<PAGE> 1
As filed with the Securities and Exchange Commission on August 23, 1996.
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)
<TABLE>
<S> <C>
Delaware 33-0255679
- ---------------------------- -------------------------
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
5935 Darwin Court
Carlsbad, California 92008
- ---------------------------------------- -------------------------
(Address of Principal Executive Offices) (Zip Code)
</TABLE>
AMENDED AND RESTATED 1989 STOCK PLAN
OF THE IMMUNE RESPONSE CORPORATION
_______________________________________________________________________________
(Full title of the plan)
<TABLE>
<S> <C>
CHARLES J. CASHION Copy to:
Vice President, Finance,
Chief Financial Officer,
Secretary and Treasurer THOMAS E. SPARKS, JR.
The Immune Response Corporation Pillsbury Madison & Sutro
5935 Darwin Court P.O. Box 7880
Carlsbad, California 92008 San Francisco, CA 94120
(619) 431-70 (415) 983-1000
- ----------------------------------------- --------------------------
(Name, address and telephone number,
including area code, of agent for service)
</TABLE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
_____________________________________________________________________________________________________________________
Proposed Maximum Proposed Maximum
Title of Securities To Be Amount To Be Offering Price per Aggregate Offering Amount of Registration
Registered Registered (1) Share (2) Price(2) Fee
_____________________________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Common Stock $.0025 par 500,000 shares $7.5625 $3,781,250 $1,304
value, including related
Series E Participating
Preferred Stock Purchase
Rights
_____________________________________________________________________________________________________________________
</TABLE>
(1) Calculated pursuant to General Instruction E to Form S-8.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457, upon the average of the high and low prices as
reported on the Nasdaq National Market on August 21, 1996.
_________________
The Registration Statement shall become effective upon filing in accordance
with Rule 462 under the Securities Act of 1933.
<PAGE> 2
INFORMATION REQUIRED PURSUANT TO
GENERAL INSTRUCTION E TO FORM S-8
GENERAL INSTRUCTION E INFORMATION
This Registration Statement is being filed for the purpose of increasing
the number of securities of the same class as other securities for which a
Registration Statement of the Registrant on Form S-8 relating to the same
employee benefit plan is effective.
Registrant's Form S-8 Registration Statements filed with the Securities and
Exchange Commission on September 4, 1990, December 20, 1990, April 9, 1992, July
6, 1993, and June 29, 1994, File Nos. 33-36555, 33-38345, 33-47058, 33-65668,
and 33-80884, respectively, are hereby incorporated by reference.
INCORPORATION OF 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 (File No. 0-18006) for the
fiscal year ended December 31, 1995, which contains, among other things, the
consolidated financial statements of Registrant and certain supplementary data
for the fiscal year ended December 31, 1995 together with the report thereon of
Ernst & Young LLP, independent auditors.
(2) Registrant's Quarterly Reports on Form 10-Q for the quarters ended
March 31, and June 30, 1996 .
(3) The description of Registrant's common stock contained in Registrant's
Registration Statement on Form 8-A filed March 30, 1990.
(4) The description of the Preferred Stock Purchase Rights for Series E
Participating Preferred Stock, par value $.001 per share, of the Registrant
contained in Registrant's Registration Statement on Form 8-A filed March 4,
1992.
In addition, all documents subsequently filed by Registrant pursuant to
Section 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 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
A partner of the law firm of Pillsbury Madison & Sutro LLP owns 15,000
shares of common stock of the Registrant and holds a stock option to purchase
20,000 shares of common stock of the Registrant.
- 2 -
<PAGE> 3
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 San Diego, State of California, on August 22, 1996.
THE IMMUNE RESPONSE CORPORATION
By /s/ Charles J. Cashion
Charles J. Cashion
Vice President, Finance,
Chief Financial Officer,
Secretary and Treasurer
(Principal Financial Officer and
Principal Accounting Officer)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Dennis J. Carlo, and Charles J. Cashion, 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, and each of them, 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:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Dennis J. Carlo President, Chief August 22, 1996
- -------------------------------- Executive Officer and Director
Dennis J. Carlo (Principal Executive Officer)
/s/ Charles J. Cashion Vice President, Finance, Chief August 22, 1996
- -------------------------------- Financial Officer, Secretary and
Charles J. Cashion Treasurer (Principal Financial
Officer and Principal Accounting
Officer)
/s/ James B. Glavin Chairman of the Board August 22, 1996
- -------------------------------- of Directors
James B. Glavin
</TABLE>
- 3 -
<PAGE> 4
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Kevin B. Kimberlin Director August 22, 1996
- --------------------------------
Kevin B. Kimberlin
/s/ Gilbert S. Omenn Director August 22, 1996
- --------------------------------
Gilbert S. Omenn
/s/ Melvin Perelman Director August 22, 1996
- --------------------------------
Melvin Perelman
/s/ John Simon Director August 22, 1996
- --------------------------------
John Simon
/s/ William M. Sullivan Director August 22, 1996
- --------------------------------
William M. Sullivan
/s/ Philip M. Young Director August 22, 1996
- --------------------------------
Philip M. Young
</TABLE>
- 4 -
<PAGE> 5
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Sequentially
Number Exhibit Numbered Page
- ------ ------- -------------
<S> <C> <C>
5.1 Opinion regarding legality of 6
securities to be offered.
10.1 Amended and Restated 1989 Stock 7
Plan of The Immune Response
Corporation.
23.1 Consent of Ernst & Young LLP, 16
independent auditors
23.2 Consent of Pillsbury Madison &
Sutro LLP (included in Exhibit 5.1).
24.1 Power of Attorney (see page 3).
</TABLE>
<PAGE> 1
Exhibit 5.1
PILLSBURY MADISON & SUTRO LLP
P.O. Box 7880
San Francisco, CA 94120
Tel: (415) 983-1000
Fax: (415) 983-1200
August 22, 1996
The Immune Response Corporation
5935 Darwin Court
Carlsbad, California 92008
Re: Registration Statement on Form S-8
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
500,000 shares of the Company's Common Stock issuable pursuant to the Amended
and Restated 1989 Stock Plan of The Immune Response Corporation (the "Plan"), it
is our opinion that such shares of the Common Stock of the Company, when issued
and sold in accordance with 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 MADISON & SUTRO LLP
<PAGE> 1
Exhibit 10.1
AMENDED AND RESTATED
1989 STOCK PLAN OF
THE IMMUNE RESPONSE CORPORATION
SECTION 1. ESTABLISHMENT AND PURPOSE.
The Plan was established in 1989 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 was last amended and restated on March 6,
1996. 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) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Committee" shall mean a committee of the Board of Directors, as
described in Section 3(a).
(d) "Company" shall mean The Immune Response Corporation, a Delaware
corporation.
(e) "Employee" shall mean (i) any individual who is a common-law employee
of the Company or of a Subsidiary, (ii) a member of the board of directors of a
Subsidiary and (iii) an independent contractor who performs services for the
Company or a Subsidiary (other than a member of the Board of Directors of the
Company). Service as a member of the board of directors of a Subsidiary or as
an independent contractor shall be considered employment for all purposes of the
Plan except as provided in the second sentence of Section 4(a).
(f) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(g) "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.
(h) "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 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
<PAGE> 2
(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.
(i) "ISO" shall mean an employee incentive stock option described in
section 422(b) of the Code.
(j) "Nonstatutory Option" shall mean an employee stock option not
described in sections 422 or 423 of the Code.
(k) "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).
(l) "Option" shall mean an ISO or Nonstatutory Option granted under the
Plan and entitling the holder to purchase Shares.
(m) "Optionee" shall mean an individual who holds an Option.
(n) "Plan" shall mean this Amended and Restated 1989 Stock Plan of The
Immune Response Corporation.
(o) "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.
(p) "Service" shall mean service as an Employee.
(q) "Share" shall mean one share of Stock, as adjusted in accordance with
Section 9 (if applicable).
(r) "Stock" shall mean the Common Stock of the Company.
(s) "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.
(t) "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.
(u) "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.
(v) "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.
2
<PAGE> 3
SECTION 3. ADMINISTRATION.
(a) Committee Membership. The Plan shall be administered by the
Committee. The Committee shall consist of two or more disinterested directors of
the Company 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. A member of the Committee shall not be eligible to receive any award of an
Option or of Shares under the Plan. The Board of Directors may appoint a
separate committee of the Board of Directors, composed of one or more directors
of the Company who need not be "disinterested" directors, who may administer the
Plan with respect to Employees who are not officers or directors of the Company,
may grant Shares and Options under the Plan to such Employees and may determine
the timing, number of Shares and other terms of such grants.
(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;
(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;
(vi) To determine the number of Shares to be offered to each Offeree
or to be made subject to each Option;
(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;
3
<PAGE> 4
(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. Only Employees shall be eligible for designation as
Optionees or Offerees by the Committee. In addition, only individuals who are
employed as common-law employees by the Company or a Subsidiary shall be
eligible for the grant of ISOs.
(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 and (ii) such ISO by its terms is not
exercisable after the expiration of five years from 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 not include shares authorized for issuance
under outstanding options held by the Employee or by any other person.
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 4,500,000 Shares, subject to adjustment
pursuant to Section 9. The number of Shares which are subject to Options or
other rights outstanding at any time under the Plan shall not exceed the number
of Shares which 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, 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.
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.
4
<PAGE> 5
(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.
Subject to the preceding sentence, 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.
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. 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.
5
<PAGE> 6
(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 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.
6
<PAGE> 7
(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.
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 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,
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 12 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).
7
<PAGE> 8
(f) Promissory Note. 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 discretion) shall specify
the term, interest rate, amortization requirements (if any), and other
provisions of such note.
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
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.
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.
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.
8
<PAGE> 9
SECTION 12. DURATION AND AMENDMENTS.
(a) Term of the Plan. The Plan, as set forth herein, shall become
effective on March 6, 1996, the date the Board of Directors amended and restated
the Plan, subject to the approval of the Company's stockholders. In the event
that the stockholders fail to approve the amendment and restatement of the Plan
at the 1996 annual meeting, any Option grants or Stock awards made in excess of
an aggregate of 4,500,000 Shares shall be null and void. The Plan shall
terminate automatically on March 6, 2006, and may be terminated on any earlier
date pursuant to Subsection (b) 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.
Stockholder approval shall not be required for any other amendment of the Plan.
(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 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 amendment and restatement of the Plan by the Board of
Directors on March 6, 1996, the Company has caused its authorized officer to
execute the same.
THE IMMUNE RESPONSE CORPORATION
By /s/ Charles J. Cashion
As its Vice President
9
<PAGE> 1
Exhibit 23.1
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the Amended and Restated 1989 Stock Plan of The Immune
Response Corporation of our report dated January 26, 1996, with respect to the
consolidated financial statements of The Immune Response Corporation included
in its Annual Report (Form 10-K) for the year ended December 31, 1995, filed
with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
San Diego, California
August 23, 1996
