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                                                                     EXHIBIT 4.2


                   INTERNATIONAL REMOTE IMAGING SYSTEMS, INC.


                             Stock Option Agreement


                            PART I --NOTICE OF GRANT


Employee's Name:                          Kshitij Mohan
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Employee's Address:
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Start Date:                         January 6, 2003
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Date of Grant:                      February 20, 2003
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Exercise Price per Share:                  $2.50
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Total Number of Shares Covered:           70,000
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Type of Option:                                   Incentive Stock Option
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                                          X       Nonstatutory Stock Option
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Expiration Date (Term of Option):   January 6, 2008 (5-Years)
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Vesting Schedule:          Subject to the termination provisions of this
                           Agreement, this Option may be exercised, in whole or
                           in part, with respect to that portion of this Option
                           which has vested as of the exercise date. This Option
                           shall vest and become exercisable in three equal
                           installments on the first, second and third
                           anniversaries of your Start Date. In each case, the
                           number of Shares that may be purchased pursuant to
                           the exercise of this Option shall be rounded to the
                           nearest full Share.
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                            PART II - TERMS OF GRANT

      1. Grant of Option. International Remote Imaging Systems, Inc. (the
"Company") hereby grants to you ("Employee") an option (the "Option") to
purchase the number of Shares set forth in the Notice of Grant at the exercise
price per share set forth in the Notice of Grant (the "Exercise Price") subject
to the terms and conditions of this Agreement.

      2. Certain Definitions. The following definitions shall apply to this
Agreement:

            (a) "Administrator" means the Compensation Committee of the Board of
Directors, or such other board committee as may be subsequently authorized to
administer the Company's stock option plans (the "Administrator").

            (b) "Consultant" means any person, including an advisor, engaged by
the Company or a Parent or Subsidiary to render services and who is compensated
for such services, but it does not include not include a director who is paid
only a director's fee by the Company.

            (c) "Continuous Status as an Employee or Consultant" means that the
employment or consulting relationship is not interrupted or terminated by the
Company. Continuous Status as an Employee or Consultant shall not be considered
interrupted in the case of any leave of absence approved by the Board, including
sick leave, military leave, or any other personal leave authorized under Company
policies.

            (d) ""Disability" means any illness, disability or other incapacity
in such a manner that you are physically rendered unable regularly to perform
the your essential duties for a period in excess of one hundred twenty (120)
consecutive days or more than one hundred eighty (180) days in any consecutive
twelve (12) month period.

            (e) "Fair Market Value" means, as of any date, the value of a Share
determined as follows:

                  (i) If the Company's common stock is listed on any established
stock exchange or a national market system, including without limitation, the
National Market System of the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System, the Fair Market Value of a Share shall be
the closing sales price for the common stock (or the closing bid, if no sales
are reported) as quoted on such system or exchange (or the exchange with the
greatest volume of trading in the common stock) on the last market trading day
prior to the day of determination, as reported in the Wall Street Journal or
such other source as the Administrator deems reliable;

                  (ii) If the Company's common stock is quoted on the NASDAQ
System (but not on the National Market System thereof) or is regularly quoted by
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recognized securities dealers but selling prices are not reported, the Fair
Market Value of a Share shall be the mean between the high bid and low asked
prices for the common stock on the last market trading day prior to the day of
determination, as reported in the Wall Street Journal or such other source as
the Administrator deems reliable; or

                  (iii) In the absence of any established market for the
Company's common stock, the Fair Market Value shall be determined in good faith
by the Administrator.

            (f) "Termination Event" means the termination of your status as an
employee for "cause" as defined in your employment agreement with the Company.

      2. Exercise of Option.

            (a) Vesting Schedule. This Option is exercisable during its term in
accordance with the Vesting Schedule set forth in the Notice of Grant.

            (b) Method of Exercise. This Option is exercisable by delivery of an
exercise notice (the "Exercise Notice") which shall state the election to
exercise this Option, the number of Shares with respect to which this Option is
being exercised (the "Exercised Shares") and such other representations and
agreements as may be required by the Company. The Exercise Notice shall be
signed by Employee and shall be delivered in person or by certified mail to the
Secretary of the Company. The Exercise Notice shall be accompanied by payment of
the aggregate Exercise Price as to all Exercised Shares. This Option shall be
deemed to be exercised upon receipt by the Company of such fully executed
Exercise Notice accompanied by such aggregate Exercise Price and any additional
documentation required by the Company. No Shares shall be issued pursuant to the
exercise of this Option unless such issuance and exercise complies with all
relevant provisions of law and the requirements of any stock exchange upon which
the Shares are then listed. Assuming such compliance, for income tax purposes
the Exercised Shares shall be considered transferred to Employee on the date
this Option is exercised with respect to such Exercised Shares.

            (b) Accelerated Termination. Your Option will terminate and cease to
be exercisable immediately upon the occurrence of a Termination Event.

            (c) Termination of Employment or Consulting Relationship. In the
event that your Continuous Status as an Employee or Consultant terminates (other
than upon your death or Disability or as a result of a Termination Event), you
may exercise this Option until the earlier of (i) ninety (90) days after
termination of the employment or consulting relationship or (ii) the Expiration
Date set forth in the Notice of Grant.

            (d) Disability of Employee. In the event that your Continuous Status
as an Employee or Consultant terminates as a result of your Disability, you may
exercise this Option at any time within twelve (12) months from the date of such
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termination, but only to the extent that you were was entitled to exercise it at
the date of such termination (but in no event later than the Expiration Date set
forth in the Notice of Grant).

            (e) Death of Employee. In the event of the death of your death, this
Option may be exercised at any time within twelve (12) months following the date
of death (but in no event later than the Expiration Date set forth in the Notice
of Grant), by your estate or by a person who acquired the right to exercise the
Option by bequest or inheritance, but only to the extent that you were entitled
to exercise the Option at the date of death.

      3. Method of Payment. Payment of the aggregate Exercise Price shall be by
any of the following, or a combination thereof, at the election of Employee:

            (a) cash;

            (b) check;

            (c) delivery of a properly executed Exercise Notice together with
such other documentation as the Administrator and Employee's broker, if
applicable, shall require to effect a "cashless" exercise of this Option and
delivery to the Company of the sale or loan proceeds required to pay the
Exercise Price; or

            (d) if permitted by the Administrator in its sole discretion,
surrender of other Shares which have been held by Employee for a period of time
equal to or exceeding six (6) months (or such other period of time as permitted
by the Administrator in its sole discretion) which have a fair market value on
the date of surrender (determined according to the closing sales price on the
prior day) equal to the aggregate Exercise Price of the Exercised Shares.

      4. Non-Transferability of Option. This Option may not be transferred in
any manner other than by will or by the laws of descent or distribution and may
be exercised during the lifetime of Employee only by Employee. The terms of this
Agreement shall be binding upon the executors, administrators, heirs, successors
and assigns of Employee.

      5. Term of Option. This Option may be exercised only prior to or on the
Expiration Date (the "Term") set forth in the Notice of Grant and may be
exercised during the Term only in accordance with the terms of this Agreement.

      6. Withholding Taxes. Upon the exercise of the Option, the Company shall
have the right to require you to pay the Company the amount of any taxes which
the Company may be required to withhold with respect to issuance of the Shares
to you pursuant to the exercise of the Option.
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      7. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.

            (a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, if the outstanding Shares are increased, decreased,
changed into or exchanged for a different number or kind of shares of securities
of the Company through reorganization, recapitalization, reclassification, stock
combination, stock dividend, stock split, reverse stock split or other similar
transaction, an appropriate and proportionate adjustment shall be made in the
maximum number and kind of shares issuable upon exercise of this Option. Any
such adjustment in the Option shall be made without change in the aggregate
purchase price applicable to the Options but with a corresponding adjustment in
the price for each share or other unit of any security covered by the Option.
Such adjustment shall be made by the Administrator, whose determination in that
respect shall be final, binding and conclusive.

            (b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option had not
been previously exercised, it will terminate immediately prior to the
consummation of such proposed action.

            (c) Merger or Asset Sale. In the event of a merger of the Company
with or into another corporation, or the sale of substantially all of the assets
of the Company or a similar event that the Administrator determines, in its
discretion, would materially alter the structure of the Company or its
ownership, the Administrator, upon 30 days prior written notice to you, will, in
its discretion, do one or more of the following: (i) shorten the period during
which the Option is exercisable (provided it remains exercisable for at least 30
days after the date the notice is given); (ii) accelerate any vesting schedule
to which this Option is subject; (iii) arrange to have the surviving or
successor entity grant replacement options with appropriate adjustments in the
number and kind of securities and option prices; or (iv) cancel the Option upon
payment to the you in cash, to the extent then exercisable (including the effect
of any accelerated vesting), of an amount equal to the excess of the fair market
value of the number of Shares as to which the Option is then exercisable (at the
effective time of the merger, reorganization, sale of other event) over the
aggregate exercise price with respect to such Shares.

      8. Conditions Upon Issuance of Shares.

            (a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of the Option unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, the rules and regulations promulgated
thereunder, the requirements of any stock exchange or quotation system upon
which the Shares may then be listed or quoted, and any other requirements of law
or of any regulatory bodies having jurisdiction over such issuance and delivery,
and shall be further subject to the approval of counsel for the
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Company with respect to such compliance. Any securities delivered upon exercise
of the Option shall be subject to such restrictions, and the person acquiring
such securities shall, if requested by the Company, provide such assurances and
representations to the Company as the Company may deem necessary or desirable to
assure compliance with all applicable legal requirements.

            (b) Investment Representation. As a condition to the exercise of an
Option, the Company may require you to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell, transfer or distribute such Shares.

      9. Not an Employment or Service Contract. Nothing in this Option shall be
construed as an agreement by the Company, express or implied, to employ Employee
or contract for Employee's services, to restrict the right of the Company to
discharge Employee or cease contracting for Employee's services or to modify,
extend or otherwise affect in any manner whatsoever the terms of any employment
agreement or contract for services which may exist between Employee and the
Company.

      10. Interpretation. The Administrator's decisions, determinations and
interpretations regarding the Option and this Agreement shall be final and
binding.

      11. Governing Law. The interpretation, performance and enforcement of this
Agreement shall be governed by the laws of the State of Delaware without
regard to the principles of conflicts of law.



Employee:                           International Remote Imaging Systems, Inc.



                                    By:
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Name:       Kshitij Mohan           Name:
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                                    Title:
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                           DESIGNATION OF BENEFICIARY

      In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all of my vested Options that are unexercised at
that time.



Name:        (print)
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                              (First)            (Middle)         (Last)



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Relationship to               (Address)
Beneficiary(ies)
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Dated:
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                              Signature of Employee


                          CONSENT OF SPOUSE OF EMPLOYEE

      The undersigned spouse of Employee has read and hereby approves the terms
and conditions of this Stock Option Agreement. In consideration of the Company's
granting his or her spouse the right to purchase Shares as set forth in this
Agreement, the undersigned hereby agrees to be irrevocably bound by the terms
and conditions of this Agreement and further agrees that any community property
interest shall be similarly bound. The undersigned hereby appoints the
undersigned's spouse as attorney-in-fact for the undersigned with respect to any
amendment or exercise of rights under this Agreement.



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                                    Signature of Spouse of Employee

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                                    (Print Name of Spouse)

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                                    (Date Signed)
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                                  EXERCISE FORM

                      (To Be Executed Upon Exercise of Option)

      The undersigned hereby exercises the Option with regard to _____________
shares of common stock and herewith makes payment of the purchase price in full.
The undersigned requests that the certificate(s) for such shares and the Option
for the unexercised portion of this Option be issued to the Employee.

                                    [NAME OF OPTION HOLDER]


Dated:                              By:
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                                          Signature

                                    Name:
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                                          (Please Print)


                                    Address:
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                                    Social Security No:
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