Exhibit 10.2



	EXHIBIT 10.2








	IMMUNE RESPONSE CORPORATION




	2003 STOCK PLAN








 
	 	
	 


 

 










	TABLE OF CONTENTS




			
	 	 	Page 
	 	 	 	 	 
	SECTION 1	ESTABLISHMENT AND PURPOSE	 	1	 
	 	 	 	 	 
	SECTION 2	DEFINITIONS	 	1	 
	 	 	 	 	 
	         (a)	“Board of Directors”	 	1	 
	         (b)	“Change in Control”	 	1	 
	         (c)	“Code”	 	2	 
	         (d)	“Consultant”	 	2	 
	         (e)	“Committee”	 	2	 
	         (f)	“Company”	 	2	 
	         (g)	“Officer”	 	2	 
	         (h)	“Employee”	 	2	 
	         (i)	“Exchange Act”	 	2	 
	         (j)	“Exercise Price”	 	2	 
	         (k)	“Fair Market Value”	 	2	 
	         (l)	“ISO”	 	 3
	         (m)	“Nonstatutory Option”	 	3	 
	         (n)	“Officer”	 	3	 
	         (o)	“Offeree”	 	3	 
	         (p)	“Option”	 	3	 
	         (q)	“Optionee”	 	3	 
	         (r)	“Outside Director”	 	3	 
	         (s)	“Plan”	 	3	 
	         (t)	“Purchase Price”	 	3	 
	         (u)	“Service”	 	3	 
	         (v)	“Share”	 	3	 
	         (w)	“Stock”	 	3	 
	         (x)	“Stock Option Agreement”	 	3	 
	         (y)	“Stock Purchase Agreement”	 	4	 
	         (z)	“Subsidiary”	 	4	 
	         (aa)	“Total and Permanent Disability”	 	4	 
	 	 	 	 	 
	SECTION 3	ADMINISTRATION	 	4	 
	 	 	 	 	 
	         (a)	Committee Membership	 	4	 
	         (b)	Disinterested Directors	 	4	 
	         (c)	Committee Procedures	 	4	 
	         (d)	Committee Responsibilities	 	4	 
	 	 	 	 	 
	SECTION 4	ELIGIBILITY	 	5	 
	 	 	 	 	 
	         (a)	General Rule	 	5	 
	         (b)	Ten-Percent Stockholders	 	6	 
	         (c)	Attribution Rules	 	6	 



 
	 	
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	         (d)	 	Outstanding Stock	 	6	 
	 	 	 	 	 	 
	SECTION 5	 	STOCK SUBJECT TO PLAN	 	6	 
	 	 	 	 	 	 
	         (a)	 	Basic Limitation	 	6	 
	         (b)	 	Additional Shares	 	6	 
	 	 	 	 	 	 
	SECTION 6	 	TERMS AND CONDITIONS OF AWARDS OR SALES	 	6	 
	 	 	 	 	 	 
	         (a)	 	Stock Purchase Agreement	 	6	 
	         (b)	 	Duration of Offers and Nontransferability
      of Rights	 	7	 
	         (c)	 	Purchase Price	 	7	 
	         (d)	 	Withholding Taxes	 	7	 
	         (e)	 	Restrictions on Transfer of Shares	 	7	 
	 	 	 	 	 	 
	SECTION 7	 	TERMS AND CONDITIONS OF OPTIONS	 	8	 
	 	 	 	 	 	 
	         (a)	 	Stock Option Agreement	 	8	 
	         (b)	 	Number of Shares	 	8	 
	         (c)	 	Exercise Price	 	8	 
	         (d)	 	Withholding Taxes	 	8	 
	         (e)	 	Exercisability and Term	 	8	 
	         (f)	 	Nontransferability	 	8	 
	         (g)	 	Termination of Service (Except by Death)	 	9	 
	         (h)	 	Leaves of Absence	 	9	 
	         (i)	 	Death of Optionee	 	9	 
	         (j)	 	No Rights as a Stockholder	 	10	 
	         (k)	 	Modification, Extension and Renewal of Options	 	10	 
	         (l)	 	Restrictions on Transfer of Shares	 	10	 
	 	 	 	 	 	 
	SECTION 8	 	PAYMENT FOR SHARES	 	10	 
	 	 	 	 	 	 
	         (a)	 	General Rule	 	10	 
	         (b)	 	Surrender of Stock	 	11	 
	         (c)	 	Exercise/Sale	 	11	 
	         (d)	 	Exercise/Pledge	 
	         (e)	 	Services Rendered	 	11	 
	         (f)	 	Promissory Note	 	11	 
	         (g)	 	Surrender of Option	 	12	 
	 	 	 	 	 	 
	SECTION 9	 	ADJUSTMENT OF SHARES	 	12	 
	 	 	 	 	 	 
	         (a)	 	General	 	12	 
	         (b)	 	Reorganizations	 	12	 
	         (c)	 	Reservation of Rights	 	12	 
	 	 	 	 	 	 
	SECTION 10	 	SECURITIES LAWS	 	12	 
	 	 	 	 
	SECTION 11	 	NO EMPLOYMENT RIGHTS	 
	 	 	 	 	 	 
	SECTION 12	 	DURATION AND AMENDMENTS	 	13	 
	 	 	 	 	 	 
	         (a)	 	Term of the Plan	 	13	 




 
	 	
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	         (b)	 	Right to Amend or Terminate the
      Plan	 	13	 
	         (c)	 	Effect of Amendment or Termination	 	13	 
	 	 	 	 	 	 
	SECTION 13	 	EXECUTION	 	14	 





 
	 	
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	2003 STOCK PLAN OF




	THE IMMUNE RESPONSE CORPORATION




	Effective February 25, 2003





	SECTION 1.   ESTABLISHMENT AND PURPOSE.





	          The
2003 Stock Plan of The Immune Response Corporation (the “Plan”) was established
in 2003 to offer selected employees,  directors, advisers and consultants an opportunity
to acquire a proprietary interest in the success of the Company, or to increase  such
interest, by purchasing Shares of the Company’s Common Stock.




	          The
Plan provides both for the direct award or sale of Shares and for the grant of Options to
purchase Shares.  Options  granted under the Plan may include Nonstatutory Options as
well as ISOs intended to qualify under section 422 of the Code.  The Plan  is intended to
comply in all respects with Rule 16b-3 (or its successor) under the Exchange Act.




	SECTION 2.   DEFINITIONS.





	                 (a)
      “Board of Directors” shall mean the Board of Directors
      of the Company, as constituted from time to time.




	                 (b) 
      “Change in Control”




	          shall
mean any of the following events:




	 	           (1)
      a change in the composition of the Board of Directors that occurs as a result
      of which fewer than two-thirds of the incumbent directors are directors
      (“Continuing Directors”) who either had been directors of the
      Company 24 months prior to such change, or were elected or nominated for
      election to the Board with the approval of at least a majority of the directors
      who had been directors of the Company 24 months prior to such change and
      who were still in office at the time of the election or nomination;





	 	           (2)
      any person is or becomes the beneficial owner (directly or indirectly) of
      at least 25% of the combined voting power of the Company’s outstanding
      securities, and such ownership has not been approved by a majority of the
      Continuing Directors; or





	 	           (3)
      any person is or becomes the beneficial owner (directly or indirectly) of
      at least 50% of the combined voting power of the Company’s outstanding
      securities.





	          For
purposes of paragraphs (2) and (3), a change in the relative beneficial ownership by
reason of the Company’s repurchase  of its own securities will be disregarded.




 
	 	
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	          For
the purposes of paragraph (3), a Change in Control will not be deemed to have occurred if
any person is or becomes the  beneficially owner of at least 50% of the Company’s
outstanding securities through the purchase and subsequent conversion, exercise  or
exchange of, convertible notes and warrants issued pursuant to that certain Note Purchase
Agreement, dated November 11, 2001, as  amended.




	                     (c)
      “Code” shall mean the Internal Revenue Code of 1986, as
      amended.




	                     (d)
      “Consultant” shall mean an independent contractor or advisor
      who performs services for the Company or a Subsidiary (other than a member
      of the Board of Directors of the Company or a Subsidiary).




	                     (e)
      “Committee” shall mean a committee of the Board of Directors,
      as described in Section 3(a).




	                     (f)
      “Company” shall mean The Immune Response Corporation, a
      Delaware corporation.




	                     (g)
      “Director” shall mean a member of the Board of Directors
      of the Company or of a Subsidiary.




	                    
      (h) “Employee” shall mean any individual who is a common-law
      employee of the Company or a Subsidiary.




	                     (i)
      “Exchange Act” shall mean the Securities Exchange Act of 1934,
      as amended.




	                     (j)
      “Exercise Price” shall mean the amount for which one Share
      may be purchased upon exercise of an Option, as specified by the Committee
      in the applicable Stock Option Agreement.




	                     (k)
      “Fair Market Value” shall mean the market price of Stock,
      determined by the Committee as follows:




	 	                (i)
      If Stock was traded on a stock exchange on the date in question, then the
      Fair Market Value shall be equal to the closing price reported for such
      date by the applicable composite-transactions report;





	 	                (ii)
      If Stock was traded over-the-counter on the date in question and was traded
      on the Nasdaq system or the Nasdaq National Market, then the Fair Market
      Value shall be equal to the last-transaction price quoted for such date
      by the Nasdaq system or the Nasdaq National Market;





	 	                (iii)
      If Stock was traded over-the-counter on the date in question but was not
      traded on the Nasdaq system or the Nasdaq National Market, then the Fair
      Market Value shall be equal to the mean between the last reported representative
      bid and asked prices quoted for such date by the principal automated inter-dealer
      quotation system on which 





 
	 	
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	 	Stock is quoted or, if the Stock is not quoted
      on any such system, by the “Pink Sheets” published by the National
      Quotation Bureau, Inc.; and




	 	                (iv)
      If none of the foregoing provisions is applicable, then the Fair Market
      Value shall be determined by the Committee in good faith on such basis as
      it deems appropriate.





	In all cases, the determination of Fair Market
Value by the Committee shall be conclusive and binding on all persons.




	                     (l)
      “ISO” shall mean an employee incentive stock option described
      in section 422(b) of the Code.




	                     (m)
      “Nonstatutory Option” shall mean an employee stock option
      not described in sections 422 or 423 of the Code.




	                     (n)
      “Officer” shall mean an Employee of the Company holding
      a title and position of vice president or higher and any “officer”
      within the meaning of that term for the purposes of Section 16(b) of the
      Exchange Act.




	                     (o)
      “Offeree” shall mean an individual to whom the Committee
      has offered the right to acquire Shares under the Plan (other than upon
      exercise of an Option).




	                     (p)
      “Option” shall mean an ISO or Nonstatutory Option granted
      under the Plan and entitling the holder to purchase Shares.




	                     (q)
      “Optionee” shall mean an individual who holds an Option.




	                     (r)
      “Outside Director” shall mean a member of the Board of
      Directors of the Company or of a Subsidiary who is not an Employee.




	                     (s)
      “Plan” shall mean this Amended and Restated 1989 Stock
      Plan of The Immune Response Corporation.




	                     (t)
      “Purchase Price” shall mean the consideration for which one
      Share may be acquired under the Plan (other than upon exercise of an Option),
      as specified by the Committee.




	                     (u)
      “Service” shall mean service as an Employee, Director or
      Consultant.




	                     (v)
      “Share” shall mean one share of Stock, as adjusted in accordance
      with Section 10 (if applicable).




	                     (w)
      “Stock” shall mean the Common Stock of the Company.




	                     (x)
      “Stock Option Agreement” shall mean the agreement between
      the Company and an Optionee which contains the terms, conditions and restrictions
      pertaining to his or her Option.




 
	 	
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	                     (y)
      “Stock Purchase Agreement” shall mean the agreement between
      the Company and an Offeree who acquires Shares under the Plan which contains
      the terms, conditions and restrictions pertaining to the acquisition of
      such Shares.




	                     (z)
      “Subsidiary” shall mean any corporation, if the Company
      and/or one or more other Subsidiaries own not less than 50 percent of the
      total combined voting power of all classes of outstanding stock of such
      corporation. A corporation that attains the status of a Subsidiary on a
      date after the adoption of the Plan shall be considered a Subsidiary commencing
      as of such date.




	                     (aa)
      “Total and Permanent Disability” shall mean that the Optionee
      is unable to engage in any substantial gainful activity by reason of any
      medically determinable physical or mental impairment which can be expected
      to result in death or which has lasted, or can be expected to last, for
      a continuous period of not less than one year.




	SECTION 3.  ADMINISTRATION.





	                     (a)
      Committee Membership. The Plan shall be administered by the Committee.
      The Committee shall consist of two or more disinterested members of the
      Board of Directors and shall meet such other requirements as may be established
      from time to time by the Securities and Exchange Commission for plans intended
      to qualify for exemption under Rule 16b-3 (or its successor) under the Exchange
      Act. The Committee may delegate its functions to one or more members of
      the Board of Directors, who need not be disinterested directors, to administer
      the Plan with respect to Employees who are not Officers or Directors of
      the Company, and such delegated member of the Board of Directors may grant
      Shares and Options under the Plan to those Employees who are not Officers
      or Directors of the Company, and may determine the timing, number of Shares
      and other terms of such grants in a manner not inconsistent with the terms
      of this Plan.




	                     (b)
      Disinterested Directors. A member of the Board of Directors shall
      be deemed “disinterested” only if he or she satisfies (i) such
      requirements as the Securities and Exchange Commission may establish for
      disinterested administrators of plans designed to qualify for exemption
      under Rule 16b-3 (or its successor) under the Exchange Act and (ii) such
      requirements as the Internal Revenue Service may establish for outside directors
      acting under plans intended to qualify for exemption under section 162(m)(4)(C)
      of the Code.




	                     (c)
      Committee Procedures. The Board of Directors shall designate one
      of the members of the Committee as chairman. The Committee may hold meetings
      at such times and places as it shall determine. The acts of a majority of
      the Committee members present at meetings at which a quorum exists, or acts
      reduced to or approved in writing by all Committee members, shall be valid
      acts of the Committee.




	                     (d)
      Committee Responsibilities. Subject to the provisions of the Plan,
      the Committee shall have full authority and discretion to take the following
      actions:




	                              (i)
      To interpret the Plan and to apply its provisions;




 
	 	
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	 	            (ii)
      To adopt, amend or rescind rules, procedures and forms relating to the Plan;





	 	            (iii)
      To authorize any person to execute, on behalf of the Company, any instrument
      required to carry out the purposes of the Plan;





	 	              (iv)
      To determine when Shares are to be awarded or offered for sale and when
      Options are to be granted under the Plan;





	 	                (v)
      To select the Offerees and Optionees, except as otherwise provided in Section
      9;





	 	                 (vi)
      To determine the number of Shares to be offered to each Offeree or to be
      made subject to each Option, except as otherwise provided in Section 9;





	 	                 (vii)
      To prescribe the terms and conditions of each award or sale of Shares, including
      (without limitation) the Purchase Price, and to specify the provisions of
      the Stock Purchase Agreement relating to such award or sale;





	 	                (viii)
      To prescribe the terms and conditions of each Option, including (without
      limitation) the Exercise Price, to determine whether such Option is to be
      classified as an ISO or as a Nonstatutory Option, and to specify the provisions
      of the Stock Option Agreement relating to such Option;





	 	                  (ix)
      To amend any outstanding Stock Purchase Agreement or Stock Option Agreement,
      subject to applicable legal restrictions and to the consent of the Offeree
      or Optionee who entered into such agreement;





	 	                   (x)
      To prescribe the consideration for the grant of each Option or other right
      under the Plan and to determine the sufficiency of such consideration; and




	                          (xi)
      To take any other actions deemed necessary or advisable for the administration
      of the Plan.




	All decisions, interpretations and other actions
of the Committee shall be final and binding on all Offerees, all Optionees, and all
persons deriving their rights from an Offeree or Optionee.  No member of the Committee
shall be liable for any action that he or she  has taken or has failed to take in good
faith with respect to the Plan, any Option, or any right to acquire Shares under the Plan.




	SECTION 4.   ELIGIBILITY.





	                     (a)
      General Rule.  Employees, Consultants and Directors shall be eligible
      for designation as Optionees or Offerees by the Committee, provided that
      only Employees of the Company or a Subsidiary shall be eligible for the
      grant of ISOs. Notwithstanding any provision herein to the contrary, no
      more than 40% of the Shares issuable under the Plan shall be reserved for
      grants to individuals who are Officers, Directors or Consultants of the
      Company. Such 




 
	 	
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	limitation shall be first calculated based on
the total grants made  under the Plan  during the first three years of the Plan and on an
annual basis thereafter.




	                     (b)
      Ten-Percent Stockholders. An Employee who owns more than 10 percent
      of the total combined voting power of all classes of outstanding stock of
      the Company or any of its Subsidiaries shall not be eligible for the grant
      of an ISO unless (i) the Exercise Price is at least 110 percent of the Fair
      Market Value of a Share on the date of grant (unless made in reliance upon
      Section 25102(f) of the California Corporations Code) and (ii) such ISO
      by its terms is not exercisable after the expiration of five years from
      the date of grant. During such time that the Plan is subject to the requirements
      of Section 25110 of the California Code of Corporations, an Employee, Consultant,
      or Director who owns more than 10 percent of the total combined voting power
      of all classes of outstanding stock of the Company or any of its Subsidiaries
      shall not be eligible for the grant of a Nonstatutory Option unless the
      Exercise Price is at least 110 percent of the Fair Market Value of a Share
      on the date of grant.




	                     (c)
      Attribution Rules. For purposes of Subsection (b) above, in determining
      stock ownership, an Employee shall be deemed to own the stock owned, directly
      or indirectly, by or for his or her brothers, sisters, spouse, ancestors
      and lineal descendants. Stock owned, directly or indirectly, by or for a
      corporation, partnership, estate or trust shall be deemed to be owned proportionately
      by or for its shareholders, partners or beneficiaries. Stock with respect
      to which such Employee holds an option shall not be counted.




	                     (d)
      Outstanding Stock. For purposes of Subsection (b) above, “outstanding
      stock” shall include all stock actually issued and outstanding immediately
      after the grant. “Outstanding stock” shall include shares authorized
      for issuance under outstanding options held by the Employee or by any other
      person to the extent required by law.




	SECTION 5.   STOCK SUBJECT TO PLAN.





	                     (a)
      Basic Limitation. Shares offered under the Plan shall be authorized
      but unissued Shares or treasury Shares. The aggregate number of Shares which
      may be issued under the Plan (upon exercise of Options or other rights to
      acquire Shares) shall not exceed 3,250,000 Shares, subject to adjustment
      pursuant to Section 9. The number of Shares that are subject to Options
      or other rights outstanding at any time under the Plan shall not exceed
      the number of Shares that then remain available for issuance under the Plan.
      The Company, during the term of the Plan, shall at all times reserve and
      keep available sufficient Shares to satisfy the requirements of the Plan.




	                     (b)
      Additional Shares. In the event that any outstanding Option or other
      right for any reason expires or is canceled or otherwise terminated, including
      Options granted under the Director’s Plan, the Shares allocable to
      the unexercised portion of such Option or other right shall again be available
      for the purposes of the Plan. In the event that Shares issued under the
      Plan are reacquired by the Company pursuant to a forfeiture provision, a
      right of repurchase or a right of first refusal, such Shares shall again
      be available for the purposes of the Plan.




 
	 	
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	SECTION 6.   TERMS AND CONDITIONS OF AWARDS OR
SALES.





	                     (a)
      Stock Purchase Agreement. Each award or sale of Shares under the
      Plan (other than upon exercise of an Option) shall be evidenced by a Stock
      Purchase Agreement between the Offeree and the Company. Such award or sale
      shall be subject to all applicable terms and conditions of the Plan and
      may be subject to any other terms and conditions which are not inconsistent
      with the Plan and which the Committee deems appropriate for inclusion in
      a Stock Purchase Agreement. The provisions of the various Stock Purchase
      Agreements entered into under the Plan need not be identical.




	                     (b)
      Duration of Offers and Nontransferability of Rights. Any right to acquire
      Shares under the Plan (other than an Option) shall automatically expire
      if not exercised by the Offeree within thirty (30) days after the grant
      of such right was communicated to him or her by the Committee. Such right
      shall not be transferable and shall be exercisable only by the Offeree to
      whom such right was granted.




	                     (c)
      Purchase Price. The Purchase Price of Shares to be offered under the
      Plan shall not be less than 85 percent of the Fair Market Value of such
      Shares. The Purchase Price of Shares to be offered to a Ten-Percent Stockholder,
      as described in Section 4(b), under the plan shall be not less that 100%
      of the Fair Market Value of such shares. Subject to the two preceding sentences,
      the Purchase Price shall be determined by the Committee at its sole discretion.
      The Purchase Price shall be payable in a form described in Section 8.




	                     (d)
      Withholding Taxes. As a condition to the purchase of Shares, the
      Offeree shall make such arrangements as the Committee may require for the
      satisfaction of any federal, state, local or foreign withholding tax obligations
      that may arise in connection with such purchase.




	                     (e)
      Restrictions on Transfer of Shares. Any Shares awarded or sold under
      the Plan shall be subject to such special forfeiture conditions, rights
      of repurchase, rights of first refusal and other transfer restrictions as
      the Committee may determine. Such restrictions shall be set forth in the
      applicable Stock Purchase Agreement and shall apply in addition to any general
      restrictions that may apply to all holders of Shares. During such time that
      the Plan is subject to the requirements of Section 25110 of the California
      Code of Corporations, if a right of repurchase of the Company is exercised
      upon termination of employment of an Offeree, the repurchase price shall
      be set at not less than the original purchase price of the Shares, provided
      that the right to repurchase shall lapse at a rate of 20% of the Shares
      per year over 5 years from the date the Shares were awarded or sold. The
      right to repurchase shall be exercised for cash or cancellation of purchase
      money indebtedness for the securities within 90 days of termination of employment.




	                     (f)
      Shareholder Approval. Any award or sale of Shares under the Plan, other
      than those made in reliance upon Section 25102(f) of the California Corporations
      Code, shall be made subject to the approval of the Plan by a majority of
      the outstanding Shares of the Company entitled to vote. If the Plan is not
      approved by a majority of outstanding Shares of the Company entitled to
      vote within twelve months of the effective date of the Plan, any award or
      sale of 




 
	 	
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	Shares under the Plan shall be  rescinded
pursuant to Section  260.140.42(f) of Title 10 of the California Code of Regulations.




	SECTION 7.   TERMS AND CONDITIONS OF OPTIONS.





	                     (a)
      Stock Option Agreement. Each grant of an Option under the Plan shall
      be evidenced by a Stock Option Agreement between the Optionee and the Company.
      Such Option shall be subject to all applicable terms and conditions of the
      Plan and may be subject to any other terms and conditions which are not
      inconsistent with the Plan and which the Committee deems appropriate for
      inclusion in a Stock Option Agreement. The provisions of the various Stock
      Option Agreements entered into under the Plan need not be identical.




	                     (b)
      Number of Shares. Each Stock Option Agreement shall specify the number
      of Shares that are subject to the Option and shall provide for the adjustment
      of such number in accordance with Section 9. Options granted to any Optionee
      in a single calendar year shall in no event cover more than 500,000 Shares,
      subject to adjustment in accordance with Section 9. The Stock Option Agreement
      shall also specify whether the Option is an ISO or a Nonstatutory Option.




	                     (c)
      Exercise Price. Each Stock Option Agreement shall specify the Exercise
      Price. The Exercise Price of an ISO shall not be less than 100 percent of
      the Fair Market Value of a Share on the date of grant, except as otherwise
      provided in Section 4(b). The Exercise Price of a Nonstatutory Option shall
      not be less than 85 percent of the Fair Market Value of a Share on the date
      of grant. Subject to the preceding two sentences, the Exercise Price under
      any Option shall be determined by the Committee at its sole discretion.
      The Exercise Price shall be payable in a form described in Section 8.




	                     (d)
      Withholding Taxes. As a condition to the exercise of an Option, the
      Optionee shall make such arrangements as the Committee may require for the
      satisfaction of any federal, state, local or foreign withholding tax obligations
      that may arise in connection with such exercise. The Optionee shall also
      make such arrangements as the Committee may require for the satisfaction
      of any federal, state, local or foreign withholding tax obligations that
      may arise in connection with the disposition of Shares acquired by exercising
      an Option.




	                     (e)
      Exercisability and Term. Each Stock Option Agreement shall specify
      the date when all or any installment of the Option is to become exercisable.
      The vesting of any Option shall be determined by the Committee at its sole
      discretion. During such time that the Plan is subject to the requirements
      of Section 25110 of the California Code of Corporations, an Option granted
      to an individual other than an Officer, Director or Consultant shall become
      exercisable at a rate of at least 20% of the underlying Shares per year
      over 5 years from the date of grant of the Option. A Stock Option Agreement
      may provide for accelerated exercisability in the event of the Optionee’s
      death, Total and Permanent Disability, retirement or other events. The Stock
      Option Agreement shall also specify the term of the Option. The term shall
      not exceed 10 years from the date of grant, except as otherwise provided
      in Section 4(b). Subject to the preceding sentence, the Committee at its
      sole discretion shall determine when an Option is to expire.




 
	 	
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	                     (f)
      Nontransferability. During an Optionee’s lifetime, his or her Option(s)
      shall be exercisable only by him or her and shall not be transferable. In
      the event of an Optionee’s death, his or her Option(s) shall not be
      transferable other than by will, by a beneficiary designation executed by
      the Optionee and delivered to the Company, or by the laws of descent and
      distribution.




	                     (g)
      Termination of Service (Except by Death). If an Optionee’s Service
      terminates for any reason other than his or her death, then his or her Option(s)
      shall expire on the earliest of the following occasions:




	 	                (i)
      The expiration date determined pursuant to Subsection (e) above;





	 	                (ii)
      The date 90 days after the termination of his or her Service for any reason
      other than Total and Permanent Disability; or





	 	                (iii)
      The date six months after the termination of his or her Service by reason
      of Total and Permanent Disability.





	The Optionee may exercise all or part of his or
her Option(s) at any time before the expiration of such Option(s) under the preceding
sentence, but only to the extent that such Option(s) had become exercisable before his or
her Service terminated or became  exercisable as a result of the termination.  The
balance of such Option(s) shall lapse when the Optionee’s Service terminates.  In  the
event that the Optionee dies after the termination of his or her Service but before the
expiration of his or her Option(s), all  or part of such Option(s) may be exercised
(prior to expiration) by the executors or administrators of the Optionee’s estate or by
any person who has acquired such Option(s) directly from him or her by bequest,
beneficiary designation or inheritance, but only to  the extent that such Option(s) had
become exercisable before his or her Service terminated or became exercisable as a result
of the  termination.




	                     (h)
      Leaves of Absence. For purposes of Subsection (g) above, Service
      shall be deemed to continue while the Optionee is on military leave, sick
      leave or other bona fide leave of absence (as determined by the Committee).
      The foregoing notwithstanding, in the case of an ISO granted under the Plan,
      Service shall not be deemed to continue beyond the first 90 days of such
      leave, unless the Optionee’s reemployment rights are guaranteed by
      statute or by contract.




	                     (i)
      Death of Optionee. If an Optionee dies while he or she is in Service,
      then his or her Option(s) shall expire on the earlier of the following dates:




	 	                (i)
      The expiration date determined pursuant to Subsection (e) above; or





	 	                (ii)
      The date six months after his or her death.





	All or part of the Optionee’s Option(s) may be
exercised at any time before the expiration of such Option(s) under the preceding
sentence by the executors or administrators of his or her estate or by any person who has
acquired such Option(s) directly from him  or her by bequest, beneficiary designation or
inheritance, but only to the extent that such Option(s) had become 




 
	 	
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	exercisable before  his or her death or became
exercisable as a result of his or her death.  The balance of  such Option(s) shall lapse
when the Optionee  dies.




	                     (j)
      No Rights as a Stockholder. An Optionee, or a transferee of an Optionee,
      shall have no rights as a stockholder with respect to any Shares covered
      by his or her Option until the date of the issuance of a stock certificate
      for such Shares. No adjustments shall be made, except as provided in Section
      9.




	                     (k)
      Modification, Extension and Renewal of Options. Within the limitations
      of the Plan, the Committee may modify, extend or renew outstanding Options
      or may accept the cancellation of outstanding Options (to the extent not
      previously exercised) in return for the grant of new Options at the same
      or a different price. The foregoing notwithstanding, no modification of
      an Option shall, without the consent of the Optionee, impair his or her
      rights or increase his or her obligations under such Option.




	                     (l)
      Restrictions on Transfer of Shares. Any Shares issued upon exercise
      of an Option shall be subject to such special forfeiture conditions, rights
      of repurchase, rights of first refusal and other transfer restrictions as
      the Committee may determine. Such restrictions shall be set forth in the
      applicable Stock Option Agreement and shall apply in addition to any general
      restrictions that may apply to all holders of Shares. During such time that
      the Plan is subject to the requirements of Section 25110 of the California
      Code of Corporations, if a right of repurchase of the Company is exercised
      upon termination of employment of an Optionee, the repurchase price shall
      be set at not less than the original purchase price of the Shares, provided
      that the right to repurchase shall lapse at a rate of 20% of the Shares
      per year over 5 years from the date the Option was granted. The right to
      repurchase shall be exercised for cash or cancellation of purchase money
      indebtedness for the securities within 90 days of termination of employment.




	                     (m)
      Shareholder Approval. Any grant of an Option to purchase Shares made
      under the Plan, other than those made in reliance upon Section 25102(f)
      of the California Corporations Code, shall be made subject to the approval
      of the Plan by a majority of the outstanding Shares of the Company entitled
      to vote. If the Plan is not approved by a majority of outstanding Shares
      of the Company entitled to vote within twelve months of the effective date
      of the Plan, any Option exercised to purchase Shares under the Plan shall
      be rescinded pursuant to Section 260.140.41(i) of Title 10 of the California
      Code of Regulations.






	SECTION 8.   PAYMENT FOR SHARES.





	                     (a)
      General Rule. The entire Purchase Price or Exercise Price of Shares
      issued under the Plan shall be payable in lawful money of the United States
      of America at the time when such Shares are purchased, except as follows:




	 	                (i)
      In the case of Shares sold under the terms of a Stock Purchase Agreement
      subject to the Plan, payment shall be made only pursuant to the express
      provisions of such Stock Purchase Agreement. However, the Committee (at
      its sole 





 
	 	
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	 	discretion)
may  specify in the  Stock Purchase Agreement that payment may be made in one or both of
the forms described  in Subsections (e) and  (f) below.





	 	                (ii)
      In the case of an ISO granted under the Plan, payment shall be made only
      pursuant to the express provisions of the applicable Stock Option Agreement.
      However, the Committee (at its sole discretion) may specify in the Stock
      Option Agreement that payment may be made pursuant to Subsections (b), (c),
      (d) or (f) below.





	 	                (iii)
      In the case of a Nonstatutory Option granted under the Plan to an Employee
      or a Consultant or to a Director, the Committee (at its sole discretion)
      may accept payment in one or more of the forms described in Subsections
      (b), (c), (d), or (f) below.





	                     (b)
      Surrender of Stock. To the extent that this Subsection (b) is applicable,
      payment may be made all or in part with Shares which have already been owned
      by the Optionee or his or her representative for more than six months and
      which are surrendered to the Company in good form for transfer. Such Shares
      shall be valued at their Fair Market Value on the date when the new Shares
      are purchased under the Plan.




	                     (c)
      Exercise/Sale. To the extent that this Subsection (c) is applicable,
      payment may be made by the delivery (on a form prescribed by the Company)
      of an irrevocable direction to a securities broker approved by the Company
      to sell Common Shares and to deliver all or part of the sales proceeds to
      the Company in payment of all or part of the Exercise Price and any withholding
      taxes.




	                     (d)
      Exercise/Pledge. To the extent that this Subsection (d) is applicable,
      payment may be made by the delivery (on a form prescribed by the Company)
      of an irrevocable direction to pledge Common Shares to a securities broker
      or lender approved by the Company, as security for a loan and to deliver
      all or part of the loan proceeds to the Company in payment of all or part
      of the Exercise Price and any withholding taxes.




	                     (e)
      Services Rendered. To the extent that this Subsection (e) is applicable,
      Shares may be awarded under the Plan in consideration of services rendered
      to the Company or a Subsidiary prior to the award. If Shares are awarded
      without the payment of a Purchase Price in cash, the Committee shall make
      a determination (at the time of the award) of the value of the services
      rendered by the Offeree and the sufficiency of the consideration to meet
      the requirements of Section 6(c).

      

                          (f)
      Promissory Note. Except as otherwise prohibited by applicable law, including
      without limitation, the Sarbanes-Oxley Act of 2002 and to the extent that
      this Subsection (f) is applicable, a portion of the Purchase Price or Exercise
      Price, as the case may be, of Shares issued under the Plan may be payable
      by a full-recourse promissory note, provided that (i) the par value of such
      Shares must be paid in lawful money of the United States of America at the
      time when such Shares are purchased, (ii) the Shares are security for payment
      of the principal amount of the promissory note and interest thereon, and
      (iii) the interest rate payable under the terms of the promissory note shall
      be no less than the minimum rate (if any) required to avoid the imputation
      of additional interest under the Code. Subject to the foregoing, the Committee
      (at its sole 




 
	 	
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	discretion) shall specify the term, interest
rate,  amortization  requirements (if any), and other provisions of such note.




	                       (g)
      Surrender of Option. To the extent that this Subsection (g) is applicable,
      the Optionee may elect to have all or any part of an exercisable Option
      settled by receiving Shares in exchange for surrendering all or the appropriate
      part of that Option. The aggregate Fair Market Value of the Shares received
      by the Optionee (as of the date of exercise) shall be equal to the difference
      between the Exercise Price of the Option and the Fair Market Value of the
      Shares as to which the Option is exercised. Shares as to which Options have
      been settled under this Subsection (g) shall not be available for further
      Option grants under the Plan.




	SECTION 9.   ADJUSTMENT OF SHARES.





	                       (a)
      General. In the event of a subdivision of the outstanding Stock,
      a declaration of a dividend payable in Shares, a declaration of a dividend
      payable in a form other than Shares in an amount that has a material effect
      on the value of Shares, a combination or consolidation of the outstanding
      Stock (by reclassification or otherwise) into a lesser number of Shares,
      a recapitalization or a similar occurrence, the Committee shall make appropriate
      and proportionate adjustments in one or more of (i) the number of Shares
      available for future grants under Section 5, (ii) the limit set forth in
      Section 7(b), (ii) the number of Shares covered by each outstanding Option,
      or (iii) the Exercise Price under each outstanding Option.




	                      (b)
      Reorganizations. In the event that the Company is a party to a merger
      or other reorganization, outstanding Options shall be subject to the agreement
      of merger or reorganization. Such agreement shall provide for the assumption
      of outstanding Options by the surviving corporation or its parent, for their
      continuation by the Company (if the Company is a surviving corporation),
      for payment of a cash settlement equal to the difference between the amount
      to be paid for one Share under such agreement and the Exercise Price, or
      for the acceleration of their exercisability followed by the cancellation
      of Options not exercised, in all cases without the Optionees’ consent.
      Any cancellation shall not occur earlier than 30 days after such acceleration
      is effective and Optionees have been notified of such acceleration. In the
      case of Options that have been outstanding for less than 12 months, a cancellation
      need not be preceded by an acceleration.




	                     (c)
      Reservation of Rights. Except as provided in this Section 9, an Optionee
      or Offeree shall have no rights by reason of any subdivision or consolidation
      of shares of stock of any class, the payment of any dividend or any other
      increase or decrease in the number of shares of stock of any class. Any
      issue by the Company of shares of stock of any class, or securities convertible
      into shares of stock of any class, shall not affect, and no adjustment by
      reason thereof shall be made with respect to, the number or Exercise Price
      of Shares subject to an Option. The grant of an Option pursuant to the Plan
      shall not affect in any way the right or power of the Company to make adjustments,
      reclassifications, reorganizations or changes of its capital or business
      structure, to merge or consolidate or to dissolve, liquidate, sell or transfer
      all or any part of its business or assets.




 
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	SECTION 10.   SECURITIES LAWS.





	          Shares
shall not be issued under the Plan unless the issuance and delivery of such Shares
complies with (or is exempt from)  all applicable requirements of law, including (without
limitation) the Securities Act of 1933, as amended, the rules and regulations
promulgated thereunder, state securities laws and regulations, and the regulations of any
stock exchange on which the Company’s  securities may then be listed.




	          During
such time that the Plan is subject to the requirements of Section 25110 of the California
Code of Corporations, the  Company shall provide Offerees and Optionees with financial
statements at least annually. This Section 10 shall not apply to key  Employees whose
duties in connection with the Company assure them access to equivalent information.




	SECTION 11.   NO EMPLOYMENT RIGHTS.





	          No
provision of the Plan, nor any right or Option granted under the Plan, shall be construed
to give any person any right to  become, to be treated as, or to remain an Employee.  The
Company and its Subsidiaries reserve the right to terminate any person’s  Service at any
time and for any reason.




	SECTION 12.   DURATION AND AMENDMENTS.





	               (a)
      Term of the Plan. The Plan, as set forth herein, shall become effective
      on February 25, 2003. The Plan shall terminate automatically on February
      25, 2013, and may be terminated on any earlier date pursuant to Subsection
      (c) below.




	               (b)
      Right to Amend or Terminate the Plan. The Board of Directors may amend,
      suspend or terminate the Plan at any time and for any reason; provided,
      however, that any amendment of the Plan which (i) increases the number of
      Shares available for issuance under the Plan (except as provided in Section
      9), (ii) materially changes the class of persons who are eligible for the
      grant of ISOs or (iii) if required by Rule 16b-3 (or any successor) under
      the Exchange Act, would materially increase the benefits accruing to participants
      under the Plan or would materially modify the requirements as to eligibility
      for participation in the Plan, shall be subject to the approval of the Company’s
      stockholders within 12 months of any such amendment to the Plan. Stockholder
      approval shall not be required for any other amendment of the Plan, except
      as provided in the following sentence. During such period that the Plan
      is subject to the requirements of Section 25110 of the California Corporations
      Code, any amendment to increase the share reserve of the Plan shall not
      increase the total number of shares of Common Stock available for issuance
      under the Plan (and any other stock bonus plan or similar plan of the Company)
      to exceed 30% of the number of outstanding Shares (such term to include
      any convertible preferred and convertible senior common shares of the Company)
      at the time of any such increase, unless a percentage higher than 30% is
      approved by at least two-thirds of the outstanding Shares of the Company
      entitled to vote.




	               (c)
      Effect of Amendment or Termination. No Shares shall be issued or
      sold under the Plan after the termination thereof, except upon exercise
      of an Option granted prior to such




 
	 	
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	termination. The termination of the Plan, or any
amendment thereof, shall not affect  any Share previously issued or any Option previously
granted under the Plan.




	SECTION 13.   EXECUTION.





	          To
record the adoption of the Plan by the Board of Directors on February 25, 2003, the
Company has caused its authorized  officer to execute the same.




 
	 	
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	 	THE IMMUNE
      RESPONSE CORPORATION 

      

      

      

      By
      

    



	 	 Michael L. Jeub 

      Chief Financial Officer and Vice President of 

      Finance




 
	 	
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