THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

PDL BioPharma, Inc. (PDLI)

5/1/2006 Proxy Information

During fiscal year 2005, there has not been, nor is there currently proposed, any transaction or series of similar transactions to which the Company was or is to be a party in which the amount involved exceeds $60,000, and in which any director, executive officer or holder of more than 5% of any class of voting securities of the Company and members of such person’s immediate family had or will have a direct or indirect material interest, other than the transactions described in “Employment Contracts, Change of Control Arrangements, Termination of Employment Arrangements.” Further, in fiscal year 2005, there has not been any relationship involving a director of the Company as described in Item 404(b) of Regulation S-K promulgated by the Securities and Exchange Commission.

From January 1987 until April 2002, Mr. Korn served as Chief Executive Officer.

Mr. Saxe served as a consultant to Protein Design Labs (now known as PDL BioPharma, Inc.) from June 1993 to December 1994 and again from May 2000 until January 2002.

Indebtedness of Management

In March and June 2002, we lent an aggregate of $150,000 to Mr. Brett Schmidli for the purchase of a home in Minnesota in connection with his commencement of employment with us at our Plymouth, Minnesota location. (The loan was made prior to the enactment of the Sarbanes-Oxley Act of 2002, which now prohibits such loans.) The loan is evidenced by two promissory notes, one for an amount of $50,000 (the “Forgivable Loan”) and one for an amount of $100,000 (the “Repayable Loan”). Each of the Forgivable Loan and the Repayable Loan bears interest at the minimum interest rate required to be charged on a loan to avoid the imputation of interest income under the Internal Revenue Code which is 4.52% on the Forgivable Loan and 4.74% on the Repayable Loan.

Pursuant to the terms of the Forgivable Loan, provided Mr. Schmidli remains a full-time employee of the Company, accumulated interest will be forgiven on each anniversary date of the loan, and, in addition, one-half of the principal amount will be forgiven on the second anniversary of the loan and the remaining balance of the principal amount will be forgiven on the fourth anniversary of the loan. If Mr. Schmidli’s full-time employment with the Company is terminated at any time before the Forgivable Loan is forgiven, any unforgiven portion of the Forgivable Loan will become immediately due and payable. The Repayable Loan is repayable as follows: (1) on each of the first and second anniversary dates of the loan, all then-accrued and unpaid interest is due; (2) on the third anniversary date of the loan, 50% of the principal as well as any then-accrued and unpaid interest is due; and (3) on the forth anniversary date of the loan, the balance of all principal as well as any then-accrued and unpaid interest under the loan is due. If Mr. Schmidli’s full-time employment with the Company is terminated at any time before the Repayable Loan is repaid, any non-repaid portion of the Repayable Loan will become immediately due and payable.

Mr. Schmidli’s employment with the Company was terminated effective January 1, 2006. Mr. Schmidli is no longer an officer of the Company. However, Mr. Schmidli entered a consulting agreement with the Company effective December 31, 2005 until December 31, 2006. Pursuant to the consulting agreement, Mr. Schmidli’s consultancy shall be considered to be full-time employment with the Company for the purpose of these two Forgivable Loan and the Repayable Loan.

In September 2000, we lent $50,000 to Mr. Jaisim Shah in connection with his commencement of employment with us. (The loan was made prior to the enactment of the Sarbanes-Oxley Act of 2002, which now prohibits such loans.) The loan is evidenced by a promissory note in the amount of $50,000 (the “Loan”). The Loan bears interest at the rate of 6.22% per annum. Pursuant to the terms of the Loan, provided Mr. Shah remains a full-time employee of the Company, accumulated interest will be forgiven on each anniversary date of the loan, and, in addition, the principal amount will be forgiven on the fourth anniversary of the loan. If Mr. Shah’s full-time employment with the Company is terminated at any time before the Loan is forgiven, all principal and interest accrued will become immediately due and payable.

5/4/2005 Proxy Information

Mr. Queen has served as a consultant to Protein Design Labs, Inc. since January 2004 and was Vice President, Research from April 1989 to August 2001 and Senior Vice President from June 1993 until January 2004.

Mr. Saxe served as a consultant to Protein Design Labs from June 1993 to December 1994 and again from May 2000 until January 2002.

From July 1986 until June 2004, Mr. Korn served as Chairman of Protein Design Labs, Inc. and from January 1987 until April 2002, he also served as Chief Executive Officer. Mr. Korn continued to serve as an executive officer of Protein Design until June 2004.

In March and June 2002, we lent an aggregate of $150,000 to Mr. Brett Schmidli for the purchase of a home in Minnesota in connection with his commencement of employment with us at our Plymouth, Minnesota location. (The loan was made prior to the enactment of the Sarbanes-Oxley Act of 2002, which now prohibits such loans.) The loan is evidenced by two promissory notes, one for an amount of $50,000 (the “Forgivable Loan”) and one for an amount of $100,000 (the “Repayable Loan”). Each of the Forgivable Loan and the Repayable Loan bears interest at the minimum interest rate required to be charged on a loan to avoid the imputation of interest income under the Internal Revenue Code which is 4.52% on the Forgivable Loan and 4.74% on the Repayable Loan.

Pursuant to the terms of the Forgivable Loan, provided Mr. Schmidli remains a full-time employee of the Company, accumulated interest will be forgiven on each anniversary date of the loan, and, in addition, one-half of the principal amount will be forgiven on the second anniversary of the loan and the remaining balance of the principal amount will be forgiven on the fourth anniversary of the loan. If Mr. Schmidli’s full-time employment with the Company is terminated at any time before the Forgivable Loan is forgiven, any unforgiven portion of the Forgivable Loan will become immediately due and payable. The Repayable Loan is repayable as follows: (1) on each of the first and second anniversary dates of the loan, all then-accrued and unpaid interest is due; (2) on the third anniversary date of the loan, 50% of the principal as well as any then-accrued and unpaid interest is due; and (3) on the forth anniversary date of the loan, the balance of all principal as well as any then-accrued and unpaid interest under the loan is due. If Mr. Schmidli’s full-time employment with the Company is terminated at any time before the Repayable Loan is repaid, any non-repaid portion of the Repayable Loan will become immediately due and payable.

5/27/2004 Proxy Information

From May 1999 to April 2000, Mr. Saxe served as Senior Advisor to the Chief Executive Officer of Protein Design Labs and from January 1995 to April 1999 served as President.

On April 4, 2003, we completed the acquisition of Eos in connection with which we hired two former executives of Eos, Richard Murray and Barbara Finck, as our Vice President, Research and Vice President, Clinical Development, respectively. Under the terms of the merger agreement between the Company and Eos, we issued an aggregate of approximately 4.3 million shares of our Common Stock to all Eos stockholders, including 65,820 and 31,456 shares issued to Dr. Murray and Dr. Finck, respectively. In our 2003 Proxy Statement, we reported that Dr. Murray had received 51,807 shares of PDL stock in connection with the merger, instead of the 65,820 shares that Dr. Murray actually received. The correct number of shares was reflected in the pro forma financial information furnished to the SEC on a Form 8 K/A on June 17, 2003. As of the closing date of the acquisition, the closing price of our Common Stock was $7.78 per share.

Indebtedness of Management

In 2002, we lent an aggregate of $150,000 to Mr. Brett Schmidli for the purchase of a home in Minnesota in connection with his commencement of employment with us at our Plymouth, Minnesota location. The loan is evidenced by two promissory notes executed prior to July 30, 2002, one for an amount of $50,000 (the “Forgivable Loan”) and one for an amount of $100,000 (the “Repayable Loan”). Each of the Forgivable Loan and the Repayable Loan bears interest at the applicable federal rate, which refers to the minimum interest rate required to be charged on a loan to avoid the imputation of interest income under the Internal Revenue Code. The Internal Revenue Service publishes the applicable federal rate on a monthly basis. The interest rate for the Forgivable Loan is 4.52% and the interest rate for the Repayable Loan is 4.74%.

Pursuant to the terms of the Forgivable Loan, provided Mr. Schmidli remains a continuous, full-time employee of the Company, accumulated interest will be forgiven on each anniversary date of the loan, and, in addition, one-half of the principal amount will be forgiven on the second anniversary date of the loan and the remaining balance of the principal amount will be forgiven on the fourth anniversary date of the loan. The Forgivable Loan becomes immediately due and payable upon the termination of Mr. Schmidli’s continuous full-time employment with the Company. The Repayable Loan is repayable as follows: (1) on each of the first and second anniversary dates of the loan, all then-accrued and unpaid interest is due; (2) on the third anniversary date of the loan, 50% of the principal as well as any then-accrued and unpaid interest is due; and (3) on the forth anniversary date of the loan, the balance of all principal as well as any then-accrued and unpaid interest under the loan is due. All principal and interest accrued under the Repayable Loan becomes immediately due and payable upon the termination of Mr. Schmidli’s continuous full-time employment with the Company.

Mr. Queen has served as a consultant to Protein Design Labs, Inc. since January 2004 and was Vice President, Research from April 1989 to August 2001 and Senior Vice President from June 1993 until January 2004.

4/30/2003 Proxy Information

On January 25, 2002 (the “Closing Date”), the Company sold the assets (the “Assets”) of its small molecule group to Signature BioScience, Inc. (“Signature”), a privately-held company of which Mark McDade was Chief Executive Officer at the time of the transaction and of which he served as director and later as Chairman of the Board, until his resignation from the Signature Board of Directors in April 2003. As consideration for the Assets, Signature issued an aggregate of 673,653 shares of its Series E Preferred Stock (the “Shares”), which we valued at $1.6 million at the time of the transaction. Signature issued the Shares to the Company in two installments with one installment of 523,952 Shares on the Closing Date (of which 74,850 Shares were transferred to the Company’s financial advisor, CIBC World Markets, as consideration for its services in connection with the transaction) and another installment of 149,701 Shares issued one year after the Closing Date. The value of the Shares is uncertain because there is no public market for such Shares. As of December 31, 2002, we estimated that the value of our shares had declined to $150,000 and that an impairment of our investment had occurred. Accordingly, we recorded an impairment charge of $1.4 million in December 2002, based on the difference between the estimated value as determined by our management and our original cost basis in the shares of approximately $1.6 million. If we deem the Shares further impaired at the end of any future period, we may incur an additional impairment charge with respect to these shares.

On April 4, 2003 (the “Closing Date”) the Company completed the acquisition (the “Acquisition”) of Eos Biotechnology, Inc. (“Eos”) and in connection with the Acquisition, the Company hired two former executives of Eos, Richard Murray and Barbara Finck, as the Company’s Vice President, Research and Vice President, Clinical Development, respectively. Under the terms of the merger agreement between the Company and Eos, the Company issued aggregate of approximately 4.3 million shares of its Common Stock to all Eos stockholders and in that connection issued 51,807 and 31,456 shares of the Company’s Common Stock to Dr. Murray and Dr. Finck, respectively. The closing price of the Company’s Common Stock on the Closing Date was $7.78 per share.

In 2002, the Company lent an aggregate of $150,000 to Mr. Brett Schmidli for the purchase of a home in Minnesota in connection with his commencement of employment with the Company at the Company’s Plymouth, Minnesota location. The loan is evidenced by two promissory notes executed prior to July 30, 2002, one for an amount of $50,000 (the “Forgivable Loan”) and one for an amount of $100,000 (the “Repayable Loan”). Each of the Forgivable Loan and the Repayable Loan bears interest at the applicable federal rate, which refers to the minimum interest rate required to be charged on a loan to avoid the imputation of interest income under the Internal Revenue Code. The Internal Revenue Service publishes the applicable federal rate on a monthly basis.

Pursuant to the terms of the Forgivable Loan, provided Mr. Schmidli remains a full-time continuous employee of the Company, accumulated interest will be forgiven annually on the anniversary date of the loan. In addition, provided Mr. Schmidli remains a full-time continuous employee of the Company, one-half of the principal amount will be forgiven on the second anniversary date of the loan and the remaining balance of the principal amount will be forgiven on the fourth anniversary date of the loan. The Forgivable Loan becomes immediately due and payable upon the termination of Mr. Schmidli’s continuous full-time employment with the Company. The Repayable Loan is repayable as follows: (1) on each of the first and second anniversary dates of the loan, all then-accrued and unpaid interest is due; (2) on the third anniversary date of the loan, fifty percent (50%) of the principal as well as any then-accrued and unpaid interest is due; and (3) on the forth anniversary date of the loan, the balance of all principal as well as any then-accrued and unpaid interest under the loan is due. All principal and interest accrued under the Repayable Loan becomes immediately due and payable upon the termination of Mr. Schmidli’s continuous full-time employment with the Company.