Document:

Third Amendment & Restated Employment Agreement

 

EXHIBIT 10.1

THIRD AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     This Agreement, effective as of August 27, 2003 (“Effective Date”), by and
between Advanced Viral Research Corp., a Delaware corporation, with offices
located at 200 Corporate Boulevard South, Yonkers, New York 10107 (“Company”),
and Shalom Z. Hirschman, M.D., with an address at 5240 Blackstone Avenue,
Riverdale, New York 10471 (“Employee”).

RECITALS:

     A.     The Company and Employee entered into an Employment Agreement dated
October 14, 1996 (“Employment Agreement”), which was in effect until July 8,
1998.

     B.     The Company and Employee entered into an amended and restated
employment agreement dated as of July 8, 1998, which superseded in all respects
the Employment Agreement (“First Amended/Restated Employment Agreement”).

     C.     The Company and Employee entered into a second amended and restated
employment agreement dated as of May 12, 2000 (“Second Amended/Restated
Employment Agreement”), which superseded in all respects the First
Amended/Restated Employment Agreement”.

     D.     Employee has resigned from the positions of Chief Executive Officer,
President, and Chief Scientific Officer of the Company and as a member of the
Company’s board of directors (“Board”).

     E.     Effective as of August 27, 2003 (“Effective Date”), the Board has
agreed to engage Employee with the title of Chief Scientist. The Chief
Scientist will be an officer of the Company and will be covered by all
insurance policies covering officers of the Company.

     F.     By this third amended and restated employment agreement (“Third
Amended/Restated Employment Agreement”), the parties intend to amend, modify
and supersede in its entirety the Second Amended/Restated Employment Agreement.
Effective on the Effective Date, the Second Amended/Restated Employment
Agreement shall have no force or effect.

     NOW, THEREFORE, in consideration of the foregoing and the mutual promises
and covenants set forth herein, and for good and valuable consideration,
Employee and the Company agree as follows:

Employment; Limitation of Authority

     1.     On the Effective Date, Employee shall assume the office of Chief
Scientist.

     2.     As Chief Scientist, Employee agrees to undertake and perform such
services in that position as the Board, in its discretion, shall reasonably
request from time to time in connection with the Company’s business. Employee
shall not represent to any person that he has authority to bind the Company to
any obligation or indebtedness whatsoever.

Term of Employment; Termination of Employment.

     3.     Term of Employment. The term of Employee’s employment with the Company
under

 

 

 this Agreement shall begin as of the Effective Date of this Agreement and
continue until December 31, 2004, except in the case of a termination as
defined in paragraphs 4 or 5 below.

     4.     Termination “For Cause” by Company. The Company has the right to
terminate Employee’s employment prior to the expiration of Employee’s term of
employment “For Cause.”

		
	 	     (a) For purposes of this Agreement, “For Cause” means the occurrence of
any one of the following:

		
	 	     (i) Employee becomes unfit to properly render services to the Company
because of alcohol or drug related abuses, as defined under and as consistent
with applicable laws;

		
	 	     (ii) conviction of a crime of moral turpitude that constitutes a felony
under federal or state law;

		
	 	     (iii) material breach of this Agreement which is not cured within sixty
(60) days after written notice is given by the Company to the Employee.

		
	 	     Such termination, except for material breach, shall be effective sixty
(60) days after the delivery of written notice thereof to the Employee, or at
such later time as may be designated in said notice. The Employee shall vacate
the offices of the Company on or before such effective date unless such
termination for cause may be subject to cure by the Employee. All
compensation due hereunder shall cease as of said effective date of the
termination, except accrued compensation that shall remain unpaid at such date,
and except for the continued right of the Employee to exercise the Options;
provided, however, that in the event of termination of the Employee’s
employment for cause, he may exercise his Options for a period expiring ninety
(90) days after the date of such termination.

     5.     Termination by Employee

		
	 	     (a) Termination for “Good Reason.” Employee may terminate this Agreement
for “Good Reason” prior to the end of the term provided that he delivers
written notice of such intention to terminate not less than sixty (60) days
prior to the date of such termination. Good Reason means if the Company
materially changes the Employee’s duties, responsibilities or working
conditions or takes any other actions which impede the Employee in the
performance of his duties hereunder. If the Employee terminates this Agreement
for good reason, the Company shall be required to pay the Employee the
compensation, remuneration, benefits and allowance and expenses specified in
paragraphs 6,8, 10 and 11 of this Agreement for the remainder of the term of
this Agreement, and the Employee may exercise the Options until the expiration
as set forth in paragraph 6(c) below.

		
	 	     (b) Termination Without “Good Reason.” If Employee terminates this
Agreement prior to the end of the term without “Good Reason,” as defined in
paragraph 5(a) above, provided he delivers written notice of such intention to
terminate not less than sixty (60) days prior to the date of such termination.
All compensation and other benefits shall cease as of the effective date
specified in such notice.

		
	 	     (c) Death of Employee. This Agreement shall terminate immediately upon
the death of the Employee, in which case all compensation due hereunder shall
cease as of the date of the Employee’s death, except that (i) all compensation
due under this Agreement as of the date of termination shall be paid to
Employee’s estate; (ii) the beneficiary or beneficiaries of the term life
insurance policy maintained by the Company pursuant to paragraph 6(b) shall be
entitled to receive the entire death benefits thereunder and (iii) until the
earlier of (A) 180 days after the issuance of Letters Testamentary or

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	 	Letters of Administration to the executor or administrator of the Employee’s
estate or (B) one year after the death of the Employee, all of the Employee’s
stock options, to the extent vested on the date of his death, may be exercised.

     6.     Compensation and Benefits

		
	 	     (a) As compensation for the services rendered and to be rendered under
this Agreement, the Company shall continue to pay Employee for his services an
annual salary at the rate of $361,000 per year (“Base Salary”), payable in
biweekly installments commencing on the Effective Date of this Agreement and
shall continue to provide the Employee with benefits provided under the Second
Amended/Restated Employment Agreement.

		
	 	     (b) During the term of this Agreement only, the Company shall purchase, at
its expense, a major medical insurance policy, disability policy and dental
policy insuring Employee and his dependents who reside in his household, which
policy shall be reasonably acceptable to the parties hereto. The Company shall
also purchase a term life insurance policy at least in the amount of
$1,000,000, with the beneficiary to be designated by Employee. The Employee
may change the designation of the beneficiary upon written notice to the
Company. The Company shall provide to the Employee written proof of payment of
premiums at least once annually. A description of the tem life insurance
policy on the life of the Employee that the Company currently owns and
maintains is set forth on Exhibit A to this Agreement. In the discretion of
the Company, the Employee shall cooperate with the Company in purchasing a “key
man” life insurance policy, which will designate the Company as beneficiary.

		
	 	     (c) Employee shall retain all of the previously approved and issued
options to purchase 39.1 million shares of the Company’s common stock at the
exercise price previously granted, as set forth in Schedule A attached
(“Options”), which Options expire on February 17, 2008; provided, however, that
the Options shall expire (i) 90 days after Employee terminates his employment
without Good Reason, as specified in paragraph 5(b) above or (ii) the Company
terminates Employee for cause, as that term is defined in paragraph 4(a) above.
The Employee may exercise the Options upon the occurrence of a Change of
Control, as defined in paragraph 7(d) of this Agreement, until the expiration
of their term as set forth in this paragraph 6(c). In the event that the
Employee has unexercised options outstanding on February 17, 2008, and the
common stock of the Company has a trading price of less than $1, then the
expiration of options to acquire 10 million shares (or such lesser number then
outstanding) shall be extended for an additional 2 years until February 17,
2010 at the exercise price of $.50 per share. The Company acknowledges that
the Options are fully vested and that the shares underlying the Options have
been registered. The Company agrees to use its best efforts to cause such
shares to be registered or to have the registration of such shares to continue
to be effective in order that the shares may be resold without a restrictive
legend. At Employee’s request, the Company will enter into a stock option
agreement incorporating the terms set forth in this paragraph 6(c).

		
	 	     (d) Employee has earned and is entitled to a bonus in the amount of
$50,000, which shall be payable in a lump sum from the proceeds of new
financing or capital investment provided (i) the Company receives new financing
or a capital investment of not less than $1,500,000, and (ii) Employee is
terminated other than For Cause. If Employee is terminated as a result of
Employee’s death, the $50,000 shall be payable to Employee’s estate, provided
the condition precedent to payment set forth in paragraph 5(c) is satisfied.

     7.     Change of Control

		
	 	     (a) If there occurs a Change of Control (as defined in this paragraph 7(d)
below) of the Company, the Employee may, at his option, upon thirty (30) days
written notice given to the

3

 

		
	 	Company within one hundred and eighty (180) days after a Change of
Control, terminate this Agreement, and the Employee shall be entitled to
receive payment of his Base Salary (as set forth in paragraph 6(a) above) and
as modified by paragraph 7(b) below, for the remaining term of the Agreement,
to be paid as a lump sum.

		
	 	     (b) Notwithstanding any other provision of this Agreement, if the
aggregate present value of the “parachute payments” to the Employee, determined
under Section 280G(b) of the Internal Revenue Code of 1986, as amended (“IRC”),
is at least three times the “base amount” determined under such Section 280G,
then the compensation otherwise payable under this Agreement and any other
amount payable hereunder or any other severance plan, program, policy or
obligation of the Company or any other affiliate thereof shall be reduced so
that the aggregate present value of the parachute payments to the Employee,
determined under such Section 280G, does not exceed 2.99 times the base amount.
In no event, however, shall any benefit provided hereunder be reduced to the
extent such benefit is specifically excluded by Section 280G(b) of the IRC as a
“parachute payment” or as an “excess parachute payment.”

		
	 	     (c) Any decisions regarding the requirement or implementation of such
reductions shall be made by such tax counsel as may be selected by the Company
and acceptable to the Employee.

		
	 	     (d) “Change in Control” means the occurrence of any of the following:

		
	 	     (i) the consummation of any transaction, the result of which is that any
person or group, as such term is used in Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended, other than Employee, Bernard Friedland or
William Bregman or any affiliate thereof or any group comprised of any of the
foregoing, owns, directly or indirectly, 51% of the Common Equity, as defined
below, of the Company;

		
	 	     (ii) the Company consolidates with, or merges with or into, another person
(other than a direct or indirect wholly owned subsidiary) or any person
consolidates with, or merges with or into, the Company, in any such event
pursuant to a transaction in which the outstanding Voting Stock, as defined
below, of the Company, as the case may be, is converted into or changed for
cash, securities or other property, other than any such transaction where the
outstanding Voting Stock of the Company, as the case may be, is converted into
or exchanged for Voting Stock of the surviving or transferee corporation and
the beneficial owners of the Voting Stock of the Company immediately prior to
such transaction own, directly or indirectly, not less than a majority of the
Voting Stock of the surviving or transferee corporation immediately after such
transaction;

		
	 	     (iii) the Company, either individually or in conjunction with one or more
subsidiaries sells, assigns, conveys, transfers, leases or otherwise disposes
of, or the subsidiaries sell, assign, convey, transfer, lease or otherwise
dispose of, all or substantially all of the properties and assets of the
Company and its subsidiaries, taken as a whole (either in one transaction or a
series of related transactions), including capital stock of the subsidiaries,
to any person (other than the Company or a wholly owned subsidiary of the
Company); or

		
	 	     (iv) during any two (2)-year period commencing subsequent to the date of
this Agreement, individuals who at the beginning of such period constituted the
Board of the Company (together with any new directors whose election by such
Board of Directors or whose nomination for election by the stockholders of the
Company was approved by a vote of two-thirds of the directors then still in
office) who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved cease for any
reason to constitute a majority of the Board of Directors then in office;
provided, however, that a person shall not be deemed to have ceased being a
director for such purpose if such person shall have resigned or died. For
purposes of this paragraph

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	 	7(d)(iv), (xx) the term “Common Equity” of the Company means all capital
stock of the Company that is generally entitled to vote in the election of
directors and (yy) the term “Voting Stock” of the Company mean securities of
any class of capital stock of the Company entitling the holders thereof to vote
in the election of members of the Board of Directors of the Company.

     8.     Automobile. The Company has leased or purchased for Employee an
automobile selected and to be used by Employee, having a list price not in
excess of $40,000, it being understood and agreed that such automobile shall be
necessary by Employee in the conduct of the Company’s business as a condition
of his employment. The Company shall continue to make payments for such leased
or purchased automobile and shall pay for all gas, oil, repairs and
maintenance, as well as the lease or purchase payments, as applicable.

     9.     Location of Employment. The Company shall provide Employee with
secretarial assistance in carrying out the services requested by the Board and
an office at the Company’s Yonkers, New York facility during such time as the
Company maintains its headquarters at that facility comparable in size and
amenities to the offices provided to management personnel within the Company.
In the event that the Company’s headquarters are relocated , Employee will be
provided with a comparable office at the new facility; provided, however, that
if the Company relocates its headquarters outside the metropolitan area,
Employee has the right to perform his services remotely from his home.

     10.     Reimbursable Expenses. Except as otherwise provided in this
Agreement, the Company shall reimburse Employee for all reasonable and
necessary expenses, or Employee is entitled to charge to the Company all
reasonable and necessary expenses incurred by him, in and about the course of
his employment by the Company, provided that said expenses are deductible under
the current tax law and sufficient proof is furnished by Employee. Such
expenses shall include but not be limited to:

		
	 	     (a) License fees, membership dues in professional organizations, and
subscriptions to two professional journals; provided that the maximum costs to
be paid by the Company in any year with respect to this paragraph (a) shall not
exceed $1,200.

		
	 	     (b) Employee’s necessary travel, hotel and entertainment expenses incurred
in connection with overnight, out-of-town trips for educational, professional,
financial, or other related meetings, and/or in connection with other events
that contribute to the benefit of the Company and as requested by the Board.

		
	 	     (c) Employee’s necessary travel and entertainment expenses in connection
with in-town events for education, professional, financial, or other related
meetings or in connection with other events that contribute to the benefit of
the Company and as requested by the Board.

		
	 	     (d) All other expenses that are pre-approved by the Board.

     11.     Vacation. Employee shall be entitled to such vacation as shall be
authorized by the Company from time to time, but not less than four (4) weeks
during each calendar year.

     12.     Sick or Other Leave. If Employee becomes so disabled as to be unable
to perform the services requested by the Board under this Agreement (as
determined by one or more experienced and reputable physicians selected by the
Company and approved by the Employee or his representative, which approval
shall not be unreasonably withheld), he shall be entitled to disability leave
for a period of at least (4) consecutive months or (6) months in any 12 month
period. At the expiration of any such period of disability, either party shall
have the right to terminate the Employment arrangement created hereby as if it
had expired in the normal course; provided, however, that in the event of
termination of the Employee’s

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 employment under this Agreement as a result of his disability, the
Employee or his representative may exercise the Employee’s Options until the
expiration of their original term, as set forth in paragraph 6(c) above.

     13.     Patents. The parties agree that if any patents shall be developed by
Employee or any patents shall result from the knowledge Employee acquires while
performing his duties to the Company under this Agreement, Employee agrees to
assign such patents to the Company. Employee also agrees to execute such
documents and perform such activities as the Company may reasonably request to
obtain such patents and to assist the Company, as reasonably requested by the
Board, in defending its patents.

     14.     Notices

		
	 	     (a) Any notice required to be given hereunder shall be deemed given, and
all time periods shall run from, the date of such notice.

		
	 	     (b) Any notice required to be given hereunder shall be deemed sufficient
if in writing and transmitted by a reputable overnight mail service or
certified mail, with proof of mailing, to the following:

	 	 	 	 	 
	 	 	
If to Employee:
	 	Shalom Z. Hirschman, M.D.

5240 Blackstone Avenue

Riverdale, NY 10471
	 	 	 	 	 
	 	 	
With a copy to:
	 	Neil J. Moritt, Esq.

Moritt Hock Hamroff & Horowitz, LLP

400 Garden City Plaza

Garden City, NY 11530
	 	 	 	 	 
	 	 	
If to Company:
	 	Advanced Viral Research Corp.

200 Corporate Boulevard South

Yonkers, NY 10107

Attention: Eli Wilner, Chairman

		
	 	     (b) Any party to this Agreement may change the address to which notice is
to be given by notifying the other party in compliance with the provisions of
paragraph 14(a) above.

     15.     Arbitration. Any controversy, dispute or claim by any party for
breach or enforcement of any provision of this Agreement or arising in any way
out of Employee’s employment with the Company will be subject to binding
arbitration through a single arbitrator of the parties’ choice through the
American Arbitration Association. The arbitration shall be conducted in New
York City. If the parties cannot agree upon an arbitrator out of the panel,
then each party shall choose its own independent representation and those
independent representatives shall in turn choose the single arbitrator within
thirty (30) days of the date of the selection of the first independent
representative. The decision of the arbitrator shall be final and conclusive,
and the parties waive the right to a trial de novo or appeal, except for the
purpose of enforcing the arbitrator’s decision.

     16. Devotion to the Company’s Business and Policies. Employee shall
devote such time and attention to the business and affairs of the Company while
employed by the Company as is reasonably necessary in order to timely fulfill
the services requested by the Board pursuant to this Agreement and shall
observe and abide by the corporate policies and decisions of the Company in all
business matters.

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     17.     Covenant Not to Compete and Confidentiality

		
	 	     (a) In order to induce the Company to enter into an employment
relationship, but if and only if this Agreement is terminated by the Company
for cause as specified in paragraph 4 above or by the Employee without Good
Reason as specified in paragraph 5(b) above, and under no other circumstance,
the Employee covenants and agrees that for a period of three (3) years after
termination of the Employee’s employment, the Employee will not directly or
indirectly, as sole proprietor, independent contractor, employee, consultant,
agent, partner or joint venturer, or as an officer, director, stockholder,
agent, servant or employee of any firm, person, entity, partnership or
corporation, or otherwise, engage or participate in or attempt to engage or
participate in any manner in the same, a similar or a directly or indirectly
competitive business, to that of the Company.

		
	 	     (b) If and only if this Agreement is terminated by the Company for cause
as specified in paragraph 4 above or by the Employee without Good Reason as
specified in paragraph 5(b) above and under no other circumstance, for a period
of one (1) year from and after the termination of the Employee’s employment,
the Employee agrees that he shall refrain from soliciting and shall not,
directly or indirectly, as sole proprietor, independent contractor, employee,
consultant, agent, partner, or joint venturer, or as an officer, director,
stockholder, agent or employee of any firm, person, entity, partnership or
corporation, or otherwise, solicit the employees of the Company to leave the
service of the Company.

		
	 	     (c) The parties agree that all information concerning the Company’s
product, RETICULOSE (or Product R), is highly confidential and is the sole and
exclusive property of the Company. The parties acknowledge that the Employee
shall have access to confidential information concerning the Company and
specifically concerning RETICULOSE (or Product R), including methodology of
manufacture of RETICULOSE (or Product R), among other confidential data and
information. The Employee expressly agrees to refrain from disclosing to any
person or entity, other than at the direction and approval of the Board of
Directors, any confidential information regarding RETICULOSE (or Product R),
either directly or indirectly, or seek to exploit RETICULOSE (or Product R),
other than through and with the approval of the Company.

		
	 	     (d) (i) It is agreed and understood by and among the parties to this
Agreement that the restrictive covenants and agreements set forth in
subparagraphs (a), (b) and (c) of this paragraph 17 each individually essential
elements of this Agreement and that, but for agreement of the Employee to
comply with such covenants and agreements, the Company would not have agreed to
employ the Employee. Further, the Employee expressly acknowledges that the
restrictions contained in subparagraphs (a), (b) and (c) of this paragraph 17
are reasonable and necessary to accomplish the mutual objectives of the parties
associated with the employment relationship and to protect the Company’s
legitimate interests and protecting its business and business relationships.
The Employee further acknowledges that enforcement of the restrictions
contained herein will not deprive him, or any of his agents, servants or
employees, or any of them, of the ability to earn a reasonable living and that
any violation of the restrictions contained in this Agreement will cause
irreparable injury to the Company. Such covenants and agreements of the
Employee shall be construed as agreements independent of any provision of this
Agreement and of each other. The existence of any claim or cause of action of
the Employee against the Company, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Company of
such restrictive covenants and agreements.

		
	 	     (ii) It is agreed by the parties hereto that if any portion of the
restrictive covenants and agreements set forth in subparagraphs (a), (b) and
(c) of this paragraph 17 are held to be invalid, unreasonable, arbitrary or
against public policy, then each such agreement shall be considered

7

 

		
	 	divisible both as to time, geographical area and any other relevant
feature, with each month of a specified period being deemed a separate period
of time and each geographical market area being deemed a separate geographical
area, it being the intention of the parties that a lesser period of time,
geographical area or other relevant feature shall be enforced as long as the
same is not unreasonable, arbitrary or against public policy. The parties
hereto further agree that, in the event any court of competent jurisdiction
determines that a specified time period, a specified geographical area or any
other relevant feature which is determined to be reasonable, nonarbitrary and
not against public policy may be enforced against the Employee, and the
Employee agrees to be bound thereby.

		
	 	     (iii) The parties hereto agree that damages at law, including but not
limited to monetary damages, will be an insufficient remedy to the Company in
the event that the restrictive covenants of subparagraphs (a), (b) and (c) of
this paragraph 17 are violated and that, in addition to any remedies or rights
that may be available to the Company, all of which other remedies or rights
shall be deemed to be cumulative, are retained by the Company and not waived by
the enforcement of any remedy available hereunder, including but not limited to
the right to sue for monetary damages; the Company also shall be entitled, upon
application to a court of competent jurisdiction, to obtain injunctive relief,
including but not limited to a temporary restraining order or temporary,
preliminary or permanent injunction, to enforce the provisions of this

     18.     Assignment. The rights and obligations of Employee and the Company
hereunder are personal and may not be assigned.

     19.     Effective Waiver. The failure of either party to insist on strict
compliance by the other party with any of the terms, covenants, or conditions
of this Agreement shall not be deemed a waiver of that term, covenant or
condition and shall not be deemed a waiver or relinquishment of any right or
power under this Agreement.

     20.     Entire Agreement; Modifications. This Agreement sets forth the entire
agreement and understanding of the parties with respect to the continued
employment of Employee by the Company and may not be varied by any statement,
representation, warranty, or covenant not set forth in this Agreement. This
Agreement may not be modified, except in writing, signed by both parties to
this Agreement.

     21.     Independent Counsel. The Employee acknowledges that he has consulted
with legal counsel of his choosing before entering into this Agreement, and
that he executes this Agreement freely and voluntarily. The Parties
acknowledge that they have read this Agreement, know its contents and the legal
ramifications of this Agreement, and signed it with full knowledge of all
relevant facts and circumstances. The Parties cooperated in the drafting of
this Agreement and any controversy over the construction of this Agreement
shall be decided neutrally without events of authorship or negotiation.

     22.     Applicable Law. The laws of the State of New York shall govern this
Agreement.

     23.     Counterparts. This Agreement may be executed in one or more
counterparts, and all such counterparts shall constitute one and the same
instrument.

     IN WITNESS WHEREOF, each party to this Agreement has caused it to be
executed on the date indicated below.

	 	 	 
	 	 	
ADVANCED VIRAL RESEARCH CORP.
	 	 	 
	 	 	 
	 	 	
By: /s/ Eli Wilner
	 	 	

	 	 	
Name: Eli Wilner

Title: Chairman
	 	 	 
	 	 	 
	 	 	
/s/ Shalom Z. Hirschman, M.D.
	 	 	

	 	 	
Shalom Z. Hirschman, M.D.

8

 

SCHEDULE A

ADVANCED VIRAL RESEARCH CORP.

COMMON STOCK OPTIONS ISSUED TO SHALOM Z. HIRSCHMAN, M.D.

	 	 	 	 	 
	Shares	 	Exercise Price
	
	 	

	4,100,000	 	 	
$0.18	 
	4,000,000	 	 	
$0.19	 
	27,000,000	 	 	
$0.27	 
	4,000,000	 	 	
$0.36<PAGE>

                       WORLDWIDE RESTAURANT CONCEPTS, INC.
                1997 NON-EMPLOYEE DIRECTORS' STOCK INCENTIVE PLAN
                       (As Amended Through June 24, 2003)

         1.       PURPOSE OF THE PLAN.

    The purpose of the 1997 Non-Employee Directors' Stock Incentive Plan of
Worldwide Restaurant Concepts, Inc. is to provide incentives that will attract
and retain highly competent persons as Non-Employee directors of the Company by
providing them with opportunities to acquire a proprietary interest in the
Company by the grant to such persons of nonqualified Stock Options which may
result in their ownership of Common Stock of the Company.

         2.       DEFINITIONS.

                  (a)      "Act" means the Securities Act of 1933, as amended.

                  (b)      "Administrator" shall mean the Board or, if and to
the extent the Board delegates any of its authority hereunder in accordance with
Section 4(b) hereof, the Committee.

                  (c)      "Board" means the Board of Directors of the Company.

                  (d)      "Committee" means a committee appointed by the Board
to administer the Plan pursuant to Section 4(b) hereof.

                  (e)      "Common Stock" means the common stock, $0.01 par
value, of the Company.

                  (f)      "Company" means Worldwide Restaurant Concepts, Inc.

                  (g)      "Date of Grant" means the date of any grant of an
option under the Plan as set forth in Section 6, 7, 8 or 9 hereof, as the case
may be.

                  (h)      "Disability" means any medically determinable
physical or mental impairment of a Participant, as determined by the
Administrator, in its complete and sole discretion, which is expected to last
for a period of at least 180 days, as a result of which such Participant is
unable to engage in any substantial gainful activity. All determinations as to a
Participant's disabled status or the date and extent of any disability shall be
made by the Administrator upon the basis of such information as it deems
necessary or desirable.

                  (i)      "Eligible Participant" means a Non-Employee Director.

                  (j)      "Exchange Act" means the Securities Exchange Act of
1934, as amended.

                  (k)      "Fair Market Value" on a given date means (i) the
mean between the highest and lowest reported sales prices for the Common Stock
on that date (or, if there were no such sales on that date, on the next most
recent date on which there were such sales) as reported by the New York Stock
Exchange (or, if the Common Stock is not then listed on the New York Stock
Exchange, such other national securities exchange on which the Common Stock is
then listed), (ii) if the Common Stock is not then listed on a national
securities exchange, the mean

                                       8

                                  EXHIBIT 4.4

<PAGE>

between the closing bid and asked price quotations for the Common Stock on that
date (or if none on that date, on the next most recent date) as reported by The
Nasdaq National Market or any successor thereto, or (iii) if the Common Stock is
not then listed on a national securities exchange or The Nasdaq National Market,
the mean between the closing bid and asked price quotations for the Common Stock
on that date (or if none on that date, on the next most recent date) as reported
by the National Association of Securities Dealers Automatic Quotation System or
any successor thereto.

                  (l)      "Non-Employee Director" means a member of the Board
who is not an officer or employee of the Company or any of its parent or
subsidiary corporations at the time of determination.

                  (m)      "Normal Board Retirement" means, in conjunction with
termination of a Participant's services as a member of the Board for any reason
other than death or Disability, the determination of the Administrator or the
Nominating Committee of the Board that such termination constitutes Normal Board
Retirement. In the absence of such a determination, termination of a
Participant's services as a member of the Board shall be deemed to be for
reasons other than Normal Board Retirement.

                  (n)      "Option" or "Stock Option" means a stock option that
does not qualify as an incentive stock option within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended.

                  (o)      "Option Agreement" means an option agreement signed
by the Company and the Participant in such form and including such terms and
conditions not inconsistent with the Plan as the Administrator may in its
discretion from time to time determine.

                  (p)      "Participant" means any Eligible Participant entitled
under the Plan to receive Options.

                  (q)      "Plan" means the 1996 Non-Employee Directors' Stock
Incentive Plan as set forth herein, and as it may be amended from time to time.

         3.       SHARES OF COMMON STOCK SUBJECT TO THE PLAN.

                  (a)      Subject to the provisions of Section 3(c) and Section
11 of the Plan, the aggregate number of shares of Common Stock that may be
issued or transferred or exercised pursuant to Options granted under the Plan
will not exceed 775,000.

                  (b)      The shares to be delivered under the Plan will be
made available, at the discretion of the Administrator, either from authorized
but unissued shares of Common Stock or from previously issued shares of Common
Stock reacquired by the Company, including shares purchased on the open market.

                  (c)      Shares of Common Stock subject to an unexercised
portion of any Stock Option granted under the Plan which expires or terminates
or is canceled will again become available for the grant of further Options
hereunder.

                                       9

                                  EXHIBIT 4.4

<PAGE>

         4.       ADMINISTRATION OF THE PLAN.

                  (a)      The Plan shall, to the extent possible, be
self-effectuating. The Plan will be administered by the Board. The Board is
authorized and empowered to administer the Plan, which administration shall
include (but is not limited to) authority to (i) construe and interpret the Plan
and any agreements defining the rights and obligations of the Company and
Participants under the Plan; (ii) prescribe, amend and rescind rules and
regulations relating to the Plan; (iii) further define the terms used in the
Plan; (iv) determine the rights and obligations of Participants under the Plan;
and (v) make all other determinations necessary or advisable for the
administration of the Plan. Each Option granted under the Plan shall be
evidenced by an Option Agreement.

                  (b)      The Board of Directors may, in its discretion,
delegate any or all of its authority under the Plan to a committee consisting of
two or more directors of the Company each of whom has not been eligible at any
time within one year before appointment to such committee to receive an Option
under the Plan, except the Board may not delegate the powers set forth in
Section 11, 13(a), or 14 hereof or powers which, under applicable law, are
nondelegable.

                  (c)      No member of the Board or the Committee will be
liable for any action or determination made in good faith by the Board or the
Committee with respect to the Plan or any Option under it, including, without
limitation, adjustments pursuant to Section 11. In making determinations under
the Plan, the Board or the Committee may obtain and may rely upon the advice of
independent counsel and accountants and other advisors to the Company. No member
of the Board or the Committee, nor an officer of the Company shall be liable for
any such action or determination taken or made in good faith with respect to the
Plan or any Option granted hereunder.

         5.       PARTICIPATION.

         Options shall be granted to each Non-Employee Director exclusively in
accordance with the provisions set forth in Sections 6, 7, 8 and 9 hereof.

         6.       AUTOMATIC OPTION GRANTS.

                  (a)      Whenever any person shall become a Non-Employee
Director, there shall be granted automatically (without any action by the
Administrator) a Stock Option (the Date of Grant of which shall be the date such
person shall have become a Non-Employee Director) to such person to purchase
3,000 shares of Common Stock (subject to adjustment pursuant to Section 11
hereof).

                  (b)      On January 2 (or if January 2 is not a business day,
on the next succeeding business day) in each calendar year after 1997 during the
term of the Plan, there shall be granted automatically (without any action by
the Administrator) a Stock Option (the Date of Grant of which shall be such date
in January) to each Non-Employee Director then in office to purchase 3,000
shares of Common Stock (subject to adjustment pursuant to Section 11 hereof).

                                       10

                                  EXHIBIT 4.4

<PAGE>

         7.       DEFERRED FEES.

                  (a)      Basic Grants. Subject to Section 14 hereof, and on
the Date of Grant specified in Section 7(c) below, Stock Options shall be
granted automatically (without any action by the Administrator) each calendar
year during the term of this Plan (a "Plan Year") to each Non-Employee Director
on such Date of Grant. Each grant of a Stock Option under this Section 6(a) (a
"Basic Grant") shall be in lieu of payment by the Company of twenty-five percent
(25%) of any Annual Retainer to which the Non-employee Director would otherwise
be entitled for the Plan Year for which the grant is made.

                  (b)      Elective Grants. Subject to Section 14 hereof, and on
the Date of Grant specified in Section 7(c) below, Stock Options shall be
granted automatically (without any action by the Administrator) each Plan Year
to each Non-Employee Director on such Date of Grant that has irrevocably
elected, in accordance with Section 7(d), to receive a grant of Stock Options in
lieu of payment by the Company of any Annual Retainer to which the Non-Employee
Director would otherwise be entitled for the Plan Year for which the grant is
made.

                  (c)      Date of Grant. The Date of Grant of each Stock Option
granted under this Section 7 shall be January 2 or, if January 2 is not a
business day, on the next succeeding business day in each Plan Year.

                  (d)      Manner of Election. Any Non-Employee Director wishing
to make such an irrevocable election pursuant to Section 7(b) hereof shall file
such election with the Secretary of the Company on or before such date as the
Company or its counsel determines is necessary to comply with applicable laws
and regulations. Such election shall specify the percentage of Annual Retainer
in lieu of which he or she wishes to receive a grant of Stock Options under
Section 7(b) hereof. All such elections, including the percentage, if any, of
Annual Retainer specified therein, shall be irrevocable for the remaining
portion of the Non-Employee Director's term to the extent such irrevocability is
necessary, in the opinion of the Company and its counsel, to comply with
applicable laws and regulations.

                  (e)      Option Formula. Subject to adjustment pursuant to
Section 11 hereof, the number of shares of Common Stock subject to any Stock
Option granted to a Non-Employee Director pursuant to this Section 7 shall be
equal to the nearest number of whole shares determined in accordance with the
following formula:

          Annual Retainer or percentage thereof = Number of Shares
          -------------------------------------
             50% of Fair Market Value

         "Annual Retainer" means the amount of fixed fees to which the
Non-Employee Director of the Company would otherwise be entitled for serving as
a director of the Company in the relevant Plan Year, assuming no change in such
compensation from that in effect as of the date in January on which the Stock
Option is granted, and shall not include fees for attendance at meetings of the
Board or any committee of the Board or for any other services to be provided to
the Company. Fair Market Value shall be determined as of the Date of Grant.

         8.       GRANTS TO DESIGNATED COMMITTEE MEMBERS.

                                       11

                                  EXHIBIT 4.4

<PAGE>

         Each Non-Employee Director that is a member of a Designated Committee
shall, in lieu of attendance or other cash fees from the Company for
participation on such Committee, automatically (without any action by the
Administrator) be granted, on the date of each meeting of the Designated
Committee attended by such Non-Employee Director, a Discount Option to purchase
1,000 shares of Common Stock. The Date of Grant of each such Stock Option shall
be the date of each such meeting so attended.

         "Designated Committee" shall mean any committee of the Board that has
been designated by resolution of the Board as (a) demanding an extraordinary
commitment of time, attention and efforts by its members and (B) whose members,
by participating thereon, agree to forego any attendance or other cash fee for
participating on the committee.

         "Discount Option" shall mean an Option granted under this Plan that has
an exercise price less than the aggregate Fair Market Value of the Common Stock
subject to such Option on the Date of Grant of such Option, but not less than
the aggregate par value of such shares.

         9.       DISCRETIONARY OPTIONS.

         The Board at its discretion may, at any time and on a one-time basis,
grant to each Non-Employee Director an Option (a "Discretionary Option") to
purchase up to 10,000 shares of Common Stock. The Board in its discretion may
grant Discretionary Options in lieu of an equivalent number of future Stock
Options that would otherwise have been granted under Section 6(b) hereof
provided that such condition is stated in the Option Agreement. The Date of
Grant of each such Stock Option shall be the date of the approval by the Board
of the grant of such Option.

         10.      TERMS AND CONDITIONS OF STOCK OPTIONS.

                  (a)      Purchase Price. The purchase price of Common Stock
under each Stock Option granted under Section 6, 8 or 9 equal to the Fair Market
Value of the Common Stock on the Date of Grant. The purchase price per share of
Common Stock under each Stock Option granted under Section 7 will be equal to
50% of the Fair Market Value of the Common Stock on the Date of Grant.

                  (b)      Exercise Period. Subject to Section 14 hereof, Stock
Options may be exercised from time to time in accordance with the terms of the
applicable Option Agreement and this Section 10. No Stock Option granted
pursuant to Section 6 or 9 hereof shall be exercised prior to the first
anniversary of its Date of Grant. No Option granted pursuant to Section 7 hereof
shall be exercised prior to six months after its Date of Grant. No Option
granted pursuant to Section 8 shall be exercised prior to its Date of Grant.
Notwithstanding anything to the contrary in the Plan or any Option Agreement
hereunder, no Option granted hereunder shall be exercised after ten years and
one month from its Date of Grant.

                  (c)      Payment of Purchase Price. Upon the exercise of a
Stock Option, the purchase price will be payable in full in cash or its
equivalent acceptable to the Company. In the discretion of the Administrator,
the purchase price may be paid by the assignment and delivery to the Company of
shares of Common Stock or a combination of cash and such shares equal in value
to the exercise price. Any shares so assigned and delivered to the Company in
payment or

                                       12

                                  EXHIBIT 4.4

<PAGE>

partial payment of the purchase price will be valued at their Fair Market Value
on the exercise date.

                  (d)      No Fractional Shares. No fractional shares will be
issued pursuant to the exercise of a Stock Option nor will any cash payments be
made in lieu of fractional shares.

                  (e)      Exercisability. Except as provided in the Option
Agreement for any Option granted hereunder or subsection (f) or (g) hereof, a
Participant may not, until the end of the second year after the Date of Grant of
an Option granted under Section 6 or 9 hereof, or until the end of the first
year after the Date of Grant of an Option granted under Section 7 hereof,
purchase by exercise of such Option an aggregate of more than 50% of the total
number of shares subject to such Option. At any time on or after the second
anniversary of such Date of Grant with respect to Options granted under Section
6 or 9 hereof or the first anniversary of the Date of Grant with respect to
Options granted under Section 7 hereof until such Option expires or terminates,
a Participant may purchase all or any part of the shares that he theretofore
failed to purchase under such Option Agreement.

                  (f)      Termination of Directorship. If a Participant's
services as a member of the Board terminate by reason of death, Disability or
Normal Board Retirement, an Option granted hereunder held by such Participant
shall be automatically accelerated with respect to its exercisability and shall
become immediately exercisable in full for the remaining number of shares of
Common Stock subject to such Option for three years after the date of such
termination or until the expiration of the stated term of such Option, whichever
period is shorter, and thereafter such Option shall terminate; provided,
however, that if a Participant dies or suffers a Disability during said
three-year period after Normal Board Retirement such Option shall remain
exercisable in full for a period of three years after the date of such death or
Disability or until the expiration of the stated term of such Option, whichever
period is shorter, and thereafter such Option shall terminate. If a
Participant's services as a member of the Board terminate for any other reason,
any portion of an Option granted hereunder held by such Participant which is not
then exercisable shall terminate and any portion of such Option which is then
exercisable may be exercised for three months after the date of such termination
or until the expiration of the stated term of such Option, whichever period is
shorter, and thereafter such Option shall terminate provided, however, that if a
participant dies or suffers a Disability during such three-month period, such
Option may be exercised for a period of one year after the date of such
Participant's death or Disability or until the expiration of the stated term of
such Option, whichever period is shorter, in accordance with its terms, but only
to the extent exercisable on the date of the Participant's death or Disability.

                  (g)      Change in Control. Notwithstanding any other
provisions of the Plan, upon any Change in Control (as hereinafter defined in
this Section 10) the unexercised portion of a Stock Option granted hereunder
shall be automatically accelerated with respect to its exercisability and shall
become immediately exercisable in full during the remainder of its term without
regard to any limitations of time or amount otherwise contained in the Plan. The
term "Change in Control" shall mean

                           (i)      any person (as such term is used in Sections
3(a)(9) and 13(d)(3) of the Exchange Act) becomes the beneficial owner (as such
term is used in Section 13(d)(1) of the

                                       13

                                  EXHIBIT 4.4

<PAGE>

Exchange Act) directly or indirectly of securities representing at least 25% of
the combined voting power of the then outstanding securities of the Company; or

                           (ii)     during any period of thirty-six (36)
consecutive months (whether commencing before or after the effective date of
this Plan), individuals who at the beginning of such period constituted the
Board cease for any reason to constitute at least a majority thereof, unless the
election, or the nomination for election, of each new director was approved by a
vote of a least two-thirds of the directors then still in office who were
directors at the beginning of the period; or

                           (iii)    any merger, consolidation, combination,
reorganization, sale, lease or exchange or issuance or delivery of stock or
other securities, or reverse stock split, exchange, liquidation or dissolution
of the Company (hereinafter called a "Transaction"), or the approval by the
stockholders of the Company (or if such stockholder approval is not required,
the approval by the Board) of a Transaction; or

                           (iv)     the approval by the stockholders of the
Company of any plan or proposal for the Company to be Acquired (as defined
below) or for the liquidation or dissolution of the Company.

         For purposes of this Section 10, the Company shall be considered to be
"Acquired" only if the owners of its voting securities immediately prior to the
effective date of any transaction referred to in Section 11(b) below will not
own immediately thereafter, as a result of having owned such voting securities,
securities representing a majority of the combined voting power of the then
outstanding securities of the Company or the entity that then owns, directly or
indirectly, the Company or all or substantially all its assets.

         11.      ADJUSTMENT PROVISIONS.

                  (a)      Subject to Section 11(b), if the outstanding shares
of Common Stock of the Company are increased, decreased or exchanged for a
different number or kind of shares or other securities, or if additional shares
or new or different shares or other securities are distributed with respect to
such shares of Common Stock or other securities, through merger, consolidation,
sale of all or substantially all the property of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other distribution with respect to such shares of Common Stock or other
securities, an appropriate and proportionate adjustment shall be made in (i) the
maximum number and kind of shares or other securities provided in Section 3(a),
(ii) the number and kind of shares or other securities subject to the
then-outstanding Stock Options, (iii) the price for each share or other unit of
any other securities subject to then-outstanding Stock Options without change in
the aggregate purchase price or value as to which such Stock Options remain
exercisable and (iv) the number, kind and price of shares or other securities to
be granted pursuant to Section 6, 7, 8 and 9 hereof.

                  (b)      Notwithstanding the provisions of Section 11(a) and
subject to the provisions of Section 10(g) hereof, upon dissolution or
liquidation of the Company or upon a reorganization, merger or consolidation of
the Company with one or more corporations as a result of which the Company is
not the surviving corporation or as a result of which the outstanding Common
Stock is converted into or exchanged for cash or securities of another issuer or
both, or upon the sale of all or substantially all the assets of the Company,
all

                                       14

                                  EXHIBIT 4.4

<PAGE>

restrictions applicable to the exercise of outstanding Stock Options shall
continue in full force and effect and provision shall be made in connection with
such transaction for the continuance of the Plan and the assumption of the
outstanding Stock Options by or the substitution for such Stock Options of new
options covering the stock of the successor corporation, or a parent or
subsidiary thereof or the Company, with appropriate and proportionate adjustment
in (i) the number and kind of shares or other securities or cash or other
property subject to such Stock Options and (ii) the price for each share or
other unit of any other securities or cash or other property subject to such
Stock Options without change in the aggregate purchase price or value as to
which such Stock Options remain exercisable; provided, however, that if no
public market exists for the Common Stock or the other securities or property
which would be subject to such Stock Options after consummation of such
transaction, such Stock Options shall be converted into the right to receive,
upon exercise thereof, an amount of each equal to the amount determined by the
Administrator to be the fair market value on the effective date of such
transaction of the stock, other securities, cash and other property that a share
of Common Stock is entitled to receive, or into which it is converted, pursuant
to such transaction.

                  (c)      Adjustments under Sections 11(a) and 11(b) will be
made by the Administrator, whose determination as to what adjustments will be
made and the extent thereof will be final, binding and conclusive in the absence
of manifest error or arbitrary action. No fractional interest will be issued
under the Plan on account of any such adjustments.

         12.      GENERAL PROVISIONS.

                  (a)      The grant of any Stock Option under the Plan may also
be subject to such other provisions (whether or not applicable to the Stock
Option awarded to any other Participant) as the Administrator determines
appropriate including, without limitation, provisions to assist the Participant
in financing the purchase of Common Stock through the exercise of Stock Options,
provisions for the forfeiture of or restrictions on resale or other disposition
of shares acquired under any form of benefit, provisions giving the Company the
right to repurchase shares acquired under any form of benefit in the event the
Participant elects to dispose of such shares, provisions to comply with Federal
and state securities laws and Federal and state income tax withholding
requirements and to such approvals by any regulatory or governmental agency
which may be necessary or advisable in connection therewith.

         In connection with the administration of the Plan or the grant of any
Award, the Administrator may impose such further limitations or conditions as in
its opinion may be required or advisable to satisfy, or secure the benefits of,
applicable regulatory requirements (including those rules promulgated under
Section 16 of the Exchange Act or those rules that facilitate exemption from or
compliance with the Act or the Exchange Act), the requirements of any stock
exchange upon which such shares or shares of the same class are then listed, and
any blue sky or other securities laws applicable to such shares.

                  (b)      No person shall be entitled to the privileges of
stock ownership in respect of shares of stock which are subject to Options
hereunder until such person shall have become the holder of record of such
shares.

                                       15

                                  EXHIBIT 4.4

<PAGE>

                  (c)      No fewer than fifty shares may be purchased at one
time pursuant to any Stock Option unless the number purchased is the total
number at the time available for purchase under the Stock Option.

                  (d)      Options shall not be transferable by the Participants
other than by will or the laws of descent and distribution, and during the
lifetime of a Participant shall be exercisable only by such Participant, except
that to the extent permitted by applicable law, and Rule 16b-3 promulgated by
the Securities and Exchange Commission under the Exchange Act, the Administrator
may permit a Participant to designate in writing during his lifetime a
beneficiary to receive and exercise Options in the event of such Participant's
death. Following the death of a Participant, Options held by such Participant
shall be exercisable, in accordance with their terms, by such designated
beneficiary or, if no such beneficiary has been designated, by the Participant's
estate or by the person or persons who acquire the right to exercise it by
bequest or inheritance. Any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of, or to subject to execution, attachment or similar process,
an Option granted hereunder, contrary to the provisions hereof, shall be void
and ineffective, shall give no rights to the purported transferee, and shall at
the sole discretion of the Administrator result in forfeiture of such Option
with respect to the shares involved in such attempt.

                  (e)      The Plan and all Stock Options granted under the Plan
and the documents evidencing Stock Options shall be governed by, and construed
in accordance with, the laws of the State of Delaware.

         13.      AMENDMENT AND TERMINATION.

                  (a)      The Board will have the power, in its discretion, to
amend, suspend or terminate the Plan at any time. No such amendment will,
without approval of the stockholders of the Company, except as provided in
Section 11 of the Plan:

                           (i)      Change the class of persons eligible to
receive Stock Options under the Plan; or

                           (ii)     Increase the number of shares of Common
Stock subject to the Plan.

                  (b)      No amendment, suspension or termination of the Plan
will, without the consent of the Participant, alter, terminate, impair or
adversely affect any right or obligation under any Stock Option previously
granted under the Plan.

         14.      EFFECTIVE DATE OF PLAN AND DURATION OF PLAN.

         This Plan will become effective upon the adoption by the Board subject
to approval by the holders of a majority of the outstanding shares of Common
Stock present in person or by proxy and entitled to vote at a meeting of
stockholders of the Company held after such Board adoption. Any Options granted
hereunder prior to approval of the Plan by the stockholders shall be granted
subject to such approval and may not be exercised or realized, nor may Common
Stock be irrevocably transferred to any Participant, until and unless such
approval has occurred and the provisions of Section 12(a) have been satisfied.
Unless previously terminated, the Plan will terminate ten years

                                       16

                                  EXHIBIT 4.4

<PAGE>

and one month after adoption by the Board, but such termination shall not affect
any Stock Option previously made or granted.

                                       17

                                  EXHIBIT 4.4

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