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                                                                    EXHIBIT 10.2


                               RETENTION AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated April 22, 1998, is made
by and between LIDAK Pharmaceuticals, a California corporation having its
principal offices at 11077 North Torrey Pines Road, La Jolla, California, 92037,
(the "Company") and ________________ ("Employee").


                                    AGREEMENT

     1.   Term. This Agreement is effective from April 21, 1998 through March
13, 1999 (the "Term").

     2.   At-will Employment. Employee reaffirms that Employees employment
relationship with the Company is at-will, terminable at any time and for any
reason by either the Company or Employee. While certain paragraphs of this
Agreement describe events which could occur at a particular time in the future,
nothing in this Agreement may be construed as a guarantee of employment of any
length.

     3.   Resignation or Termination other than "Change of Control Termination".
If Employee voluntarily resigns his employment at his own initiative or if
Employee is terminated for any reason other than Change of Control as defined
below, the Company will pay Employee accrued and unpaid Base Salary through the
date of termination and any vacation which is accrued but unused as of the date
of termination. "Base Salary" is gross salary as of the date of Termination or
Resignation, less applicable state and federal taxes. Employee is ineligible for
Severance Payments or any continuation of benefits (other than provided for
under the federal Consolidated Omnibus Budget Reconciliation Act ("COBRA")), or
any other such compensation pursuant to this Agreement or otherwise.

     4.   Change of Control Termination.

          a.   Payment upon Change of Control Termination. In the event of a
"Change of Control Termination" during the Term of this Agreement,

               i.   Employee is eligible for payment of Base Salary and accrued
but unused vacation through the date of termination.

               ii.  Employee is eligible for severance under this Agreement in
an amount equal to twelve (12) months of Base Salary ("Severance Payments"),
paid on the same dates as Employee would have received salary payments had
Employee continued to be employed by the Company, over a twelve (12) month
period ("Severance Period");

               iii. If Employee elects to continue insurance coverage as
afforded to Employee according to COBRA, Company will reimburse Employee the
amount of the premiums incurred by Employee during the Severance period. Nothing
in this Agreement will extend Employees COBRA period beyond the period allowed
under COBRA, nor is Company assuming any responsibility which Employee has for
formally electing to continue coverage.




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               iv.  The benefits set forth in Sections 4(a)(ii) and (iii) above
are in exchange for Employee's execution of a release of all claims as of the
termination date, in substantially the form attached to this Agreement as
Exhibit 1.

          b.   Defined. A "Change of Control Termination" of the employment
relationship occurs where Employee is (i) terminated without "Cause" or (ii)
"Resigns for Good Reason", during the Term of the Agreement, following a "Change
of Control".

               i.   "Cause" is defined as (i) Employee?s material breach of this
Agreement or the Confidentiality Agreement; (ii) Employee?s failure or refusal
to substantially and materially perform according to or to comply with the
reasonable policies and directions established by the Company; (iii) the
appropriation (or attempted appropriation) of a material business opportunity of
Employer, including attempting to secure or securing any personal profit in
connection with any transaction entered into on behalf of Employer; (iv) the
misappropriation (or attempted misappropriation) of any of Employer?s funds or
property; (v) the conviction of, or the entering of a guilty plea or plea of no
contest with respect to a felony, the equivalent thereof, or any other crime
with respect to which imprisonment is a possible punishment; (vi) willful
misconduct or incompetence; (vii) physical or mental disability or other
inability to perform the essential functions of his position, with or without
reasonable accommodation; or (viii) death.

               ii.  "Resignation for Good Reason" is defined as resignation
based on

               (1)  a meaningful and detrimental alteration in Employee's
                    position or the nature or status of Employee's
                    responsibilities and reporting relationship from those in
                    effect upon execution of this Agreement;

               (2)  the assignment to Employee of any duties inconsistent with
                    his or her status as an executive officer/director (as
                    applicable) of Company;

               (3)  a reduction by the Company in Employee's Base Salary by
                    greater than Five Percent (5%), except to the extent the
                    base salaries of other executive officers of the Company are
                    accordingly reduced;

               (4)  a relocation of Employee's or the Company's principal
                    executive offices to a location outside San Diego County, if
                    Employee's principal office is at such offices, without
                    reimbursement of relocation costs.

               (5)  any other conduct which satisfies the requirements for
                    "constructive termination" as that term is defined under
                    California law.





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     An event described in 4(b)(ii)(1) - (5) will not constitute Good Reason
unless it is communicated by Employee to the Company in writing and unless it is
not corrected by the Company in a manner which is reasonably satisfactory to
Employee within ten (10) days of the Company's receipt of such written notice.

               iii. "Change of Control" is defined to have occurred if, and only
if, during the Term of this Agreement:

               (1)  any individual, partnership, firm, corporation, association,
                    trust, unincorporated organization or other entity or
                    person, or any syndicate or group deemed to be a person
                    under Section 14(d)(2) of the Exchange Act is or becomes the
                    "Beneficial Owner" (as defined in Rule 13d-3 of the General
                    Rules and Regulations under the Exchange Act), directly or
                    indirectly, of securities of the Company representing 50% or
                    more of the combined voting power of the Company's then
                    outstanding securities entitled to vote in the election of
                    directors of the Company;

               (2)  the following persons cease to constitute a majority of the
                    Board: (a) individuals who constituted the Board at the
                    beginning of the Term (the "Incumbent Directors"); (b)
                    individuals (the "New Directors") who were elected by, or
                    whose nomination for election by the Company's shareholders
                    was approved by a majority of the Incumbent Directors; and
                    (c) individuals who were elected by, or whose nomination for
                    election by the Company's shareholders was approved by, a
                    majority of the Incumbent Directors and the New Directors
                    still serving as Board Members at the time of such election.
                    It is expressly acknowledged that all directors who are not
                    Incumbent Directors and who are nominated for election
                    pursuant to the terms of the Agreement of Compromise and
                    Settlement, dated March 24, 1998, will constitute "New
                    Directors" for purposes of this provision;

               (3)  there occurs a reorganization, merger, consolidation or
                    other corporate transaction involving the Company
                    ("Transaction"), in each case, with respect to which the
                    stockholders of the Company immediately prior to such
                    Transaction do not, immediately after the Transaction, own
                    more than fifty (50) percent of the combined voting power of
                    the Company or other corporation resulting from such
                    Transaction; or

               (4)  all or substantially all of the assets of the Company are
                    sold, liquidated or distributed.



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     5.   Exercise of Vested Options after Change of Control Termination. In the
event of a Change of Control Termination during the Term of this Agreement,
Employee's vested options will be exercisable in all respects in accordance with
the terms of Section 6 of the Company's 1994 Stock Option Plan ("the Plan"),
unless Employee requests, within ninety (90) days following the termination, an
extension of his or her time to exercise. In the event of such a request,
Employee has up to twelve (12) months following the date of termination to
exercise any vested options and Employee's vested options will immediately
convert to non-qualified options. The Company does not make any warranty or
representation with respect to (1) the effect of the right to extend the date of
exercise set forth above or the status of the stock options previously granted
to Employee as incentive, despite the description of the options as such or (2)
the tax consequence of exercise of any options or consequent sale of any shares
purchased. Employee is advised to consult with his own tax advisor with respect
to the tax treatment of all aspects of exercise of vested options as contained
in this Agreement.

     6.   Dispute Resolution Procedures. Any dispute or claim arising out of
this agreement shall be subject to final and binding arbitration. The
arbitration will be conducted by one arbitrator who is a member of the American
Arbitration Association (AAA) or of the Judicial Arbitration and Mediation
Services (JAMS). The arbitration shall be held in San Diego, California. The
arbitrator shall have all authority to determine the arbitrability of any claim
and enter a final and binding judgment at the conclusion of any proceedings in
respect of the arbitration. Any final judgment only may be appealed on the
grounds of improper bias or improper conduct of the arbitrator. The parties will
be entitled to conduct discovery (i.e. investigation of facts through
depositions and other means) which shall be governed by the Code of Civil
Procedure section 1283.05. The arbitrator shall have all power and authority to
enter orders relating to such discovery as are allowed under the Code. The
arbitrator will apply California substantive law in all respects. The party
prevailing in the resolution of any such claim will be entitled, in addition to
such other relief as may be granted, to an award of all actual attorneys fees
and costs incurred in pursuit of the claim, without regard to any statute,
schedule, or rule of court purported to restrict such award.

     7.   General Provisions.

          a.   Governing Law. This Agreement will be governed by and construed
in accordance with the laws of the State of California.

          b.   Assignment. Employee may not assign, pledge or encumber his
interest in this Agreement or any part thereof.

          c.   No Waiver Of Breach. The failure to enforce any provision of this
Agreement will not be construed as a waiver of any such provision, nor prevent a
party thereafter from enforcing the provision or any other provision of this
Agreement. The rights granted the parties are cumulative, and the election of
one will not constitute a waiver of such party's right to assert all other legal
and equitable remedies available under the circumstances.



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          d.   Severability. The provisions of this Agreement are severable, and
if any provision will be held to be invalid or otherwise unenforceable, in whole
or in part, the remainder of the provisions, or enforceable parts of this
Agreement, will not be affected.

          e.   Entire Agreement. This Agreement constitutes the entire agreement
of the parties with respect to the subject matter of this Agreement, and
supersedes all prior and contemporaneous negotiations, agreements and
understandings between the parties, oral or written.

          f.   Modification; Waivers. No modification, termination or attempted
waiver of this Agreement will be valid unless in writing, signed by the party
against whom such modification, termination or waiver is sought to be enforced.

          g.   Fees and Expenses. If any proceeding is brought for the
enforcement or interpretation of this Agreement, or because of any alleged
dispute, breach, default or misrepresentation in connection with any provisions
of this Agreement, the successful or prevailing party will be entitled to
recover from the other party reasonable attorneys' fees and other costs incurred
in that proceeding (including, in the case of an arbitration, arbitration fees
and expenses), in addition to any other relief to which such party may be
entitled.

          h.   Amendment. This Agreement may be amended or supplemented only by
a writing signed by both of the parties hereto.

          i.   Duplicate Counterparts. This Agreement may be executed in
duplicate counterparts, each of which shall be deemed an original; provided,
however, such counterparts shall together constitute only one instrument.

          j.   Interpretation. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.



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          k.   Drafting Ambiguities. Each party to this Agreement and its
counsel have reviewed and revised this Agreement. The rule of construction that
any ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Agreement or any of the amendments to
this Agreement.


Dated: April 22, 1988                 LIDAK Pharmaceuticals


                                      By:
                                          --------------------------------------
                                          Gerald J. Yakatan, Chief Executive 
                                          Officer and President


Dated: April 22, 1998                 ------------------------------------------
                                      Employee



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EXHIBIT 1

GENERAL RELEASE

     This GENERAL RELEASE ("Release") is entered into effective as of
______________ __, ____, (the "Effective Date") by and between The Company, a
California corporation, having its principal offices at 11077 North Torrey Pines
Road, La Jolla, California, 92037 ("Company") and Employee, an individual
residing at ________________ ("Employee") with reference to the following facts:

RECITALS

     A.   The parties hereto entered into a Retention Agreement dated April 22,
1988 ("Retention") by which the parties agreed that upon termination resulting
from "Change in Control" prior to March 13, 1999, Employee would become eligible
for severance payments for a period of twelve (12) months (the "Severance
Period") from the date of termination of his employment ("Termination Date") in
exchange for Employee's release of the Company from all claims which Employee
may have against the Company as of the Termination Date.

     B.   The parties desire to dispose of, fully and completely, all claims
which Employee may have against the Company in the manner set forth in this
Release.

AGREEMENT

     1.   Release. Employee, for himself and his heirs, successors and assigns,
each fully releases, and discharges Company, its officers, directors, employees,
shareholders, attorneys, accountants, other professionals, insurers and agents
of the other (collectively "Agents"), and all entities related to each party,
including, but not limited to, heirs, executors, administrators, personal
representatives, assigns, parent, subsidiary and sister corporations,
affiliates, partners and co-venturers (collectively "Related Entities"), from
all rights, claims, demands, actions, causes of action, liabilities and
obligations of every kind, nature and description whatsoever, Employee now has,
owns or holds or has at anytime had, owned or held or may have against the
Company, Agents or Related Entities from any source whatsoever, whether or not
arising from or related to the facts recited in this Release. Employee
specifically releases and waives any and all claims arising under any express or
implied contract, rule, regulation or ordinance, including, without limitation,
Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the
Americans with Disabilities Act, the California Fair Employment and Housing Act,
and the Age Discrimination in Employment Act, as amended ("ADEA").

     2.   Section 1542 Waiver. This Release is intended as a full and complete
release and discharge of any and all claims that Employee may have against the
Company, Agents or Related Entities. In making this release, Employee intends to
release the Company, Agents and Related Entities from liability of any nature
whatsoever for any claim of damages or injury or for equitable or declaratory
relief of any kind, whether the claim, or any facts on which such claim might be
based, is 



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known or unknown to him. Employee expressly waives all rights under ?1542 of the
Civil Code of the State of California, which Employee understands provides as
follows:

          A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
          CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
          THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM
          MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
          DEBTOR.

     Employee acknowledges that he may discover facts different from or in
addition to those which he now believes to be true with respect to this Release.
Employee agrees that this Release shall remain effective notwithstanding the
discovery of any different or additional facts.

     3.   Waiver of Certain Claims. Employee acknowledges that he has been
advised in writing of his right to consult with an attorney prior to executing
the waivers set out in this Release, and that he has been given a 21-day period
in which to consider entering into the release of ADEA claims, if any. In
addition, Employee acknowledges that he has been informed that he may revoke a
signed waiver of the ADEA claims for up to seven (7) days after executing this
Release.

     4.   No Undue Influence. This Release is executed voluntarily and without
any duress or undue influence. Employee acknowledges he has read this Release
and executed it with his full and free consent. No provision of this Release
shall be construed against any party by virtue of the fact that such party or
its counsel drafted such provision or the entirety of this Release.

     5.   Governing Law. This Release is made and entered into in the State of
California and accordingly the rights and obligations of the parties hereunder
shall in all respects be construed, interpreted, enforced and governed in
accordance with the laws of the State of California as applied to contracts
entered into by and between residents of California to be wholly performed
within California.

     6.   Severability. If any provision of this Release is held to be invalid,
void or unenforceable, the balance of the provisions of this Release shall,
nevertheless, remain in full force and effect and shall in no way be affected,
impaired or invalidated.

     7.   Counterparts. This Release may be executed simultaneously in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Release may be
executed by facsimile, with originals to follow by overnight courier.

     8.   Dispute Resolution Procedures. Any dispute or claim arising out 



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of this Release shall be subject to final and binding arbitration. The
arbitration will be conducted by one arbitrator who is a member of the American
Arbitration Association (AAA) or of the Judicial Arbitration and Mediation
Services (JAMS) and will be governed by the Model Employment Arbitration rules
of AAA. The arbitration shall be held in San Diego, California. The arbitrator
shall have all authority to determine the arbitrability of any claim and enter a
final and binding judgment at the conclusion of any proceedings in respect of
the arbitration. Any final judgment only may be appealed on the grounds of
improper bias or improper conduct of the arbitrator. Notwithstanding any rule of
AAA to the contrary, the parties will be entitled to conduct discovery (i.e.
investigation of facts through depositions and other means) which shall be
governed by the Code of Civil Procedure Section 1283.05. The arbitrator shall
have all power and authority to enter orders relating to such discovery as are
allowed under the Code. The arbitrator will apply California substantive law in
all respects. The party prevailing in the resolution of any such claim will be
entitled, in addition to such other relief as may be granted, to an award of all
actual attorneys fees and costs incurred in pursuit of the claim, without regard
to any statute, schedule, or rule of court purported to restrict such award.

     9.   Entire Agreement. This Agreement constitutes the entire agreement of
the parties with respect to the subject matter of this Agreement, and supersedes
all prior and contemporaneous negotiations, agreements and understandings
between the parties, oral or written.

     10.  Modification; Waivers. No modification, termination or attempted
waiver of this Agreement will be valid unless in writing, signed by the party
against whom such modification, termination or waiver is sought to be enforced.

     11.  Amendment. This Agreement may be amended or supplemented only by a
writing signed by Employee and the Company.


Dated: -----------------------------    ----------------------------------------
                                        Employee




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