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                           SECOND AMENDED AND RESTATED
                               ILEX ONCOLOGY, INC.
                  1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN


                                                                    EXHIBIT 10.7


         1. Purpose. This 1996 Non-Employee Director Stock Option Plan (the
"Plan") of ILEX Oncology, Inc., a Delaware corporation (the "Company"), is
adopted for the benefit of the directors of the Company who at the time of their
service are not employees or consultants of the Company or any of its
subsidiaries ("Non-Employee Directors"), and is intended to advance the
interests of the Company by providing the Non-Employee Directors with additional
incentive to serve the Company by increasing their proprietary interest in the
success of the Company.

         2. Administration. The Plan shall be administered by the Board of
Directors of the Company (the "Board"). For the purposes of the Plan, a majority
of the members of the Board shall constitute a quorum for the transaction of
business, and the vote of a majority of those members present at any meeting
shall decide any question brought before that meeting. In addition, the Board
may take any action otherwise proper under the Plan by the affirmative vote,
taken without a meeting, of a majority of its members. No member of the Board
shall be liable for any act or omission of any other member of the Board or for
any act or omission on his own part, including but not limited to the exercise
of any power or discretion given to him under the Plan, except those resulting
from his own gross negligence or willful misconduct. Except as otherwise
expressly provided for herein, all questions of interpretation and application
of the Plan, or as to options granted hereunder (the "Options"), shall be
subject to the determination, which shall be final and binding, of a majority of
the whole Board.

         3. Option Shares. The stock subject to the Options and other provisions
of the Plan shall be shares of the Company's Common Stock, $.01 par value (or
such other par value as may be designated by act of the Company's stockholders)
(the "Common Stock"). The total amount of the Common Stock with respect to which
Options may be granted shall not exceed in the aggregate 225,000 shares;
provided, that the class and aggregate number of shares which may be subject to
the Options granted hereunder shall be subject to adjustment in accordance with
the provisions of Paragraph 12 hereof. Such shares may be treasury shares or
authorized but unissued shares.

         In the event that any outstanding Option for any reason shall expire or
terminate by reason of the death of the optionee or the fact that the optionee
ceases to be a director, the surrender of any such Option, or any other cause,
the shares of Common Stock allocable to the unexercised portion of such Option
may again be subject to an Option under the Plan.

         4. Grant of Options. Subject to the provisions of Paragraph 16 and the
availability under the Plan of a sufficient number of shares of Common Stock
that may be issuable upon the exercise of outstanding Options, there shall be
granted to each Non-Employee Director as of the date he is first elected as a
director of the Company, an Option to purchase 17,500 shares of Common Stock at
a purchase price per share of Common Stock (the "Option Price") equal to the
fair market value of the Common Stock as defined in Paragraph 7 hereof as of the
date of grant. In addition to



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the Options automatically granted under this Section 4 of the Plan, the Board
may grant Options at any time during the term of the Plan to any Non-Employee
Director, subject only to the applicable limitations set forth in this Plan and
applicable law.

No Option shall be granted pursuant to the Plan after October 18, 2006.

         5. Duration of Options. Each Option granted under the Plan shall be
exercisable for a term of ten years from the date of grant, subject to earlier
termination as provided in Paragraph 9 hereof.

         6. Amount Exercisable. Unless otherwise determined by the Board, all
Options granted pursuant to the Plan shall vest and become exercisable as
follows:

         (a)      Beginning on the last day of the calendar month following the
                  calendar month of the date of grant, an Option may be
                  exercised for up to one-forty-eighth of the shares subject to
                  the Option;

         (b)      On the last day of each succeeding calendar month, the Option
                  may be exercised for up to an additional one-forty-eighth of
                  the shares subject to the Option, so that after the expiration
                  of the last day of the forty-eighth calendar month following
                  the calendar month of grant, the Option shall be exercisable
                  in full; and

         (c)      To the extent not exercised, installments shall be cumulative
                  and may be exercised in whole or in part until the Option
                  expires on the tenth anniversary of the date of grant.

         Notwithstanding anything to the contrary in the Plan, this Option will
become exercisable in full upon a "change in control." For purposes of this
Section, a "change in control" shall arise if, at any time while the Optionee is
a member of the Company's Board of Directors any one or more of the following
events occurs:

                           (i) The Company is merged, consolidated or
                  reorganized into or with another corporation, or other entity
                  and, as a result thereof, less than 50% of the outstanding
                  stock or other capital interests of the surviving, resulting
                  or acquiring corporation, person, or other entity is owned, in
                  the aggregate, by the stockholder or stockholders of the
                  Company immediately prior to such merger, consolidation or
                  reorganization; or

                           (ii) The Company sells all or substantially all of
                  its business or assets (or both) to any other corporation,
                  person, or other entity, less than 50% of the outstanding,
                  voting stock or other capital interests of which are owned, in
                  the aggregate, by the stockholders of the Company, directly or
                  indirectly, immediately prior to or after such sale.



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         7. Exercise of Options. An optionee may exercise such optionee's Option
by delivering to the Company a written notice stating (i) that such optionee
wishes to exercise such Option on the date such notice is so delivered, (ii) the
number of shares of stock with respect to which such Option is to be exercised,
(iii) the address to which the certificate representing such shares of stock
should be mailed, and (iv) the social security number of such optionee. In order
to be effective, such written notice shall be accompanied by (i) payment of the
Option Price of such shares of stock and (ii) if applicable, payment of an
amount of money necessary to satisfy any withholding tax liability that may
result from the exercise of such Option. Each such payment shall be made by
cashier's check drawn on a national banking association and payable to the order
of the Company in United States dollars.

         If, at the time of receipt by the Company of such written notice, (i)
the Company has unrestricted surplus in an amount not less than the Option Price
of such shares of stock, (ii) all accrued cumulative preferential dividends and
other current preferential dividends on all outstanding shares of preferred
stock of the Company have been fully paid and (iii) the acquisition by the
Company of its own shares of stock for the purpose of enabling such optionee to
exercise such Option is otherwise permitted by applicable law and without any
vote or consent of any stockholder of the Company, then such optionee may
deliver to the Company, in payment of the Option Price of the shares of stock
with respect to which such Option is exercised, (x) certificates registered in
the name of such optionee that represent a number of shares of stock legally and
beneficially owned by such optionee (free of all liens, claims and encumbrances
of every kind) and having a fair market value on the date of receipt by the
Company of such written notice that is not greater than the Option Price of the
shares of stock with respect to which such Option is to be exercised, such
certificates to be accompanied by stock powers duly endorsed in blank by the
record holder of the shares of stock represented by such certificates, with the
signature of such record holder guaranteed by a national banking association
(or, in lieu of such certificates, other arrangements for the transfer of such
shares to the Company which are satisfactory to the Company) and (y) if the
Option Price of the shares of stock with respect to which such Options are to be
exercised exceeds such fair market value, a cashier's check drawn on a national
banking association and payable to the order of the Company in an amount, in
United States dollars, equal to the amount of such excess plus the amount of
money necessary to satisfy any withholding tax liability that may result from
the exercise of such Option. Notwithstanding the provisions of the immediately
preceding sentence, the Board, in its sole discretion, may refuse to accept
shares of stock in payment of the Option Price of the shares of stock with
respect to which such Option is to be exercised and, in that event, any
certificates representing shares of stock that were received by the Company with
such written notice shall be returned to such optionee, together with notice by
the Company to such optionee of the refusal of the Board to accept such shares
of stock. The Company may, at its option and upon approval by the Board of
Directors of the Company, retain shares of Common Stock which would otherwise be
issued upon exercise of an Option to satisfy any withholding tax liability that
may result from the exercise of such Option, which shares shall be valued for
such purpose at their then fair market value. If, at the expiration of seven
business days after the delivery to such optionee of such written notice from
the Company, such optionee shall not have delivered to the Company a cashier's
check drawn on a national banking association and payable to the order of the
Company in an amount, in United States dollars,



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equal to the Option Price of the shares of stock with respect to which such
Option is to be exercised, such written notice from the optionee to the Company
shall be ineffective to exercise such Option.

         As promptly as practicable after the receipt by the Company of (i) such
written notice from the optionee, (ii) payment, in the form required by the
foregoing provisions of this Paragraph 7, of the Option Price of the shares of
stock with respect to which such Option is to be exercised, and (iii) payment,
if required, in the form required by the foregoing provisions of this Paragraph
7, of an amount necessary to satisfy any withholding tax liability that may
result from the exercise of such Option, a certificate representing the number
of shares of stock with respect to which such Option has been so exercised,
reduced, to the extent applicable by the number of shares retained by the
Company to pay any required withholding tax, such certificate to be registered
in the name of such optionee, provided that such delivery shall be considered to
have been made when such certificate shall have been mailed, postage prepaid, to
such optionee at the address specified for such purpose in such written notice
from the optionee to the Company.

         For purposes of this Paragraph 7, the "fair market value" of a share of
stock as of any particular date shall mean the closing sale price of a share of
Common Stock on that date as reported by the principal national securities
exchange on which the Common Stock is listed if the Common Stock is then listed
on a national securities exchange, or if the Common Stock is not so listed, the
closing sale price of a share of Common Stock on that date and reported in the
National Association of Securities Dealers Automated Quotation system (the
"NASDAQ System"); provided that if no such closing price or quotes are so
reported on that date or if in the discretion of the Board another means of
determining the fair market value of a share of stock at such date shall be
necessary or advisable, the Board may provide for another means for determining
such fair market value, including a determination in good faith by the Board of
the fair market value as of the date of grant.

         8. Transferability of Options. Options shall not be transferable by the
optionee otherwise than by will or under the laws of descent and distribution,
and shall be exercisable, during his lifetime, only by him.

         9. Termination. Except as may be otherwise expressly provided herein,
each Option, to the extent it shall not previously have been exercised, shall
terminate on the earlier of the following:

         (a)      On the last day within the three month period commencing on
                  the date on which the optionee ceases to be a member of the
                  Company's Board of Directors, for any reason other than the
                  death, disability or retirement of the optionee, during which
                  period the optionee shall be entitled to exercise all Options
                  fully vested as described in Paragraph 6 by the optionee on
                  the date on which the optionee ceased be a member of the
                  Company's Board of Directors;

         (b)      On the last day within the one year period commencing on the
                  date on which the optionee ceases to be a member of the
                  Company's Board of Directors because of permanent disability,
                  during which period the optionee shall be entitled to exercise



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                  all Options fully vested as described in Paragraph 6 by the
                  optionee on the date on which the optionee ceased to be a
                  member of the Company's Board of Directors because of such
                  disability;

         (c)      On the last day within the one year period commencing on the
                  date of the optionee's death while serving as a member of the
                  Company's Board of Directors, during which period the executor
                  or administrator of the optionee's estate or the person or
                  persons to whom the optionee's Option shall have been
                  transferred by will or the laws of descent or distribution,
                  shall be entitled to exercise all Options in respect of the
                  number of shares that the optionee would have been entitled to
                  purchase had the optionee exercised such Options on the date
                  of his death;

         (d)      On the last day within the one year period commencing on the
                  date an optionee retires from the Board of Directors of the
                  Company in accordance with the Company's retirement policy,
                  during which period the optionee, or the executor or
                  administrator of the optionee's estate or the person or
                  persons to whom such Option shall have been transferred by the
                  will or the laws of descent or distribution in the event of
                  the optionee's death within such one year period, as the case
                  may be, shall be entitled to exercise all Options in respect
                  of the number of shares that the optionee would have been
                  entitled to purchase had the optionee exercised such Options
                  on the date of such retirement; and

         (e)      Ten years after the date of grant of such Option.

         10. Requirements of Law. The Company shall not be required to sell or
issue any shares under any Option if the issuance of such shares shall
constitute a violation by the optionee or the Company of any provisions of any
law or regulation of any governmental authority. Each Option granted under the
Plan shall be subject to the requirements that, if at any time the Board of
Directors of the Company or the Board shall determine that the listing,
registration or qualification of the shares subject thereto upon any securities
exchange or under any state or federal law of the United States or of any other
country or governmental subdivision thereof, or the consent or approval of any
governmental regulatory body, or investment or other representations, are
necessary or desirable in connection with the issue or purchase of shares
subject thereto, no such Option may be exercised in whole or in part unless such
listing, registration, qualification, consent, approval or representation shall
have been effected or obtained free of any conditions not acceptable to the
Board of Directors. If required at any time by the Board of Directors or the
Board, an Option may not be exercised until the optionee has delivered an
investment letter to the Company. In addition, specifically in connection with
the Securities Act of 1933 (as now in effect or hereafter amended), upon
exercise of any Option, the Company shall not be required to issue the
underlying shares unless the Board has received evidence satisfactory to it to
the effect that the holder of such Option will not transfer such shares except
pursuant to a registration statement in effect under such Act or unless an
opinion of counsel satisfactory to the Company has been received by the Board to
the effect that such registration is not required. Any determination in this
connection by the Board shall be final, binding and conclusive. In the event the
shares issuable on exercise of an Option are not registered



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under the Securities Act of 1933, the Company may imprint on the certificate for
such shares the following legend or any other legend which counsel for the
Company considers necessary or advisable to comply with the Securities Act of
1933:

         "The shares of stock represented by this certificate have not been
         registered under the Securities Act of 1933 or under the securities
         laws of any state and may not be sold or transferred except upon such
         registration or upon receipt by the Corporation of an opinion of
         counsel satisfactory, in form and substance to the Corporation, that
         registration is not required for such sale or transfer."

The Company may, but shall in no event be obligated to, register any securities
covered hereby pursuant to the Securities Act of 1933 (as now in effect or as
hereafter amended) and, in the event any shares are so registered, the Company
may remove any legend on certificates representing such shares. The Company
shall not be obligated to take any other affirmative action in order to cause
the exercise of an Option or the issuance of shares pursuant thereto to comply
with any law or regulation of any governmental authority.

         11. No Rights as Stockholder. No optionee shall have rights as a
stockholder with respect to shares covered by his Option until the date of
issuance of a stock certificate for such shares; and, except as otherwise
provided in Paragraph 12 hereof, no adjustment for dividends, or otherwise,
shall be made if the record date therefor is prior to the date of issuance of
such certificate.

         12. Changes in the Company's Capital Structure. The existence of
outstanding Options shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Common Stock or the rights of the Common Stock, or the dissolution
or liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.

         If the Company shall effect a subdivision or consolidation of shares or
other capital readjustment, the payment of a stock dividend, or other increase
or reduction of the number of shares of the Common Stock outstanding, without
receiving compensation for it in money, services or property, then (a) the
number, class and per share price of shares of stock subject to outstanding
Options under this Plan shall be appropriately adjusted in a manner as to
entitle an optionee to receive upon exercise of an Option, for the same
aggregate cash consideration, the same total number and class or classes of
shares as he would have received had he exercised his Option in full immediately
prior to the event requiring the adjustment; and (b) the number and class of
shares then reserved for issuance under this Plan shall be adjusted by
substituting for the total number and class of shares of stock then reserved for
the number and class or classes of shares of stock that would have been received
by the owner of an equal number of outstanding shares of Common Stock as the
result of the event requiring the adjustment.



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         If the Company merges or consolidates with another corporation, whether
or not the Company is a surviving corporation, or if the Company is liquidated
or sells or otherwise disposes of substantially all its assets while unexercised
Options remain outstanding under the Plan, (a) subject to the provisions of
clause (c) below, after the effective date of the merger, consolidation,
liquidation, sale or other disposition, as the case may be, each holder of an
outstanding Option shall be entitled, upon exercise of an Option, to receive, in
lieu of shares of Common Stock, the number and class or classes of shares of
stock or other securities or property to which the holder would have been
entitled if, immediately prior to the merger, consolidation, liquidation, sale
or other disposition, the holder had been the holder of record of a number of
shares of Common Stock equal to the number of shares as to which the Option may
be exercised.

         Except as expressly provided before in this Plan, the issue by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, for cash or property, or for labor or services either
upon direct sale or upon the exercise of rights or warrants to subscribe for
shares, or upon conversion of shares or obligations of the Company convertible
into shares or other securities, shall not affect, and no adjustment by reason
of it shall be made with respect to, the number or price of shares of Common
Stock then subject to outstanding Options.

         13. Amendment or Termination of Plan. The Board of Directors may at any
time and from time to time modify, revise or amend the Plan in such respects as
the Board of Directors may deem advisable in order that the Options granted
hereunder may conform to any changes in the law or in any other respect that the
Board of Directors may deem to be in the best interests of the Company;
provided, however, that without approval by the stockholders of the Company
voting the proper percentage of its voting power, no such amendment shall make
any change in the Plan for which stockholder approval is required in order to
comply with (i) Rule 16b-3 of the Securities Exchange Act of 1934, as amended,
(ii) any rules for listed companies promulgated by any national stock exchange
on which the Company's Common Stock is traded or (iii) any other applicable rule
or law. All Options granted under the Plan shall be subject to the terms and
provisions of the Plan and any amendment, modification or revision of the Plan
shall be deemed to amend, modify or revise all Options outstanding under the
Plan at the time of the amendment, modification or revision.

         14. Written Agreement. Each Option granted hereunder shall be embodied
in a written option agreement, which shall be subject to the terms and
conditions prescribed above, and shall be signed by the optionee and by the
appropriate officer of the Company for and in the name and on behalf of the
Company. Such an option agreement shall contain such other provisions as the
Board in its discretion shall deem advisable.

         15. Indemnification of Board. The Company shall indemnify each present
and future member of the Board against, and each member of the Board shall be
entitled without further act on his part to indemnity from the Company for, all
expenses (including the amount of judgments and the amount of approved
settlements made with a view to the curtailment of costs of litigation, other
than amounts paid to the Company itself) reasonably incurred by him in
connection with or arising out of any action, suit or proceeding in which he may
be involved by reason of his being or having been a member of the Board, whether
or not he continues to be such member of the Board at the time



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of incurring such expenses; provided, however, that such indemnity shall not
include any expenses incurred by any such member of the Board (a) in respect of
matters as to which he shall be finally adjudged in any such action, suit or
proceeding to have been guilty of gross negligence or willful misconduct in the
performance of his duty as such member of the Board, or (b) in respect of any
matter in which any settlement is effected, to an amount in excess of the amount
approved by the Company on the advice of its legal counsel; and provided
further, that no right of indemnification under the provisions set forth herein
shall be available to or enforceable by any such member of the Board unless,
within sixty (60) days after institution of any such action, suit or proceeding,
he shall have offered the Company, in writing, the opportunity to handle and
defend same at its own expense. The foregoing right of indemnification shall
inure to the benefit of the heirs, executors or administrators of each such
member of the Board and shall be in addition to all other rights to which such
member of the Board may be entitled to as a matter of law, contract, or
otherwise. Nothing in this Section 15 shall be construed to limit or otherwise
affect any right to indemnification, or payment of expense, or any provisions
limiting the liability of any officer or director of the Company or any member
of the Board, provided by law, the Certificate of Incorporation of the Company
or otherwise.

         16. Effective Date of Plan. This Plan shall be deemed to have been
adopted and effective on October 18, 1996; provided, however, that if the
Company has not completed an underwritten public offering of its Common Stock on
or before April 30, 1997, this Plan and all Options granted hereunder shall
automatically terminate.


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