**EXHIBIT 10.42**

 
| **[Form of  Non-employee Director Stock Option Agreement]** |   |             |
|-------------------------------------------------------------|--------|------------------|
| NQO No. **XX-XX**                                           |   | Option for       |
|                                                        |   | **XXXXXX**Shares |

 

**MEDAREX,INC.**

# **NONQUALIFIEDSTOCK OPTION AGREEMENT**

#  

**FOR          STOCKOPTION PLAN**

 

**MEDAREX, INC.**a NewJersey corporation (the “Company”), in consideration of the value to it of thecontinuing services of **XXXXXXX**(hereinafter called “Optionee”), which continuing services the grant of thisoption is designed to secure, and in consideration of the various undertakingsmade herein by Optionee, and pursuant to its **XXXX StockOption Plan** (hereinafter called the “Plan”), hereby grants toOptionee an option (the “Option”), evidenced by this Option Agreement,exercisable for the period and upon the terms hereinafter set out, to purchase **XXXXX**shares (the “Option Amount”) of $.01par value common stock of the Company (“Common Stock”) at a price of **$XXXXX**per share (the “Option Price”),which price represents at least the fair market value (as such term is definedin the Plan) of the shares as of the Date of Grant (as hereinafter defined).

 

**1.  Termof Option**. This Option is granted and dated on the date set forth next above thesignature shown (sometimes hereinafter called the “Date of Grant”), and willterminate and expire, to the extent not previously exercised, one day prior tothe end of ten (10) years after the Date of Grant (i.e, on the **XXX day of XXXXX, XXXX**), or at such earlier time as may bespecified in Section 4 hereof.

 

**2.  Vesting**.  Except as set forth in the immediatelyfollowing sentence or as otherwise provided in the Plan or this OptionAgreement, this Option is exercisable in whole or in part at any time and fromtime to time prior to the termination of the Option pursuant to Section 4herein.  Notwithstanding the foregoing,under no circumstances shall this Option be exercisable within six (6) months(or such greater or lesser period prescribed or permitted by any applicablerule or regulation promulgated under the Securities Exchange Act of 1934, asamended, (the “Exchange Act”), including, without limitation, Rule 16(b)-3)from the Date of Grant hereof; provided, however, that upon the occurrence ofan event constituting a Change of Control, as such term is defined in the Plan,the Option Amount shall become immediately exercisable in full.

 

**3.  Non-Transferability.**  This Option is transferable to an optionee’sfamily members pursuant to a gift or by means of a domestic relationsorder.  An optionee may not sell orotherwise transfer an option for values.

 

**4.  Mannerof Exercise.** The Optionee (or other person entitled to exercise the Option) shallpurchase shares of Common Stock subject hereto by the payment to the Company ofthe

 

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Option Price in full.  This Option is to be exercised by writtennotice to the Company stating the full number of shares to be purchased and thetime of delivery thereof, which shall be at least 15 days after the giving ofnotice unless an earlier date shall have been agreed upon between Optionee (orother person entitled to exercise the Option) and the Company.  At such time, the Company shall, withouttransfer or issue tax to the Optionee (or other person entitled to exercise theOption), deliver at the principal office of the Company, or at such other placeas shall be mutually agreed upon, a certificate or certificates for such sharesagainst payment of the Option Price therefor in full for the number of sharesto be delivered; provided, however, that the time of delivery may be postponedby the Company for such period as may be required for it to comply withreasonable diligence with any requirements of law.  Payment of the Option Price shall be made incash either by a certified or official bank check; provided, however, thatduring the 60-day period from and after a Change of Control the Optionee(unless the Optionee initiated a Change of Control in a capacity other than asan officer or director of the Company within the meaning of Section 16 ofthe Securities Exchange Act of 1934, as amended (the “Exchange Act”), and therules and regulations thereunder), shall have the right, in lieu of the paymentof the full Option Price of the shares of the Common Stock being purchasedunder the Option, by forwarding written notice to the Company, to elect (withinsuch 60-day period) to surrender all or part of the Option to the Company andto receive in cash an amount equal to the amount by which the fair market valueper share of Common Stock on the date of exercise shall exceed the Option Priceper share under the Option multiplied by the number of shares of Common Stockgranted under the Option as to which the right granted by this proviso shallhave been exercised. The written notice provided by the Optionee shall specifythe Optionee’s election to purchase shares subject to this Option or to receivethe cash payment herein provided.

 

Notwithstanding the foregoing, payment inwhole or in part of the Option Price may be made in unrestricted shares ofCommon Stock which are already owned by the Optionee free and clear of anyliens, claims, encumbrances or security interests, based upon the fair marketvalue (as defined in the Plan) of the Common Stock on the date the Option isexercised.  No shares of Common Stockshall be issued until full payment therefor has been made.  If the Optionee (or other persons entitled toexercise the Option) fails to accept a delivery of, or to pay for all or anypart of the number of shares specified in such notice upon tender or deliverythereof, the right to exercise the Option with respect to such undeliveredshares shall be thereupon terminated.

 

**5.  Terminationof Employment.**

 

(a)  Death.  If any Optionee’s relationship with oremployment by the Company and/or any of its subsidiaries terminates by reasonof death, this Option may thereafter be exercised immediately in full by thelegal representative of the estate or by the legatee of the Optionee under thewill of the Optionee until the expiration of the stated term of the Option.

 

(b)  PermanentDisability.  If the Optionee’srelationship with or employment by the Company and/or any of its subsidiariesterminates by reason of “Permanent and Total Disability” (as defined in Section 22(e)(3) of the Code), this Option may, to the extent suchOption has vested, thereafter be exercised by the Optionee for a period ofthree years from the date of such termination or expiration of the stated termof the Option, whichever period is the shorter.

 

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(c)    Termination forCause.  If the Optionee’srelationship with or employment by the Company is terminated by the Company forreason of willful violation of the Company’s policies, the Option shallthereupon terminate.  Notwithstanding theforegoing, nothing herein shall be deemed to alter the at-will employmentstatus of an employee of the Company in any way.

 

(d)  OtherTermination.  If the Optionee’srelationship with or employment by the Company terminates for any reason otherthan death or permanent disability or for reason of willful violation of theCompany’s policies, this Option may, to the extent such Option has vested,thereafter be exercised by the Optionee for a period of three months from thedate of such termination or expiration of the stated term of the Option,whichever period is the shorter; provided, however, that if such termination isby action of the Company within 18 months following a Change of Control (otherthan discharge for reason of willful violation of the Company’s policies ), anyunexercised portion of this Option may be exercised by the Optionee until theearlier of six months and one day after such termination or the expiration ofsuch Option in accordance with the terms hereof.

 

(e)    Directors.  Notwithstanding anything in this Section 5to the contrary, if the Optionee is a non-employee member of the Board ofDirectors of the Company, when such Optionee’s term on the Board of Directorsof the Company terminates by reason of retirement, permanent disability orresignation (in each case, except in the event of a willful violation of theCompany’s policies), this Option, to the extent such Option has vested, shall remainexercisable until the expiration of the stated term of the Option.

 

**6.  Adjustmentson Recapitalization.**  The number of shares of Common Stock subjecthereto and the Option Price per share shall be proportionately adjusted for anyincrease or decrease in the number of issued shares of the Common Stockresulting from the subdivision or consolidation of the shares, or the paymentof a stock dividend after the Date of Grant, or other decrease or increase inthe shares of Common Stock outstanding effected without receipt ofconsideration by the Company; provided, however, that any Options to purchasefractional shares resulting from such adjustments shall be eliminated.

 

If the Company shall at any time merge orconsolidate with or into another corporation, the holder of this Option willthereafter receive, upon the exercise thereof, the securities or property towhich a holder of the number of shares of Common Stock then deliverable uponthe exercise of such Option would have been entitled upon such merger orconsolidation, and the Company shall take such steps in connection with suchmerger or consolidation as may be necessary to assure that the provisions ofthe Plan shall thereafter be applicable, as nearly as reasonably may be, inrelation to any securities or property thereafter deliverable upon the exerciseof such Option.  A sale of consideration(apart from the assumption of obligations) consisting primarily of securitiesshall be deemed a merger or consolidation for the foregoing purposes.  In the event of the proposed dissolution,liquidation or reorganization of the Company, other than pursuant to a mergeror consolidation as referred to above, the Option granted hereunder shallterminate as of a date to be fixed by the Committee (as that term is defined inthe Plan); provided that not less than 30 day’s prior written notice of thedate so fixed shall be given to the Optionee, and the Optionee shall have theright, during the period of thirty

 

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(30) days preceding such termination, toexercise his or her Option as to all or any part of the shares covered thereby,including shares as to which such Option would not otherwise be exercisable.

 

**7.  Subjectto Plan.** This Option is subject to all the terms andconditions of the Plan, and specifically to the power of the Committee to makeinterpretations of the Plan and of the options granted thereunder, and of theBoard of Directors of the Company (“Board of Directors”) to alter, amend,suspend or discontinue the Plan subject to the limitations expressed in thePlan.  By acceptance hereof, Optioneeacknowledges receipt of a copy of a Summary Plan Description which describesthe basic terms and conditions of the Plan and is attached hereto as ExhibitA, and recognizes and agrees that determinations, interpretations or otheractions respecting the Plan may be made by a majority of the Board of Directorsor of the Committee, and that such determinations, interpretations or otheractions are final, conclusive and binding upon all parties, including Optionee.

 

**8.  Rightsas Shareholder.** This Option shall not entitle Optionee or anypermitted transferee hereof to any rights of a shareholder of the Company or toany notice of proceedings of the Company or to any notice of proceedings of theCompany in respect of any shares issuable upon exercise of this Option unlessand until the Optionee has given to the Company a written notice of exercise,has paid in full the Option Price for such shares and, if applicable, has givena representation to the Company that he or she is purchasing such shares forinvestment only and not with a view towards any distribution.  The Company shall not be required to issue ordeliver any certificate for shares of its Common Stock purchased hereunderprior to compliance with applicable federal and state laws and regulations withrespect to the issuance, registration or listing of such shares.

 

**9.****Securities Laws**.    Optionee acknowledges that he or she hasbeen informed of, or is otherwise familiar with, the nature and the limitationsimposed by the Securities Act of 1933, as amended (the “Act”), the ExchangeAct, and the rules and regulations thereunder (in particular, Rule 144,promulgated under the Act and Section 16 of the Exchange Act, and Rule16b-3 promulgated thereunder), concerning the shares issuable upon exercise ofthis Option and agrees to be bound by the restrictions embodied in such Act,the Exchange Act, and all the rules and regulations promulgated thereunder.

 

**10.  Miscellaneous;Governing Law.**

 

(a) In the event the Option shall beexercised in whole, this Option Agreement shall be surrendered to the Companyfor cancellation.  In the event theOption shall be exercised in part, or a change in the number or designation ofthe Common Stock shall be made, this Option Agreement shall be delivered byOptionee to the Company for the purpose of making appropriate notation thereon,or of otherwise reflecting, in such manner as the Company shall determine, thepartial exercise or the change in the number of designation of the Common Stock.

 

(b) The Option shall be exercised in accordance with such administrativeregulations as the Committee shall from time to time adopt.

 

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(c) The Option and this Option Agreement shall be construed, administeredand governed in all respects under and by the laws of the State of New Jersey.

 

(d) Optionee hereby agrees that he or she will make such arrangements as theCompany deems necessary to discharge any federal, state, or local income orpayroll tax withholding obligations imposed upon the Company with respect tothis Option.  Upon Optionee’s request andsubject to the Company’s approval, in its sole discretion, and in compliancewith any applicable conditions or restrictions of law, the Company may withholdfrom fully vested shares of Common Stock otherwise issuable to Optionee uponexercise of the Option a number of whole shares of Common Stock having a fairmarket value, determined as of the date of exercise, not in excess of theminimum amount of tax required to be withheld by law.

 

(e) Nothing contained in this Agreement shall confer upon Optionee the rightto employment by the Company or any of its subsidiaries.

 

IN WITNESS WHEREOF, this Option Agreement isexecuted as of the **XXX day of XXXX, XXX.**

 

 
|   | MEDAREX, INC. |
|--------|---------------|
|   |          |
|   |          |
|   | By:           |   |

 

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