptide, the manufacture, use, sale, offer
for sale or import of which, but for the licenses granted herein, would
infringe a Valid Royalty Claim.

 

* Certain
information on this page has been omitted and filed separately with the
SEC. Confidential treatment has been requested with respect to the omitted
portions.

 

3

 

1.12                        “Licensed
Diagnostic Product(s)” shall mean any product used solely for the
diagnosis, prognosis, or monitoring of a human disease, but not to treat or
prevent a human disease, the manufacture, use, sale, offer for sale or import
of which, but for the license from HGS, would infringe a Valid Royalty Claim.

 

1.13                        “Licensed
Drug Product(s)” shall mean any product other than a Licensed Biologic
Product, Licensed Diagnostic Product, or Developed Drug Product, the
manufacture, use, sale, offer for sale or import of which, but for the license
from HGS, would infringe a Valid Royalty Claim.

 

1.14                        “Licensed
Queen Product(s)” shall mean any Antibody that binds to an HGS Antigen
whose development, manufacture, import, export, use, offer for sale or sale
would infringe a Valid Queen Claim absent a license to one or more of the Queen
Patents.

 

1.15                        “Licensed
Intellectual Property” shall mean (a) all patents and patent
applications listed in Exhibit A and any future patent applications that
claim the manufacture, use, or composition of matter of a product with respect
to Tweak-R; (b) all patent applications anywhere in the world claiming
priority to such filings; (c) all provisionals, converted provisionals,
divisionals, continuations and continuations-in-part (but solely to the extent
not containing new matter) of any of the foregoing in the United States; (d) any
non-United States counterparts of the applications listed in (a), (b) and (c) above;
and (e) all patents issuing on any of the foregoing patent applications
listed in (a)-(d) and all reissues, re-examinations, and extensions in the
United States (and their equivalents in the other countries of the world) of
any such patents; collectively, all of the above subparagraphs, solely to the
extent that they claim the manufacture, use, or composition of matter of a
product with respect to Tweak-R.

 

1.16                        “Major
European Country” shall mean any one of [****]*.

 

1.17                        “Net Sales” shall mean, with respect to a particular
time period, the gross amount invoiced by PDL, its sublicensees and Affiliates
for sales, transfer or disposition to independent, unrelated third parties of
Royalty Products or Developed Drug Products (such Royalty Products or Developed
Drug Products being in the final form intended for use by the end user), during
such time period (including the fair market value of all other consideration
received for the sale, transfer or other disposition of Royalty Products or
Developed Drug Products by PDL, its sublicensees and Affiliates, whether such
consideration is in cash, payments in kind, exchange or other forms), less an
allowance of [****]* to cover factors such as (a) credits
or allowances, if any, actually granted on account of price adjustments,
recalls, rejection or return of items previously sold, (b) excise and
sales taxes, duties or other taxes imposed on and paid with respect to such
sales (excluding income or franchise taxes of any kind) and (c) outer
packing, freight and freight insurance costs. 
The provisions of (a) through (c) above shall be adjusted
periodically as necessary to reflect amounts actually incurred. Notwithstanding
anything to the contrary, in all cases Net Sales shall be determined in
accordance with United  States
GAAP. In the event that a Royalty Product or Developed Drug Products is sold in
combination with other active components, (“Combination Royalty Product”), Net
Sales for purposes of royalty payments on the Combination Royalty Products
shall be calculated by multiplying the Net Sales of the Combination Royalty
Product by the fraction A/(A+B), where A is the gross selling price of the
Royalty Product sold separately (i.e. without the other active components) and
B is the gross selling price of the other active components. In the event that
no such separate sales are made, Net Sales for royalty payments shall be
calculated by multiplying Net Sales of the Combination Royalty Product by C/
(C+D) where C is the fully allocated cost of the Royalty Product

 

* Certain
information on this page has been omitted and filed separately with the
SEC. Confidential treatment has been requested with respect to the omitted
portions.

 

4

 

(not including the other active components) and D is
the fully allocated cost of such other active components, such costs being
determined using United States GAAP consistently applied.

 

Net Sales for Bulk Products shall be calculated by multiplying the
units of Finished Product to which such Bulk Product is reasonably anticipated
to be converted by the established market price of the Finished Product on the
date of sale of the Bulk Product. By way of example and without limitation,
units of Finished Product may be measured in grams or doses, as appropriate.

 

The method of calculating Net Sales of
materials in forms other than Finished Product or Bulk Product that can be
converted into Finished Product shall be established by good faith discussion
between PDL and HGS prior to the first sale or transfer of any such material by
PDL to a non-Affiliate.

 

1.18                        “PDL Antibody
Humanization Patent Rights” shall mean those patent and patent applications
related to the humanization of Antibodies consisting of the patents identified
in Exhibit B  and any
foreign counterparts thereto, and any, continuations, continuations-in-part,
reissues, extensions or patent term extension of any such patent, divisions of
such patents or patent applications or any substitute applications therefor,
and any supplementary protection certificate, confirmation patent or
registration patent or patent of addition based on any such patent owned by PDL
as of the Effective Date or at any time during the term of this Agreement
otherwise referred to herein as the “Queen
Patents”.

 

1.19                        “PDL License Agreement” shall mean the agreement in the form
attached hereto as Exhibit C.

 

1.20                        “Phase II Clinical Trial”
shall mean the
first controlled and lawful study of the safety, dose ranging and efficacy of a
specific Royalty Product or Developed Drug Product by administration of such
Royalty Product or Developed Drug Product to human beings where the principal
purpose of such trial is to generate sufficient data (if successful) to
commence a Phase III Clinical Trial for such Royalty Product or Developed Drug
Product or the first trial that would otherwise satisfy the requirements of 21
C.F.R. Section 312.21(a).

 

1.21                        “Phase III Clinical
Trial” shall mean
the first controlled and lawful pivotal study of the efficacy of a specific
Royalty Product or Developed Drug Product by administration of such Royalty
Product or Developed Drug Product to human beings where the principal purpose
of such trial is to provide statistically significant efficacy data primarily
to support an application for Regulatory Approval of a Royalty Product or
Developed Drug Product for the  indication
being investigated by the trial or the first trial that would otherwise satisfy
the requirements of 21 C.F.R. Section 312.21(c).

 

1.22                        “Regulatory Application”
shall mean an application
filed to obtain Regulatory Approval, including, without limitation, a Biologics
License Application (“BLA”) or New
Drug Application (“NDA”) and their
foreign equivalents.

 

1.23                        “Regulatory Approval” shall mean the final government approval
required to market a Royalty Product in a given country, including, but not
limited to, product registration(s) and price and marketing approval(s),
as applicable, in such country.

 

1.24                        “Royalty Product” shall mean a Licensed Biologic Product, a
Licensed Diagnostic Product, or a Licensed Drug Product.

 

1.25                        “Royalty Term” is defined in Section 5.1.

 

1.26                        “Term” is defined in Section 5.1.

 

5

 

1.27                        “Therapeutic Field” shall mean any human and/or animal use.

 

1.28                        “Tweak-R” shall mean the receptor to the tumor
necrosis factor like weak inducer of apoptosis, which is the molecule
designated [****]* by HGS.

 

1.29                        “Valid Milestone Claim” shall mean (i) a claim in an
unexpired, issued patent within the Licensed Intellectual Property that has not
been found to be unpatentable, invalid or unenforceable by a decision of a
court or other governmental body of competent jurisdiction in the country of
the patent, which decision is unappealable or unappealed within the time allowed
for appeal, that has not been rendered unenforceable through disclaimer or
otherwise, and that has not been lost though an interference proceeding, or (ii) for
the time period ending on the [****]*
anniversary of the
Effective Date, a claim in a pending patent application within the Licensed
Intellectual Property. For purposes of clarity, no claim of any patent
application shall be considered a Valid Milestone Claim at any time following
the [****]* anniversary of the Effective Date.

 

1.30                        “Valid Queen Claim” shall mean a claim in an unexpired,
issued patent within the PDL Antibody Humanization Patent Rights that has not
been found to be unpatentable, invalid or unenforceable by a decision of a
court or other governmental body of competent jurisdiction in the country of
the patent, which decision is unappealable or unappealed within the time
allowed for appeal, that has not been rendered unenforceable through disclaimer
or otherwise, and that has not been lost though an interference proceeding.

 

1.31                        “Valid Royalty Claim” shall mean a claim in an unexpired,
issued patent within the Licensed Intellectual Property that has not been found
to be unpatentable, invalid or unenforceable by a decision of a court or other
governmental body of competent jurisdiction in the country of the patent, which
decision is unappealable or unappealed within the time allowed for appeal, that
has not been rendered unenforceable through disclaimer or otherwise, and that
has not been lost though an interference proceeding.

 

Article 2.  LICENSES

 

2.1                               License Grant to PDL for
Licensed Biologic Products. HGS hereby grants to PDL an exclusive, sub-licensable
(without restriction), worldwide license to PDL to research, develop, use,
make, have made, sell, offer for sale, import or export any Licensed Biologic
Product(s) in the Therapeutic Field.

 

2.2                               License Grant to PDL for
Licensed Drug Products. HGS hereby grants to PDL an exclusive, sub-licensable (with restriction
as set forth in Section 2.5 below), worldwide license to research, develop,
use, make, have made, sell, offer for sale, import or export any Licensed Drug
Product(s) in the Therapeutic Field. Notwithstanding the foregoing, PDL
may sublicense a Licensed Drug Product, provided that PDL has at least [****]* covering
such product.

 

2.3                               License Grant to PDL for
Developed Drug Products. HGS hereby grants to PDL a non-exclusive, sub-licensable (with
restriction as set forth in Section 2.5 below), worldwide license to
research, develop, use, make, have made, sell, offer for sale, import or export
any Developed Drug Products in the Therapeutic Field. Notwithstanding the
foregoing, PDL may sublicense a Developed Drug Product, provided that PDL has
at least [****]* covering such product.

 

* Certain information on this page has
been omitted and filed separately with the SEC. Confidential treatment has been
requested with respect to the omitted portions.

 

6

 

2.4                               License Grant to PDL for
Licensed Diagnostic Products. HGS hereby grants to PDL a non-exclusive,
sub-licensable (with restriction), worldwide license to research, develop, use,
make, have made, sell, offer for sale, import or export any Licensed Diagnostic
Product in the Diagnostic Field. PDL’s right to sublicense a Licensed
Diagnostic Product will be limited to applications reasonably determined to be
necessary for successful commercialization of the Licensed Biologic Product or
Licensed Drug Product and subject to HGS approval, which will not be
unreasonably withheld.

 

2.5                               Sublicensing. Each sublicense granted hereunder shall
include a grant that is consistent with the terms herein and PDL shall be
responsible for payments and royalties under such sublicense due to HGS as if
such were made by PDL directly and pursuant to the terms and conditions of this
Agreement. PDL shall provide HGS with written notice of any sublicense granted
hereunder within [****]* of granting such sublicense.

 

2.6                               License Grant to HGS. PDL hereby grants to HGS, and HGS hereby
accepts, a non-exclusive, non-sublicensable, royalty-free sublicense under the
exclusive rights granted to PDL pursuant to Section 2.1 herein to
research, develop, make and use (but not to, have made, sell, or offer for
sale) Licensed Biologic Products for HGS internal research only.

 

2.7                               Licenses to HGS Under the Queen
Patents

 

2.7.1                     Election. Subject to the terms and conditions of this
Agreement, PDL hereby grants to HGS through the [****]*
anniversary of the
Effective Date (or until such earlier time as HGS has exercised its rights
under this Section 2.7 with respect to the HGS Antigens), the right, upon
written notice to PDL, to receive licenses under the PDL Antibody Humanization
Patent Rights for the HGS Antigens. HGS shall identify each HGS Antigen prior
to [****]* for the associated Licensed Queen Product. Each
license shall be a nonexclusive, worldwide (except as provided in Section 2.7.2),
transferable (to an Affiliate of HGS or to a successor in interest to the
CoGenesys division of HGS), license under the PDL Antibody Humanization Patent
Rights to make, have made, use, import, offer for sale and sell or otherwise
dispose of Licensed Queen Product pursuant to a PDL License Agreement to be
executed by the Parties after such written notice. The rights of HGS under such
PDL License Agreement shall include the right to grant sublicenses for Licensed
Queen Product in accordance with the terms of the applicable PDL License
Agreement. Each license elected by HGS hereunder shall be pursuant to a
separate PDL License Agreement and effective as of the date when the election
for such license by HGS becomes irrevocable, which license agreement will
include such terms that are standard and customary for PDL in other
non-exclusive license agreements under the Queen Patents substantially in the
form as attached hereto as Exhibit C to this Agreement.

 

2.7.2                     Procedure for Exercise of License Rights. Prior to [****]*, HGS shall provide PDL with written
notice identifying the HGS Antigen for which HGS desires to enter into a PDL
license agreement pursuant to the provisions of Section 2.7.1. A separate
notice shall be provided with respect to each antigen for which a license is
requested. PDL shall promptly review and respond in writing to the request by
HGS for a license within [****]* of receipt of the written request. PDL
may refuse to grant HGS a license only if PDL [****]*. In the event that PDL validly refuses
to grant HGS a license under the PDL Antibody Humanization Patent Rights, [****]*. If PDL
affirms HGS’s request or has not responded by notice in writing within [****]* of
receipt of HGS’s request under this Section 2.7.2, then HGS’s election
shall be deemed irrevocable and HGS and PDL shall enter into a PDL License
Agreement with respect to that HGS Antigen for the territory designated.

 

* Certain
information on this page has been omitted and filed separately with the
SEC. Confidential treatment has been requested with respect to the omitted
portions.

 

7

 

2.7.3                     Humanization
Technical Support.  [****]*.

 

Article 3.  PAYMENTS AND ROYALTIES

 

3.1                               License Fee. Within [****]* after the Effective Date, PDL shall pay
HGS a non-refundable initial licensing fee of [****]*.

 

3.2                               Milestone Payments.

 

3.2.1                     PDL shall pay HGS the following
non-refundable amounts for the first achievement of the following milestone
events by PDL, its Affiliates or sublicensees for the first of each type of
Royalty Product covered by a Valid Milestone Claim (subject to Section 3.2.4):

 

	
   

  	
   

  	
  Licensed Biologic

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Product or

  	
   

  	
  Licensed

  	
   

  
	
   

  	
   

  	
  Licensed Drug

  	
   

  	
  Diagnostic

  	
   

  
	
  Milestone Event

  	
   

  	
  Product

  	
   

  	
  Product

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  

 

* Certain information on this page has
been omitted and filed separately with the SEC. Confidential treatment has been
requested with respect to the omitted portions.

 

8

 

	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  

 

3.2.2                     Solely for the sake of clarification, and
only with respect to this Section 3.2, a Royalty Product shall include a
product covered by a Valid Milestone Claim or a Valid Royalty Claim. Such
non-refundable amounts shall be payable within [****]* after the day on which the relevant
milestone event is achieved.

 

3.2.3                     [****]*.

 

3.2.4                     In the event that a payment to HGS upon
achievement of a milestone event pursuant to Section 3.2.1 herein with
respect to a Royalty Product is due from PDL, and PDL has not paid one or more
previous milestone payments (if any) with respect to such Royalty Product, then
at such time PDL shall pay all such previously unpaid milestone payments (if
any) with respect to such Royalty Product. If, at the time of the first
commercial sale of a Royalty Product by PDL, its Affiliates or sublicensee, PDL
has not paid all milestone payments (if any) pursuant to Section 3.2.1
herein with respect to such Royalty Product, then at such time PDL shall pay
all such previously unpaid milestone payments (if any) with respect to such
Royalty Product.

 

3.2.5                     Each of the milestone payments payable
pursuant to Section 3.2.1 above shall be payable only one time for the first
achievement of such milestone by a Developed Drug Product, provided further
that PDL shall pay to HGS [****]* of each milestone payment that would be
applicable to a Licensed Drug Product referenced in Section 3.2.1 above
for each Developed Drug Product that achieves such milestone.

 

3.2.6                     Milestones Achieved by
Sublicensees. [****]*.

 

3.3                               Non-creditable Payments.
Milestone
payments payable pursuant to Section 3.2 are not creditable against the
earned royalties set forth in Section 3.5.

 

3.4                               Entire Consideration. The initial license fee payable pursuant
to Section 3.1, the milestone payments payable pursuant to Section 3.2,
if any, and the right granted to the Queen Patents in Section 2.7 of this
Agreement shall be the entire consideration for the licenses granted to PDL
hereunder for any use or purpose other than the sale of Royalty Products or
Developed Drug Products.

 

3.5                               Royalties.

 

3.5.1                     PDL shall pay HGS earned royalties on
annual Net Sales of Royalty Products by PDL, its Affiliates or sublicensees,
covered by a Valid Royalty Claim at the following rates:

 

* Certain
information on this page has been omitted and filed separately with the
SEC. Confidential treatment has been requested with respect to the omitted
portions.

 

9

 

	
  Annual Net Sales

  	
   

  	
  Royalty Rate

  	
   

  
	
  The portion of annual Net Sales worldwide of
  Licensed Biologic Products or Licensed Drug Products less than U.S. $[****]*

  	
   

  	
  [****]*

  	
   

  
	
  The portion of annual Net Sales worldwide of
  Licensed Biologic Products or Licensed Drug Products equal to U.S. $[****]* but
  less than U.S. $[****]*

  	
   

  	
  [****]*

  	
   

  
	
  The portion of annual Net Sales worldwide of
  Licensed Biologic Products or Licensed Drug Products equal to U.S. $[****]* but
  less than U.S. $[****]*

  	
   

  	
  [****]*

  	
   

  
	
  The portion of annual Net Sales worldwide of
  Licensed Biologic Products or Licensed Drug Products equal to U.S. $[****]*and
  greater

  	
   

  	
  [****]*

  	
   

  
	
  Net Sales worldwide of Licensed Diagnostic Products

  	
   

  	
  [****]*

  	
   

  

 

PDL’s obligation to pay royalties under this Section 3.5.1 will
accrue or become due or payable on a country-by-country basis solely with
respect to Royalty Product(s) that are covered by a Valid Royalty Claim at
the time of sale by PDL or its sublicensees. Where a Royalty Product is covered
by more than one Valid Royalty Claim, only a single royalty payment shall be
payable and there will be no multiple royalties due with respect to each
separate Royalty Product under this Section 3.5.1.

 

3.5.2                     Developed Drug Products.
For a Developed
Drug Product, PDL shall pay HGS an earned royalty on annual Net Sales of
Developed Drug Products by PDL its Affiliates or sublicensees at a rate of [****]* of
those required for Royalty Products. In the event that a Licensed Drug Product
is also a Developed Drug Product, PDL’s sole royalty payment obligations
hereunder shall be set forth in Section 3.5.1 above, and the royalty
obligations set forth in this Section 3.5.2 shall not apply.

 

3.6                               Net Sales Reports. Beginning with the calendar quarter of
the first commercial sale of a Royalty Product or Developed Drug Product,
within [****]* after the end of each calendar quarter in which there
are Net Sales, PDL shall submit a written report to HGS stating the amount of
Net Sales in such calendar quarter and the amount of royalty due hereunder with respect to
such Net Sales. Such written report shall describe for each calendar quarter: (a) the
total worldwide Net Sales; (b) the Net Sales on a country by country
basis; (c) the exchange rate used to convert Net Sales from local currency
to U.S. dollars; and (d) the total royalty due.

 

3.7                               Payment. Concurrently with the making of each
written report as set forth in Section 3.7, PDL shall pay to HGS any
royalties due hereunder with respect to Net Sales in the calendar quarter
covered by the report. If PDL does not make any royalty or other payments due
hereunder at the times that they are due, PDL shall pay to HGS interest on each
late payment, to the extent permitted by applicable law, at a rate of [****]* the
annual prime rate of interest, as published in the Federal Reserve Bulletin
H.15 or successor thereto, for the date on which such payment becomes
delinquent, calculated

 

* Certain
information on this page has been omitted and filed separately with the
SEC. Confidential treatment has been requested with respect to the omitted
portions.

 

10

 

daily on the basis of a three hundred sixty-five (365)
day year. Royalties payable on sales in countries other than the United States
shall be calculated by multiplying the appropriate royalty rate times the sales
in each currency in which they are made and converting the resulting amounts
into U.S. Dollars, at the average rate of exchange for the currency of the
country, from which the royalties are payable, as reported by Reuters Ltd for each calendar quarter for
which a payment is due. Such payments shall be without deduction of exchange,
collection, or other charges. All payments to HGS hereunder shall be made in
U.S. Dollars by wire transfer to an HGS account identified by HGS prior to the
date such payment is due. PDL shall send HGS a facsimile transmission or an
email message confirming the details of each such transfer promptly after
making such transfer.

 

3.8                               Accounting and Records. PDL shall keep complete, true and
accurate records of the Net Sales of all Royalty Products or Developed Drug
Products by PDL and its sublicensees for not less than [****]*
following the end of the [****]* in which such sales were made. PDL shall
make such records available to an independent certified public accountant
representing HGS, who will not be unreasonably rejected by PDL, provided that
such representative has entered into a confidentiality agreement with PDL
limiting the use of such records to verification of the accuracy of payments
due hereunder and prohibiting the disclosure of information in such records to
HGS or to any third party for any purpose. Audits of such records shall be
conducted no more frequently than annually and upon at least [****]* prior
written notice during reasonable business hours, for the sole purpose of
conducting an audit to verify the accuracy of PDL’s royalty statements and any
other payments made or owed to HGS. Such accountant shall provide PDL with a
copy of any written report prepared or given to HGS in connection with such
audits. Any claims of underpayment or overpayment will be submitted to PDL
within [****]* of the final written report. All such audits shall be
conducted at HGS’s cost and expense; provided, however, that if the audit
reveals an underpayment to HGS of more than [****]*, PDL shall pay for the cost and expense
of the audit.

 

3.9                               Taxes. HGS shall be responsible for any and all
taxes levied on account of amounts it receives under this Agreement. If PDL is
required by law, rule or regulation to withhold taxes from the types of
payments due HGS hereunder, PDL shall (a) deduct those taxes from the
amount otherwise remittable to HGS hereunder, (b) pay such taxes to the
proper taxing authority and (c) send evidence of the obligation together
with proof of payment to HGS within [****]* following that payment.

 

3.10                        HGS Payments for the PDL Antibody
Humanization Patent Licenses.

 

3.10.1              Milestones. For each license granted pursuant to HGS’ exercise
of its right under Section 2.7 of this Agreement, HGS shall pay to PDL [****]*.

 

3.10.2              Royalties. HGS shall pay PDL an earned royalty of [****]* on
annual Net Sales, as defined in the applicable PDL License Agreement, by HGS, a
successor in interest to the CoGenesys division of HGS, their sublicensees, or
Affiliates for any Licensed Queen Product [****]*.

 

Article 4.  INTELLECTUAL PROPERTY

 

4.1                               Prosecution
of Licensed Intellectual Property.

 

4.1.1                     Licensed Biologic
Products and Licensed Drug Products. Outside counsel mutually acceptable to PDL and HGS
shall have the responsibility to file, prosecute and maintain Licensed
Intellectual Property relating to Licensed Biologic Products and Licensed Drug
Products, and

 

* Certain
information on this page has been omitted and filed separately with the
SEC. Confidential treatment has been requested with respect to the omitted
portions.

 

11

 

methods of making and using the same, and HGS shall
transfer responsibility therefor to such outside counsel promptly after the
Effective Date. Such outside counsel shall respond to both Parties’ reasonable
requests for information about the course of patent prosecution or other
proceedings relating thereto and shall provide both Parties with copies of all
communications relating thereto with a patent office. The outside counsel shall
perform its duties in the filing, prosecution and maintenance of such Licensed
Intellectual Property hereunder in the best interests of both parties hereto.
The expenses for such outside counsel and all filing, issue, maintenance and
other fees and other costs of filing, prosecution and maintenance of such
Licensed Intellectual Property shall be borne by PDL.  PDL shall be responsible for providing
instructions to such outside counsel and shall reasonably consider comments
thereon by HGS. The Parties shall cooperate reasonably in the prosecution
thereof and shall share all material information relating thereto promptly
after receipt of such information. If PDL elects not to participate in the filing,
prosecution or maintenance, or otherwise abandons, any such Licensed
Intellectual Property in a country for which the Parties had agreed to so file
and prosecute such Licensed Intellectual Property, it shall promptly notify HGS
in a timely manner to allow HGS to preserve any and all rights in such
intellectual property. Thereafter, HGS shall have the right to pursue, at its
sole expense and sole discretion, prosecution or maintenance of such Licensed
Intellectual Property in the relevant country and PDL shall have no further
rights to such Licensed Intellectual Property.

 

4.1.2                     Licensed Diagnostic
Products. Outside
counsel mutually acceptable to PDL and HGS shall have the responsibility to
file, prosecute and maintain Licensed Intellectual Property relating to
Licensed Diagnostic Products, and methods of making and using the same, and HGS
shall transfer responsibility therefor to such outside counsel promptly after
the Effective Date. Such outside counsel shall respond to both Parties’
reasonable requests for information about the course of patent prosecution or
other proceedings relating thereto and shall provide both Parties with
copies of all communications relating thereto with a patent office. The outside
counsel shall perform its duties in the filing, prosecution and maintenance of
such Licensed Intellectual Property hereunder in the best interests of both
parties hereto. PDL shall be responsible for providing instructions to such
outside counsel and shall reasonably consider comments thereon by HGS. The
Parties shall cooperate reasonably in the prosecution thereof and shall share
all material information relating thereto promptly after receipt of such
information. The expenses for such outside counsel and all filing, issue,
maintenance and other fees and other costs of filing, prosecution and
maintenance of such Licensed Intellectual Property shall be borne by PDL. In
the event that HGS licenses any rights to Licensed Diagnostic Products to a
third party, HGS shall notify PDL of such license in writing (the “Notice”)
within [****]* of the effective date
thereof. The Notice shall indicate that such a license has been granted, but
need not identify to PDL the licensee or the terms of such license. After the
effective date of such license, HGS and PDL will share equally the expenses for
outside counsel and all filing, issue, maintenance and other fees and other
costs of filing, prosecution and maintenance of such Licensed Intellectual
Property relating to Licensed Diagnostic Products. In the event HGS licenses
rights to a third party, HGS shall be responsible for providing instruction to
such outside counsel on behalf of all parties and shall reasonably consider
comments thereon by PDL and the third party. If PDL elects not to participate
in the filing, prosecution or maintenance, or to otherwise abandon, any such
Licensed Intellectual Property in a country for which the Parties had agreed to
so file and prosecute such Licensed Intellectual Property, it shall promptly
notify HGS. Thereafter, HGS shall have the right to pursue, at its sole expense
and sole discretion, prosecution or maintenance of such Licensed Intellectual
Property in the relevant country and PDL shall have no further rights to such
Licensed Intellectual Property.

 

* Certain information on this page has
been omitted and filed separately with the SEC. Confidential treatment has been
requested with respect to the omitted portions.

 

12

 

4.2                               Enforcement of Licensed
Intellectual Property for any Licensed Biologic Product or Licensed Drug
Product.

 

4.2.1                     If either Party learns of any alleged
infringement of any Licensed Intellectual Property relating to Licensed
Biologic Product or Licensed Drug Product, that Party shall promptly provide
written notice to the other Party of such alleged infringement. The Parties
shall consult as to potential strategies to terminate such alleged infringement
without litigation. PDL, at its sole discretion, may take reasonable actions to
terminate such alleged infringement without litigation.

 

4.2.2                     If the efforts of PDL are not successful
in terminating the alleged infringement, PDL shall have the first right, at its
sole discretion and expense using counsel of its choice, to take action to
enforce such Licensed Intellectual Property (an “Infringement Action”) against
such alleged infringer. To the extent PDL takes such Infringement Action, PDL
shall control any such Infringement Action undertaken by PDL against such an
alleged infringer, and PDL may enter into settlements, stipulated judgments or
other arrangements respecting such infringement, at its own expense; provided,
however, that if such proposed settlements, judgments or arrangements would
result in reduction or elimination of payments to HGS under this agreement,
they shall be subject to HGS’s consent.

 

4.2.3                     If PDL commences such Infringement
Action, HGS agrees to execute all papers and to perform such other acts as may
be reasonably required (including consent to be joined as nominal party
plaintiffs in such Infringement Action). PDL shall reimburse HGS for its
out-of-pocket expenses relating to such Infringement Action, and HGS may, at
its option and expense, be represented by counsel of its choice. If PDL
commences such Infringement Action, PDL shall indemnify, defend and hold HGS
harmless from any costs, expenses or liability arising out of PDL’s negligent
conduct or as a consequence of HGS conduct that was requested or required by
PDL for Infringement Actions undertaken by PDL. Any damages or other recovery
from an Infringement Action undertaken by PDL pursuant to this section shall be
retained by PDL, subject to payments and royalties due under this Agreement
including any royalties that might have been due on sales lost as a result of
the infringement.

 

4.2.4                     In the event that PDL does not initiate
reasonable actions to terminate such alleged infringement without litigation
within [****]* of the date of notice from HGS pursuant to Section 4.2.1
or does not initiate an Infringement Action thereafter in accordance with Section 4.2.2,
then HGS may at its option and sole expense initiate and control an
Infringement Action against such third party infringer. PDL shall reasonably
cooperate with HGS in preparing and presenting such Infringement Action at HGS’s
expense. Any recovery or damages derived from such Infringement Action shall
first be applied to reimburse both Parties expenses incurred in preparing and
presenting such Infringement Action. Any remaining balance of such recovery and
damages shall be retained by HGS.

 

4.3                               Enforcement of Licensed
Intellectual Property for any Licensed Diagnostic Product. If either Party learns of any alleged
infringement of any Licensed Intellectual Property relating to a Licensed
Diagnostic Product, that Party shall promptly inform the other Party of such
alleged infringement. The Parties shall consult as to potential strategies to
terminate such alleged infringement.

 

4.4                               Infringement of Third
Party Rights. In
the event that the practice of any invention claimed by any Licensed Intellectual
Property or the making, using, offering for sale, selling or importing of any
Royalty Products hereunder becomes the subject of a third party claim of patent
infringement against PDL and/or HGS, the Party first having notice of the claim
shall promptly give the other Party

 

* Certain
information on this page has been omitted and filed separately with the
SEC. Confidential treatment has been requested with respect to the omitted
portions.

 

13

 

written notice of such infringement claim, setting
forth the facts of such claim in reasonable detail. As between the Parties to
this Agreement, PDL, in its sole discretion, shall have the first and primary
right, at its own expense, to defend and control the defense of any such claim,
by counsel of its own choice and PDL shall indemnify HGS in accordance with Section 7
herein. If HGS is named a defendant in any lawsuit relating to any such third
party claim, PDL shall not settle any such action without HGS’s written
consent, such consent not to be unreasonably withheld. Upon PDL’s reasonable
request, HGS shall cooperate with PDL in the defense of any such action at PDL’s
cost and expense. In HGS’s sole discretion, HGS shall be entitled to
participate through counsel of its own choice in any legal action naming HGS as
a defendant that involves the validity of Licensed Intellectual Property at HGS’s
cost and expense (subject to any applicable indemnification obligations
pursuant to Sections 7.1 through 7.3).

 

4.5                               PDL Rights. As between the Parties, PDL and its
sublicensees hereunder shall own all inventions, whether patentable or not,
know-how and other intellectual property developed, conceived or reduced to
practice by or on behalf of PDL or its sublicensees, as the case may be, as a
result of activities under this Agreement.

 

Article 5.  TERM AND TERMINATION

 

5.1                               Term. The term of this Agreement shall commence
upon the Effective Date and shall continue while PDL has an obligation to pay
royalties to HGS hereunder (“Term”).
Unless this Agreement is terminated pursuant to this Article 5, PDL’s
obligation to pay royalties (“Royalty
Term”) shall continue on a country-by-country basis until the
expiration of the last to expire Valid Royalty Claim covering a Royalty Product
in such country or in the case of a Developed Drug Product, in accordance with Section 3.5.2.
Upon expiration of the Royalty Term in a given country, the licenses granted to
PDL hereunder with respect to such country shall become fully paid, subject to Section 5.2
below.

 

5.2                               Termination for Material Breach.

 

(a)                                  Prior
to the receipt of Regulatory Approval to market a Royalty Product or Developed
Drug Product hereunder, either Party may terminate this Agreement in its
entirety for breach by the other Party by providing written notice to the
breaching Party as set forth in Section 5.2(c) and otherwise
complying with Section 5.2 (c) below.

 

(b)                                 After
the receipt of any Regulatory Approval to market a Royalty Product or Developed
Drug Product hereunder, either Party may terminate this Agreement for breach by
the other Party, but only with respect to the specific Royalty Product or
Developed Drug Product that is the subject of the breach in question, by
providing written notice to the breaching Party as set forth in Section 5.2(c) and
otherwise complying with Section 5.2 (c) below.

 

(c)                                  Either
Party may exercise the right to terminate for the breach as set forth in
Sections 5.2(a) and/or Section 5.2(b) hereunder, upon the breach
by the breaching Party of such Party’s obligations to pay any amounts owing
hereunder, if such breach is not cured within [****]* after receipt of written
notice from the non-breaching Party or (b) upon any material breach of
this Agreement by the non-breaching Party, if such breach is not cured within [****]*
after the breaching Party receives written notice of such breach from the
non-breaching Party; provided, however, if such breach is not capable of being
cured within such [****]* period, the cure period shall be extended for such amount
of time as may

 

* Certain
information on this page has been omitted and filed separately with the
SEC. Confidential treatment has been requested with respect to the omitted
portions.

 

14

 

be reasonably
necessary to cure such breach, so long as the breaching Party is making
diligent efforts to do so. Such termination shall be effective upon expiration
of such cure period. Any dispute as to whether a notice of termination pursuant
to this Section 5.2 is proper, or a breach has been cured, shall be
resolved as provided pursuant to Article 10. Upon termination of this
Agreement under this Section 5.2 as a result of a material breach by PDL,
all rights granted to PDL by HGS hereunder to research, develop, make (and have
made), use, sell, offer for sale and import such particular Royalty Product or
Developed Drug Product shall terminate.

 

5.3                               PDL Elective
Termination. PDL
shall have the right to terminate this Agreement, in its sole discretion, upon [****]* written
notice to HGS. With respect to a Royalty Product, if at the time of such
termination the manufacture, use, sale, offer for sale, or import of such
Royalty Product would, but for the licenses granted herein, infringe a Valid
Royalty Claim within Licensed Intellectual Property, then PDL shall grant to
HGS a license on commercially reasonable terms (provided such terms shall be
memorialized in a mutually acceptable definitive license agreement executed
within [****]* following such termination under this Section 5.3)
under any granted patents or patent applications owned and obtained by PDL in
the course of, in furtherance of, and as a direct result of activities under
this Agreement, that are necessary to make, use and sell such Royalty
Product(s). PDL shall have no obligation to grant such license to HGS under any
patent if such grant under such patent would constitute a breach of an
obligation owed by PDL under an agreement between PDL and a third party. HGS
will be solely responsible for the payment of any third party payment
obligations or other relevant obligations in connection with the license
granted to HGS to Royalty Products in accordance with this Section. The grant
of such license to Royalty Products and the negotiation of terms thereto shall
be subject to the provisions of Article 10, which provisions shall survive
termination of this Agreement; provided, however, the arbitrators chosen in
accordance with the terms of Section 10.2 shall render their decision
within [****]* from their receipt of
written evidence with such evidence being provided by the parties hereto within
[****]* of the appointment of the
arbitrators. No oral testimony shall be permitted. At any time during the
negotiation period, HGS may notify PDL in writing that it is terminating the
negotiations and its right to secure the license to Royalty Product under this
Section.

 

With respect to a Developed Drug Product, if the Valid
Royalty Claim that was infringed by the screening and discovery of the
Developed Drug Product is issued and valid at the time PDL terminates this
Agreement pursuant to the first sentence of this Section 5.3, PDL shall
grant to HGS a license on commercially reasonable terms (provided such terms
shall be memorialized in a mutually acceptable definitive license agreement
executed within [****]*
following such termination under this Section 5.3) under any granted
patents or patent applications owned and obtained by PDL in the course of, in
furtherance of, and as a direct result of activities under this Agreement, that
are necessary to make, use and sell such Developed Drug Product. PDL shall have
no obligation to grant such license to HGS under any patent if such grant under
such patent would constitute a breach of an obligation owed by PDL under an
agreement between PDL and a third party. HGS will be solely responsible for the
payment of any third party payment obligations or other relevant obligations in
connection with the license granted to HGS to Developed Drug Product in
accordance with this Section. The grant of such license to Developed Drug
Product and the negotiation of terms thereto shall be subject to the provisions
of Article 10, which provisions shall survive termination of this
Agreement; provided, however, the arbitrators chosen in accordance with the
terms of Section 10.2 shall render their decision within [****]* from their receipt of written
evidence with such evidence being provided by the parties hereto within [****]* of the appointment of the
arbitrators. No oral testimony shall be permitted. At any time during the
negotiation period, HGS may notify PDL in writing that it is terminating the
negotiations and its right to secure 

 

* Certain
information on this page has been omitted and filed separately with the
SEC. Confidential treatment has been requested with respect to the omitted
portions.

 

15

 

licenses to Developed Drug Product under this Section.

 

The
right of HGS to obtain licenses to Royalty Product under this Section 5.3,
and PDL’s obligations related thereto, shall terminate upon the expiration of
the last to expire Valid Royalty claim. The right of HGS to obtain licenses to
Developed Drug Product under this Section 5.3 and PDL’s obligations
related thereto shall terminate upon the earlier of June 25, 2019, or upon
the expiration of issued Valid Claims within Licensed Technology that were
infringed by methods of drug screening or material utilized in the discovery of
the Developed Drug Product.

 

5.4                               Insolvency or
Bankruptcy. In
the event that a Party becomes insolvent, files a petition in bankruptcy, has
such a petition filed against it, determines to file a petition in bankruptcy,
or receives notice of a third party’s intention to file an involuntary petition
in bankruptcy, such Party shall immediately notify the other Party in writing.
Furthermore, such other Party shall have the right to immediately terminate
this Agreement, in whole or in part as the terminating Party may determine,
upon learning of any of the foregoing events.

 

5.5                               Payment of Royalties
Due. No
termination or expiration of this Agreement shall relieve PDL of its obligation
to pay any royalty or other payments which obligation accrued prior to such
termination or expiration.

 

5.6                               Treatment of Inventory
at Termination. In
the event a Party for any reason terminates this Agreement, PDL shall have the
right to sell or otherwise dispose of the stock of Royalty Products or
Developed Drug Products then on hand until [****]* after the effective date of such
termination, subject to Article 3 (Payments and Royalties) and the other
applicable terms of this Agreement.

 

5.7                               Effects of Termination. Termination of this Agreement shall not
affect the rights and obligations of the Parties that accrued prior to the
effective date of such termination.

 

5.8                               Survival. The provisions of [****]*, shall
survive termination or expiration of this Agreement in perpetuity, unless
otherwise explicitly stated in this or the applicable section.

 

Article 6.  PUBLICITY

 

6.1                               PDL Publicity. Subject to Section 6.3 below, PDL
shall not identify HGS or use the name of HGS, or any contraction thereof, in
any manner in connection with the exercise of this Agreement, or use the name
of any agent or employee of HGS, or any trademark, service mark, trade name, or
symbol of HGS without HGS’s prior written consent.

 

6.2                               HGS Publicity. Subject to Section 6.3 below, HGS
shall not identify PDL or use the name of PDL, or any contraction thereof, in
any manner in connection with the exercise of this Agreement, or use the name
of any agent or employee of PDL, or any trademark, service mark, trade name, or
symbol of PDL without PDL’s prior written consent.

 

6.3                               Public Announcements. Except as may otherwise be required by
law or regulation, neither Party shall disclose any terms of this Agreement to
any third party or make any public announcement concerning this Agreement or
the subject matter hereof, without the prior written consent of the other
Party. Each Party shall provide the other with a copy of any proposed press
release in advance of distribution and shall in good faith consider any
comments from such other Party. Both Parties must

 

* Certain
information on this page has been omitted and filed separately with the
SEC. Confidential treatment has been requested with respect to the omitted
portions.

 

16

 

agree to the content of such press release prior to
disclosure to any third party. Thereafter, press releases and like public
announcements concerning this Agreement or the activities hereunder that
contain information not previously disclosed to the public shall be made only
when, and in the form, approved by the Parties; provided, however, if a press
release or like public announcement is required by law, regulation  or court or administrative order, the
Parties shall, as is reasonably practicable under the circumstances, consult
with one another in connection with such disclosure to allow the other Party an
opportunity to comment thereon.

 

Article 7.  INDEMNIFICATION

 

7.1                               Indemnification by PDL. PDL shall indemnify, defend and hold
harmless HGS, its Affiliates, directors, officers, employees, agents, and
contractors (“HGS Indemnitees”)
from any costs, fees, damage, loss, liability, expense or judgment (including
attorneys’ fees and expenses of litigation if assessed against the indemnified
Party by a court of competent jurisdiction) (collectively “Losses”) incurred by or imposed upon the
HGS Indemnitees in connection with any third party claims, suits, actions or
demands (collectively, “Claims”)
arising out of PDL’s (a) exercise of the rights granted to PDL under the
Licensed Intellectual Property pursuant to this Agreement or (b) testing,
labeling, manufacture, use, offer for sale or sale of Royalty Products or
Developed Drug Products; (c) the material violation of any applicable
federal, state or local law or regulation by PDL, its Affiliates, directors,
officers, employees, agents and contractors; or (d) a breach by PDL of its
representations and warranties hereunder, except to the extent that such Losses
are due to the negligence or willful misconduct of any HGS Indemnitee, or by
the violation of any applicable federal, state or local law or regulation by
any HGS Indemnitee.

 

7.2                               Indemnification by HGS. HGS shall indemnify, defend and hold
harmless PDL, its Affiliates, directors, officers, employees, agents and
contractors (“PDL Indemnitees”)
from any Losses incurred by or imposed upon the PDL Indemnitees in connection
with any Claims arising out of (a) the negligence or willful misconduct of
any HGS Indemnitee, (b) the material violation of any applicable federal,
state or local law or regulation by any HGS Indemnitee, or (c) a breach by
HGS of its representations and warranties hereunder.

 

7.3                               Procedures. The indemnified Party shall promptly, but
in no event more than [****]* after receiving notice of any Claim,
notify the indemnifying Party of any Claim and shall cooperate with the
indemnifying Party in the defense of the Claim. The indemnifying Party shall
have the right to control such defense (including the right to settle the claim
solely for monetary consideration). The indemnifying Party agrees, at its own
expense, to provide attorneys reasonably acceptable to the indemnified Party to
defend against any Claim with respect to which the indemnifying Party has
agreed to provide indemnification hereunder. The indemnified Party shall not
settle or compromise the claim without the express, prior written consent of
the indemnifying Party, and the indemnifying Party’s obligations under this Article 7
shall not apply to amounts paid by the indemnified Party in settlement of any
Claim if such settlement is made without the consent of the indemnifying Party,
which consent shall not be unreasonably withheld.

 

Article 8.  WARRANTIES

 

8.1                               Binding Agreement. Each Party hereby represents and warrants
to the other Party as follows:

 

* Certain information on this page has
been omitted and filed separately with the SEC. Confidential treatment has been
requested with respect to the omitted portions.

 

17

 

(a)                                  it
is validly organized under the laws of its jurisdiction of incorporation;

 

(b)                                 this
Agreement has been duly authorized by all requisite corporate action and is a
legal and valid obligation binding upon the representing and warranting Party
and enforceable in accordance with its terms; and

 

(c)                                  the
execution, delivery and performance of this Agreement by it does not conflict
with any agreement, instrument or understanding, oral or written, to which it
is a party or by which it may be bound, nor violate any material law or
regulation of any court, governmental body or administrative or other agency
having jurisdiction over it.

 

8.2                               HGS Warranty. HGS represents and warrants to PDL that (i) it
owns or Controls the Licensed Intellectual Property, (ii) it has all
right, power and authority necessary to grant the licenses set forth in
Sections 2.1-2.4 to PDL, (iii) as of the Effective Date, such license
grants represent all intellectual property rights to Tweak-R owned or
Controlled by HGS, and (iv) that it has not, and shall not during the
Term, grant any right or interest in the Licensed Intellectual Property to any
third party that would conflict with the rights granted to PDL hereunder.

 

8.3                               PDL Warranty. PDL represents and warrants to HGS that,
as of the Effective Date, it has not initiated any of the in vivo studies necessary to support an
IND filing for any Tweak-R-related therapeutic.

 

8.4                               Disclaimer of
Warranties; Limitation of Liability. NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A
WARRANTY THAT ANY PATENT OR PATENT APPLICATION INCLUDED WITHIN THE LICENSED
INTELLECTUAL PROPERTY IS VALID OR ENFORCEABLE OR THAT THE EXERCISE OF ANY
RIGHTS GRANTED HEREUNDER WILL NOT INFRINGE ANY PATENTS OF THIRD PARTIES. EXCEPT
AS EXPLICITLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTIES,
EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION,
THE CONDITION OF ANY INVENTION(S) OR PRODUCT(S), THAT ARE THE SUBJECT OF
THIS AGREEMENT; OR THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF
ANY SUCH INVENTION OR PRODUCT. EXCEPT FOR ANY BREACH UNDER ARTICLE 9, NEITHER
PARTY SHALL BE LIABLE TO THE OTHER PARTY OR TO ANY OF THE OTHER PARTY’S
AFFILIATES FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, INCIDENTAL, OR PUNITIVE
DAMAGES SUFFERED BY THE OTHER PARTY OR ITS AFFILIATES IN RELATION TO ANY
SUBJECT MATTER OF THIS AGREEMENT (INCLUDING LOST PROFITS) UNDER ANY CONTRACT,
NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY, EVEN IF SUCH
PARTY OR ITS AFFILIATES HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS,
DAMAGE, OR COST, EXCEPT TO THE EXTENT IT MAY BE REQUIRED TO INDEMNIFY THE
OTHER PARTY.

 

Article 9.  CONFIDENTIALITY

 

9.1                               Confidential
Information. As
used in this Agreement, “Confidential
Information” means nonpublic information disclosed by one Party to
the other in connection with this Agreement, provided that such information
is clearly marked as confidential. PDL’s Confidential Information shall
include, without limitation, reports submitted by PDL to HGS pursuant to Section 3.7.
Information disclosed other than in written or other tangible form will be
deemed Confidential Information only if the

 

18

 

disclosing Party provides
the receiving Party with a written statement within [****]* of the initial
disclosure that identifies which portion of such information is to be deemed
Confidential Information.

 

9.2                               Confidentiality. Each Party agrees (a) to hold the
other Party’s Confidential Information in confidence; (b) to use such
Confidential Information solely in accordance with this Agreement; and (c) except
as otherwise expressly permitted herein, to not disclose such Confidential
Information to any third party without prior written permission. The foregoing
confidentiality obligations do not pertain to any information that a receiving
Party establishes: (i) was known to the receiving Party prior to receipt
from the disclosing Party; (ii) is now or becomes public knowledge, other
than through acts or omissions of the receiving Party in breach of this
Agreement; (iii) is disclosed at any time to the receiving Party by a
third party with a lawful right to disclose such information; or (iv) was
independently developed by or on behalf of the receiving Party without use of
the Confidential Information of the disclosing Party. Notwithstanding the
above, the receiving Party may disclose Confidential Information to comply with
any applicable law, court order or governmental regulation, provided that if a
Party is required by law or regulation to make any such disclosure of the other
Party’s Confidential Information it will, except where impracticable for
necessary disclosures, give reasonable notice to the other Party of such
disclosure requirement and will use its reasonable efforts to secure a
protective order or confidential treatment of such confidential information to
be disclosed.

 

9.3                               Survival. The confidentiality provisions of this Article 9
will continue with respect to given Confidential Information for a period of [****]* after
the date of disclosure thereof.

 

Article 10.  DISPUTE RESOLUTION

 

10.1                        Internal Resolution. The Parties shall discuss in good faith
for a period of no less than [****]* any disputes arising between the Parties
in connection with this Agreement. In the event such a dispute between the
Parties is not settled within [****]*, the issue shall be referred to an
officer of HGS, or his/her designee, and an officer of PDL, or his/her
designee, for discussions in good faith for a period of no less than [****]*. If the
executives do not reach agreement within such additional [****]* period,
then either Party may initiate dispute resolution procedures pursuant to Section 10.2
or 10.3, as applicable.

 

10.2                        Arbitration. Subject to Section 12.4 and except
as otherwise expressly provided herein, the Parties agree that any dispute not
resolved internally by the Parties pursuant to Section 10.1, shall be
resolved through binding arbitration utilizing “Baseball Arbitration.” The
parties shall agree upon one arbitrator. If the Parties cannot agree on the
person to be named as arbitrator within [****]*, the President of the International
Chamber of Commerce shall make the necessary appointment for arbitrator. Within
[****]* of the conclusion of the arbitration, the arbitration
decision shall be rendered in writing and must specify the basis on which the
decision was made. Unless otherwise mutually agreed upon by the Parties, the
arbitration proceedings shall be conducted in English, in New York, NY, USA.
Such decision shall be final, binding upon the Parties and enforceable through
application to any court of competent jurisdiction. The Parties agree that they
shall share equally the cost of the arbitration filing and hearing fees, and
the cost of the arbitrator. Each Party must bear its own attorneys’ fees and
associated costs and expenses.

 

10.3                        Patent Validity. Notwithstanding the other provisions of
this Article 10, any dispute that involves the validity of a patent (a) that
is issued in the United States shall be subject to actions before the United
States Patent and Trademark Office and/or submitted exclusively to the federal
courts, and (b) that

 

* Certain
information on this page has been omitted and filed separately with the
SEC. Confidential treatment has been requested with respect to the omitted
portions.

 

19

 

is issued in any other country shall be brought before
an appropriate regulatory or administrative body or court in that country, and
the Parties hereby consent to the jurisdiction and venue of such courts and
bodies.

 

Article 11.  DILIGENCE

 

11.1                        Diligence. During the Term of this Agreement, PDL
shall use Commercially Reasonable and Diligent Efforts to research, develop and
commercialize at least one Royalty Product.

 

11.2                        Progress Reports. Within [****]* following each anniversary of the
Effective Date of this Agreement, PDL shall provide a written summary to HGS on
(i) the development progress of Royalty Products or Developed Drug
Products and (ii) submissions for Regulatory Approval, if any. Such
written summaries shall contain reasonably sufficient information as is
necessary for HGS to assess the progress of PDL in its research, development,
clinical testing (if any) and Regulatory Approval (if any).

 

Article 12.  MISCELLANEOUS

 

12.1                        Force Majeure. Neither Party shall be liable for any
failure to perform as required by this Agreement, if the failure to perform is
caused by circumstances beyond such Party’s reasonable control, such as labor
disturbances or labor disputes of any kind, accidents, civil disorders or
commotions, acts of aggression, acts of God, energy or other conservation
measures, explosions, failure of utilities, disease, thefts or other such
occurrences; provided, however, that such Party shall use reasonable efforts to
prevent and overcome such circumstances.

 

12.2                        Assignment. Neither Party may assign this Agreement
without the prior written consent of the other Party, such consent not to be
unreasonably withheld; provided, however,  that
either Party may assign this Agreement in connection with a merger or similar
reorganization, consolidation, or sale of all or substantially all of such
Party’s assets to which this Agreement relates; Notwithstanding the foregoing,
HGS may assign this Agreement in its entirety to a successor in interest to the
CoGenesys division of HGS without the prior written consent of PDL. Any
purported assignment in violation of this Section 12.2 shall be null and
void. Subject to the foregoing, this Agreement shall be binding upon the
Parties, their legal representatives, successors and permitted assigns.

 

12.3                        Notices. Any notices given under this Agreement
shall be in writing and deemed delivered upon receipt by first class mail
(registered or certified), by private express courier, by hand, or by facsimile
(confirmed by registered or certified first class mail) addressed to the
Parties as set forth below. Either Party may change its address for purposes
hereof by written notice to the other in accordance with the provisions of this
Section.

 

If to PDL:

 

Protein Design Labs, Inc. 34801

Campus Drive Fremont, Ca 94555

Attention: General Counsel

 

* Certain
information on this page has been omitted and filed separately with the
SEC. Confidential treatment has been requested with respect to the omitted
portions.

 

20

 

If to HGS:

 

Human Genome Sciences, Inc.

14200 Shady Grove Road

Rockville, MD 20850

Telephone: (301) 309-8504

Facsimile: (301) 309-8512

Attention: General Counsel

Copy to: Vice President, Business Development

 

12.4                        Legal and Equitable
Remedies. Because
a material breach of this Agreement may result in a harm to either Party which
could not be remedied by monetary damages, both Parties shall have the right to
seek enforcement of this Agreement and any of its provisions by injunction,
specific performance or other equitable relief without prejudice to any other
rights and remedies that a Party may have for a breach of this Agreement.

 

12.5                        Severability. If any provision of this Agreement
becomes or is declared illegal, invalid, or unenforceable, such provision shall
be deemed severed from this Agreement and the remaining provisions shall
continue in full force and effect. If such severance substantially alters the
basis of this Agreement, the Parties shall negotiate in good faith to amend the
provisions of this Agreement to give effect to the original intent of the
Parties.

 

12.6                        Independent Contractors.
HGS and PDL are
independent contractors under this Agreement. Nothing contained in this
Agreement is intended, nor is to be construed so as to constitute a joint
venture, partnership, agency, distributorship, employer-employee, or fiduciary
relationship between the Parties with respect to this Agreement. Neither Party
shall have any  express or implied
right or authority to assume or create any obligations on behalf of or in the
name of the other Party or to bind the other Party to any other contract,
agreement or undertaking with any third party.

 

12.7                        Entire Agreement. This Agreement represents the entire
agreement and understanding between the Parties with respect to its subject
matter and supersedes any prior and/or contemporaneous discussions,
representations or agreements, whether written or oral, of the Parties
regarding the subject matter hereof.

 

12.8                        Waiver. The failure of either Party to assert a
right hereunder or to insist upon compliance with any term or condition of this
Agreement shall not constitute a waiver of that right or excuse a similar
subsequent failure to perform any such term or condition by the other Party.
None of the terms, covenants and conditions of this Agreement can be waived
except by the written consent of the Party waiving compliance.

 

12.9                        Governing Law. This Agreement shall be governed by and
construed under the laws of the State of New York and the United States without
regard to the conflicts of laws provisions thereof.

 

12.10                 Amendments. Amendments or changes to this Agreement
shall be valid and binding only if in writing and signed by duly authorized
representatives of the Parties. No provision of this Agreement can be waived
except by the express written consent of the Party waiving compliance.

 

12.11                 Construction. The Parties mutually acknowledge that
they and their attorneys have participated in the negotiation and preparation
of this Agreement. Ambiguities, if any, in this Agreement shall not be
construed against any Party, irrespective of which Party may be deemed to have
drafted the Agreement or authorized the ambiguous provision.

 

21

 

12.12                 Captions. Titles, headings and other captions are
for convenience only and are not to be used for interpreting this Agreement.

 

12.13                 Bankruptcy. All rights and licenses granted under or
pursuant to this Agreement are and shall be deemed to be, for purposes of Section 365(n) of
the U.S. Bankruptcy Code, licenses of rights to “intellectual property” as
defined under Section 101 of the U.S. Bankruptcy Code. The Parties shall
retain and may fully exercise all of its rights and elections under the U.S.
Bankruptcy Code; provided that nothing herein shall be deemed to constitute a
present exercise of such rights and elections.

 

12.14                 Counterparts. This Agreement may be executed in two or
more counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument. For purposes hereof, a
facsimile copy of this Agreement, including the signature pages hereto
will be deemed to be an original. Notwithstanding the foregoing, the Parties
will deliver original execution copies of this Agreement to one another as soon
as practicable following execution thereof.

 

[Signature
Page Follows]

 

22

 

IN
WITNESS WHEREOF, these duly authorized representatives of the
Parties hereby execute this Agreement.

 

	
  PROTEIN DESIGN LABS, INC.

  	
  HUMAN GENOME SCIENCES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Mark McDade

  	
   

  	
  By: 

  	
  /s/ Barry A. Labinger

  
	
  Name:   Mark
  McDade

  	
  Name:   Barry
  A. Labinger

  
	
  Title:     Chief
  Executive Officer

  	
  Title:     Executive
  Vice President

  
	
   

  	
   

  
	
  Date:  December
  15, 2005

  	
  Date:  December
  15, 2005

  
					

 

23

 

EXHIBIT A

 

	
  Country

  	
   

  	
  Application/Patent No.

  	
   

  	
  Filing/Issue Date

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  

 

* Certain information on this page has
been omitted and filed separately with the SEC. Confidential treatment has been
requested with respect to the omitted portions.

 

24

 

EXHIBIT B

 

PDL Antibody
Humanization Patent Rights

 

The following are patents
and patent applications issued and filed in certain countries in the world and
licensed as part of the PDL Antibody Humanization Patent Rights under this
Agreement. (As of: October 6, 2005)

 

	
  Application Number

  	
   

  	
  Filing Date

  	
   

  	
  Patent Number

  	
   

  	
  Issue Date

  	
   

  	
  Country

  	
   

  	
  Status

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  

 

* Certain information on this page has
been omitted and filed separately with the SEC. Confidential treatment has been
requested with respect to the omitted portions.

 

25

 

	
  Application Number

  	
   

  	
  Filing Date

  	
   

  	
  Patent Number

  	
   

  	
  Issue Date

  	
   

  	
  Country

  	
   

  	
  Status

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  c

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  
	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  	
  [****]*

  	
   

  

 

* PCT International Publication Number and
International Publication Date

 

* Certain information on this page has
been omitted and filed separately with the SEC. Confidential treatment has been
requested with respect to the omitted portions.

 

26

 

EXHIBIT C

 

PATENT
LICENSE AGREEMENT

 

between

 

PROTEIN
DESIGN LABS, INC.

 

and

 

HUMAN
GENOME SCIENCES, INC.

 

[****]*

 

* Certain information on
this page has been omitted and filed separately with the SEC. Confidential
treatment has been requested with respect to the omitted portions.

 

27

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00148-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00148-of-00352.parquet"}]]