Document:

Exhibit

2018 Independent Director Compensation Policy

The compensation and benefits for service as a member of the Board of Directors is determined by our Board of Directors. Directors employed by us or one of our subsidiaries are not compensated for service on the Board or on any committee of the Board; however, we reimburse each of our directors for any out-of-pocket expenses in connection with attending meetings of our Board of Directors and committees of the Board of Directors. Each of our non-employee directors, other than Mr. Khazani and Mr. Nia, are entitled to a fee of $30,000 per year for his or her service as a director. Members of the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee each receive an additional $7,500, $5,000 and $2,500, respectively, per year for his or her service on such committee. The chairpersons of the Board, the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee each receive an additional $25,000, $14,500, $5,000, and $5,000, respectively, per year for his or her service as chairperson for such committee.

In addition, on the date of each annual stockholders meeting, each person who has served as an independent member of the Board of Directors for at least six months before the date of the stockholder meeting will be granted $50,000 of restricted stock units based on the closing stock price on the grant date and our Chairman of the Board (provided such Chairman has served as an independent member of the Board of Directors and Chairman for at least six months before the date of the stockholder meeting) will be granted an additional $25,000 of restricted stock units based on the closing price on the grant date. These restricted stock units will vest in full at the 2019 Annual Meeting of Stockholders, subject to the director’s continuing service on our Board of Directors. These restricted stock units will also immediately vest in full upon a change in control of the Company. The restricted stock units are to be granted under our 2016 Equity Incentive Plan.Exhibit

Exhibit 10.1

PDL BIOPHARMA, INC.

2018 Annual Bonus Plan

This 2018 Annual Bonus Plan (the “Plan”) is intended to enhance stockholder value by promoting a connection between the performance of PDL BioPharma, Inc. (the “Company”) and the compensation of personnel of the Company and to promote retention of high performing personnel.  The Plan is being implemented under the Company’s Amended and Restated 2005 Equity Incentive Plan (as amended, the “2005 Equity Plan”), which was approved by the Company’s stockholders.  The annual bonuses will be granted as a Cash-Based Award pursuant to the 2005 Equity Plan. 
 
1.All employees of the Company working 30 hours per week or more (each, a “Participant”) are eligible to receive annual bonuses for 2018 according to this Plan. The Plan will be administered by the Compensation Committee of the Board of Directors of the Company (the “Committee”).  The Committee shall have all powers and discretion necessary to administer the Plan, determine awards and to control its operation and may delegate responsibilities to Company officers as it deems appropriate. A Participant who does not demonstrate satisfactory individual performance (50% or higher), however, will not be eligible for any portion of his or her bonus, including the portion based on Company performance.    
2.The determination of the amount of payments under the plan shall be based on the performance of the 2018 Corporate Goals and the 2018 Individual Goals as well as the other factors set forth in this Section 3.  Company performance shall be determined by the Committee based on the Company’s ability to accomplish corporate goals (“2018 Corporate Goals”) as approved by the Committee and the Board of Directors and set forth in Exhibit A(i). The Committee may adjust or modify the 2018 Corporate Goals to reflect changed Company objectives.  Individual performance of the Company’s officers shall be reviewed and recommended to the Committee by the Chief Executive Officer, except for the performance of the Chief Executive Officer, which shall be determined by the Committee based on the Company’s achievement of established Corporate Goals. Individual performance of employees shall be reviewed by the appropriate manager and approved by the Chief Executive Officer.  In all cases, individual performance shall be based on the 2018 Individual Goals that have been approved by the Chief Executive Officer and set forth as Exhibit B, which may be adjusted or modified to reflect changed employee objectives (the “2018 Individual Goals”). 
The Committee shall have the sole discretion on the basis of individual or corporate performance metrics to determine that the actual amount paid with respect to a Participant’s award will be equal to or less than (but not greater than) the maximum payout calculated.  For clarification, the Committee may determine, in its sole discretion on the basis of individual or corporate performance metrics that a reduced bonus, or no bonus, shall be paid to individual, regardless of achievement of the 2018 Corporate Goals or the 2018 Individual Goals.  
3.To be eligible for a bonus, a Participant must be on payroll prior to October 1, 2018, and must be employed by the Company as of the date of payment of the bonus. A Participant hired after April 1, 2018, shall be eligible for a pro-rated bonus.  
4.A Participant who has taken an approved leave of absence pursuant to the Company’s policies during 2018 shall receive a pro-rated bonus, at the Compensation Committee's discretion. The amount of a Participant’s bonus is based on a target percentage of such Participant’s annual base salary for the 2018 calendar year.  The target percentage for executives has been determined by the Committee and for employees has been determined by the manager at the beginning of the Plan Year.  The target percentage shall then be adjusted based on the level of attainment of 2018 Corporate Goals and 2018 Individual Goals over the course of the Plan Year to arrive at a final performance percentage.  For each person, the target percentage and ratio of attainment of 2018 Corporate Goals and 2018 Individual Goals is set forth as Exhibit C.
5.The Company performance percentage and/or the individual performance percentage may exceed 100% in the event the Company or the individual Participant exceeds expected goals, provided that neither percentage may exceed 200%; provided, that, for the avoidance of doubt, the stretch goals set forth in Exhibit A(ii) shall be calculated exclusive of such percentages. For example, assuming the Company has met 100% of its 2018 Corporate Goals, a Participant, who has met 150% of his or her 2018 Individual Goals, has a target percentage of 25%, has a corporate-to-individual goal ratio of 50%/50% and a base pay rate of $100,000 will receive a bonus of $31,250 (100% x 0.5 + 150% x 0.5 = 125%; and 125% x 25% = 31.25%; and 31.25% of Participant’s base pay rate of $100,000 = $31,250).  All determinations and decisions made by the Committee shall be final, conclusive and binding on all persons and shall be given the maximum deference permitted by law. 

6.This Plan is effective for the Company’s 2018 calendar year beginning January 1, 2018, through December 31, 2018 (the “Plan Year”), and will expire automatically on December 31, 2018.  Bonus payments will be made no later than February 15th, 2019.
7.The Company shall withhold all applicable taxes from any bonus payment, including any federal, state and local taxes.
8.Nothing in this Plan shall interfere with or limit in any way the right of the Company to terminate any Participant’s employment or service at any time, with or without cause. Nothing in these guidelines should be construed as an employment agreement or an entitlement to any Participant for any incentive payment hereunder. 
9.This Plan and all awards shall be construed in accordance with and governed by the laws of the State of Nevada, without regard to its conflict of law provisions.
10.Payments under this Plan shall be unsecured, unfunded obligations of the Company.  To the extent a Participant has any rights under this Plan, the Participant’s rights shall be those of a general unsecured creditor of the Company.Exhibit

Exhibit 10.2

    

AMENDMENT NO. 1
TO ROYALTY PURCHASE AND SALE AGREEMENT
AND BILL OF SALE
AMENDMENT NO. 1 TO ROYALTY PURCHASE AND SALE AGREEMENT AND BILL OF SALE dated as of August 2, 2018 (the “Amendment”) among DEPOMED, INC., a California corporation (“Depomed”), DEPO DR SUB, LLC, a Delaware limited liability company (the “Seller”, and together with Depomed, the “Selling Parties”), and PDL Investment Holdings, LLC, a Delaware limited liability company (as assignee of PDL BIOPHARMA, INC., the “Purchaser”)
PRELIMINARY STATEMENTS
A.The Purchaser, Depomed and the Seller have entered into that certain Royalty Purchase and Sale Agreement dated as of October 18, 2013 (as amended, restated, amended and restated, supplemented or otherwise modified prior to the date hereof, the “Existing Royalty Purchase Agreement” and as amended, restated, supplemented or otherwise modified from time to time including pursuant hereto, the “Royalty Purchase Agreement”).
B.Pursuant to Section 5.8 of the Existing Royalty Purchase Agreement, upon the Reversionary Interest Commencement Date, Depomed shall be entitled to receive the Reversionary Interest.
C.In exchange for a payment of up to $20,000,000 from the Purchaser, the Selling Parties are willing to (1) amend the Existing Royalty Purchase Agreement and the other Transaction Documents to, among other changes, remove the right of Depomed to receive the Reversionary Interest, and (2) transfer the equity interest in the Seller from Depomed to the Purchaser or its designee, in each case upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the sufficiency and receipt of all of which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1.  Definitions.  Capitalized terms not otherwise defined in this Amendment have the same meanings as specified in the Royalty Purchase Agreement.
SECTION 2.  Amendments to Existing Royalty Purchase Agreement and Bill of Sale.  Subject to the terms and conditions set forth herein, effective on the Amendment Effective Date (as defined below): 
(a)Section 1.1 of the Existing Royalty Purchase Agreement shall be amended by:
(i)adding the following definition in appropriate alphabetical order: “DM Portfolio Intellectual Property Transferee” has the meaning set forth in Section 5.5(b).”;
(ii)adding the following definition in appropriate alphabetical order: ““First Amendment” means the Amendment No. 1 to Royalty Purchase and Sale Agreement, dated as of the Amendment Effective Date (as defined therein), among Depomed, the Seller and the Purchaser.”;
(iii)deleting the definitions of “Reversionary Interest”, “Reversionary Interest Commencement Date” and “Reversionary Interest Threshold”, and any reference to any such defined terms in the Royalty Purchase Agreement or any other Transaction Document shall be deemed deleted and of no further force and effect; and 
(iv)deleting the phrase “, subject to the Reversionary Interest” in the definition of “Subject Assets”.
(b)Section 2.5(a) of the Existing Royalty Purchase Agreement shall be amended by deleting the phrase “, subject to the Reversionary Interest”.
(c)Section 5.5(b) of the Existing Royalty Purchase Agreement shall be amended and restated in its entirety as follows:
“(b)    The Selling Parties shall not, without the prior written consent of the Purchaser and subject in all respects to Section 5.5(a), withhold any consent, grant any consent, exercise or waive any right or option, fail to exercise or waive any right or option or take or fail to take any action in respect of, affecting or relating to the Subject 

Assets, any DM Portfolio Product or the License Agreements, insofar as they relate to any DM Portfolio Product or DM Portfolio Intellectual Property Rights, until and unless all of the membership interests in Seller have been transferred to the Purchaser, and thereafter only if doing so could not reasonably be expected to, in any case, (i) result in an Adverse Change or (ii) conflict with or cause a default under, or breach or termination of any Transaction Document or the License Agreements.  In addition, Depomed shall in no event directly or indirectly sell, assign, convey, transfer or otherwise dispose of any DM Portfolio Intellectual Property Rights to a Person (a “DM Portfolio Intellectual Property Transferee”) unless any applicable License Agreement has been concurrently assigned to such DM Portfolio Intellectual Property Transferee.”
(d)Section 5.8 of the Existing Royalty Purchase Agreement shall be amended by deleting it in its entirety and replacing it with: “[Intentionally Omitted].” 
(e)Section 5.9 of the Existing Royalty Purchase Agreement shall be amended by:
		
	(i)
	revising the first two sentences of Section 5.9(a) to read as follows: “Notwithstanding the accounting treatment thereof, for United States federal, state, local and foreign tax purposes, the Selling Parties and the Purchaser shall (i) treat the transactions contemplated by the Transaction Documents as a sale as of the Closing Date and (ii) treat the transactions contemplated by the First Amendment as a sale as of the Amendment Effective Date (as defined in the First Amendment).  Accordingly, any and all Royalty Payments made pursuant to the License Agreements after the Closing Date (including any Royalty Payments in respect of the interest treated as sold to Purchaser pursuant to the transactions contemplated by the First Amendment) shall be treated as made to the Purchaser for United States federal, state, local and foreign tax purposes.”

		
	(ii)
	changing the references to Section 5.8 in Section 5.9(b) to Section 5.9.

(f)A new Section 5.17 is hereby added to the Existing Royalty Purchase Agreement as follows:
“Section 5.17    Power of Attorney.
(a)    Appointment and Powers of PDL Subsidiary. Depomed, in its capacity as Member of Seller, hereby irrevocably constitutes and appoints the PDL Subsidiary and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Depomed, in its capacity as Member of Seller, and in the name of Depomed, Seller, or in PDL Subsidiary’s own name, for the purpose of carrying out the terms of the LLC Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of the LLC Agreement, without notice to or assent by Depomed or Seller.  To the extent permitted by law, Depomed and Seller each hereby ratifies all that PDL Subsidiary shall lawfully do or cause to be done by virtue of this Power of Attorney. This Power of Attorney is a power coupled with an interest and is irrevocable.
(b)    Ratification by Seller. To the extent permitted by law, each Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue of this Section 5.17. This power of attorney is a power coupled with an interest and is irrevocable.
(c)    No Duty on the PDL Subsidiary. The powers conferred on the PDL Subsidiary, its directors, officers and agents pursuant to this Section 5.17 are solely to protect the PDL Subsidiary’s and the Purchaser’s interests under the Transaction Documents and shall not impose any duty (fiduciary or otherwise) upon any of them to exercise any such powers.
(g)Section 7.1 of the Existing Royalty Purchase Agreement shall be amended by adding the following clauses (C) and (D) to the proviso thereof:
“(C) from and after the Amendment Effective Date (as defined in the First Amendment), to the extent resulting from acts or omissions of the Seller directed by the Purchaser or its Affiliates pursuant to the power of attorney granted under Section 5.17 or (D) from and after the Consent Effective Date (as defined in the First Amendment), to the extent resulting from acts or omissions of the Seller directed by the Purchaser or its Affiliates acting in the capacity as the Manager of the Seller or a Member of the Seller.”

(h)Section 7 of the Bill of Sale shall be amended by deleting the phrase “, subject to the Reversionary Interest” in the definition of “Subject Assets”.
(i)As of the Amendment Effective Date, all rights granted to Depomed with respect to the Reversionary Interest by the Existing Royalty Purchase Agreement shall terminate, have no further force and effect and, if necessary, are hereby reconveyed to the Purchaser.
(j)Notwithstanding anything herein or any of the Transaction Documents, on and after the Amendment Effective Date, none of Depomed, or any of its unit holders, shareholders, managers, officers, directors, heirs, successors and assigns, shall have any duty, liability or obligation of any nature with respect to the actions or inactions of Seller that are solely the result of the exercise by PDL Subsidiary of its rights, obligations or control under the LLC Agreement. Further, from and after the transfer of the Seller to the Purchaser as contemplated by Section 6(c) of this Amendment, none of Depomed, or any of its unit holders, shareholders, managers, officers, directors, heirs, successors and assigns, shall have not have any duty, liability or obligation of any nature with respect to the actions or inactions of Seller.
SECTION 3.  Conditions to Effectiveness of Amendment.  This Amendment shall become effective on the date (the “Amendment Effective Date”) when:
(a)the Purchaser shall have received a copy of this Amendment, duly executed and delivered by each of the Selling Parties; 
(b)the Purchaser shall have received, in form and substance satisfactory to the Purchaser, an executed release with respect to any lien granted on the Reversionary Interest and the equity interests of the Seller in favor of Deerfield Private Design Fund III, L.P., as collateral agent (in such capacity, the “Deerfield Collateral Agent”) for the purchasers party to the Note Purchase Agreement dated as of April 2, 2015 among Depomed, such purchasers and the Deerfield Collateral Agent; and
(c)the Purchaser shall pay (or cause to be paid) to Depomed $10,000,000 in immediately available funds by wire transfer to the Seller Account.
SECTION 4.  Conditions Precedent to Final Payment.  The Purchaser shall pay (or cause to be paid) to Depomed $10,000,000 in immediately available funds by wire transfer to the Seller Account when (the date on which the conditions below have been satisfied or waived by the Purchaser, the “Consent Effective Date”):
(a)the Purchaser shall have received an executed copy of an amended and restated limited liability company agreement of the Seller in the form attached hereto as Exhibit A (the “LLC Agreement”) and Depomed, as the sole member of the Seller, shall have taken action by written consent of the sole member in the form attached hereto as Exhibit B to appoint the PDL Subsidiary as the sole manager of the Seller; and
(b)the Purchaser shall have received a Required Consent (as defined in Section 6(b) herein) with respect to the Santarus Agreement.
SECTION 5.  Representations and Warranties.  Each party hereto represents and warrants to the others that:
(a)Such party has taken all necessary organizational action to authorize the execution, delivery and performance of this Amendment.
(b)This Amendment has been duly executed and delivered by each party and constitutes a legal, valid and binding obligation of such party, enforceable against such party in accordance with its terms, subject to the applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
SECTION 6.  Further Assurances.  
(a)Each Seller Party agrees, at the Purchaser’s sole cost and expense, to consent to or take any action reasonably requested by the Purchaser to further evidence, give effect to or carry out the terms of this Amendment.
(b)Depomed shall use its commercially reasonable efforts to obtain the Required Consents with respect to each License Agreement within 90 days of the Amendment Effective Date (or such later date as agreed to in writing by the Purchaser in its sole discretion).  “Required Consents” means the written consent of each Licensee to the transfer of the equity interests in the Seller or rights under the License Agreement from Depomed or the Seller, as applicable, to a Subsidiary of the Purchaser (the “PDL Subsidiary”) and, in the case of the Santarus Agreement, the appointment of the PDL Subsidiary to serve as the sole manager of the Seller, in form and substance reasonably satisfactory to the Purchaser.

(c)Promptly after receipt of the Required Consents, Depomed shall transfer its membership interests in Seller to the PDL Subsidiary.
SECTION 7.  Reference to and Effect on the Existing Royalty Purchase Agreement and the Transaction Documents.
(a)On and after the Amendment Effective Date, each reference in the Existing Royalty Purchase Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Existing Royalty Purchase Agreement shall mean and be a reference to the Existing Royalty Purchase Agreement as amended by this Amendment on the Amendment Effective Date.  
(b)The Existing Royalty Purchase Agreement and each of the other Transaction Documents, as specifically amended by this Amendment, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed.  
(c)The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any of the Purchaser or the Selling Parties under any of the Transaction Documents, nor constitute a modification, acceptance or waiver of any other provision of any of the Transaction Documents.
SECTION 8.  Counterparts.  This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.  Any counterparty may be executed by facsimile or other electronic transmission (including .pdf) and such facsimile or other electronic transmission shall be deemed an original.
SECTION 9.  Miscellaneous.  THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL SUBSTANTIVE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE RULES THEREOF RELATING TO CONFLICTS OF LAW OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.  Sections 9.2, 9.3, 9.4, 9.7(b)-(d), 9.8, 9.9, 9.11, 9.12, 9.13 and 9.14 of the Existing Royalty Purchase  Agreement are hereby incorporated by reference into this Amendment, mutatis mutandis, and the parties hereto hereby agree that such provisions shall apply to this Amendment with the same force and effect as if set forth herein in their entirety.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.
DEPOMED, INC.
By: /S/    ARTHUR HIGGINS
Name:  Arthur Higgins
Title: Chief Executive Officer

DEPO DR SUB, LLC
By: /S/  ARTHUR HIGGINS
Name:  Arthur Higgins
Title: Chief Executive Officer

PDL Investment Holdings, LLC
By: /S/    CHRISTOPHER STONE
Name:  Christopher Stone
Title: Chief Executive Officer and Treasurer

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