S-8

As filed with the Securities and Exchange Commission on March 21, 2003

Registration No. 333-

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form S-8

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

The Immune Response Corporation
(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of
incorporation or organization) 33-0225679 (I.R.S. Employer Identification No.)

5931 Darwin Court
Carlsbad, California (Address of Principal Executive Offices) 92008 (Zip Code)

THE IMMUNE RESPONSE CORPORATION 2003 STOCK PLAN
STOCK OPTION GRANT OUTSIDE OF A PLAN
(Full title of the plans)

	Copy to:
MICHAEL L. JEUB Chief Financial Officer 5931 Darwin Court Carlsbad, CA 92008 (760) 431-7080 (Name, address and telephone number, including area code, of agent for service)	P. JOSEPH CAMPISI, JR. Pillsbury Winthrop LLP 50 Fremont Street San Francisco, CA 94120-7880 (415) 983-1000

CALCULATION OF REGISTRATION FEE
Title of Securities to be Registered	Amount to be Registered (2)	Proposed Maximum Offering Price per Share	Proposed Maximum Aggregate Offering Price	Amount of Registration Fee
Common Stock, par value $0.0025 (3)	3,250,000 shares	$1.22(1)	$3,965,000(1)	$320.77
Common Stock, par value $0.0025	750,000 shares	$1.20	$   900,000	$  72.81
Total	4,000,000 shares	—	$4,865,000	$393.58

(1)      Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457, based upon the average of the high and low prices as reported on the Nasdaq Stock Market on March 19, 2003.

(2)      In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this registration statement also covers an indeterminate amount of interests to be offered or sold pursuant to the employee benefit plan described herein.

(3)      The shares as issuable pursuant to the respective plans as follows: Stock Option Grant Outside of a Plan, 750,000 shares and 2003 Stock Option Plan, 3,250,000 shares.

          The Registration Statement shall become effective upon filing in accordance with Rule 462 under the Securities Act of 1933.

PART I

INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

Item 1.   Plan Information.*

Item 2.   Registrant Information and Employee Plan Annual Information.*

* Information required by Part I to be contained in the Section 10(a) prospectus is omitted from this Registration Statement in accordance with Rule 428 under the Securities act of 1933 and the Note to Part I of Form S-8.

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.      Incorporation of Certain Documents by Reference.

          The following documents filed by Registrant with the Securities and Exchange Commission are incorporated by reference in this registration statement:

          (1)      Registrant’s Annual Report on Form 10-K, as restated (File No. 0-18006) for the fiscal year ended December 31, 2001, which contains, among other things, the consolidated financial statements of Registrant and certain supplementary data for the fiscal year ended December 31, 2001 together with the report therein of BDO Seidman, LLP, the Registrant’s independent public accountants;

          (2)      Registrant’s Quarterly Report on Form 10-Q (File No. 0-18006) for the quarter ended June 30, 2002;

          (3)      Registrant’s Quarterly Report on Form 10-Q (File No. 0-18006) for the quarter ended September 30, 2002, which contains, among other things, the condensed consolidated financial statements of the Registrant and certain supplementary data for the quarterly period ended September 30, 2002;

          (4)      The description of Registrant’s Common Stock contained in Registrant’s registration statement on Form 8-A, filed March 30, 1990.

          In addition, all documents subsequently filed by Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the filing of a post-effective amendment which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this registration statement and to be a part hereof from the date of filing of such documents.

Item 4.      Description of Securities.

                  Not applicable.

Item 5.      Interests of Named Experts and Counsel.

          Certain legal matters with respect to the validity of securities offered hereby has been passed upon for us by Pillsbury Winthrop LLP. A partner of Pillsbury Winthrop LLP owns 1,106 shares of common stock and an option to acquire 5,000 shares of our common stock.

Item 6.      Indemnification of Directors and Officers.

          Section 145 of the Delaware General Corporation Law, the “Delaware GCL”, permits our board of directors to indemnify any person against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with any threatened, pending or completed action, suit or proceeding in which such person is made a party by reason of his being or having been a director, officer, employee or agent of ours, in terms sufficiently broad to permit such indemnification under certain circumstances for liabilities (including reimbursement for expenses incurred) arising under the Securities Act of 1933, as amended. The Delaware GCL provides that indemnification pursuant to its provisions is not exclusive of other rights of indemnification to which a person may be entitled under any by-law, agreement, vote of stockholders or disinterested directors, or otherwise.

          Article VII of our Restated Certificate of Incorporation, as amended, and Article V of our Bylaws, provide for indemnification of our directors, officers, employees and other agents to the maximum extent permitted by law. In addition, we have entered into separate indemnification agreements with our directors and officers that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers to the fullest extent not prohibited by law.

Item 7.       Exemption from Registration Claimed.

                   Not applicable.

Item 8.       Exhibits.

                   See Index to Exhibits.*

Item 9.       Undertakings.

(a) The undersigned Registrant hereby undertakes:

          (1)     To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

     (i)     To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

     (ii)     To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement;

     (iii)      To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is on Form S-3 or Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.

     (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

     (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

          (b) The undersigned Registrant hereby further undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

          (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

SIGNATURES

          Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8, and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Carlsbad, State of California, on March 20, 2003.

THE IMMUNE RESPONSE CORPORATION


By /s/ Michael L. Jeub Michael L. Jeub
Chief Financial Officer and Vice President of Finance

POWER OF ATTORNEY

          KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Michael L. Jeub and Dr. John N. Bonfiglio, and each of them his true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to this registration statement, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or his substitute or substitutes, may do or cause to be done by virtue hereof.

          Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the date indicated:

Name	Title	Date
/s/ John N. Bonfiglio John N. Bonfiglio	Chief Executive Officer and Director	March 20, 2003
/s/ Michael L. Jeub Michael L. Jeub	Chief Financial Officer and Vice President of Finance	March 20, 2003

Name	Title	Date
/s/ James B. Glavin James B. Glavin	Chairman of the Board	March 20, 2003
/s/ Kevin B. Kimberlin Kevin B. Kimberlin	Director	March 20, 2003
/s/ Jed B. Trosper Jed B. Trosper	Director	March 20, 2003
/s/ Dennis J. Carlo Dennis J. Carlo	Director	March 20, 2003
/s/ William M. Sullivan William M. Sullivan	Director	March 20, 2003
/s/ Alan S. Rosenthal Alan S. Rosenthal	Director	March 20, 2003

INDEX TO EXHIBITS

Number	Exhibit
5.1	Opinion of Pillsbury Winthrop LLP
10.1	Stock Option Agreement, dated January 13, 2003, by and between The Immune Response Corporation and John N. Bonfiglio, Ph.D.
10.2	The Immune Response Corporation 2003 Stock Plan
23.1	Consent of BDO Seidman, LLP, Independent Public Accountants
23.3	Consent of Pillsbury Winthrop LLP (included in Exhibit 5.1).
24.1	Power of Attorney (see page 6).

EX-5.1 3 k30266ex5_1.htm OPINION OF PILLSBURY WINTHROP LLP

EXHIBIT 5.1

PILLSBURY WINTHROP LLP
50 Fremont Street
San Francisco, CA 94105

March 20, 2002

The Immune Response Corporation
5931 Darwin Court
Carlsbad, CA 92008
Re: Registration Statement on Form S-8

Ladies and Gentlemen:

          With reference to the Registration Statement on Form S-8 to be filed by The Immune Response Corporation, a Delaware corporation (the “Company”), with the Securities and Exchange Commission under the Securities Act of 1933, relating to the aggregate of 4,000,000 shares of the Company’s Common Stock issuable pursuant to a stock option agreement, by and between the Company and John N. Bonfiglio, effective as of January 13, 2003 (the “Agreement”) and The Immune Response Corporation 2003 Stock Plan (the “Plan”), it is our opinion that such shares of the Common Stock of the Company, when issued in accordance with the terms of the Agreement and the Plan, will be legally issued, fully paid and nonassessable.

          We hereby consent to the filing of this opinion with the Securities and Exchange Commission as
Exhibit 5.1 to the Registration Statement.

Very truly yours,


/s/ Pillsbury Winthrop LLP
PILLSBURY WINTHROP LLP

EX-10.1 4 k30266ex10_1.htm STOCK OPTION AGREEMENT, DATED JANUARY 13, 2003

EXHIBIT 10.1

THE IMMUNE RESPONSE CORPORATION

STOCK OPTION GRANT NOTICE

(OUTSIDE OF THE 1989 STOCK PLAN)

THE IMMUNE RESPONSE CORPORATION, a Delaware corporation (the “Company”), hereby grants to Optionee an option to purchase the number of shares of the Company’s Common Stock set forth below. This option is not intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). This option is granted outside of, and is not subject to, the Company’s 1989 Stock Plan, as amended. This option is subject to all of the terms and conditions set forth herein and in the Stock Option Agreement, which is attached hereto as Attachment I and incorporated herein in its entirety.

Optionee:	John N. Bonfiglio
Date of Grant:	January 13, 2003
Vesting Commencement Date	January 13, 2003
Number of Shares Subject to Option:	750,000
Exercise Price (Per Share):	$ 1.20
Total Exercise Price:	$ 900,000
Expiration Date:	January 13, 2013

VESTING SCHEDULE FOR 250,000 SHARES: The first two hundred fifty thousand shares subject to this option shall become vested as follows:

• Fifty thousand (50,000) shares shall be vested immediately as of the Date of Grant.

• Seventy-five thousand (75,000) shares shall vest in such amounts and upon the achievement of such milestones as described in the Employment Offer Letter between the Company and Optionee, effective as of January 7, 2003 (the “Employment Agreement”).

• One hundred twenty-five thousand (125,000) shares shall vest immediately upon the earliest to occur of (i) the date which is twelve months after the effective date of the Employment Agreement provided that you continue to provide Continuous Service as an Employee, Director or Consultant from January 7, 2003, through such anniversary date, (ii) if the Board of Directors of the Company (the “Board”) decides to relocate you in accordance with the Employment Agreement, the date on which you and your family are legally domiciled in the State of Pennsylvania, or (iii) if the Board does not relocate you in accordance with the Employment Agreement, the date of such decision by the Board.

VESTING SCHEDULE FOR 500,000 SHARES: The remaining 500,000 shares subject to this option shall vest pro rata quarterly with each quarter of your Continuous Service as Employee, Director or Consultant that you complete thereafter for three years following the Date of Grant.

PAYMENT: Payment of the exercise price may be made in cash, check or any other method provided in the Stock Option Agreement.

ADDITIONAL TERMS/ACKNOWLEDGEMENTS: The undersigned Optionee acknowledges receipt of, and understands and agrees to, this Grant Notice and the Stock Option Agreement. Optionee further acknowledges that as of the Date of Grant, this Grant Notice and the Stock Option Agreement set forth the entire understanding between Optionee and the Company regarding the acquisition of stock in the Company and supersede all prior oral and written agreements on that subject with the exception of the following agreements only:

OTHER AGREEMENTS: Employment Offer Letter dated January 7, 2003.

THE IMMUNE RESPONSE CORPORATION

By _____________________________________


Title ____________________________________


Date ____________________________________

OPTIONEE

By ____________________________________

John N. Bonfigio, Ph.D.

Date ___________________________________

 

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THE IMMUNE RESPONSE CORPORATION
STOCK OPTION AGREEMENT

Pursuant to your Stock Option Grant Notice (“Grant Notice”) and this Stock Option Agreement, THE IMMUNE RESPONSE CORPORATION, a Delaware corporation (the “Company”), has granted you an option to purchase the number of shares of the Company’s common stock (“Common Stock”) indicated in your Grant Notice at the exercise price indicated in your Grant Notice. This option is granted in connection with and in furtherance of the Company’s compensatory benefit plan for the Company’s employees (including officers), directors and consultants and was granted in order to induce you to accept employment with the Company. This option is not intended to qualify as an “incentive stock option” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). This option is granted outside of, and is not subject to, the Company’s 1989 Stock Plan.

The details of your option are as follows:

1. VESTING. Subject to the limitations contained herein, your option will vest as provided in your Grant Notice, provided that vesting will cease upon the termination of your Continuous Service as an Employee, Director or Consultant (as defined in Section 6 below).

2. NUMBER OF SHARES AND EXERCISE PRICE. The number of shares of Common Stock subject to your option and your exercise price per share are set forth in your Grant Notice and may be adjusted from time to time for Capitalization Adjustments, as provided in Section 9 below.

3. FORM OF PAYMENT. When you submit your notice of exercise, you must include payment of the option price for the shares you are purchasing. Payment may be made in one (or a combination of two or more) of the following forms in the forms to the extent permitted now or hereafter by applicable law:

          (a) Your personal check, a cashier’s check or money order.

          (b) Irrevocable directions to a securities broker approved by the Company to sell you option shares and to deliver all or a portion of the sale proceeds to the Company in payment of the option price. (The balance of the sale proceeds, if any, will be delivered to you.) The directions must be given by signing the “Notice of Exercise” form.

          (c) Certificates for shares of stock of the Company that you have owned for at least two months, along with any forms needed to effect a transfer of the shares to the Company. The value of the shares determined as of the effective date of the option exercise, will be applied to the option price.

4. WHOLE SHARES. You may exercise your option only for whole shares of Common Stock.

 

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5. SECURITIES LAW COMPLIANCE. Notwithstanding anything to the contrary contained herein, you may not exercise your option unless the shares of Common Stock issuable upon such exercise are then registered under the Securities Act of 1933, as amended (the “Securities Act”), or, if such shares of Common Stock are not then so registered, the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act. The exercise of your option must also comply with other applicable laws and regulations governing your option, and you may not exercise your option if the Company determines that such exercise would not be in material compliance with such laws and regulations.

6. TERM. The term of your option commences on the Date of Grant (as specified in your Grant Notice) and expires as follows:

          (a) For all vested but unexercised shares, six (6) months after the termination of your Continuous Service as an Employee, Director or Consultant; PROVIDED that if during any part of such six (6) month period your option is not exercisable solely because of the condition set forth in the preceding paragraph relating to “Securities Law Compliance,” your option shall not expire until the earlier of the Expiration Date indicated in your Grant Notice or until it shall have been exercisable for an aggregate period of six (6) months after the termination of your Continuous Service as an Employee, Director or Consultant;

          (b) the Expiration Date indicated in your Grant Notice.

          For purposes of your option, the following terms shall have the meanings given them in this paragraph.

                    (i)      “Continuous Service as an Employee, Director or Consultant” means that your service with the Company or an affiliate of the Company, whether as an employee, director or consultant, is not interrupted or terminated. Your Continuous Service as an Employee, Director or Consultant shall not be deemed to have terminated merely because of a change in the capacity in which you render service to the Company or an affiliate as an employee, consultant or director or a change in the entity for which you render such service, provided that there is no interruption or termination of your Continuous Service as an Employee, Director or Consultant. For example, a change in status from an employee of the Company directly to a consultant of an affiliate or a director will not constitute an interruption of Continuous Service as an Employee, Director or Consultant. The Board of Directors of the Company (the “Board”), in its sole discretion, may determine whether Continuous Service as an Employee, Director or Consultant shall be considered interrupted in the case of any leave of absence, including sick leave, military leave or any other personal leave.

                    (ii)      “Disability” means the permanent and total disability of a person within the meaning of Section 22(e)(3) of the Code.

                    (iii)      “Cause” shall have the meaning given in Section 4.1(a) of the Employment Offer Letter, dated as of January 7, 2003.

 

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7. EXERCISE.

          (a) You may exercise the vested portion of your option during its term by delivering a Notice of Exercise (in a form designated by the Company) together with the exercise price to the Secretary of the Company, or to such other person as the Company may designate, during regular business hours, together with such additional documents as the Company may then require.

          (b) By exercising your option you agree that, as a condition to any exercise of your option, the Company may require you to enter into an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of (1) the exercise of your option, (2) the lapse of any substantial risk of forfeiture to which the shares of Common Stock are subject at the time of exercise (3) the disposition of shares of Common Stock acquired upon such exercise.

8. TRANSFERABILITY. Your option is not transferable, except by will or by the laws of descent and distribution, and is exercisable during your life only by you. Notwithstanding the foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you may designate a third party who, in the event of your death, shall thereafter be entitled to exercise your option, subject to the terms and conditions otherwise applicable to the exercise of this option, the issuance of Common Stock pursuant to such exercise and the subsequent transfer of such Common Stock.

9. CAPITALIZATION ADJUSTMENTS. If any change is made in the Common Stock subject to this option without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company), this Stock Option Agreement will be appropriately adjusted in the class(es) and number of shares and price per share of stock subject to the option. Such adjustments shall be made by the Board, determination of which shall be final, binding and conclusive. (The conversion of any convertible securities of the Company shall not be treated as a transaction “without receipt of consideration” by the Company.)

10. CHANGE OF CONTROL. Upon the occurrence of a Change of Control, then to the extent not prohibited by applicable law, any surviving or acquiring corporation may assume this option or may substitute a similar option (including an option to acquire the same consideration paid to the stockholders in the transaction that results in a Change of Control) for this option. In the event any surviving or acquiring corporation does not assume this option or substitute a similar option for this option, then the vesting of this option and the time during which this option may be exercised shall be accelerated in full and shall continue to be exercisable for a period of six (6) months or until the applicable expiration date of the options. For purposes of this option, a “Change of Control” is defined in Section 3.3 of the Employment Offer Letter, dated as of January 7, 2003.

11. OPTION NOT A SERVICE CONTRACT. Your option is not an employment or service contract, and nothing in your option shall be deemed to create in any way whatsoever any

 

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obligation on your part to continue in the employ of the Company or an affiliate, or of the Company or an affiliate to continue your employment. In addition, nothing in your option shall obligate the Company or an affiliate, their respective stockholders, Boards of Directors, officers or employees to continue any relationship that you might have as a director or consultant for the Company or an affiliate.

12. ACCELERATION OF EXERCISABILITY AND VESTING. The Board shall have the power to accelerate the time at which the option may first be exercised or the time during which the option or any part thereof will vest, notwithstanding the provisions in the Grant Notice or this Stock Option Agreement stating the time at which it may first be exercised or the time during which it will vest.

13. STOCKHOLDER RIGHTS. You shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to the option unless and until you have satisfied all requirements for exercise of the option pursuant to its terms.

14. WITHHOLDING OBLIGATIONS.

          (a) At the time you exercise your option, in whole or in part, or at any time thereafter as requested by the Company, you hereby authorize withholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for (including by means of a “cashless exercise” pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax withholding obligations of the Company or an affiliate of the Company, if any, which arise in connection with your option.

          (b) Upon your request and subject to approval by the Company, in its sole discretion, and compliance with any applicable conditions or restrictions of law, the Company may withhold from fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a number of whole shares of Common Stock having a fair market value, determined by the Company as of the date of exercise, not in excess of the minimum amount of tax required to be withheld by law. If the date of determination of any tax withholding obligation is deferred to a date later than the date of exercise of your option, share withholding pursuant to the preceding sentence shall not be permitted unless you make a proper and timely election under Section 83(b) of the Code, covering the aggregate number of shares of Common Stock acquired upon such exercise with respect to which such determination is otherwise deferred, to accelerate the determination of such tax withholding obligation to the date of exercise of your option. Notwithstanding the filing of such election, shares of Common Stock shall be withheld solely from fully vested shares of Common Stock determined as of the date of exercise of your option that are otherwise issuable to you upon such exercise. Any adverse consequences to you arising in connection with such share withholding procedure shall be your sole responsibility. Notwithstanding the foregoing, the Company shall not be authorized to withhold shares of Common Stock in excess of the minimum statutory withholding requirements for federal and state tax purposes, including payroll taxes.

          (c) You may not exercise your option unless the tax withholding obligations of the Company and/or any affiliate are satisfied. Accordingly, you may not be able to exercise your

 

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option when desired even though your option is vested, and the Company shall have no obligation to issue a certificate for such shares of Common Stock or release such shares of Common Stock from any escrow provided for herein.

15. NOTICES. Any notices provided for in your option shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company.

16. CHOICE OF LAW. This option shall be governed by, and construed in accordance with the laws of the State of California, as such laws are applied to contracts entered into and performed in such State.

17. MARKET LOCK-UP AGREEMENT. Any shares purchased with this option may not be sold or transferred except with the prior consent of the Board during any market lock-up period required by underwriters pursuant to a public offering of the Company’s securities or under an insider trading policy adopted by the Board designed to ensure compliance with applicable securities and other laws.

18. GOVERNING AUTHORITY. This option is subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted by the Company. This authority shall be exercised by the Board, or by a committee of one or more members of the Board in the event that the Board delegates its authority to a committee. The Board, in the exercise of this authority, may correct any defect, omission or inconsistency in this option in a manner and to the extent the Board shall deem necessary or desirable to make this option fully effective. References to the Board also include any committee appointed by the Board to administer and interpret this option. Any interpretations, amendments, rules and regulations promulgated by the Board shall be final and binding upon the Company and its successors in interest as well as you and your heirs, assigns, and other successors in interest.

19. AMENDMENT OF OPTION. The Board at any time, and from time to time, may amend the terms of this option; PROVIDED, HOWEVER, that the rights under this option shall not be impaired by any such amendment unless (i) the Company requests your consent and (ii) you consent in writing.

 

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NOTICE OF EXERCISE

The Immune Response Corporation
5931 Darwin Court
Carlsbad, CA 92008 Date of Exercise: _______________

Ladies and Gentlemen:

This constitutes notice under my nonstatutory stock option that I elect to purchase the number of shares for the price set forth below.

Stock option dated: January 13, 2003

Number of shares as to which option is exercised: _______________

Certificates to be issued in name of: _______________

Total exercise price: $______________

Cash payment delivered herewith: $______________

By this exercise, I agree (i) to provide such additional documents as you may require and (ii) to provide for the payment by me to you (in the manner designated by you) of your withholding obligation, if any, relating to the exercise of this option.

Very truly yours,

____________________________

 

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  EX-10.2 5 k30266ex10_2.htm THE IMMUNE RESPONSE CORP. 2003 STOCK PLAN

EXHIBIT 10.2

IMMUNE RESPONSE CORPORATION

2003 STOCK PLAN

TABLE OF CONTENTS

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

 

- -i-

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

 

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

 

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2003 STOCK PLAN OF

THE IMMUNE RESPONSE CORPORATION

Effective February 25, 2003

SECTION 1.  ESTABLISHMENT AND PURPOSE.

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

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

SECTION 2.   DEFINITIONS.

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

                 (b)  “Change in Control”

          shall mean any of the following events:

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

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

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

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

 

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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

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

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

SECTION 3.  ADMINISTRATION.

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

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

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

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

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

 

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

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

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

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

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

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

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

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

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

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

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

SECTION 4.   ELIGIBILITY.

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

 

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

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

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

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

SECTION 5.  STOCK SUBJECT TO PLAN.

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

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

 

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SECTION 6.  TERMS AND CONDITIONS OF AWARDS OR SALES.

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

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

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

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

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

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

 

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

SECTION 7.   TERMS AND CONDITIONS OF OPTIONS.

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

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

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

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

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

 

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

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

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

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

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

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

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

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

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

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

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

 

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

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

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

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

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

SECTION 8.  PAYMENT FOR SHARES.

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

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

 

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

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

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

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

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

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

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

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

 

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

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

SECTION 9.  ADJUSTMENT OF SHARES.

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

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

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

 

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SECTION 10.  SECURITIES LAWS.

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

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

SECTION 11.  NO EMPLOYMENT RIGHTS.

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

SECTION 12.  DURATION AND AMENDMENTS.

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

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

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

 

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

SECTION 13.   EXECUTION.

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

 

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THE IMMUNE RESPONSE CORPORATION



By

Michael L. Jeub
Chief Financial Officer and Vice President of
Finance

 

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  EX-23.1 6 k30266ex23_1.htm CONSENT OF BDO SEIDMAN, LLP

EXHIBIT 23.1

The Immune Response Corporation
5931 Darwin Court
Carlsbad, California 92008

We hereby consent to the incorporation by reference in the Registration Statement of our report dated December 12, 2002, relating to the consolidated financial statements of The Immune Response Corporation appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2001.

/s/ BDO Seidman, LLP
Costa Mesa, California

March 20, 2003

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EX-5.1

 Exhibit 5.1 

EX-10.1

 Exhibit 10.2 

EX-10.2

 Exhibit 10.2 

EX-23.1

 Exhibit 23.1