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                                                                   EXHIBIT 10.06

                              CANCERVAX CORPORATION

              THIRD AMENDED AND RESTATED 2000 STOCK INCENTIVE PLAN

                               SECTION 1. PURPOSE

         The purpose of the CancerVax Corporation Third Amended and Restated
2000 Stock Incentive Plan (the "Plan") is to enhance the long-term stockholder
value of CancerVax Corporation, a Delaware corporation (the "Company"), by
offering opportunities to selected persons to participate in the Company's
growth and success, and to encourage them to remain in the service of the
Company and its Related Corporations (as defined in Section 2) and to acquire
and maintain stock ownership in the Company.

                             SECTION 2. DEFINITIONS

         For purposes of the Plan, the following terms shall be defined as set
forth below:

         "AWARD" means a grant of Options or Stock Awards, or any combination
thereof, pursuant to the Plan.

         "BOARD" means the Board of Directors of the Company.

         "CAUSE," unless otherwise defined in an employment or services
agreement between the Participant and the Company or a Related Corporation,
means dishonesty, fraud, misconduct, unauthorized use or disclosure of
confidential information or trade secrets, or conviction or confession of a
crime punishable by law (except minor violations), in each case as determined by
the Board, and its determination shall be conclusive and binding.

         "CODE" means the Internal Revenue Code of 1986, as amended from time to
time.

         "COMMON STOCK" means the common stock, par value $.00004 per share, of
the Company.

         "CORPORATE TRANSACTION" means consummation of either

         (a)      a merger or consolidation of the Company with or into any
other corporation or other entity or person or

         (b)      a sale, lease, exchange or other transfer in one transaction
or a series of related transactions of all or substantially all the Company's
outstanding securities or all or substantially all the Company's assets;

provided, however, that a Corporate Transaction shall not include a Related
Party Transaction.

         "DISABILITY" has the meaning set forth in Section 22(e)(3) of the Code,
which as of the date of the adoption of the Plan is as follows: "An individual
is permanently and totally disabled

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if he is unable to engage in any substantial gainful activity by reason of any
medially 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 12 months.".

         "EMPLOYMENT TERMINATION DATE" has the meaning set forth in Section 7.6.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

         "FAIR MARKET VALUE" means, as of any date, the per share value of the
Common Stock as established in good faith by the Board or (a) if the Common
Stock is listed on the Nasdaq National Market, the closing sales price (or
closing bid, if no sales were reported) for the Common Stock as reported by that
market for the last market trading day prior to the time of determination or (b)
if the Common Stock is listed on the New York Stock Exchange or the American
Stock Exchange, the closing sales price (or closing bid, if no sales were
reported) for the Common Stock as such price is officially quoted in the
composite tape of transactions on such exchange for the last market trading day
prior to the time of determination.

         "GOOD REASON" means the occurrence of any of the following events or
conditions and the failure of the Successor Corporation to cure such event or
condition within 30 days after receipt of written notice from the Participant:

         (a)      a change in the Participant's status, position or
responsibilities (including reporting responsibilities) that, in the
Participant's reasonable judgment, represents a substantial reduction in the
status, position or responsibilities as in effect immediately prior thereto; the
assignment to the Participant of any duties or responsibilities that, in the
Participant's reasonable judgment, are materially inconsistent with such status,
position or responsibilities; or any removal of the Participant from or failure
to reappoint or reelect the Participant to any of such positions, except in
connection with the termination of the Participant's employment for Cause, as a
result of his or her Disability or death, or by the Participant other than for
Good Reason;

         (b)      a material reduction in the Participant's annual base salary,
except in connection with a general reduction in the compensation of the
Successor Corporation's personnel with similar status and responsibilities;

         (c)      the Successor Corporation's requiring the Participant (without
the Participant's consent) to be based at any place outside a 50-mile radius of
his or her place of employment prior to a Corporate Transaction, except for
reasonably required travel on the Successor Corporation's business that is not
materially greater than such travel requirements prior to the Corporate
Transaction;

         (d)      the Successor Corporation's failure to provide the Participant
with compensation and benefits substantially equivalent (in terms of benefit
levels and/or reward opportunities) to those provided for under each material
employee benefit plan, program and practice as in effect immediately prior to
the Corporate Transaction;

         (e)      any material breach by the Successor Corporation of its
obligations to the Participant under the Plan or any substantially equivalent
plan of the Successor Corporation; or

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         (f)      any purported termination of the Participant's employment or
service relationship for Cause by the Successor Corporation that is not in
accordance with the definition of Cause under the Plan.

         "GRANT DATE" means the date on which the Plan Administrator completes
the corporate action relating to the grant of an Award and all conditions
precedent to the grant have been satisfied, provided that conditions to the
exercisability or vesting of Awards shall not defer the Grant Date.

         "INCENTIVE STOCK OPTION" means an Option to purchase Common Stock
granted under Section 7 with the intention that it qualify as an "incentive
stock option" as that term is defined in Section 422 of the Code.

         "NONQUALIFIED STOCK OPTION" means an Option to purchase Common Stock
granted under Section 7 other than an Incentive Stock Option.

         "OPTION" means the right to purchase Common Stock granted under Section
7.

         "OPTION EXPIRATION DATE" has the meaning set forth in Section 7.6.

         "OPTION TERM" has the meaning set forth in Section 7.3.

         "PARENT" means any corporation, whether now or hereafter existing
(other than the Company), in an unbroken chain of corporations ending with the
Company if each of the corporations other than the last corporation in the
unbroken chain owns stock possessing more than fifty percent (50%) of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

         "PARTICIPANT" means (a) the person to whom an Award is granted; (b) for
a Participant who has died, the personal representative of the Participant's
estate, the person(s) to whom the Participant's rights under the Award have
passed by will or by the applicable laws of descent and distribution, or the
beneficiary designated in accordance with Section 11; or (c) the person(s) to
whom an Award has been transferred in accordance with Section 11.

         "PLAN ADMINISTRATOR" means the Board or any committee or committees
designated by the Board.

         "RELATED CORPORATION" means any Parent or Subsidiary of the Company.

         "RELATED PARTY TRANSACTION" means (i) a merger or consolidation of the
Company in which the holders of the voting securities of the Company immediately
prior to the merger or consolidation hold at least a majority of the voting
securities in the Successor Corporation immediately after the merger or
consolidation; (ii) a sale, lease, exchange or other transaction in one
transaction or a series of related transactions of all or substantially all of
the Company's assets to a wholly owned subsidiary corporation; (iii) a mere
reincorporation of the Company; or (iv) a transaction undertaken for the sole
purpose of creating a holding company that will be owned in substantially the
same proportion by the persons who held the Company's securities immediately
before such transaction.

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         "RETIREMENT" means retirement on or after the individual's normal
retirement date under the Company's 401(k) plan or other similar successor plan
applicable to salaried employees, unless otherwise defined by the Plan
Administrator from time to time for purposes of the Plan.

         "SECURITIES ACT" means the Securities Act of 1933, as amended.

         "STOCK AWARD" means an Award of shares of Common Stock or units
denominated in Common Stock granted under Section 9, the rights of ownership of
which may be subject to restrictions prescribed by the Plan Administrator.

         "SUBSIDIARY" means any corporation, whether now existing or hereafter
existing (other than the Company), in an unbroken chain of corporations
beginning with the Company if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing more than fifty percent
(50%) of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

         "SUCCESSOR CORPORATION" has the meaning set forth in Section 12.3.1.

         "VESTING COMMENCEMENT DATE" means the Grant Date or such other date
selected by the Plan Administrator as the date from which the Option begins to
vest for purposes of Section 7.4.

                            SECTION 3. ADMINISTRATION

3.1      PLAN ADMINISTRATOR

         The Plan shall be administered by the Board and/or a committee or
committees (which term includes subcommittees) appointed by, and consisting of
two or more members of, the Board (a "Plan Administrator"). If and so long as
the Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act,
the Board shall consider in selecting the members of any committee acting as
Plan Administrator, with respect to any persons subject or likely to become
subject to Section 16 of the Exchange Act, the provisions regarding (a) "outside
directors" as contemplated by Section 162(m) of the Code and (b) "nonemployee
directors" as contemplated by Rule 16b-3 under the Exchange Act. Notwithstanding
the foregoing, the Board may delegate the responsibility for administering the
Plan with respect to designated classes of eligible persons to different
committees consisting of one or more members of the Board, subject to such
limitations as the Board deems appropriate. Committee members shall serve for
such term as the Board may determine, subject to removal by the Board at any
time.

3.2      ADMINISTRATION AND INTERPRETATION BY PLAN ADMINISTRATOR

         Except for the terms and conditions explicitly set forth in the Plan,
the Plan Administrator shall have exclusive authority, in its discretion, to
determine all matters relating to Awards under the Plan, including the selection
of individuals to be granted Awards, the type of Awards, the number of shares of
Common Stock subject to an Award, all terms, conditions, restrictions and
limitations, if any, of an Award and the terms of any instrument that evidences
the Award. The Plan Administrator shall also have exclusive authority to
interpret the Plan and the terms of any instrument evidencing the Award and may
from time to time adopt and change rules and

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regulations of general application for the Plan's administration. The Plan
Administrator's interpretation of the Plan and its rules and regulations, and
all actions taken and determinations made by the Plan Administrator pursuant to
the Plan, shall be conclusive and binding on all parties involved or affected.
The Plan Administrator may delegate administrative duties to such of the
Company's officers as it so determines.

                      SECTION 4. STOCK SUBJECT TO THE PLAN

4.1      AUTHORIZED NUMBER OF SHARES

         Subject to adjustment from time to time as provided in Section 12.1, a
maximum of 10,874,082 shares of Common Stock shall be available for issuance
under the Plan. Shares issued under the Plan shall be drawn from authorized and
unissued shares or shares now held or subsequently acquired by the Company as
treasury shares.

4.2      REUSE OF SHARES

         Any shares of Common Stock that have been made subject to an Award that
cease to be subject to the Award (other than by reason of exercise or settlement
of the Award to the extent it is exercised for or settled in vested and
nonforfeitable shares) shall again be available for issuance in connection with
future grants of Awards under the Plan. Notwithstanding the foregoing, to the
extent required by applicable law, shares repurchased by the Company pursuant to
Section 13 shall not again be available for issuance in connection with future
grants of Awards under the Plan; provided, however, the aggregate number of
shares that may be issued upon the exercise of Incentive Stock Options shall in
no event exceed the number set forth in Section 4.1, subject to adjustment from
time to time as provided in Section 12.1.

                             SECTION 5. ELIGIBILITY

         Awards may be granted under the Plan to those officers, directors and
employees of the Company and its Related Corporations as the Plan Administrator
from time to time selects. Awards may also be granted to consultants, agents,
advisors and independent contractors who provide services to the Company and its
Related Corporations; provided, however, that such Participants (a) are natural
persons who have contracted directly with the Company or a Related Corporation
to render such services; (b) render bona fide services that are not in
connection with the offer and sale of the Company's securities in a
capital-raising transaction; and (c) render bona fide services that do not
directly or indirectly promote or maintain a market for the Company's
securities.

                                SECTION 6. AWARDS

6.1      FORM AND GRANT OF AWARDS

         The Plan Administrator shall have the authority, in its sole
discretion, to determine the type or types of Awards to be granted under the
Plan. Awards may be granted singly or in combination.

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6.2      SETTLEMENT OF AWARDS

         The Company may settle Awards through the delivery of shares of Common
Stock, the granting of replacement Awards or any combination thereof as the Plan
Administrator shall determine. Any Award settlement, including payment
deferrals, may be subject to such conditions, restrictions and contingencies as
the Plan Administrator shall determine. The Plan Administrator may permit or
require the deferral of any Award payment, subject to such rules and procedures
as it may establish, which may include provisions for the payment or crediting
of interest, or dividend equivalents, including converting such credits into
deferred stock equivalents.

6.3      ACQUIRED COMPANY AWARDS

         Notwithstanding anything in the Plan to the contrary, the Plan
Administrator may grant Awards under the Plan in substitution for awards issued
under other plans, or assume under the Plan awards issued under other plans, if
the other plans are or were plans of other acquired entities ("Acquired
Entities") (or the parent of the Acquired Entity) and the new Award is
substituted, or the old award is assumed, by reason of a merger, consolidation,
acquisition of property or stock, reorganization or liquidation (the
"Acquisition Transaction"). In the event that a written agreement pursuant to
which the Acquisition Transaction is completed is approved by the Board and said
agreement sets forth the terms and conditions of the substitution for or
assumption of outstanding awards of the Acquired Entity, said terms and
conditions shall be deemed to be the action of the Plan Administrator without
any further action by the Plan Administrator, except as may be required for
compliance with Rule 16b-3 under the Exchange Act, and the persons holding such
awards shall be deemed to be Participants.

                          SECTION 7. AWARDS OF OPTIONS

7.1      GRANT OF OPTIONS

         The Plan Administrator is authorized under the Plan, in its sole
discretion, to issue Options as Incentive Stock Options or as Nonqualified Stock
Options, which shall be appropriately designated.

7.2      OPTION EXERCISE PRICE

         The exercise price for shares purchased under an Option shall be as
determined by the Plan Administrator, but (a) for Incentive Stock Options, shall
not be less than 100% of the Fair Market Value of the Common Stock on the Grant
Date and (b) for Nonqualified Stock Options, to the extent required by
applicable law, shall not be less than 85% of the Fair Market Value of the
Common Stock on the Grant Date. The exercise price for an Option granted to an
individual who owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or any Related Corporation shall
not be less than 110% of the Fair Market Value of the Common Stock on the Grant
Date.

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7.3      TERM OF OPTIONS

         The term of each Option (the "Option Term") shall be as established by
the Plan Administrator or, if not so established, shall be ten years from the
Grant Date. Notwithstanding the foregoing, to the extent required by applicable
law, the maximum Option Term shall not exceed ten years from the Grant Date. For
Incentive Stock Options, the Option Term shall be as specified in Sections 8.2
and 8.4.

7.4      EXERCISE OF OPTIONS

         The Plan Administrator shall establish and set forth in each instrument
that evidences an Option the time at which, or the installments in which, the
Option shall vest and become exercisable, which provisions may be waived or
modified by the Plan Administrator at any time. If not so established in the
instrument evidencing the Option, the Option shall vest and become exercisable
according to the following schedule, which may be waived or modified by the Plan
Administrator at any time:

PERIOD OF PARTICIPANT'S CONTINUOUS
EMPLOYMENT OR SERVICE WITH THE COMPANY
OR ITS RELATED CORPORATIONS FROM THE         PORTION OF TOTAL OPTION
VESTING COMMENCEMENT DATE                    THAT IS VESTED AND EXERCISABLE

After 1 year                                 1/4th

Each additional one-month period of          An additional 1/36th of the
continuous service completed thereafter      unvested shares calculated as of
                                             the 1 year anniversary of the
                                             Vesting Commencement Date.

After 4 years                                100%

         The Plan Administrator may adjust the vesting schedule of an Option
held by a Participant who works less than "full-time" as that term is defined by
the Plan Administrator or who takes a Company-approved leave of absence.

         To the extent that an Option has vested and become exercisable, the
Option may be exercised from time to time by delivery to the Company of a
written stock option exercise agreement or notice, in a form and in accordance
with procedures established by the Plan Administrator, setting forth the number
of shares with respect to which the Option is being exercised, the restrictions
imposed on the shares purchased under such exercise agreement, if any, and such
representations and agreements as may be required by the Plan Administrator,
accompanied by payment in full as described in Section 7.5. An Option may be
exercised only for whole shares and may not be exercised for less than a
reasonable number of shares at any one time, as determined by the Plan
Administrator.

         Notwithstanding the foregoing, to the extent required by applicable
law, Options granted to persons who are not officers, directors or consultants
of the Company or any of its Related Corporations shall become exercisable at
the rate of at least 20% per year over five years from the Grant Date, subject
to reasonable conditions such as continued employment. As indicated

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above, the Company's standard vesting schedule is over a four year period from
the Vesting Commencement Date.

7.5      PAYMENT OF EXERCISE PRICE

         The exercise price for shares purchased under an Option shall be paid
in full to the Company by delivery of consideration equal to the product of the
Option exercise price and the number of shares purchased. Such consideration
must be paid in cash or by check (acceptable to the Plan Administrator) or,
unless the Plan Administrator in its sole discretion determines otherwise,
either at the time the Option is granted or at any time before it is exercised,
in any combination of

         (a)      cash;

         (b)      check (acceptable to the Plan Administrator);

         (c)      tendering (either actually or, if the Common Stock is
registered under Section 12(b) or 12(g) of the Exchange Act, by attestation)
shares of Common Stock already owned by the Participant for at least six months
(or any shorter period necessary to avoid a charge to the Company's earnings for
financial reporting purposes) that on the day prior to the exercise date have a
Fair Market Value equal to the aggregate exercise price of the shares being
purchased under the Option;

         (d)      if the Common Stock is registered under Section 12(b) or 12(g)
of the Exchange Act, delivery of a properly executed exercise notice, together
with irrevocable instructions to a brokerage firm designated by the Company to
deliver promptly to the Company the aggregate amount of sale or loan proceeds to
pay the Option exercise price and any withholding tax obligations that may arise
in connection with the exercise, all in accordance with the regulations of the
Federal Reserve Board; or

         (e)      such other consideration as the Plan Administrator may permit.

         In addition, to assist a Participant (including a Participant who is an
officer or a director of the Company) in acquiring shares of Common Stock
pursuant to an Award granted under the Plan, the Plan Administrator, in its sole
discretion, may authorize, either at the Grant Date or at any time before the
acquisition of Common Stock pursuant to the Award, (i) the payment by a
Participant of a full-recourse promissory note or (ii) the guarantee by the
Company of a full-recourse loan obtained by the Participant from a third party.
Any such promissory note shall bear interest at a market rate of interest
sufficient to preclude the imputation of interest (taking into account any
exceptions to the imputed interest rules) for federal income tax purposes.
Subject to the foregoing, the Plan Administrator shall in its sole discretion
specify the terms of any loans or loan guarantees, including the interest rate
and terms of and security for repayment.

7.6      POST-TERMINATION EXERCISES

         The Plan Administrator shall establish and set forth in each instrument
that evidences an Option whether the Option shall continue to be exercisable,
and the terms and conditions of such exercise, if a Participant ceases to be
employed by, or to provide services to, the Company or its

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Related Corporations, which provisions may be waived or modified by the Plan
Administrator at any time. If not so established in the instrument evidencing
the Option, the Option shall be exercisable according to the following terms and
conditions, which may be waived or modified by the Plan Administrator at any
time:

         (a)      Any portion of an Option that is not vested and exercisable on
the date of termination of the Participant's employment or service relationship
(the "Employment Termination Date") shall expire on such date.

         (b)      Any portion of an Option that is vested and exercisable on the
Employment Termination Date shall expire upon the earliest to occur of

                  (i)      if the Participant's Employment Termination Date
occurs for reasons other than Cause, Retirement, Disability or death, the
three-month anniversary of such Employment Termination Date;

                  (ii)     if the Participant's Employment Termination Date
occurs by reason of Retirement, Disability or death, the one-year anniversary of
such Employment Termination Date; and

                  (iii)    the last day of the Option Term (the "Option
Expiration Date").

         Notwithstanding the foregoing, if the Participant dies after the
Employment Termination Date but while the Option is otherwise exercisable, the
portion of the Option that is vested and exercisable on such Employment
Termination Date shall expire upon the earlier to occur of (y) the Option
Expiration Date and (z) the first anniversary of the date of death, unless the
Plan Administrator determines otherwise.

         Also notwithstanding the foregoing, in case of termination of the
Participant's employment or service relationship for Cause, the Option shall
automatically expire at the time the Company first notifies the Participant of
such termination, unless the Plan Administrator determines otherwise. If a
Participant's employment or service relationship with the Company is suspended
pending an investigation of whether the Participant shall be terminated for
Cause, all the Participant's rights under any Option likewise shall be suspended
during the period of investigation. If any facts that would constitute
termination for Cause are discovered after the Participant's relationship with
the Company or a Related Corporation has ended, any Option then held by the
Participant may be immediately terminated by the Plan Administrator, in its sole
discretion.

         Also notwithstanding the foregoing, to the extent required by
applicable law, unless employment is terminated for Cause, the right to exercise
an Option in the event of termination of employment, to the extent that the
Participant is otherwise entitled to exercise an Option on the Employment
Termination Date, shall be at least six months from the Employment Termination
Date if termination was caused by death or Disability, and at least 30 days from
the Employment Termination Date if termination of employment was caused by other
than death or Disability, but in no event later than the Option Termination
Date.

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         (c)      A Participant's transfer of employment or service relationship
between or among the Company and a Related Corporation, or a change in status
from an employee to a consultant, agent, advisor or independent contractor or a
change in status from a consultant, agent, advisor or independent contractor to
an employee, shall not be considered a termination of employment or service
relationship for purposes of this Section 7. The effect of a Company-approved
leave of absence on the terms and conditions of an Option shall be determined by
the Plan Administrator, in its sole discretion.

         7.7      EARLY EXERCISABILITY

         The Plan Administrator may provide in the terms of a Participant's
Option agreement that the Participant may exercise the Option in whole or in
part prior to the full vesting of the Option; provided, however, that subject to
Section 13, shares of Common Stock acquired upon exercise of an Option which has
not fully vested may be subject to any forfeiture, transfer or other
restrictions as the Plan Administrator may determine in its sole discretion.

                  SECTION 8. INCENTIVE STOCK OPTION LIMITATIONS

         To the extent required by Section 422 of the Code, Incentive Stock
Options shall be subject to the following additional terms and conditions:

8.1      DOLLAR LIMITATION

         To the extent the aggregate Fair Market Value (determined as of the
Grant Date) of Common Stock with respect to which Incentive Stock Options are
exercisable by any Participant for the first time during any calendar year
(under the Plan and all other stock option plans of the Company and any Related
Corporation) exceeds $100,000, such portion in excess of $100,000 shall be
treated as a Nonqualified Stock Option. In the event the Participant holds two
or more such Options that become exercisable for the first time in the same
calendar year, such limitation shall be applied on the basis of the order in
which such Options are granted.

8.2      MORE THAN 10% STOCKHOLDERS

         If an individual owns more than 10% of the total combined voting power
of all classes of the stock of the Company or of its Related Corporations, then
the exercise price per share of an Incentive Stock Option granted to such
individual shall not be less than 110% of the Fair Market Value of the Common
Stock on the Grant Date and the Option Term shall not exceed five years. The
determination of more than 10% ownership shall be made in accordance with
Section 422 of the Code.

8.3      ELIGIBLE EMPLOYEES

         Individuals who are not employees of the Company or one of its Related
Corporations may not be granted Incentive Stock Options.

8.4      TERM

         Subject to Section 8.2, the Option Term shall not exceed ten years.

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8.5      EXERCISABILITY

         An Option designated as an Incentive Stock Option shall cease to
qualify for favorable tax treatment as an Incentive Stock Option to the extent
it is exercised (if permitted by the terms of the Option) (a) more than three
months after the Employment Termination Date if termination was for reasons
other than death or Disability, (b) more than one year after the Employment
Termination Date if termination was by reason of Disability, or (c) after the
Participant has been on leave of absence for more than 90 days, unless the
Participant's reemployment rights are guaranteed by statute or contract.

8.6      TAXATION OF INCENTIVE STOCK OPTIONS

         In order to obtain certain tax benefits afforded to Incentive Stock
Options under Section 422 of the Code, the Participant must hold the shares
issued upon the exercise of an Incentive Stock Option for two years after the
Grant Date and one year from the date of exercise. A Participant may be subject
to the alternative minimum tax at the time of exercise of an Incentive Stock
Option. The Participant shall give the Company prompt notice of any disposition
of shares acquired by the exercise of an Incentive Stock Option prior to the
expiration of such holding periods.

8.7      PROMISSORY NOTES

         The amount of any promissory note delivered pursuant to Section 7.5 in
connection with an Incentive Stock Option shall bear interest at a rate
specified by the Plan Administrator, but in no case less than a market rate of
interest sufficient to avoid imputation of interest (taking into account any
exceptions to the imputed interest rules) for federal income tax purposes.

8.8      STOCKHOLDER APPROVAL

         If the stockholders of the Company do not approve the Plan within 12
months after the Board's adoption of the Plan, any outstanding Incentive Stock
Options shall become Nonqualified Stock Options.

                             SECTION 9. STOCK AWARDS

9.1      GRANT OF STOCK AWARDS

         (a)      The Plan Administrator is authorized to make Awards of Common
Stock or Awards denominated in units of Common Stock on such terms and
conditions and subject to such restrictions, if any (which may be based on
continuous service with the Company or the achievement of performance goals), as
the Plan Administrator shall determine, in its sole discretion, which terms,
conditions and restrictions shall be set forth in the instrument evidencing the
Award. Subject to Section 13.3, the terms, conditions and restrictions that the
Plan Administrator shall have the power to determine shall include, without
limitation, the manner in which shares subject to Stock Awards are held during
the periods they are subject to restrictions

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and the circumstances under which repurchase or forfeiture of the Stock Award
shall occur by reason of termination of the Participant's employment or service
relationship.

         (b)      Notwithstanding the foregoing, to the extent required by
applicable law, the purchase price for any Stock Awards that may be purchased
under the Plan ("Stock Purchase Rights") shall be at least 85% of the Fair
Market Value of the Common Stock at the time the Participant is granted the
Stock Purchase Right or at the time the purchase is consummated. Also
notwithstanding the foregoing, the purchase price shall be at least 100% of the
Fair Market Value of the Common Stock at the time the Participant is granted the
Stock Purchase Right or at the time the purchase is consummated in the case of
any person who owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or any Related Corporation.

9.2      ISSUANCE OF SHARES

         Upon the satisfaction of any terms, conditions and restrictions
prescribed in respect to a Stock Award, or upon the Participant's release from
any terms, conditions and restrictions of a Stock Award, as determined by the
Plan Administrator, the Company shall release, as soon as practicable, to the
Participant or, in the case of the Participant's death, to the personal
representative of the Participant's estate or as the appropriate court directs,
the appropriate number of shares of Common Stock.

9.3      WAIVER OF RESTRICTIONS

         Notwithstanding any other provision of the Plan, the Plan Administrator
may, in its sole discretion, waive the repurchase or forfeiture period and any
other terms, conditions or restrictions on any Stock Award under such
circumstances and subject to such terms and conditions as the Plan Administrator
shall deem appropriate.

                             SECTION 10. WITHHOLDING

10.1     GENERAL

         To the extent required by applicable federal, state, local or foreign
law, a Participant shall make arrangements satisfactory to the Company for the
satisfaction of any withholding tax obligations that arise in connection with an
Award. The Company shall not be required to issue any shares of Common Stock or
make any cash distributions under the Plan until such obligations are satisfied.

10.2     SHARE WITHHOLDING

         The Plan Administrator may permit or require a Participant to satisfy
all or part of any withholding tax obligations by having the Company withhold a
portion of any shares of Common Stock that would otherwise be issued to the
Participant pursuant to an Award (up to the employer's minimum required tax
withholding rate) or by surrendering any shares that the Participant previously
acquired (up to the employer's minimum required tax withholding rate to the
extent the Participant has held the surrendered shares for less than six
months). Such shares

                                      -12-

<PAGE>

of Common Stock shall be valued at their Fair Market Value on the date when
taxes otherwise would be withheld in cash.

                            SECTION 11. ASSIGNABILITY

         Awards granted under the Plan and any interest therein may not be
assigned, pledged or transferred by the Participant and may not be made subject
to attachment or similar proceedings otherwise than by will or by the applicable
laws of descent and distribution, and, during the Participant's lifetime, such
Awards may be exercised only by the Participant. Notwithstanding the foregoing,
the Plan Administrator, in its discretion, may permit the transfer by a
Participant of an Award other than an Incentive Stock Option as permitted by
Rule 701 of the Securities Act; provided, however, that any Award so assigned or
transferred shall be subject to all the same terms and conditions contained in
the instrument evidencing the Award.

                             SECTION 12. ADJUSTMENTS

12.1     ADJUSTMENT OF SHARES

         In the event that, at any time or from time to time, a stock dividend,
stock split, spin-off, combination or exchange of shares, recapitalization,
merger, consolidation, distribution to stockholders other than a normal cash
dividend, or other change in the Company's corporate or capital structure,
including without limitation, a Related Party Transaction, results in (a) the
outstanding shares of Common Stock, or any securities exchanged therefor or
received in their place, being exchanged for a different number or kind of
securities of the Company or of any other corporation or (b) new, different or
additional securities of the Company or of any other corporation being received
by the holders of shares of Common Stock of the Company, then the Plan
Administrator shall make proportional adjustments in (i) the maximum number and
kind of securities subject to the Plan and issuable as Incentive Stock Options
as set forth in Section 4 and (ii) the number and kind of securities that are
subject to any outstanding Awards and the per share price of such securities,
without any change in the aggregate price to be paid therefor. The determination
by the Plan Administrator as to the terms of any of the foregoing adjustments
shall be conclusive and binding. Notwithstanding the foregoing, a dissolution or
liquidation of the Company or a Corporate Transaction shall not be governed by
this Section 12.1 but shall be governed by Sections 12.2 and 12.3, respectively.

12.2     DISSOLUTION OR LIQUIDATION

         To the extent not previously exercised or settled, and unless otherwise
determined by the Board in its sole discretion, Options and Stock Awards
denominated in units shall terminate immediately prior to the dissolution or
liquidation of the Company. To the extent a forfeiture provision or repurchase
right applicable to an Award has not been waived by the Board, the Award shall
be forfeited immediately prior to the consummation of the dissolution or
liquidation.

                                      -13-
<PAGE>

12.3     CORPORATE TRANSACTION

         12.3.1   OPTIONS

         (a)      In the event of a Corporate Transaction, except as otherwise
provided in the instrument evidencing an Option and except as provided in
Subsection (b) below, each outstanding Option shall be assumed or an equivalent
option or right substituted by the surviving corporation, the successor
corporation or its parent corporation, as applicable (the "Successor
Corporation").

         (b)      If in the event of a Corporate Transaction the Successor
Corporation refuses to assume or substitute for an Option, then each such
outstanding Option shall become fully vested and exercisable with respect to
100% of the unvested portion of the Option. In such case, the Plan Administrator
shall notify the Participant in writing or electronically that the unvested
portion of the Option specified above shall be fully vested and exercisable for
a specified time period. At the expiration of the time period, the Option shall
terminate, provided that the Corporate Transaction is consummated.

         (c)      For the purposes of this Section 12.3, the Option shall be
considered assumed, continued or substituted for if following the Corporate
Transaction the option or right confers the right to purchase or receive, for
each share of Common Stock subject to the Option immediately prior to the
Corporate Transaction, the consideration (whether stock, cash, or other
securities or property) received in the Corporate Transaction by holders of
Common Stock for each share held on the effective date of the transaction (and
if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding shares); provided,
however, that if such consideration received in the Corporate Transaction is not
solely common stock of the Successor Corporation, the Plan Administrator may,
with the consent of the Successor Corporation, provide for the consideration to
be received upon the exercise of the Option, for each share of Common Stock
subject thereto, to be solely common stock of the Successor Corporation
substantially equal in fair market value to the per share consideration received
by holders of Common Stock in the Corporate Transaction. The determination of
such substantial equality of value of consideration shall be made by the Plan
Administrator and its determination shall be conclusive and binding.

         (d)      All Options shall terminate and cease to remain outstanding
immediately following the Corporate Transaction, except to the extent assumed by
the Successor Corporation.

         12.3.2   STOCK AWARDS

         In the event of a Corporate Transaction, except as otherwise provided
in the instrument evidencing the Award, the vesting of shares subject to Stock
Awards shall accelerate, and the repurchase or forfeiture provisions to which
such shares are subject shall lapse, if and to the same extent that the vesting
of outstanding Options accelerates in connection with the Corporate Transaction.
If unvested Options are to be assumed, continued or substituted by a Successor
Corporation without acceleration upon the occurrence of a Corporate Transaction,
the repurchase or forfeiture provisions to which such Stock Awards are subject
shall continue with respect to shares of the Successor Corporation that may be
issued in exchange for such shares.

                                      -14-

<PAGE>

         12.3.3   ACCELERATION

         Except as otherwise provided in the Agreement evidencing the Award, any
such Awards that are assumed or replaced in a Corporate Transaction and do not
otherwise accelerate at that time shall automatically become fully vested and
exercisable with respect to 100% of the unvested portion of the Award (the
forfeiture or repurchase provisions to which such Awards may be subject shall
lapse to the same extent) in the event that the Participant's employment or
service relationship with the Successor Corporation should terminate (i) in
connection with the Corporate Transaction or (ii) subsequently within two years
following such Corporate Transaction, unless such employment or service
relationship is terminated by the Successor Corporation for Cause or by the
Participant voluntarily without Good Reason; provided, that any such
acceleration shall not occur (a) if, in the opinion of the Company's outside
accountants, such acceleration would render unavailable "pooling of interests"
accounting treatment for any Corporate Transaction for which pooling of
interests accounting treatment is sought by the Company, or (b) in connection
with a general reduction in workforce.

12.4     FURTHER ADJUSTMENT OF AWARDS

         Subject to Sections 12.2 and 12.3, the Plan Administrator shall have
the discretion, exercisable at any time before a sale, merger, consolidation,
reorganization, liquidation or change in control of the Company, as defined by
the Plan Administrator, to take such further action as it determines to be
necessary or advisable, and fair and equitable to the Participants, with respect
to Awards. Such authorized action may include (but shall not be limited to)
establishing, amending or waiving the type, terms, conditions or duration of, or
restrictions on, Awards so as to provide for earlier, later, extended or
additional time for exercise, lifting restrictions and other modifications, and
the Plan Administrator may take such actions with respect to all Participants,
to certain categories of Participants or only to individual Participants. The
Plan Administrator may take such action before or after granting Awards to which
the action relates and before or after any public announcement with respect to
such sale, merger, consolidation, reorganization, liquidation or change in
control that is the reason for such action.

12.5     LIMITATIONS

         The grant of Awards shall in no way affect the Company's right to
adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.

12.6     FRACTIONAL SHARES

         In the event of any adjustment in the number of shares covered by any
Award, each such Award shall cover only the number of full shares resulting from
such adjustment.

                 SECTION 13. FIRST REFUSAL AND REPURCHASE RIGHTS

13.1     FIRST REFUSAL RIGHTS

         Until the date on which the initial registration of the Common Stock
under Section 12(b) or 12(g) of the Exchange Act first becomes effective, the
Company shall have the right of first

                                      -15-

<PAGE>

refusal with respect to any proposed sale or other disposition by the
Participant of any shares of Common Stock issued pursuant to an Award granted
under the Plan. Such right of first refusal shall be exercisable in accordance
with the terms and conditions established by the Plan Administrator and set
forth in the agreement evidencing such right.

13.2     REPURCHASE RIGHTS FOR UNVESTED SHARES

         Subject to Section 13.3, the Plan Administrator shall have the
discretion to provide that the Company may repurchase unvested shares of Common
Stock acquired upon exercise of an Option or Stock Award upon the occurrence of
certain specified events, including, without limitation, a Participant's
cessation of employment or services, divorce, bankruptcy or insolvency. The
terms and conditions upon which such repurchase right shall be exercisable
(including the period and procedure for exercise) shall be established by the
Plan Administrator and set forth in the agreement evidencing such right.

         Except as otherwise provided in the instrument evidencing the Award, in
the event of a Corporate Transaction, the Company's repurchase rights shall
automatically be assigned to the Successor Corporation; provided, however, that
such repurchase rights shall automatically lapse if and to the same extent that
the vesting of outstanding Options accelerates in connection with the Corporate
Transaction.

         The Plan Administrator shall have the discretionary authority,
exercisable either before or after the Participant's cessation of employment or
service, to cancel the Company's outstanding repurchase rights with respect to
one or more shares purchased or purchasable by the Participant under an Option
and thereby accelerate the vesting of such shares in whole or in part at any
time.

13.3     RESTRICTIONS ON RIGHTS

         (a)      To the extent required by applicable law, any right of
repurchase on behalf of the Company in the event of a Participant's termination
of employment shall be at a purchase price that is (i) not less than the Fair
Market Value of the securities upon termination of employment, and the right to
repurchase shall be exercised for cash or cancellation of purchase money
indebtedness for the shares within 90 days of termination of employment (or in
the case of securities issued upon exercise of Options after the date of
termination, within 90 days after the date of the exercise), and the right shall
terminate when the Company's securities become publicly traded; or (ii) at the
original purchase price, provided that the right to repurchase at the original
purchase price shall lapse in accordance with the vesting schedule established
by the Plan Administrator for such Option or Stock Purchase Right, but in any
case at the rate of at least 20% of the shares per year over five years from the
date the Option or Stock Purchase Right is granted (without respect to the date
the Option or Stock Purchase Right was exercised or became exercisable) and the
right to repurchase shall be exercised for cash or cancellation of purchase
money indebtedness for the shares within 90 days of termination of employment
(or in the case of securities issued upon exercise of Options after the date of
termination, within 90 days after the date of the exercise). In addition to the
restrictions set forth in clauses (i) and (ii), the securities held by an
officer, director or consultant of the Company or an affiliate of the Company
may be subject to additional or greater restrictions.

                                      -16-

<PAGE>

         (b)      Notwithstanding the foregoing, repurchase or first refusal
rights under this Section 13 may not be exercised earlier than six months and
one day following the date the shares were purchased by the Participant or such
other time period necessary to avoid charges to the Company's earnings for
financial reporting purposes. All the Company's first refusal and repurchase
rights under this Section 13 are assignable by the Company at any time.

                           SECTION 14. MARKET STANDOFF

         In connection with any underwritten public offering by the Company of
its equity securities pursuant to an effective registration statement filed
under the Securities Act, including the Company's initial public offering, a
person shall not sell, make any short sale of, loan, hypothecate, pledge, grant
any option for the purchase of, or otherwise dispose of or transfer for value or
otherwise agree to engage in any of the foregoing transactions with respect to
any shares issued pursuant to an Award granted under the Plan without the prior
written consent of the Company or its underwriters. Such limitations shall be in
effect for such period of time beginning on the date such person is notified in
writing by the Company that the Company proposes to file a registration
statement under the Securities Act and ending on the date specified by the
Company or its underwriters; provided, however, that in no event shall such
period exceed 180 days following the effective date of such registration. The
limitations of this Section 14 shall in all events terminate four years after
the effective date of the Company's initial public offering.

         In the event of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
Company's outstanding Common Stock effected as a class without the Company's
receipt of consideration, any new, substituted or additional securities
distributed with respect to the purchased shares shall be immediately subject to
the provisions of this Section 14, to the same extent the purchased shares are
at such time covered by such provisions.

         In order to enforce the limitations of this Section 14, the Company may
impose stop-transfer instructions with respect to the purchased shares until the
end of the applicable standoff period.

                      SECTION 15. AMENDMENT AND TERMINATION

15.1     AMENDMENT OR TERMINATION OF PLAN

         The Board may suspend, amend or terminate the Plan or any portion of
the Plan at any time and in such respects as it shall deem advisable; provided,
however, that to the extent required for compliance with Section 422 of the Code
or any applicable law or regulation, stockholder approval shall be required for
any amendment that would (a) increase the total number of shares available for
issuance under the Plan, (b) modify the class of employees eligible to receive
Options, or (c) otherwise require stockholder approval under any applicable law
or regulation. Any amendment made to the Plan that would constitute a
"modification" to Incentive Stock Options outstanding on the date of such
amendment shall not, without the consent of the Participant, be applicable to
such outstanding Incentive Stock Options but shall have prospective effect only.

                                      -17-

<PAGE>

15.2     TERM OF PLAN

         Unless sooner terminated as provided therein, the Plan shall terminate
ten years after the earlier of (a) the Plan's adoption by the Board and (b) its
approval by the stockholders.

15.3     CONSENT OF PARTICIPANT

         The suspension, amendment or termination of the Plan or the amendment
of an outstanding Award (including, without limitation, any action taken under
Section 12.4) shall not, without the Participant's consent, impair or diminish
any rights or obligations under any Award theretofore granted to the Participant
under the Plan. Any amendment made to the Plan or to an outstanding Incentive
Stock Option (including, without limitation, any amendment under Section 12.4)
that would constitute a "modification" to Incentive Stock Options outstanding on
the date of such amendment shall not, without the consent of the Participant, be
applicable to such outstanding Incentive Stock Options but shall have
prospective effect only.

                               SECTION 16. GENERAL

16.1     EVIDENCE OF AWARDS

         Awards granted under the Plan shall be evidenced by a written
instrument that shall contain such terms, conditions, limitations and
restrictions as the Plan Administrator shall deem advisable and that are not
inconsistent with the Plan.

16.2     NO INDIVIDUAL RIGHTS

         Nothing in the Plan or any Award granted under the Plan shall be deemed
to constitute an employment contract or confer or be deemed to confer on any
Participant any right to continue in the employ of, or to continue any other
relationship with, the Company or any Related Corporation or limit in any way
the right of the Company or any Related Corporation to terminate a Participant's
employment or other relationship at any time, with or without Cause.

16.3     ISSUANCE OF SHARES

         Notwithstanding any other provision of the Plan, the Company shall have
no obligation to issue or deliver any shares of Common Stock under the Plan or
make any other distribution of benefits under the Plan unless such issuance,
delivery or distribution would comply with all applicable laws (including,
without limitation, the requirements of the Securities Act), and the applicable
requirements of any securities exchange or similar entity.

         The Company shall be under no obligation to any Participant to register
for offering or resale or to qualify for exemption under the Securities Act, or
to register or qualify under state securities laws, any shares of Common Stock,
security or interest in a security paid or issued under, or created by, the
Plan, or to continue in effect any such registrations or qualifications if made.

         To the extent that the Plan or any instrument evidencing an Award
provides for the issuance of stock certificates to reflect the issuance of
shares of Common Stock, the issuance

                                      -18-

<PAGE>

may be effected on a noncertificated basis, to the extent not prohibited by
applicable law or the applicable rules of any stock exchange. As a condition to
the exercise of an Option or any other receipt of Common Stock pursuant to an
Award under the Plan, the Company may require (a) the Participant to represent
and warrant at the time of any such exercise or receipt that such shares are
being purchased or received only for the Participant's own account and without
any present intention to sell or distribute such shares and (b) such other
action or agreement by the Participant as may from time to time be necessary to
comply with federal and state securities laws. At the option of the Company, a
stop-transfer order against any such shares may be placed on the official stock
books and records of the Company, and a legend indicating that such shares may
not be pledged, sold or otherwise transferred, unless an opinion of counsel is
provided (concurred in by counsel for the Company) stating that such transfer is
not in violation of any applicable law or regulation, may be stamped on stock
certificates to ensure exemption from registration. The Plan Administrator may
also require the Participant to execute and deliver to the Company a purchase
agreement or such other agreement as may be in use by the Company at such time
that describes certain terms and conditions applicable to the shares.

16.4     NO RIGHTS AS A STOCKHOLDER

         No Option or Stock Award denominated in units shall entitle the
Participant to any cash dividend, voting or other right of a stockholder unless
and until the date of issuance under the Plan of the shares that are the subject
of such Award.

16.5     COMPLIANCE WITH LAWS AND REGULATIONS

         Notwithstanding anything in the Plan to the contrary, the Plan
Administrator, in its sole discretion, may bifurcate the Plan so as to restrict,
limit or condition the use of any provision of the Plan to Participants who are
officers or directors subject to Section 16 of the Exchange Act without so
restricting, limiting or conditioning the Plan with respect to other
Participants. Additionally, in interpreting and applying the provisions of the
Plan, any Option granted as an Incentive Stock Option pursuant to the Plan
shall, to the extent permitted by law, be construed as an "incentive stock
option" within the meaning of Section 422 of the Code.

16.6     PARTICIPANTS IN FOREIGN COUNTRIES

         The Plan Administrator shall have the authority to adopt such
modifications, procedures and subplans as may be necessary or desirable to
comply with provisions of the laws of foreign countries in which the Company or
its Related Corporations may operate to assure the viability of the benefits
from Awards granted to Participants employed in such countries and to meet the
objectives of the Plan.

16.7     NO TRUST OR FUND

         The Plan is intended to constitute an "unfunded" plan. Nothing
contained herein shall require the Company to segregate any monies or other
property, or shares of Common Stock, or to create any trusts, or to make any
special deposits for any immediate or deferred amounts payable to any
Participant, and no Participant shall have any rights that are greater than
those of a general unsecured creditor of the Company.

                                      -19-

<PAGE>

16.8     SEVERABILITY

         If any provision of the Plan or any Award is determined to be invalid,
illegal or unenforceable in any jurisdiction, or as to any person, or would
disqualify the Plan or any Award under any law deemed applicable by the Plan
Administrator, such provision shall be construed or deemed amended to conform to
applicable laws, or, if it cannot be so construed or deemed amended without, in
the Plan Administrator's determination, materially altering the intent of the
Plan or the Award, such provision shall be stricken as to such jurisdiction,
person or Award, and the remainder of the Plan and any such Award shall remain
in full force and effect.

16.9     CHOICE OF LAW

         The Plan and all determinations made and actions taken pursuant hereto,
to the extent not otherwise governed by the laws of the United States, shall be
governed by the laws of the State of California without giving effect to
principles of conflicts of laws.

16.10    FINANCIAL REPORTS

         To the extent required by applicable law, including Section 260.140.46
of Title 10 of the California Code of Regulations, the Company shall provide
annual financial statements of the Company to each Participant. Such financial
statements need not be audited and need not be issued to key employees whose
duties with the Company assure them access to equivalent information.

                           SECTION 17. EFFECTIVE DATE

         The effective date of the Plan is the date on which it is adopted by
the Board, so long as it is approved by the Company's stockholders at any time
within 12 months of such adoption. Any Award exercised or settled in shares of
Common Stock before stockholder approval is obtained shall be rescinded if
stockholder approval is not obtained within 12 months before or after the Board
adopts the Plan. Such shares shall not be counted in determining whether such
approval is obtained.

                                      -20-<PAGE>
                                                                   EXHIBIT 10.07

                              CANCERVAX CORPORATION

                          EMPLOYEE STOCK PURCHASE PLAN

                  CancerVax Corporation, a Delaware corporation (the "Company"),
hereby adopts the CancerVax Corporation Employee Stock Purchase Plan (the
"Plan"), effective as of the Effective Date (as defined herein).

         1.       Purpose. The purposes of the Plan are as follows:

                  (a)      To assist employees of the Company and its Designated
Subsidiaries (as defined below) in acquiring a stock ownership interest in the
Company pursuant to a plan which is intended to qualify as an "employee stock
purchase plan" within the meaning of Section 423(b) of the Internal Revenue Code
of 1986, as amended.

                  (b)      To help employees provide for their future security
and to encourage them to remain in the employment of the Company and its
Designated Subsidiaries.

         2.       Definitions.

                  (a)      "Administrator" shall mean the administrator of the
Plan, as determined pursuant to Section 14 hereof.

                  (b)      "Board" shall mean the Board of Directors of the
Company.

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

                  (d)      "Committee" shall mean the committee appointed to
administer the Plan pursuant to Section 14 hereof.

                  (e)      "Common Stock" shall mean the common stock of the
Company.

                  (f)      "Company" shall mean CancerVax Corporation, a
Delaware corporation, and any successor by merger, consolidation or otherwise.

                  (g)      "Compensation" shall mean all base straight time
gross earnings and commissions, exclusive of payments for overtime, shift
premium, incentive compensation, incentive payments, bonuses, expense
reimbursements, fringe benefits and other compensation.

                  (h)      "Designated Subsidiary" shall mean any Subsidiary
which has been designated by the Administrator from time to time in its sole
discretion as eligible to participate in the Plan. The Administrator may
designate, or terminate the designation of, a subsidiary as a Designated
Subsidiary without the approval of the stockholders of the Company.

                  (i)      "Effective Date" shall mean the date on which the
Company's Registration Statement on Form S-8 filed with respect to the Plan
becomes effective.

<PAGE>

                  (j)      "Eligible Employee" shall mean an Employee of the
Company or a Designated Subsidiary: (i) who does not, immediately after the
Option is granted, own stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company, a Parent
or a Subsidiary (as determined under Section 423(b)(3) of the Code); (ii) whose
customary employment is for more than twenty (20) hours per week; and (iii)
whose customary employment is for more than five (5) months in any calendar
year. For purposes of clause (i), the rules of Section 424(d) of the Code with
regard to the attribution of stock ownership shall apply in determining the
stock ownership of an individual, and stock which an employee may purchase under
outstanding options shall be treated as stock owned by the employee. For
purposes of the Plan, the employment relationship shall be treated as continuing
intact while the individual is on sick leave or other leave of absence approved
by the Company or Designated Subsidiary and meeting the requirements of Treasury
Regulation Section 1.421-7(h)(2). Where the period of leave exceeds ninety (90)
days and the individual's right to reemployment is not guaranteed either by
statute or by contract, the employment relationship shall be deemed to have
terminated on the ninety-first (91st) day of such leave.

                  (k)      "Employee" shall mean any person who renders services
to the Company or a Subsidiary in the status of an employee within the meaning
of Code Section 3401(c). "Employee" shall not include any director of the
Company or a Subsidiary who does not render services to the Company or a
Subsidiary in the status of an employee within the meaning of Code Section
3401(c).

                  (l)      "Enrollment Date" shall mean the first Trading Day of
each Offering Period.

                  (m)      "Exercise Date" shall mean the last Trading Day of
each Purchase Period.

                  (n)      "Fair Market Value" shall mean, as of any date, the
value of Common Stock determined as follows:

                           (i)      If the Common Stock is listed on any
established stock exchange or a national market system, including without
limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The
Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system for the last market trading day prior to the date of
determination, as reported in The Wall Street Journal or such other source as
the Administrator deems reliable;

                           (ii)     If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean of the closing bid and asked prices for the
Common Stock on the date prior to the date of determination as reported in The
Wall Street Journal or such other source as the Administrator deems reliable;

                           (iii)    In the absence of an established market for
the Common Stock, the Fair Market Value thereof shall be determined in good
faith by the Administrator; or

                           (iv)     For purposes of the first Offering Period
under the Plan, the Fair Market Value shall be the initial price to the public
as set forth in the final prospectus included

                                       2

<PAGE>

within the registration statement in Form S-1 filed with the Securities and
Exchange Commission for the initial public offering of the Company's Common
Stock (the "Registration Statement").

                  (o)      "Offering Period" shall mean (i) the period
commencing on the Effective Date and ending on the last Trading Day on or before
the June 1 or December 1 following the Effective Date that is at least eighteen
(18) months but not more than twenty-four (24) months following the Effective
Date, and (ii) subject to Section 24, each twenty-four (24) month period
commencing on any December 1 or June 1 thereafter following the termination of
the preceding Offering Period and terminating on the last Trading Day in the
periods ending twenty-four (24) months later. The duration and timing of
Offering Periods may be changed pursuant to Section 4 of this Plan.

                  (p)      "Parent" means any corporation, other than the
Company, in an unbroken chain of corporations ending with the Company if, at the
time of the determination, each of the corporations other than the Company owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.

                  (q)      "Plan" shall mean this CancerVax Corporation Employee
Stock Purchase Plan.

                  (r)      "Purchase Period" shall mean the approximately six
(6) month period commencing after one Exercise Date and ending with the next
Exercise Date, except that the first Purchase Period of any Offering Period
shall commence on the Enrollment Date and end with the next Exercise Date.
Notwithstanding the foregoing, the first Purchase Period with respect to the
initial Offering Period under the Plan shall end on the last Trading Day on or
before the next occurring June 1 or December 1 following the Effective Date and
such period may be more or less than six-months in duration.

                  (s)      "Purchase Price" shall mean 85% of the Fair Market
Value of a share of Common Stock on the Enrollment Date or on the Exercise Date,
whichever is lower; provided, however, that the Purchase Price may be adjusted
by the Administrator pursuant to Section 20; provided, further, that the
Purchase Price shall not be less than the par value of a share of Common Stock.

                  (t)      "Subsidiary" shall mean any corporation, other than
the Company, in an unbroken chain of corporations beginning with the Company if,
at the time of the determination, each of the corporations other than the last
corporation in an unbroken chain owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

                  (u)      "Trading Day" shall mean a day on which national
stock exchanges and the Nasdaq System are open for trading.

         3.       Eligibility.

                  (a)      Any Eligible Employee who shall be employed by the
Company or a Designated Subsidiary on a given Enrollment Date for an Offering
Period shall be eligible to

                                       3

<PAGE>

participate in the Plan during such Offering Period, subject to the requirements
of Section 5 and the limitations imposed by Section 423(b) of the Code.

                  (b)      Each person who, during the course of an Offering
Period, first becomes an Eligible Employee subsequent to the Enrollment Date
will be eligible to become a participant in the Plan on the first day of the
first Purchase Period following the day on which such person becomes an Eligible
Employee, subject to the requirements of Section 5 and the limitations imposed
by Section 423(b) of the Code.

                  (c)      No Eligible Employee shall be granted an option under
the Plan which permits his rights to purchase stock under the Plan, and to
purchase stock under all other employee stock purchase plans of the Company, any
Parent or any Subsidiary subject to the Section 423, to accrue at a rate which
exceeds $25,000 of fair market value of such stock (determined at the time the
option is granted) for each calendar year in which the option is outstanding at
any time. For purpose of the limitation imposed by this subsection, the right to
purchase stock under an option accrues when the option (or any portion thereof)
first becomes exercisable during the calendar year, the right to purchase stock
under an option accrues at the rate provided in the option, but in no case may
such rate exceed $25,000 of fair market value of such stock (determined at the
time such option is granted) for any one calendar year, and a right to purchase
stock which has accrued under an option may not be carried over to any option.
This limitation shall be applied in accordance with Section 423(b)(8) of the
Code and the Treasury Regulations thereunder.

         4.       Offering Periods. Subject to Section 24, the Plan shall be
implemented by consecutive, overlapping Offering Periods which shall continue
until the Plan expires or is terminated in accordance with Section 20 hereof.
The Administrator shall have the power to change the duration of Offering
Periods (including the commencement dates thereof) with respect to future
offerings without stockholder approval if such change is announced at least five
(5) days prior to the scheduled beginning of the first Offering Period to be
affected thereafter.

         5.       Participation.

                  (a)      Each Eligible Employee who is employed by the Company
or a Designated Subsidiary on the calendar day immediately preceding the
Effective Date shall automatically become a participant in the Plan with respect
to the first Offering Period. Each such participant shall be granted an option
to purchase shares of Common Stock and shall be enrolled in such first Offering
Period to the extent of twenty percent (20%) of his or her Compensation for the
pay days during the first Offering Period (or, if less, the maximum amount of
contributions permitted to be made by such participant for such Offering Period
by payroll deduction under the terms of this Plan). Participants wishing to
purchase shares of Common Stock during the first Offering Period shall do so by
making a lump sum cash payment to the Company not later than ten (10) calendar
days before each Exercise Date of such Offering Period, and each such payment
may be made in an amount not exceeding twenty percent (20%) of such
participant's Compensation for the pay days occurring during such Offering
Period and occurring prior to such lump sum payment; provided, however, that
such participant shall not be required to make such lump sum cash payments, or
exercise all or any portion of such option to purchase shares of Common Stock by
making such lump sum payments. Following the Effective Date, each such
participant may, during the period designated from time to

                                       4

<PAGE>

time by the Administrator for such purpose, elect to make such contributions (or
a lesser amount of contributions) for the first Offering Period by payroll
deductions in accordance with Section 6, in lieu of making contributions in such
lump sum cash payments under this subsection (a), or may elect to make no
contributions for such Offering Period; provided, however, that, to make
contributions by payroll deductions, such participant must complete the form of
subscription agreement provided by the Company for the first Offering Period
under this Plan. If (i) during such Offering Period, such a participant elects
to make contributions by payroll deduction, or elects to make no contributions
for such Offering Period, or (ii) on or prior to the tenth (10th) calendar day
before the last Exercise Date of such Offering Period, such a participant fails
to make any lump sum cash payment, such participant shall be deemed to have
elected not to make contributions by lump sum payment with respect to such first
Offering Period. Except as described in subsection (e) below, a participant may
not make contributions by lump sum payment for any Offering Period other than
the first Offering Period.

                  (b)      Following the first Offering Period, an Eligible
Employee may become a participant in the Plan by completing a subscription
agreement authorizing payroll deductions in the form of Exhibit A to this Plan
and filing it with the Company's payroll office FIFTEEN (15) days (or such
shorter or longer period as may be determined by the Administrator, in its sole
discretion) prior to the applicable Enrollment Date.

                  (c)      Each person who, during the course of an Offering
Period, first becomes an Eligible Employee subsequent to the Enrollment Date
will be eligible to become a participant in the Plan on the first day of the
first Purchase Period following the day on which such person becomes an Eligible
Employee. Such person may become a participant in the Plan by completing a
subscription agreement authorizing payroll deductions in the form of Exhibit A
to this Plan and filing it with the Company's payroll office FIFTEEN (15) days
(or such shorter or longer period as may be determined by the Administrator, in
its sole discretion) prior to the first day of any Purchase Period during the
Offering Period in which such person becomes an Eligible Employee. The rights
granted to such participant shall have the same characteristics as any rights
originally granted during that Offering Period except that the first day of the
Purchase Period in which such person initially participates in the Plan shall be
the "Enrollment Date" for all purposes for such person, including determination
of the Purchase Price.

                  (d)      Except as provided in subsection (a), payroll
deductions for a participant shall commence on the first payroll following the
Enrollment Date and shall end on the last payroll in the Offering Period to
which such authorization is applicable, unless sooner terminated by the
participant as provided in Section 10 hereof.

                  (e)      During a leave of absence approved by the Company or
a Subsidiary and meeting the requirements of Treasury Regulation Section
1.421-7(h)(2), a participant may continue to participate in the Plan by making
cash payments to the Company on each pay day equal to the amount of the
participant's payroll deductions under the Plan for the pay day immediately
preceding the first day of such participant's leave of absence. If a leave of
absence is unapproved or fails to meet the requirements of Treasury Regulation
Section 1.421-7(h)(2), the participant will cease automatically to participate
in the Plan. In such event, the company will automatically cease to deduct the
participant's payroll under the Plan. The Company will pay to the participant
his or her

                                       5

<PAGE>

total payroll deductions for the quarterly purchase period, in cash in one lump
sum (without interest), as soon as practicable after the participant ceases to
participate in the Plan.

                  (f)      A participant's completion of a subscription
agreement will enroll such participant in the Plan for each successive Purchase
Period and each subsequent Offering Period on the terms contained therein until
the participant either submits a new subscription agreement, withdraws from
participation under the Plan as provided in Section 10 hereof or otherwise
becomes ineligible to participate in the Plan.

         6.       Payroll Deductions.

                  (a)      At the time a participant files his or her
subscription agreement, he or she shall elect to have payroll deductions made on
each pay day during the Offering Period in an amount from one percent (1%) to
twenty percent (20%) of the Compensation which he or she receives on each pay
day during the Offering Period.

                  (b)      All payroll deductions made for a participant shall
be credited to his or her account under the Plan and shall be withheld in whole
percentages only. Except as described in Section 5(a) hereof, a participant may
not make any additional payments into such account.

                  (c)      A participant may discontinue his or her
participation in the Plan as provided in Section 10 hereof, or may increase or
decrease the rate of his or her payroll deductions during the Offering Period by
completing or filing with the Company a new subscription agreement authorizing a
change in payroll deduction rate. The Administrator may, in its discretion,
limit the number of participation rate changes during any Offering Period. The
change in rate shall be effective with the first full payroll period following
five (5) business days after the Company's receipt of the new subscription
agreement (or such shorter or longer period as may be determined by the
Administrator, in its sole discretion).

                  (d)      Notwithstanding the foregoing, to the extent
necessary to comply with Section 423(b)(8) of the Code and Section 3(c) hereof,
a participant's payroll deductions may be decreased to zero percent (0%) at any
time during a Purchase Period.

                  (e)      At the time the option is exercised, in whole or in
part, or at the time some or all of the Company's Common Stock issued under the
Plan is disposed of, the participant must make adequate provision for the
Company's federal, state, or other tax withholding obligations, if any, which
arise upon the exercise of the option or the disposition of the Common Stock. At
any time, the Company may, but shall not be obligated to, withhold from the
participant's compensation the amount necessary for the Company to meet
applicable withholding obligations, including any withholding required to make
available to the Company any tax deductions or benefits attributable to sale or
early disposition of Common Stock by the Employee.

         7.       Grant of Option. On the Enrollment Date of each Offering
Period, each Eligible Employee participating in such Offering Period shall be
granted an option to purchase on each Exercise Date during such Offering Period
(at the applicable Purchase Price) up to a number of shares of the Company's
Common Stock determined by dividing such participant's payroll

                                       6

<PAGE>

deductions accumulated prior to such Exercise Date and retained in the
participant's account as of the Exercise Date by the applicable Purchase Price;
provided, however, that in no event shall a participant be permitted to purchase
during each Offering Period more than 30,000 shares of the Company's Common
Stock (subject to any adjustment pursuant to Section 19) and during each
Purchase Period more than 30,000 shares of the Company's Common Stock (subject
to any adjustment pursuant to Section 19); and provided, further, that such
purchase shall be subject to the limitations set forth in Sections 3(c) and 13
hereof. The Administrator may, for future Offering Periods, increase or
decrease, in its absolute discretion, the maximum number of shares of the
Company's Common Stock a participant may purchase during each Purchase Period
and Offering Period. Exercise of the option shall occur as provided in Section 8
hereof, unless the participant has withdrawn pursuant to Section 10 hereof or
otherwise becomes ineligible to participate in the Plan. The option shall expire
on the last day of the Offering Period.

         8.       Exercise of Option.

                  (a)      Unless a participant withdraws from the Plan as
provided in Section 10 hereof or otherwise becomes ineligible to participate in
the Plan, his or her option for the purchase of shares shall be exercised
automatically on the Exercise Date, and the maximum number of full shares
subject to the option shall be purchased for such participant at the applicable
Purchase Price with the accumulated payroll deductions in his or her account. No
fractional shares shall be purchased; any payroll deductions accumulated in a
participant's account which are not sufficient to purchase a full share shall be
retained in the participant's account for the subsequent Purchase Period or
Offering Period. During a participant's lifetime, a participant's option to
purchase shares hereunder is exercisable only by him or her.

                  (b)      If the Administrator determines that, on a given
Exercise Date, the number of shares with respect to which options are to be
exercised may exceed (i) the number of shares of Common Stock that were
available for sale under the Plan on the Enrollment Date of the applicable
Offering Period, or (ii) the number of shares available for sale under the Plan
on such Exercise Date, the Administrator may in its sole discretion (x) provide
that the Company shall make a pro rata allocation of the shares of Common Stock
available for purchase on such Enrollment Date or Exercise Date, as applicable,
in as uniform a manner as shall be practicable and as it shall determine in its
sole discretion to be equitable among all participants exercising options to
purchase Common Stock on such Exercise Date, and continue all Offering Periods
then in effect, or (y) provide that the Company shall make a pro rata allocation
of the shares available for purchase on such Enrollment Date or Exercise Date,
as applicable, in as uniform a manner as shall be practicable and as it shall
determine in its sole discretion to be equitable among all participants
exercising options to purchase Common Stock on such Exercise Date, and terminate
any or all Offering Periods then in effect pursuant to Section 20 hereof. The
Company may make pro rata allocation of the shares available on the Enrollment
Date of any applicable Offering Period pursuant to the preceding sentence,
notwithstanding any authorization of additional shares for issuance under the
Plan by the Company's stockholders subsequent to such Enrollment Date. The
balance of the amount credited to the account of each participant which has not
been applied to the purchase of shares of stock shall be paid to such
participant in one lump sum in cash as soon as reasonably practicable after the
Exercise Date, without any interest thereon.

                                       7

<PAGE>

         9.       Deposit of Shares. As promptly as practicable after each
Exercise Date on which a purchase of shares occurs, the Company may arrange for
the deposit, into each participant's account with any broker designated by the
Company to administer this Plan, of the number of shares purchased upon exercise
of his or her option.

         10.      Withdrawal.

                  (a)      A participant may withdraw all but not less than all
of the payroll deductions credited to his or her account and not yet used to
exercise his or her option under the Plan at any time by giving written notice
to the Company in the form of Exhibit A to this Plan. All of the participant's
payroll deductions credited to his or her account during the Offering Period
shall be paid to such participant as soon as reasonably practicable after
receipt of notice of withdrawal and such participant's option for the Offering
Period shall be automatically terminated, and no further payroll deductions for
the purchase of shares shall be made for such Offering Period. If a participant
withdraws from an Offering Period, payroll deductions shall not resume at the
beginning of the succeeding Offering Period unless the participant delivers to
the Company a new subscription agreement.

                  (b)      A participant's withdrawal from an Offering Period
shall not have any effect upon his or her eligibility to participate in any
similar plan which may hereafter be adopted by the Company or in succeeding
Offering Periods which commence after the termination of the Offering Period
from which the participant withdraws.

         11.      Termination of Employment. Upon a participant's ceasing to be
an Eligible Employee, for any reason, he or she shall be deemed to have elected
to withdraw from the Plan and the payroll deductions credited to such
participant's account during the Offering Period shall be paid to such
participant or, in the case of his or her death, to the person or persons
entitled thereto under Section 15 hereof, as soon as reasonably practicable and
such participant's option for the Offering Period shall be automatically
terminated.

         12.      Interest. No interest shall accrue on the payroll deductions
or lump sum contributions of a participant in the Plan.

         13.      Shares Subject to Plan.

                  (a)      Subject to adjustment upon changes in capitalization
of the Company as provided in Section 19 hereof, the maximum number of shares of
the Company's Common Stock which shall be made available for sale under the Plan
shall be 300,000 shares, plus an annual increase to be added on each December 31
during the term of the Plan equal to the least of (i) 30,000 shares, (ii) 1.0 %
of the Company's outstanding shares on such date or (iii) a lesser amount
determined by the Board. If any right granted under the Plan shall for any
reason terminate without having been exercised, the Common Stock not purchased
under such right shall again become available for issuance under the Plan. The
stock subject to the Plan may be unissued shares or reacquired shares, bought on
the market or otherwise.

                                       8

<PAGE>

                  (b)      With respect to shares of stock subject to an option
granted under the Plan, a participant shall not be deemed to be a stockholder of
the Company, and the participant shall not have any of the rights or privileges
of a stockholder, until such shares have been issued to the participant or his
or her nominee following exercise of the participant's option. No adjustments
shall be made for dividends (ordinary or extraordinary, whether in cash
securities, or other property) or distribution or other rights for which the
record date occurs prior to the date of such issuance, except as otherwise
expressly provided herein.

         14.      Administration.

                  (a)      The Plan shall be administered by the Board unless
and until the Board delegates administration to a Committee as set forth below.
The Board may delegate administration of the Plan to a Committee comprised of
two or more members of the Board, each of whom is a "non-employee director"
within the meaning of Rule 16b-3 which has been adopted by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended, and
which is otherwise constituted to comply with applicable law, and the term
"Committee" shall apply to any persons to whom such authority has been
delegated. If administration is delegated to a Committee, the Committee shall
have, in connection with the administration of the Plan, the powers theretofore
possessed by the Board, including the power to delegate to a subcommittee any of
the administrative powers the Committee is authorized to exercise, subject,
however, to such resolutions, not inconsistent with the provisions of the Plan,
as may be adopted from time to time by the Board. Each member of the Committee
shall serve for a term commencing on a date specified by the Board and
continuing until the member dies or resigns or is removed from office by the
Board. References in this Plan to the "Administrator" shall mean the Board
unless administration is delegated to a Committee or subcommittee, in which case
references in this Plan to the Administrator shall thereafter be to the
Committee or subcommittee.

                  (b)      It shall be the duty of the Administrator to conduct
the general administration of the Plan in accordance with the provisions of the
Plan. The Administrator shall have the power to interpret the Plan and the terms
of the options and to adopt such rules for the administration, interpretation,
and application of the Plan as are consistent therewith and to interpret, amend
or revoke any such rules. The Administrator at its option may utilize the
services of an agent to assist in the administration of the Plan including
establishing and maintaining an individual securities account under the Plan for
each participant. In its absolute discretion, the Board may at any time and from
time to time exercise any and all rights and duties of the Administrator under
the Plan.

                  (c)      All expenses and liabilities incurred by the
Administrator in connection with the administration of the Plan shall be borne
by the Company. The Administrator may, with the approval of the Board, employ
attorneys, consultants, accountants, appraisers, brokers or other persons. The
Administrator, the Company and its officers and directors shall be entitled to
rely upon the advice, opinions or valuations of any such persons. All actions
taken and all interpretations and determinations made by the Administrator in
good faith shall be final and binding upon all participants, the Company and all
other interested persons. No member of the Board shall be personally liable for
any action, determination or interpretation made in good faith with respect to
the Plan or the options, and all members of the Board shall be fully protected
by the Company in respect to any such action, determination, or interpretation.

                                       9

<PAGE>

         15.      Designation of Beneficiary.

                  (a)      A participant may file a written designation of a
beneficiary who is to receive any shares and cash, if any, from the
participant's account under the Plan in the event of such participant's death
subsequent to an Exercise Date on which the option is exercised but prior to
delivery to such participant of such shares and cash. In addition, a participant
may file a written designation of a beneficiary who is to receive any cash from
the participant's account under the Plan in the event of such participant's
death prior to exercise of the option. If a participant is married and the
designated beneficiary is not the spouse, spousal consent shall be required for
such designation to be effective.

                  (b)      Such designation of beneficiary may be changed by the
participant at any time by written notice to the Company. In the event of the
death of a participant and in the absence of a beneficiary validly designated
under the Plan who is living at the time of such participant's death, the
Company shall deliver such shares and/or cash to the executor or administrator
of the estate of the participant, or if no such executor or administrator has
been appointed (to the knowledge of the Company), the Company, in its
discretion, may deliver such shares and/or cash to the spouse or to any one or
more dependents or relatives of the participant, or if no spouse, dependent or
relative is known to the Company, then to such other person as the Company may
designate.

         16.      Transferability. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 15 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.

         17.      Use of Funds. All payroll deductions received or held by the
Company under the Plan may be used by the Company for any corporate purpose, and
the Company shall not be obligated to segregate such payroll deductions.

         18.      Reports. Individual accounts shall be maintained for each
participant in the Plan. Statements of account shall be given to participating
Employees at least annually, which statements shall set forth the amounts of
payroll deductions, the Purchase Price, the number of shares purchased and the
remaining cash balance, if any.

         19.      Adjustments Upon Changes in Capitalization, Dissolution,
Liquidation, Merger or Asset Sale.

                  (a)      Changes in Capitalization. Subject to any required
action by the stockholders of the Company, the number of shares of Common Stock
which have been authorized for issuance under the Plan but not yet placed under
option, the maximum number of shares each participant may purchase each Purchase
Period (pursuant to Section 7), as well as the price per share and the number of
shares of Common Stock covered by each option under the Plan which has not yet
been exercised shall be proportionately adjusted for any increase or decrease in
the number of issued shares of

                                       10

<PAGE>

Common Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the
Administrator, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an option.

                  (b)      Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, the Offering Period then in
progress shall be shortened by setting a new Exercise Date (the "New Exercise
Date"), and shall terminate immediately prior to the consummation of such
proposed dissolution or liquidation, unless provided otherwise by the
Administrator. The New Exercise Date shall be before the date of the Company's
proposed dissolution or liquidation. The Administrator shall notify each
participant in writing, at least ten (10) business days prior to the New
Exercise Date, that the Exercise Date for the participant's option has been
changed to the New Exercise Date and that the participant's option shall be
exercised automatically on the New Exercise Date, unless prior to such date the
participant has withdrawn from the Offering Period as provided in Section 10
hereof.

                  (c)      Merger or Asset Sale. In the event of a proposed sale
of all or substantially all of the assets of the Company, or the merger of the
Company with or into another corporation, each outstanding option shall be
assumed or an equivalent option substituted by the successor corporation or a
Parent or Subsidiary of the successor corporation. In the event that the
successor corporation refuses to assume or substitute for the option, any
Purchase Periods then in progress shall be shortened by setting a New Exercise
Date and any Offering Periods then in progress shall end on the New Exercise
Date. The New Exercise Date shall be before the date of the Company's proposed
sale or merger. The Administrator shall notify each participant in writing, at
least ten (10) business days prior to the New Exercise Date, that the Exercise
Date for the participant's option has been changed to the New Exercise Date and
that the participant's option shall be exercised automatically on the New
Exercise Date, unless prior to such date the participant has withdrawn from the
Offering Period as provided in Section 10 hereof.

         20.      Amendment or Termination.

                  (a)      The Board may at any time and for any reason
terminate or amend the Plan. Except as provided in Section 19 hereof, no such
termination can affect options previously granted, provided that an Offering
Period may be terminated by the Board if the Board determines that the
termination of the Offering Period or the Plan is in the best interests of the
Company and its stockholders. Except as provided in Section 19 and this Section
20 hereof, no amendment may make any change in any option theretofore granted
which adversely affects the rights of any participant without the consent of
such participant. To the extent necessary to comply with Section 423 of the Code
(or any successor rule or provision or any other applicable law, regulation or
stock exchange rule), the Company shall obtain stockholder approval in such a
manner and to such a degree as required.

                                       11

<PAGE>

                  (b)      Without stockholder consent and without regard to
whether any participant rights may be considered to have been "adversely
affected," the Administrator shall be entitled to change the Offering Periods,
limit the frequency and/or number of changes in the amount withheld during an
Offering Period, establish the exchange ratio applicable to amounts withheld in
a currency other than U.S. dollars, permit payroll withholding in excess of the
amount designated by a participant in order to adjust for delays or mistakes in
the Company's processing of properly completed withholding elections, establish
reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of Common Stock
for each participant properly correspond with amounts withheld from the
participant's Compensation, and establish such other limitations or procedures
as the Administrator determines in its sole discretion advisable which are
consistent with the Plan.

                  (c)      In the event the Board determines that the ongoing
operation of the Plan may result in unfavorable financial accounting
consequences, the Board may, in its discretion and, to the extent necessary or
desirable, modify or amend the Plan to reduce or eliminate such accounting
consequence including, but not limited to:

                           (i)      altering the Purchase Price for any Offering
Period including an Offering Period underway at the time of the change in
Purchase Price;

                           (ii)     shortening any Offering Period so that the
Offering Period ends on a new Exercise Date, including an Offering Period
underway at the time of the Administrator action; and

                           (iii)    allocating shares.

         Such modifications or amendments shall not require stockholder approval
or the consent of any Plan participants.

         21.      Notices. All notices or other communications by a participant
to the Company under or in connection with the Plan shall be deemed to have been
duly given when received in the form specified by the Company at the location,
or by the person, designated by the Company for the receipt thereof.

         22.      Conditions To Issuance of Shares. The Company shall not be
required to issue or deliver any certificate or certificates for shares of Stock
purchased upon the exercise of options prior to fulfillment of all the following
conditions:

                  (a)      The admission of such shares to listing on all stock
exchanges, if any, on which is then listed; and

                  (b)      The completion of any registration or other
qualification of such shares under any state or federal law or under the rulings
or regulations of the Securities and Exchange Commission or any other
governmental regulatory body, which the Administrator shall, in its absolute
discretion, deem necessary or advisable; and

                                       12

<PAGE>

                  (c)      The obtaining of any approval or other clearance from
any state or federal governmental agency which the Administrator shall, in its
absolute discretion, determine to be necessary or advisable; and

                  (d)      The payment to the Company of all amounts which it is
required to withhold under federal, state or local law upon exercise of the
option; and

                  (e)      The lapse of such reasonable period of time following
the exercise of the Option as the Administrator may from time to time establish
for reasons of administrative convenience.

         23.      Term of Plan. The Plan shall become effective on the Effective
Date. Subject to approval by the stockholders of the Company in accordance with
this Section, the Plan shall be in effect until the tenth (10th) anniversary of
the date of the initial adoption of the Plan by the Board, unless sooner
terminated under Section 20 hereof. The Plan shall be submitted for the approval
of the Company's stockholders within twelve (12) months after the date of the
initial adoption of the Plan by the Board.

         24.      Automatic Transfer to Low Price Offering Period. To the extent
permitted by any applicable laws, regulations, or stock exchange rules, if the
Fair Market Value of the Common Stock on any Exercise Date in an Offering Period
is lower than the Fair Market Value of the Common Stock on the Enrollment Date
of such Offering Period, then (i) a new twenty-four (24) month Offering Period
will automatically begin on the first trading day following that Exercise Date,
and (ii) all participants in such Offering Period shall be automatically
withdrawn from such Offering Period immediately after the exercise of their
option on such Exercise Date and automatically re-enrolled in the immediately
following Offering Period as of the first day thereof.

         25.      Equal Rights and Privileges. All Eligible Employees of the
Company (or of any Designated Subsidiary) will have equal rights and privileges
under this Plan so that this Plan qualifies as an "employee stock purchase plan"
within the meaning of Section 423 of the Code or applicable Treasury regulations
thereunder. Any provision of this Plan that is inconsistent with Section 423 or
applicable Treasury regulations will, without further act or amendment by the
Company, the Board or the Administrator, be reformed to comply with the equal
rights and privileges requirement of Section 423 or applicable Treasury
regulations.

         26.      No Employment Rights. Nothing in the Plan shall be construed
to give any person (including any Eligible Employee or participant) the right to
remain in the employ of the Company, a Parent or a Subsidiary or to affect the
right of the Company, any Parent or any Subsidiary to terminate the employment
of any person (including any Eligible Employee or participant) at any time, with
or without cause.

         27.      Notice of Disposition of Shares. Each participant shall give
prompt notice to the Company of any disposition or other transfer of any shares
of stock purchased upon exercise of an option if such disposition or transfer is
made: (a) within two (2) years from the Enrollment Date of the Offering Period
in which the shares were purchased or (b) within one (1) year after the Exercise
Date on which such shares were purchased. Such notice shall specify the date of
such disposition or

                                       13

<PAGE>

other transfer and the amount realized, in cash, other property, assumption of
indebtedness or other consideration, by the participant in such disposition or
other transfer.

         28.      Governing Law. The validity and enforceability of this Plan
shall be governed by and construed in accordance with the laws of the State of
Delaware without regard to otherwise governing principles of conflicts of law.

                                       14

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