PROTEIN DESIGN LABS INC/DE
EXHIBIT 10.36
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<TYPE>EX-10.36
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<FILENAME>exh1036.htm
<DESCRIPTION>EXHIBIT 10.36
<TEXT>

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                                                                    EXHIBIT 10.36
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<p><strong>PROTEIN DESIGN LABS, INC.
        OUTSIDE DIRECTORS STOCK OPTION PLAN</strong></p>
<p>(As amended June 29, 2000)


<p>        1.      Purpose.  The Protein Design Labs, Inc. Outside Directors Stock
Option Plan (the "Plan") is established to create additional incentive for the
non-employee directors of Protein Design Labs, Inc. and any successor
corporation thereto (collectively referred to as the "Company"), to promote
the financial success and progress of the Company and any present or future
parent and/or subsidiary corporations of the Company (all of whom along with
the Company being individually referred to as a "Participating Company" and
collectively referred to as the "Participating Company Group").  The Plan
shall be effective as of the date it is approved by the stockholders of the
Company (the "Effective Date").  For purposes of the Plan, a parent
corporation and a subsidiary corporation shall be as defined in sections
424(e) and 424(f) of the Internal Revenue Code of 1986, as amended (the
"Code").

<p>        2.      Administration.  The Plan shall be administered by the Board of
Directors of the Company (the "Board") and/or by a duly appointed committee of
the Board having such powers as shall be specified by the Board.  Any
subsequent references herein to the Board shall also mean the committee if
such committee has been appointed and, unless the powers of the committee have
been specifically limited, the committee shall have all of the powers of the
Board granted herein, including, without limitation, the power to terminate or
amend the Plan at any time, subject to the terms of the Plan and any
applicable limitations imposed by law.  The Board shall have no authority,
discretion, or power to select which non-employee directors of the Company
will receive options under the Plan, to set the exercise price of the options
granted under the Plan, to determine the number of shares of common stock to
be granted under an option or the time at which any  options are to be
granted, to establish the duration of option grants, or alter any other terms
or conditions specified in the Plan, except in the sense of administering or
amending the Plan subject to the provisions of the Plan.  All questions of
interpretation of the Plan or of any options granted under the Plan (an
"Option") shall be determined by the Board, and such determinations shall be
final and binding upon all persons having an interest in the Plan and/or any
Option.  The Chief Executive Officer, President or General Counsel of the
Company shall have the authority to act on behalf of the Company with respect
to any matter, right, obligation, or election which is the responsibility of
or which is allocated to the Company herein.

<p>        3.      Eligibility and Type of Option.  Options may be granted only to
directors of the Company who are not employees of the Company or any present
parent and/or subsidiary corporations of the Company ("Outside Directors").
Options granted to Outside Directors shall be nonqualified stock options;
that is, options which are not treated as having been granted under section
422(b) of the Code.

<p>        4.      Shares Subject to Option.  Options shall be for the purchase of
shares of the authorized but unissued common stock or treasury shares of
common stock of the Company (the "Stock"), subject to adjustment as provided
in paragraph 8 below.  The maximum number of shares of Stock which may be
issued under the Plan shall be two hundred thousand (200,000) shares.  In the
event that any outstanding Option for any reason expires or is terminated
and/or shares of Stock subject to repurchase are repurchased by the Company,
the shares allocable to the unexercised portion of such Option, or such
repurchased shares, may again be subject to an Option grant.

<p>        5.      Time for Granting Options.  All Options shall be granted, if at
all, within ten (10) years from the Effective Date.

<p>        6.      Terms, Conditions and Form of Options.  Options granted pursuant
to the Plan shall be evidenced by written agreements specifying the number of
shares of Stock covered thereby, in substantially the form attached hereto as
Exhibit A (the "Option Agreement"), which written agreements may incorporate
all or any of the terms of the Plan by reference and shall comply with and be
subject to the following terms and conditions:

<p>                (a)     Automatic Grant of Options.  Subject to execution by each
Outside Director of an Option Agreement, options shall be granted
automatically and without further action of the Board, as follows:

<p>                        (i)     Each person who is newly appointed or elected as an
Outside Director after February 6, 1997 or who becomes an Outside Director as
a result of ceasing to be an employee of the Company or any parent or
subsidiary corporation of the Company after June 29, 2000 (a "Future Outside
Director") shall be granted an Option for thirty thousand (30,000) shares of
Stock upon the date such person becomes an Outside Director.

<p>                        (ii)    Each Outside Director shall be granted an Option for
thirty thousand (30,000) shares of Stock upon the fifth Anniversary Date (as
defined below) and each subsequent five year Anniversary Date thereafter
(e.g., 10th, 15th, etc.) of such Outside Director.

<p>                        (iii)   The Anniversary Date of each Outside Director shall be
the date the Outside Director became an Outside Director except that if he or
she elected not to receive an option at that time under paragraph 6(a)(iv)
then his or her Anniversary Date shall be the date upon which he or she was
first granted an Option under the Plan.  If an Outside Director subsequently
elects not to receive an Option and later revokes that election, his or her
Anniversary Date may be adjusted as provided in paragraph 6(a)(iv).

<p>                        (iv)    Notwithstanding the foregoing, any Outside Director
may elect not to receive an Option granted pursuant to this paragraph 6(a) by
delivering written notice of such election to the Board no later than the day
prior to the date such Option would otherwise be granted.  A person so
declining an Option shall receive no payment or other consideration in lieu of
such declined Option.  An Outside Director who has declined an Option may
revoke such election by delivering written notice of such revocation to the
Board, in which event such Outside Director shall be automatically granted an
Option on the later of the date the Option would otherwise have been granted
to such Outside Director or the date of such notice (and in such latter event
the Outside Director's Anniversary Date shall then become the date of such
notice).

<p>                        (v)     Notwithstanding any other provision of the Plan, no
Option shall be granted to any individual on his or her Anniversary Date when
he or she is no longer serving as an Outside Director of the Company on such
Anniversary Date.

<p>                (b)     Option Exercise Price.  The Option exercise price per share
of Stock for an Option shall be the fair market value of a share of the common
stock of the Company on the date of the granting of the Option.  Where there
is a public market for the common stock of the Company, the fair market value
per share of Stock shall be the mean of the bid and asked prices of the common
stock of the Company on the date of the granting of the Option, as reported in
the Wall Street Journal (or, if not so reported, as otherwise reported by the
National Association of Securities Dealers Automated Quotation ("NASDAQ")
System) or, in the event the common stock of the Company is listed on the
NASDAQ National Market System or a national or regional securities exchange,
the fair market value per share of Stock shall be the closing price on such
National Market System or exchange on the date of the granting of the Option,
as reported in the Wall Street Journal.  If the date of the granting of an
Option does not fall on a day on which the common stock of the Company is
trading on the NASDAQ National Market System or other national or regional
securities exchange, the date on which the Option exercise price per share
shall be established shall be the last day on which the common stock of the
Company was so traded prior to the date of the granting of the Option.

<p>                (c)     Exercise Period and Exercisability of Options.  An Option
granted pursuant to the Plan shall be exercisable for a term of ten (10)
years.  Options granted pursuant to the Plan shall become exercisable over a
sixty (60) month period commencing one (1) month after the date of grant as
provided in the form of Option Agreement.

<p>                (d)     Payment of Option Exercise Price.  Payment of the Option
exercise price for the number of shares of Stock being purchased pursuant to
any Option shall be made (i) in cash, by check, or in cash equivalent, (ii) by
the assignment of the proceeds of a sale of some or all of the shares being
acquired upon the exercise of an Option (including, without limitation,
through an exercise complying with the provisions of Regulation T as
promulgated from time to time by the Board of Governors of the Federal Reserve
System), or (iii) by any combination thereof.  The Company reserves, at any
and all times, the right, in the Company's sole and absolute discretion, to
establish, decline to approve and/or terminate any program and/or procedure
for the exercise of Options by means of an assignment of the proceeds of a
sale of some or all of the shares of Stock to be acquired upon such exercise.

<p>                (e)     Transfer of Control.  A "Transfer of Control" shall be
deemed to have occurred in the event any of the following occurs with respect
to the Company:

<p>                        (i)     any acquisition of the Company's stock or any
reorganization as defined in section 368(a)(1) of the Code to which the
Company is a party as defined in section 368(b) of the Code and in which the
Company is not the surviving corporation or is not immediately after the
reorganization engaged in the active conduct of a trade or business or in
which the stockholders of the Company will own less than fifty percent (50%)
of the voting securities of the surviving corporation; or

<p>                        (ii)    any sale or conveyance of substantially all of the net
assets of the Company, unless immediately after such sale the Company is
engaged in the active conduct of a trade or business.

<p>        In the event of a Transfer of Control, the surviving, continuing,
successor, or purchasing corporation, as the case may be (the "Acquiring
Corporation"), shall either assume the Company's rights and obligations under
outstanding stock option agreements or substitute options for the Acquiring
Corporation's stock for such outstanding Options unless the Company's Board
otherwise agrees.  In the event that, with the Board's consent, the Acquiring
Corporation elects not to assume or substitute for such outstanding Options in
connection with a merger in which the Company is not the surviving corporation
or a reverse triangular merger in which the Company is the surviving
corporation where the stockholders of the Company before such merger do not
retain, directly or indirectly, at least a majority of the beneficial interest
in the voting stock of the Company after such merger, the Board may, but shall
not be obligated to, provide that any unexercisable and/or unvested portion of
the outstanding Options shall be immediately exercisable and vested as of a
date prior to the Transfer of Control, as the Board so determines.  The
exercise and/or vesting of any Option that was permissible solely by reason of
this paragraph 6(e) shall be conditioned upon the consummation of the Transfer
of Control.  Any Options which are neither assumed or substituted for by the
Acquiring Corporation nor exercised as of the date of the Transfer of Control
shall terminate effective as of the date of the Transfer of Control.

<p>        7.      Authority to Vary Terms.  The Board shall have the authority from
time to time to vary the terms of the Option Agreement either in connection
with the grant of an individual Option or in connection with the authorization
of a new standard form or forms; provided, however, that the terms and
conditions of such revised or amended standard form or forms of Option
Agreement shall be in accordance with the terms of the Plan.  Such authority
shall include, but not by way of limitation, the authority to grant Options
which are immediately exercisable subject to the Company's right to repurchase
any unvested shares of Stock acquired by the Optionee on exercise of an Option
in the event such Optionee's service as a director of the Company is
terminated for any reason.

<p>        8.      Effect of Change in Stock Subject to Plan.  Appropriate
adjustments shall be made in the number and class of shares of Stock subject
to the Plan and to any outstanding Options and in the Option exercise price of
any outstanding Options in the event of a stock dividend, stock split, reverse
stock split, combination, reclassification, or like change in the capital
structure of the Company.

<p>        9.      Options Non-Transferable.  Except as may be permitted by the Board
and expressly provided in an Option agreement granted by the Board, Options
may not be assigned or transferred by an Optionee except by will or by the
laws of descent and distribution.

<p>        10.     Termination or Amendment of Plan.  The Board, including any duly
appointed committee of the Board, may terminate or amend the Plan at any time;
provided, however, that without the approval of the stockholders of the
Company, there shall be (a) no increase in the total number of shares of Stock
covered by the Plan (except by operation of the provisions of paragraph 8
above), and (b) no expansion in the class of persons eligible to receive
Options.  In any event, no amendment may adversely affect any then outstanding
Option, or any unexercised portion thereof, without the consent of the
Optionee.

<p>        IN WITNESS WHEREOF, the undersigned Secretary of the Company certifies
that the foregoing Protein Design Labs, Inc. Outside Directors Stock Option
Plan was approved by the stockholders of the Company at the Annual Meeting of
Stockholders on the twentieth day of October, 1992, and subsequently amended
by the Board on October 17, 1996, February 6, 1997 and June 29, 2000, in
accordance with applicable laws and the terms of the Plan.

<p>Date:

<p>By:
<p>        Douglas O. Ebersole
<p>        Secretary



<p><strong>        EXHIBIT A</strong></p>


<p><strong>        PROTEIN DESIGN LABS, INC.
        NONQUALIFIED STOCK OPTION AGREEMENT
        FOR OUTSIDE DIRECTORS</strong></p>


<p>        Protein Design Labs, Inc., a Delaware corporation (the "Company"),
hereby grants to                              (the "Optionee") an option to
purchase a total of thirty thousand (30,000) shares of the common stock of the
Company (the "Number of Option Shares") under the Protein Design Labs, Inc.
Outside Directors Stock Option Plan (the "Plan"), at an exercise price of
$         per share and in the manner and subject to the provisions of this
Option Agreement (the "Option").  The grant, in all respects, is subject to
the terms and conditions of this Option Agreement and the Plan, the provisions
of which are incorporated by reference herein.  Unless otherwise provided in
this Option Agreement, defined terms shall have the meaning given to such
terms in the Plan.

<p>        1.      Grant of the Option.  The Option is granted effective as of
                       (the "Date of Option Grant").  The Number of Option
Shares and the exercise price per share of the Option are subject to
adjustment from time to time as provided in the Plan.

<p>        2.      Status of the Option.  The Option is intended to be a nonqualified
stock option and shall not be treated as an incentive stock option as
described in section 422 of the Internal Revenue Code of 1986, as amended.

<p>        3.      Term of the Option.  The Option shall terminate and may no longer
be exercised on the first to occur of (i) the date ten (10) years after the
Date of Option Grant (the "Option Term Date"), (ii) the last date for
exercising the Option following termination of the Optionee's service as a
director of the Company as described in paragraph 6 below, or (iii) upon a
Transfer of Control of the Company as described in the Plan.

<p>        4.      Exercise of the Option.

<p>                (a)     Right to Exercise.  The Option shall first become
exercisable on the date occurring one (1) month after the Date of Option Grant
(the "Initial Exercise Date").  The Option shall be exercisable on and after
the Initial Exercise Date and prior to the termination of the Option in the
amount equal to the Number of Option Shares multiplied by the Vested Ratio as
set forth below less the number of shares previously acquired upon exercise of
the Option:


<pre>

                                         Vested Ratio

Prior to Initial Exercise Date                0


On Initial Exercise Date,                    1/60
provided the Optionee has
continuously served as a
director of Company from the
Date of Option Grant until the
Initial Exercise Date


Plus


For each full month of the                   1/60
Optionee's continuous service
as a director of the Company
from the Initial Exercise Date


In no event shall the Vested
Ratio exceed 1/1.
</pre>

<p>In no event shall the Option be exercisable for more shares than the Number of
Option Shares.  Notwithstanding the foregoing, the Option may not be exercised
more frequently than twice in any continuous twelve (12) month period;
provided, however, that the foregoing restriction shall not apply so as to
prevent an exercise (i) following termination of the Optionee's service as a
director of the Company as described in paragraph 6 below or (ii) during the
thirty (30) day period immediately preceding a Transfer of Control of the
Company as described in the Plan.

<p>                (b)     Method of Exercise.  The Option may be exercised by written
notice to the Company which must state the election to exercise the Option,
the number of shares of stock for which the Option is being exercised and such
other representations and agreements as to the Optionee's investment intent
with respect to such shares as may be required pursuant to the provisions of
this Option Agreement and the Plan.  The written notice must be signed by the
Optionee and must be delivered in person, by facsimile or by certified or
registered mail, return receipt requested, to the President of the Company, or
other authorized representative of the Participating Company Group, prior to
the termination of the Option as set forth in paragraph 3 above, accompanied
by full payment of the exercise price for the number of shares of stock being
purchased in a form permitted under the terms of the Plan.

<p>                (c)     Withholding.  At the time the Option is exercised, in whole
or in part, or at any time thereafter as requested by the Company, the
Optionee shall make adequate provision for the foreign, federal and state tax
withholding obligations of the Company, if any, which arise in connection with
the Option including, without limitation, obligations arising upon (i) the
exercise, in whole or in part, of the Option, (ii) the transfer, in whole or
in part, of any shares of stock acquired on exercise of the Option, or (iii)
the lapsing of any restriction with respect to any shares acquired on exercise
of the Option.

<p>                (d)     Certificate Registration.  The certificate or certificates
for the shares of stock as to which the Option shall be exercised shall be
registered in the name of the Optionee, or, if applicable, the heirs of the
Optionee.

<p>                (e)     Restriction on Grant of the Option and Issuance of Shares.
The grant of the Option and the issuance of shares of stock on exercise of the
Option shall be subject to compliance with all of the applicable requirements
of federal or state law with respect to such securities.  The Option may not
be exercised if the issuance of shares of stock upon such exercise would
constitute a violation of any applicable federal or state securities laws or
other law or regulation.  In addition, no Option may be exercised unless (i) a
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), shall at the time of exercise of the Option be in effect
with respect to the shares of stock issuable upon exercise of the Option, or
(ii) in the opinion of legal counsel to the Company, the shares issuable upon
exercise of the Option may be issued in accordance with the terms of an
applicable exemption from the registration requirements of the Securities Act.
As a condition to the exercise of the Option, the Company may require the
Optionee to satisfy any qualifications that may be necessary or appropriate,
to evidence compliance with any applicable law or regulation and to make any
representation or warranty with respect thereto as may be requested by the
Company.

<p>                (f)     Fractional Shares.  The Company shall not be required to
issue fractional shares of stock upon the exercise of the Option.

<p>        5.      Non-Transferability of the Option.  The Option may be exercised
during the lifetime of the Optionee only by the Optionee and may not be
assigned or transferred in any manner except by will or by the laws of descent
and distribution.

<p>        6.      Termination of Service as a Director.

<p>                (a)     Termination of Director Status.  If the Optionee ceases to
be a director of the Company for any reason except death or disability within
the meaning of section 22(e)(3) of the Code, the Option, to the extent
unexercised and exercisable by the Optionee on the date on which the Optionee
ceased to be a director, may be exercised by the Optionee at any time prior to
the expiration of three (3) months from the date on which the Optionee's
service as a director of the Company terminated, but in any event no later
than the Option Term Date.  If the Optionee ceases to be a director of the
Company because of the death or disability of the Optionee within the meaning
of section 22(e)(3) of the Code, the Option, to the extent unexercised and
exercisable by the Optionee on the date on which the Optionee ceased to be a
director, may be exercised by the Optionee (or the Optionee's legal
representative) at any time prior to the expiration of twelve (12) months from
the date on which the Optionee's service as a director of the Company
terminated, but in any event no later than the Option Term Date.  The
Optionee's service as a director of the Company shall be deemed to have
terminated on account of death if the Optionee dies within three (3) months
after the Optionee's termination of service as a director of the Company.
Except as provided in this paragraph 6, an Option shall terminate and may not
be exercised after the Optionee ceases to be a director of the Company.

<p>                (b)     Extension of Exercise Prevented by Law.  Notwithstanding the
foregoing, if the exercise of the Option within the applicable time periods
set forth above is prevented because the issuance of shares of stock upon such
exercise would constitute a violation of any applicable federal or state
securities law or other law or regulation, the Option shall remain exercisable
until three (3) months after the date the Optionee is notified by the Company
that the Option is exercisable, but in any event no later than the Option Term
Date.

<p>                (c)     Extension if Optionee Subject to Section 16(b).
Notwithstanding the foregoing, if the exercise of the Option within the
applicable time periods set forth above would subject the Optionee to suit
under Section 16(b) of the Exchange Act, the Option shall remain exercisable
until the earliest to occur of (i) the tenth (10th) day following the date on
which the Optionee would no longer be subject to such suit, (ii) the one
hundred and ninetieth (190th) day after the Optionee's termination of service
as a director of the Company and (iii) the Option Term Date.

<p>        7.      Rights as a Stockholder.  The Optionee shall have no rights as a
stockholder with respect to any shares of stock covered by the Option until
the date of the issuance of a certificate or certificates for the shares for
which the Option has been exercised.  No adjustment shall be made for
dividends or distributions or other rights for which the record date is prior
to the date such stock certificate or certificates are issued, except as
provided in the Plan.

<p>        8.      Legends.  The Company may at any time place legends referencing
any applicable federal or state securities law restrictions on all
certificates representing shares of stock subject to the provisions of this
Option Agreement.  The Optionee shall, at the request of the Company, promptly
present to the Company any and all certificates representing shares of stock
acquired pursuant to the Option in the possession of the Optionee in order to
effectuate the provisions of this paragraph.

<p>        9.      Binding Effect.  This Option Agreement shall inure to the benefit
of the successors and assigns of the Company and be binding upon the Company
and the Optionee and the Optionee's heirs, executors, administrators,
successors and assigns.

<p>        10.     Termination or Amendment.  The Board, including any duly appointed
committee of the Board, may terminate or amend the Plan and/or the Option at
any time subject to any limitations described in the Plan; provided, however,
that no such termination or amendment may adversely affect the Option or any
unexercised portion hereof without the consent of the Optionee.

<p>        11.     Integrated Agreement.  This Option Agreement and the Plan
constitute the entire understanding and agreement of the Optionee and the
Company with respect to the subject matter contained herein and therein, and
there are no agreements, understandings, restrictions, representations, or
warranties among the Optionee and the Company other than those as set forth or
provided for herein or therein.  To the extent contemplated herein and
therein, the provisions of this Option Agreement and the Plan shall survive
any exercise of the Option and shall remain in full force and effect.

<p>        12.     Applicable Law.  This Option Agreement shall be governed by the
laws of the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within the
State of California.

<p>        13.     Arbitration.  In the event a dispute between the parties to this
Option  Agreement arises out of, in connection with, or with respect to this
Option Agreement, or any breach of this Option Agreement, such dispute will,
on the written request of one (1) party delivered to the other party, be
submitted and settled by arbitration in Palo Alto, California in accordance
with the rules of the American Arbitration Association then in effect and will
comply with the California Arbitration Act, except as otherwise specifically
stated in this paragraph 13.  Judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction.  The parties
submit to the in personam jurisdiction of the Supreme Court of the State of
California for the purpose of confirming any such award and entering judgment
upon the award.  Notwithstanding anything to the contrary that may now or in
the future be contained in the rules of the American Arbitration Association,
the parties agree as follows:

<p>                (a)     Each party will appoint one person approved by the American
Arbitration Association to hear and determine the dispute within twenty (20)
days after receipt of notice of arbitration from the noticing party.  The two
(2) persons so chosen will select a third impartial arbitrator.  The majority
decision of the arbitrators will be final and conclusive upon the parties to
the arbitration.  If either party fails to designate its arbitrator within
twenty (20) days after delivery of the notice provided for in this paragraph
13(a), then the arbitrator designated by the one (1) party will act as the
sole arbitrator and will be considered the single, mutually approved
arbitrator to resolve the controversy.  In the event the parties are unable to
agree upon a rate of compensation for the arbitrators, they will be
compensated for their services at a rate to be determined by the American
Arbitration Association.

<p>                (b)     The parties will enjoy, but are not limited to, the same
rights to discovery as they would have in the United States District Court for
the Northern District of California.

<p>                (c)     The arbitrators will, upon the request of either party,
issue a written opinion of their findings of fact and conclusions of law.

<p>                (d)     Upon receipt by the requesting party of said written
opinion, said party will have the right within ten (10) days to file with the
arbitrators a motion to reconsider, and upon receipt of a timely request the
arbitrators will reconsider the issues raised by said motion and either
confirm or change their majority decision which will then be final and
conclusive upon the parties to the arbitration.



<p>                (e)     The arbitrators will award to the prevailing party in any
such arbitration reasonable expenses, including attorneys' fees and costs,
incurred in connection with the dispute.

<p>        PROTEIN DESIGN LABS, INC.

<p>        By:

<p>        Title:

<p>        The Optionee represents that the Optionee is familiar with the terms and
provisions of this Option Agreement and the Plan and hereby accepts the Option
subject to all of the terms and provisions thereof.

<p>        The undersigned acknowledges receipt of a copy of the Plan.



<p>Date:


<p>Signature:

 <br>
<br>
<br>
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