Document:

EX-10.89 Advanced Viral Research Incentive Plan

 

EXHIBIT 10.89

ADVANCED VIRAL RESEARCH CORP.

2007 STOCK INCENTIVE PLAN

Adopted by Stockholders on

March 21, 2007

     1. ESTABLISHMENT, EFFECTIVE DATE AND TERM

Advanced Viral Research Corp., a Delaware corporation hereby establishes the “Advanced Viral
Research Corp. 2007 Stock Incentive Plan.” The Effective Date of the Plan shall be the date that
the Plan was approved by the stockholders of Advanced Viral Research Corp. in accordance with its
Bylaws and the laws of the State of Delaware, or such later date as is provided in the resolutions
adopting the Plan. Unless earlier terminated pursuant to Section 14(h) hereof, the Plan shall
terminate on the tenth anniversary of the Effective Date. Capitalized terms used herein are
defined in Section 15 below.

     2. PURPOSE

The purpose of the Plan is to advance the interests of the Company by allowing the Company to
attract, retain, reward and motivate Eligible Individuals by providing them with an opportunity to
acquire or increase a proprietary interest in Advanced Viral Research Corp. and incentives to
expend maximum effort for the growth and success of the Company so as to strengthen the mutuality
of the interests between the Eligible Individuals and the stockholders of Advanced Viral Research
Corp..

     3. ELIGIBILITY

Awards may be granted under the Plan to any Eligible Individual as determined by the Committee from
time to time on the basis of their importance to the business of the Company pursuant to the terms
of the Plan.

     4. ADMINISTRATION

          (a) Committee. The Plan shall be administered by the Committee, which shall have the
full power and authority to take all actions, and to make all determinations not inconsistent with
the specific terms and provisions of the Plan deemed by the Committee to be necessary or
appropriate to the administration of the Plan, any Award granted or any Award Agreement entered
into hereunder. The Committee may correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any Award Agreement in the manner and to the extent it shall deem
expedient to carry the Plan into effect as it may determine in its sole discretion. The decisions
by the Committee shall be final, conclusive and binding with respect to the interpretation and
administration of the Plan, any Award or any Award Agreement entered into under the Plan.

          (b) Advisors to Committee. The Committee may designate employees of the Company and
professional advisors to assist the Committee in the administration of the Plan and may grant
authority to employees of the Company to execute agreements or other documents on behalf of the
Committee in connection with the administration of the Plan. The Committee may employ such legal
counsel, consultants, and agents as it may deem desirable for the administration of the Plan and
may rely upon any advice and any computation received from any such counsel, consultant, or agent.
The Company shall pay all expenses and costs incurred by the Committee for the engagement of any
such counsel, consultant, or agent.

          (c) Participants Outside the U.S. In order to conform with the provisions of local
laws and regulations in foreign countries in which the Company operates, the Committee shall have
the sole discretion to (i) modify the terms and conditions of the Awards granted under the Plan to
Eligible Individuals located outside the United States; (ii) establish subplans with such
modifications as may be necessary or advisable under the circumstances present by local laws and
regulations; and (iii) take any action which it deems advisable to comply with or otherwise reflect
any necessary governmental regulatory procedures, or to obtain any exemptions or approvals
necessary with respect to the Plan or any subplan established hereunder.

 

 

          (d) Liability and Indemnification. No Covered Individual shall be liable for any
action or determination made in good faith with respect to the Plan, any Award granted or any Award
Agreement entered into hereunder. The Company shall, to the maximum extent permitted by applicable
law and the Certificate of Incorporation and Bylaws of Advanced Viral Research Corp., indemnify and
hold harmless each Covered Individual against any cost or expense (including reasonable attorney
fees reasonably acceptable to the Company) or liability (including any amount paid in settlement of
a claim with the approval of the Company), and amounts advanced to such Covered Individual
necessary to pay the foregoing at the earliest time and to the fullest extent permitted, arising
out of any act or omission to act in connection with the Plan, any Award granted or any Award
Agreement entered into hereunder. Such indemnification shall be in addition to any rights of
indemnification such individuals may have under applicable law or under the Certificate of
Incorporation or Bylaws of Advanced Viral Research Corp.. Notwithstanding anything else herein,
this indemnification will not apply to the actions or determinations made by a Covered Individual
with regard to Awards granted to such Covered Individual under the Plan or arising out of such
Covered Individual’s own fraud or bad faith.

     5. COMMON STOCK

          (a) Shares Available for Awards. The Common Stock that may be issued pursuant to
Awards granted under the Plan shall be treasury shares or authorized but unissued shares of the
Common Stock. The total number of shares of Common Stock that may be issued pursuant to Awards
granted under the Plan shall be One Hundred Million (100,000,000) shares, subject to adjustment as
provided in the Plan.

          (b) Cancelled, Forfeited, or Surrendered Awards. If any Award is cancelled,
forfeited, exchanged, surrendered or terminated for any reason prior to exercise or becoming vested
in full, the shares of Common Stock that were subject to such Award will to the extent cancelled,
forfeited, exchanged, surrendered or terminated be available for future Awards granted under the
Plan as if said Award had never been granted.

          (c) Recapitalization. If the outstanding shares of Common Stock are increased or
decreased or changed into or exchanged for a different number or kind of shares or other securities
of Advanced Viral Research Corp. by reason of any recapitalization, reclassification,
reorganization, stock split, reverse split, combination of shares, exchange of shares, stock
dividend or other distribution payable in capital stock of Advanced Viral Research Corp. or other
increase or decrease in such shares effected without receipt of consideration by Advanced Viral
Research Corp. occurring after the Effective Date, an appropriate and proportionate adjustment
shall be made by the Committee (i) in the aggregate number and kind of shares of Common Stock
available under the Plan; (ii) in the number and kind of shares of Common Stock issuable upon
exercise (or vesting) of outstanding Awards granted under the Plan; and (iii) in the Exercise Price
per share of outstanding Options granted under the Plan. No fractional shares of Common Stock or
units of other securities shall be issued pursuant to any such adjustment under this Section 5(c),
and any fractions resulting from any such adjustment shall be eliminated in each case by rounding
downward to the nearest whole share or unit. Any adjustments made under this Section 5(c) with
respect to any Incentive Stock Options must be made in accordance with Code Section 424.

     6. OPTIONS

          (a) Grant of Options. Subject to the terms and conditions of the Plan, the Committee
may grant to Eligible Individuals Options to purchase such number of shares of Common Stock on such
terms and conditions as the Committee may determine. Each grant of an Option must satisfy the
requirements set forth in this Section.

          (b) Type of Options. Each Option granted under the Plan may be designated by the
Committee, in its sole discretion, as either (i) an Incentive Stock Option, or (ii) a Non-qualified
Stock Option. Options designated as Incentive Stock Options that fail to continue to meet the
requirements of Code Section 422 shall be re-designated as Non-qualified Stock Options
automatically on the date of such failure to continue to meet such requirements without further
action by the Committee. In the absence of any designation, Options granted under the Plan will be
deemed to be Non-qualified Stock Options.

          (c) Exercise Price. Subject to the limitations set forth in the Plan relating to
Incentive Stock Options, the Exercise Price of an Option shall be fixed by the Committee and stated
in the respective Award Agreement, provided that the Exercise Price may not be less than Fair
Market Value of the Common Stock, or if greater, the par value of the Common Stock, as of the Grant
Date.

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          (d) Limitation on Option Period. Subject to the limitations set forth in the Plan
relating to Incentive Stock Options, Options granted under the Plan and all rights to purchase
Common Stock thereunder shall terminate no later than the tenth anniversary of the Grant Date of
such Options, or on such earlier date as may be stated in the Award Agreement relating to such
Option. In the case of Options expiring prior to the tenth anniversary of the Grant Date, the
Committee may in its discretion, at any time prior to the expiration or termination of said
Options, extend the term of any such Options for such additional period as it may determine, but in
no event beyond the tenth anniversary of the Grant Date thereof.

          (e) Limitations on Incentive Stock Options. Notwithstanding any other provisions of
the Plan, the following provisions shall apply with respect to Incentive Stock Options granted
pursuant to the Plan.

               (i) Limitation on Grants. Incentive Stock Options may only be granted to Section 424
Employees. The aggregate Fair Market Value (determined at the time such Incentive Stock Option is
granted) of the shares of Common Stock for which any individual may have Incentive Stock Options
which first become vested and exercisable in any calendar year (under all incentive stock option
plans of the Company) shall not exceed $100,000. Options granted to such individual in excess of
the $100,000 limitation, and any Options issued subsequently which first become vested and
exercisable in the same calendar year, shall be treated as Non-qualified Stock Options.

               (ii) Minimum Exercise Price. In no event may the Exercise Price of an Incentive Stock
Option be less than 100% of the aggregate Fair Market Value of the Common Stock as of the Grant
Date.

               (iii) Ten Percent Stockholder. Notwithstanding any other provision of the Plan to the
contrary, in the case of Incentive Stock Options granted to a Section 424 Employee who, at the
time the Option is granted, owns (after application of the rules set forth in Code Section 424(d))
stock possessing more than ten percent of the total combined voting power of all classes of stock
of Advanced Viral Research Corp., such Incentive Stock Options (i) must have an Exercise Price that
is at least 110% of the aggregate Fair Market Value of the Common Stock as of the Grant Date, and
(ii) must not be exercisable after the fifth anniversary of the Grant Date.

          (f) Vesting Schedule and Conditions. No Options may be exercised prior to the
satisfaction of the conditions and vesting schedule provided for in the Award Agreement relating
thereto. Unless otherwise provided in the applicable Award Agreement, Options will vest and become
exercisable on each anniversary of the Grant Date in equal annual installments over the four (4)
years following the Grant Date of the Option.

          (g) Exercise. When the conditions to the exercise of an Option have been satisfied,
the Participant may exercise the Option only in accordance with the following provisions. The
Participant shall deliver to Advanced Viral Research Corp. a written notice stating that the
Participant is exercising the Option and specifying the number of shares of Common Stock which are
to be purchased pursuant to the Option, and such notice shall be accompanied by payment in full of
the aggregate Exercise Price of the shares of Common Stock for which the Option is being exercised,
by one or more of the methods provided for in the Plan. Said notice must be delivered to Advanced
Viral Research Corp. at its principal office and addressed to the attention of Advanced Viral
Research Corp.’s Chief Financial Officer. The minimum number of shares of Common Stock with respect
to which an Option may be exercised, in whole or in part, at any time shall be the lesser of 100
shares or the maximum number of shares available for purchase under the Option at the time of
exercise. An attempt to exercise any Option granted hereunder other than as set forth in the Plan
shall be invalid and of no force and effect.

          (h) Payment. Payment of the Exercise Price for the shares of Common Stock purchased
pursuant to the exercise of an Option shall be made by one of the following methods:

               (i) by cash, certified or cashier’s check, bank draft or money order; or

               (ii) through the delivery to Advanced Viral Research Corp. of shares of Common Stock which
have been previously owned by the Participant for the requisite period necessary to avoid a charge
to Advanced Viral Research Corp.’s earnings for financial reporting purposes; such shares shall be
valued, for purposes of determining the extent to which the Exercise Price has been paid thereby,
at their Fair Market Value on the date of exercise; without limiting the foregoing, the Committee
may require the Participant to furnish an opinion of counsel acceptable to the Committee to the
effect that such delivery would not result in Advanced Viral Research Corp. incurring any liability
under Section 16(b) of the Exchange Act.

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Notwithstanding the foregoing, the Committee may, in its sole and absolute discretion and to the
extent permitted by applicable law, permit such payment to be made by one of the following methods
or in any combination thereof as it may determine: (i) by the delivery of a promissory note of the
Participant to Advanced Viral Research Corp. on such terms as the Committee shall specify in its
sole and absolute discretion; (ii) through a “cashless exercise sale and remittance procedure”
pursuant to which the Participant shall concurrently provide irrevocable instructions (1) to a
brokerage firm approved by the Committee to effect the immediate sale of the purchased shares and
remit to Advanced Viral Research Corp., out of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate Exercise Price payable for the purchased shares plus all
applicable federal, state and local income, employment, excise and other taxes required to be
withheld by the Company by reason of such exercise, and (2) to Advanced Viral Research Corp. to
deliver the certificates for the purchased shares directly to such brokerage firm in order to
complete the sale; or (iii) any other method as may be permitted by the Committee.

          (i) Termination of Employment, Retirement, Disability, or Death. Unless otherwise
provided in an Award Agreement, upon the termination of the employment or other service of a
Participant with the Company for any reason, all of the Participant’s outstanding Options (whether
vested or unvested) shall be subject to the rules of this paragraph. Upon such termination, the
Participant’s unvested Options shall expire. Notwithstanding the foregoing, the Committee may
provide, in its sole and absolute discretion, that following the termination of employment or
service of a Participant with the Company for any reason other than for Cause, a Participant or the
Participant’s estate, devisee or heir at law (whichever is applicable) may exercise an Option
(whether vested or unvested), in whole or in part, at any time subsequent to such termination of
employment or service and prior to termination of the Option pursuant to its terms. Unless
otherwise determined by the Committee, temporary absence from employment because of illness,
vacation, approved leaves of absence or military service shall not constitute a termination of
employment or service.

               (i) Termination for Reason Other Than Cause, Disability, Retirement or Death. If a
Participant’s termination of employment is for any reason other than Cause, Disability, Retirement
or death, any Option held by such Participant, may be exercised, to the extent exercisable at
termination, by the Participant at any time within a period not to exceed thirty (30) days from the
date of such termination, and prior to the termination of the Option pursuant to its terms.

               (ii) Disability. If a Participant’s termination of employment or service with the
Company is by reason of a Disability of such Participant, the Participant shall have the right at
any time within a period not to exceed one (1) year after such termination and prior to termination
of the Option pursuant to its terms, to exercise, in whole or in part, any vested portion of the
Option held by such Participant at the date of such termination; provided, however, that if the
Participant dies within such period, any vested Option held by such Participant upon death shall be
exercisable by the Participant’s estate, devisee or heir at law (whichever is applicable) for a
period not to exceed one (1) year after the Participant’s death and prior to the termination of the
Option pursuant to its terms.

               (iii) Termination by Reason of Retirement. If a Participant’s termination of
employment or service with the Company is by reason of Retirement, the Participant shall have the
right at any time within a period not to exceed ninety (90) days from the date of such termination,
and prior to the termination of the Option pursuant to its terms to exercise, in whole or in part,
any vested portion of the Option held by such Participant at the date of such termination;
provided, however, that, if the Participant dies within such exercise period, any vested Option
held by such Participant upon death shall be exercisable by the Participant’s estate, devisee or
heir at law (whichever is applicable) for a period not to exceed one (1) year after the
Participant’s death and prior to the termination of the Option pursuant to its terms.

               (iv) Death. If a Participant dies while in the employment or service of the Company,
the Participant’s estate or the devisee named in the Participant’s valid last will and testament or
the Participant’s heir at law who inherits the Option has the right, at any time within a period
not to exceed one (1) year after the date of such Participant’s death and prior to termination of
the Option pursuant to its terms, to exercise, in whole or in part, any portion of the vested
Option held by such Participant at the date of such Participant’s death.

               (v) Other Termination. In the event the termination is for Cause or is a voluntary
termination by the Participant within ninety (90) days after occurrence of an event which would be
grounds for termination of employment by the Company for Cause (without regard to any notice or
cure period requirement), any Option held by the Participant at the time of the termination for
Cause or the occurrence of the event which would be grounds for termination of employment by the
Company for Cause, as the case may be, shall be deemed to have

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terminated and expired upon such
termination or upon such occurrence of the event which would be grounds for termination of
employment by the Company for Cause.

     7. STOCK APPRECIATION RIGHTS

          (a) Grant of Stock Appreciation Rights. Subject to the terms and conditions of the
Plan, the Committee may grant to such Eligible Individuals as the Committee may determine, Stock
Appreciation Rights, in such amounts, as the Committee shall determine in its sole and absolute
discretion. Stock Appreciation Rights may be granted in tandem with an Option, or may be granted
on a freestanding basis, not related to any Option. Each grant of a Stock Appreciation Right shall
satisfy the requirements as set forth in this Section.

          (b) Terms and Conditions of Stock Appreciation Rights. Unless otherwise provided in
an Award Agreement, the terms and conditions (including, without limitation, the exercise period of
the Stock Appreciation Right, the vesting schedule applicable thereto and the impact of any
termination of service on the Participant’s rights with respect to the Stock Appreciation Right)
applicable with respect to (i) Stock Appreciation Rights granted in tandem with an Option shall be
substantially identical (to the extent possible taking into account the differences related to the
character of the Stock Appreciation Right) to the terms and conditions applicable to the tandem
Options, and (ii) freestanding Stock Appreciation Rights shall be substantially identical (to the
extent possible taking into account the differences related to the character of the Stock
Appreciation Right) to the terms and conditions that would have been applicable under Section 6
above were the grant of the Stock Appreciation Rights a grant of an Option. Notwithstanding
anything to the contrary, the Committee may, in its sole and absolute discretion, designate a Stock
Appreciation Right as a limited Stock Appreciation Right that shall be exercisable only upon the
occurrence of certain events including but not limited to a Change in Control of Advanced Viral
Research Corp..

          (c) Exercise of Stock Appreciation Rights. Stock Appreciation Rights (regardless of
whether free-standing or tandem) shall be exercised by a Participant only by written notice
delivered to the Chief Financial Officer of Advanced Viral Research Corp., specifying the number of
shares of Common Stock with respect to which the Stock Appreciation Right is being exercised.
Tandem Stock Appreciation Rights may only be exercised upon the surrender of the right to exercise
the related Option for an equivalent number of shares of Common Stock and may be exercised only
with respect to the shares of Common Stock for which the related Option is then exercisable. Upon
the exercise of an Option granted in connection with a Stock Appreciation Right, the related Stock
Appreciation Right shall be canceled to the extent of the number of shares of Common Stock to which
the Option was exercised.

          (d) Payment of Stock Appreciation Right. Unless otherwise provided in an Award
Agreement, upon exercise of a Stock Appreciation Right, the Participant or Participant’s estate,
devisee or heir at law (whichever is applicable) shall be entitled to receive payment, in cash, in
shares of Common Stock, or in a combination thereof, as determined by the Committee in its sole and
absolute discretion. The amount of such payment shall be determined by multiplying the excess, if
any, of the Fair Market Value of a share of Common Stock on the date of exercise over the Fair
Market Value of a share of Common Stock on the Grant Date, by the number of shares of Common Stock
with respect to which the Stock Appreciation Rights are then being exercised. Notwithstanding the
foregoing, the Company may limit in any manner the amount payable with respect to a Stock
Appreciation Right by including such limitation in the Award Agreement.

     8. RESTRICTED STOCK AND RESTRICTED STOCK UNITS

          (a) Grant of Restricted Stock and Restricted Stock Units. Subject to the terms and
conditions of the Plan, the Committee may grant to such Eligible Individuals as the Committee may
determine, Restricted Stock or Restricted Stock Units, in such amounts, as the Committee shall
determine in its sole and absolute discretion. Each grant of Restricted Stock or Restricted Stock
Units shall satisfy the requirements as set forth in this Section.

          (b) Restrictions. The Committee shall impose such restrictions on any Restricted
Stock or Restricted Stock Units granted pursuant to the Plan as it may deem advisable including,
without limitation; time based vesting restrictions, or the attainment of Performance Goals.
Unless otherwise provided in the applicable Award Agreement, Restricted Stock and Restricted Stock
Units will vest and become exercisable on each anniversary of the Grant Date in equal annual
installments over the three (3) years following the Grant Date of the Restricted Stock or
Restricted Stock Units. Shares of Restricted Stock or Restricted Stock Units subject to the
attainment of Performance

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Goals will be released from restrictions only after the attainment of such Performance Goals
has been certified by the Committee in accordance with Section 9(c).

          (c) Certificates and Certificate Legend. With respect to a grant of Restricted Stock,
the Company may issue a certificate evidencing such Restricted Stock to the Participant or issue
and hold such shares of Restricted Stock for the benefit of the Participant until the applicable
restrictions expire. The Company may legend the certificate representing Restricted Stock to give
appropriate notice of such restrictions. In addition to any such legends, each certificate
representing shares of Restricted Stock granted pursuant to the Plan shall bear the following
legend:

“The sale or other transfer of the shares of stock represented by this
certificate, whether voluntary, involuntary, or by operation of law,
are subject to certain terms, conditions, and restrictions on transfer
as set forth in the Advanced Viral Research Corp. Stock Incentive Plan,
and in an Agreement entered into by and between the registered owner of
such shares and the Company, dated                     . A copy of the Plan
and the Award Agreement may be obtained from the Secretary of the
Company.”

          (d) Removal of Restrictions. Except as otherwise provided in the Plan, shares of
Restricted Stock shall, subject to any applicable federal or state securities law, become freely
transferable by the Participant upon the lapse of the applicable restrictions. Once the shares of
Restricted Stock are released from the restrictions, the Participant shall be entitled to have the
legend required by paragraph (c) above removed from the share certificate evidencing such
Restricted Stock and the Company shall pay or distribute to the Participant all dividends and
distributions held in escrow by the Company with respect to such Restricted Stock. Upon the lapse
of the applicable restrictions with respect to any Restricted Stock Units, Advanced Viral Research
Corp. shall deliver to the Participant, one share of Common Stock for each Restricted Stock Unit
and any Dividend Equivalents credited with respect to such Restricted Stock Units, if any. Unless
otherwise provided in an Award Agreement, the Committee may, in its sole discretion, elect to pay
cash or part cash and part Common Stock in lieu of delivering only Common Stock for Restricted
Stock Units. If a cash payment is made in lieu of delivering Common Stock, the amount of such cash
payment for each share of Common Stock to which a Participant is entitled shall be equal to the
Fair Market Value of the Common Stock on the date on which the applicable restrictions lapsed with
respect to the related Restricted Stock Unit and any Dividend Equivalents credited with respect to
such Restricted Stock Units, if any.

          (e) Stockholder Rights. Until the expiration of all applicable restrictions, the
Restricted Stock shall be treated as outstanding, the Participant holding shares of Restricted
Stock may exercise full voting rights with respect to such shares and shall be entitled to receive
all dividends and other distributions paid with respect to such shares while they are so held. If
any such dividends or distributions are paid in shares of Common Stock, such shares shall be
subject to the same restrictions on transferability and forfeitability as the shares of Restricted
Stock with respect to which they were paid. Notwithstanding anything to the contrary, at the
discretion of the Committee, all such dividend and distributions may be held in escrow by the
Company until all restrictions on the respective Restricted Stock have lapsed. A Participant shall
not have any right with respect to Restricted Stock Units granted under the Plan to vote on any
matter submitted to Advanced Viral Research Corp.’s stockholders until the shares of Common Stock
attributable to such Restricted Stock Units have been issued.

          (f) Termination of Service. Unless otherwise provided in a Award Agreement, if a
Participant’s employment or service with the Company terminates for any reason, all nonvested
shares of Restricted Stock held by the Participant and any dividends or distributions held in
escrow by Advanced Viral Research Corp. with respect to such Restricted Stock shall be forfeited
immediately and returned to the Company, and all nonvested Restricted Stock Units and related
Dividend Equivalents shall be forfeited. Notwithstanding this paragraph, all grants of Restricted
Stock or Restricted Stock Units that vest solely upon the attainment of Performance Goals shall be
treated pursuant to the terms and conditions that would have been applicable under Section 9(d) as
if such grants of Restricted Stock or Restricted Stock Units were Awards of Performance Shares or
Performance Units.

     9. PERFORMANCE SHARES AND PERFORMANCE UNITS

          (a) Grant of Performance Shares and Performance Units. Subject to the terms and
conditions of the Plan, the Committee may grant to such Eligible Individuals as the Committee may
determine, Performance Shares and Performance Units, in such amounts, as the Committee shall
determine in its sole and absolute discretion. Each grant of a Performance Share or a Performance
Unit shall satisfy the requirements as set forth in this Section.

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          (b) Terms and Conditions of Performance Shares and Performance Units. The applicable
Award Agreement shall set forth (i) the number of Performance Shares or the dollar value of
Performance Units granted to the Participant; (ii) the Performance Period and Performance Goals
with respect to each such Award; (iii) the threshold, target and maximum shares of Common Stock or
dollar values of each Performance Share or Performance Unit and corresponding Performance Goals,
and (iv) any other terms and conditions as the Committee determines in its sole and absolute
discretion. The Committee shall establish, in its sole and absolute discretion, the Performance
Goals for the applicable Performance Period for each Performance Share or Performance Unit granted
hereunder. Performance Goals for different Participants and for different grants of Performance
Shares and Performance Units need not be identical.

          (c) Determination and Payment of Performance Units or Performance Shares Earned. As
soon as practicable after the end of a Performance Period, the Committee shall determine the extent
to which Performance Shares or Performance Units have been earned on the basis of the Company’s
actual performance in relation to the established Performance Goals as set forth in the applicable
Award Agreement and shall certify these results in writing. As soon as practicable after the
Committee has determined that an amount is payable or should be distributed with respect to a
Performance Share or a Performance Unit, the Committee shall cause the amount of such Award to be
paid or distributed to the Participant or the Participant’s estate, devisee or heir at law
(whichever is applicable). Unless otherwise provided in an Award Agreement, the Committee shall
determine in its sole and absolute discretion whether payment with respect to the Performance Share
or Performance Unit shall be made in cash, in shares of Common Stock, or in a combination thereof.
For purposes of making payment or a distribution with respect to a Performance Share or Performance
Unit, the cash equivalent of a share of Common Stock shall be determined by the Fair Market Value
of the Common Stock on the day the Committee designates the Performance Shares or Performance Units
to be payable.

          (d) Termination of Employment. Unless otherwise provided in an Award Agreement, if a
Participant’s employment or service with the Company terminates for any reason, all of the
Participant’s outstanding Performance Shares and Performance Units shall be subject to the rules of
this Section.

               (i) Termination for Reason Other Than Retirement, Death, or Disability. If a
Participant’s employment or service with the Company terminates prior to the expiration of a
Performance Period with respect to any Performance Units or Performance Shares held by such
Participant for any reason other than Retirement, death, or Disability the outstanding Performance
Units or Performance Shares held by such Participant for which the Performance Period has not yet
expired shall terminate upon such termination and the Participant shall have no further rights
pursuant to such Performance Units or Performance Shares.

               (ii) Termination of Employment for Retirement, Death, or Disability. If a
Participant’s employment or service with the Company terminates by reason of the Participant’s
Retirement, death or Disability prior to the end of a Performance Period , the Participant, or the
Participant’s estate, devisee or heir at law (whichever is applicable) shall be entitled to a
payment of the Participant’s outstanding Performance Units and Performance Shares at the end of the
applicable Performance Period, pursuant to the terms of the Plan and the Participant’s Award
Agreement; provided, however, that the Participant shall be deemed to have earned only that
proportion (to the nearest whole unit or share) of the Performance Units or Performance Shares
granted to the Participant under such Award as the number of months of the Performance Period which
have elapsed since the first day of the Performance Period for which the Award was granted to the
end of the month in which the Participant’s termination of employment or service, bears to the
total number of months in the Performance Period, subject to the attainment of the Performance
Goals associated with the Award as certified by the Committee. The right to receive any remaining
Performance Units or Performance Shares shall be canceled and forfeited.

     10. STOCK AWARDS

     Subject to the terms and conditions of the Plan, the Committee may grant to such Eligible
Individuals as the Committee may determine, shares of Common Stock, in such amounts, as the
Committee shall determine in its sole and absolute discretion. Such Common Stock may be issued in
satisfaction of awards granted under any other plan sponsored by the Company or compensation
payable to an Eligible Individual. Grants of Common Stock made pursuant to this Section may
include the issuance of Common Stock to a Non-Employee Director in settlement of director fees
payable to such director that were previously deferred under the Deferred Compensation Plan.

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     11. DEFERRAL OF AWARDS

     The Committee may from time to time establish procedures pursuant to which a Participant may
elect to defer, until a time or times later than the exercise of an Award, receipt of all or a
portion of the shares of Common Stock subject to such Award and/or to receive cash at such later
time or times in lieu of such deferred shares of Common Stock, all on such terms and conditions as
the Committee shall determine. If any such deferrals are permitted, then notwithstanding anything
to the contrary herein, a Participant who elects such deferral shall not have any rights as a
stockholder with respect to deferred shares of Common Stock unless and until shares of Common Stock
are actually delivered to the Participant with respect thereto, except to the extent otherwise
determined by the Committee.

     12. CHANGE IN CONTROL AND OTHER CORPORATE EVENTS

          (a) Change in Control. Unless otherwise provided in an Award Agreement, in the event
of a Change in Control, the Committee may, in its sole and absolute discretion, provide on a case
by case basis (i) that some or all outstanding Awards may become immediately exercisable or vested,
without regard to any limitation imposed pursuant to this Plan, (ii) that all Awards shall
terminate, provided however, that Participants shall have the right for a reasonable period as the
Committee in its sole discretion shall determine and designate, to exercise any vested Awards in
whole or in part, subject to any terms and conditions as the Committee shall establish, (iii) that
all Awards shall be honored, assumed or substituted for by new rights (the “Alternative Awards”)
granted by the Participants’ employer immediately following the Change in Control (provided that
such Alternative Awards must have economic value substantially equivalent to the Awards at the time
of the Change in Control), or (iv) that any or all Awards shall be purchased by the Company without
the consent of the Participants, based on such terms and conditions as the Committee shall
determine which shall be communicated to the Participants, provided that any such purchases by the
Company must be must made for consideration having economic value substantially equivalent to the
Awards at the time of the Change in Control. With respect any Awards subject to performance-based
vesting which become vested upon a Change in Control, all Performance Goals shall be deemed
satisfied as of the date of the Change in Control.

          (b) Change in Status of Affiliates. Unless otherwise provided in an Award Agreement
or otherwise determined by the Committee, in the event that an entity which was previously a part
of the Company is no longer a part of the Company, as determined by the Committee in its sole
discretion, the employment or other services of a Participant employed by such entity may be
treated in the sole discretion of the Committee as terminated if such Participant is not employed
by the Company immediately after such event.

     13. REQUIREMENTS OF LAW

          (a) Stockholder Approval. Notwithstanding anything to the contrary herein, no Awards
shall be made pursuant to the Plan prior to the date on which the Plan is approved by the
stockholders of Advanced Viral Research Corp. in accordance with its Bylaws and the laws of the
State of Delaware and the rules and regulations of the securities exchange on which the Common
Stock is traded.

          (b) Violations of Law. The Company shall not be required to sell or issue any shares
of Common Stock under any Award if the sale or issuance of such shares would constitute a violation
by the individual exercising the Award, the Participant or the Company of any provisions of any law
or regulation of any governmental authority, including without limitation any provisions of the
Sarbanes-Oxley Act, and any other federal or state securities laws or regulations. Any
determination in this connection by the Committee shall be final, binding, and conclusive. The
Company shall not be obligated to take any affirmative action in order to cause the exercise of an
Award, the issuance of shares pursuant thereto or the grant of an Award to comply with any law or
regulation of any governmental authority.

          (c) Registration. At the time of any exercise or receipt of any Award, the Company
may, if it shall determine it necessary or desirable for any reason, require the Participant (or
Participant’s heirs, legatees or legal representative, as the case may be), as a condition to the
exercise or grant thereof, to deliver to the Company a written representation of present intention
to hold the shares for their own account as an investment and not with a view to, or for sale in
connection with, the distribution of such shares, except in compliance with applicable federal and
state securities laws with respect thereto. In the event such representation is required to be
delivered, an appropriate legend may be placed upon each certificate delivered to the Participant
(or Participant’s heirs, legatees or legal representative, as the case may be) upon the
Participant’s exercise of part or all of the Award or receipt of an Award and a stop transfer

8

 

order may be placed with the transfer agent. Each Award shall also be subject to the
requirement that, if at any time the Company determines, in its discretion, that the listing,
registration or qualification of the shares subject to the Award upon any securities exchange or
under any state or federal law, or the consent or approval of any governmental regulatory body is
necessary or desirable as a condition of or in connection with, the issuance or purchase of the
shares thereunder, the Award may not be exercised in whole or in part and the restrictions on an
Award may not be removed unless such listing, registration, qualification, consent or approval
shall have been effected or obtained free of any conditions not acceptable to The Company in its
sole discretion. The Participant shall provide the Company with any certificates, representations
and information that the Company requests and shall otherwise cooperate with the Company in
obtaining any listing, registration, qualification, exemption, consent or approval that the Company
deems necessary or appropriate. The Company shall not be obligated to take any affirmative action
in order to cause the exercisability or vesting of an Award, to cause the exercise of an Award or
the issuance of shares pursuant thereto, or to cause the grant of Award to comply with any law or
regulation of any governmental authority.

          (d) Withholding. The Committee may make such provisions and take such steps as it may
deem necessary or appropriate for the withholding of any taxes that the Company is required by any
law or regulation of any governmental authority, whether federal, state or local, domestic or
foreign, to withhold in connection with the grant or exercise of an Award, or the removal of
restrictions on an Award including, but not limited to: (i) the withholding of delivery of shares
of Common Stock until the holder reimburses the Company for the amount the Company is required to
withhold with respect to such taxes; (ii) the canceling of any number of shares of Common Stock
issuable in an amount sufficient to reimburse the Company for the amount it is required to so
withhold; (iii) withholding the amount due from any such person’s wages or compensation due to such
person; or (iv) requiring the Participant to pay the Company cash in the amount the Company is
required to withhold with respect to such taxes.

          (e) Governing Law. The Plan shall be governed by, and construed and enforced in
accordance with, the laws of the State of Delaware.

     14. GENERAL PROVISIONS

          (a) Award Agreements. All Awards granted pursuant to the Plan shall be evidenced by
an Award Agreement. Each Award Agreement shall specify the terms and conditions of the Award
granted and shall contain such provisions, as the Committee shall deem appropriate. The terms of
each Award Agreement need not be identical for Eligible Individuals provided that all Award
Agreements comply with the terms of the Plan.

          (b) Purchase Price. To the extent the purchase price of any Award granted hereunder
is less than par value of a share of Common Stock and such purchase price is not permitted by
applicable law, the per share purchase price shall be equal to the par value of a share of Common
Stock.

          (c) Issuance of Certificates; Stockholder Rights. Advanced Viral Research Corp. shall
deliver to the Participant a certificate evidencing the Participant’s ownership of shares of Common
Stock issued pursuant to the exercise of an Award as soon as administratively practicable after
satisfaction of all conditions relating to the issuance of such shares. A Participant shall not
have any of the rights of a stockholder with respect to such Common Stock prior to satisfaction of
all conditions relating to the issuance of such Common Stock, and, except as expressly provided in
the Plan, no adjustment shall be made for dividends, distributions or other rights of any kind for
which the record date is prior to the date on which all such conditions have been satisfied. The
Committee in its absolute and sole discretion may credit a Participant’s Award with Dividend
Equivalents with respect to any Awards. To the extent that dividends and distributions relating to
an Award are held in escrow by the Company, or Dividend Equivalents are credited to an Award, a
Participant shall not be entitled to any interest on any such amounts. The Committee may not grant
Dividend Equivalents to an Award subject to performance-based vesting to the extent the grant of
such Dividend Equivalents would limit the Company’s deduction of the compensation payable under
such Award for federal tax purposes pursuant to Code Section 162(m).

          (d) Transferability of Awards. A Participant may not Transfer an Award other than by
will or the laws of descent and distribution; provided, however, that the provisions of this
Section 14(d) shall not apply to any Common Stock issued that is not subject to any transferability
restrictions, and Common Stock issued pursuant to an Award for which all restrictions have lapsed
and which are fully vested. Awards may be exercised during the Participant’s lifetime only by the
Participant. No Award shall be liable for or subject to the debts, contracts, or liabilities of
any Participant, nor shall any Award be subject to legal process or attachment for or against such
person.

9

 

Any purported Transfer of an Award in contravention of the provisions of the Plan shall
have no force or effect and shall be null and void, and the purported transferee of such Award
shall not acquire any rights with respect to such Award. Notwithstanding anything to the contrary,
the Committee may in its sole and absolute discretion permit the Transfer of an Award to a
Participant’s “family member” as such term is defined in the Form S-8 Registration Statement under
the Securities Act of 1933, under such terms and conditions as specified by the Committee. In such
case, such Award shall be exercisable only by the transferee approved of by the Committee. To the
extent that the Committee permits the Transfer of an Incentive Stock Option to a “family member”,
so that such Option fails to continue to satisfy the requirements of an incentive stock option
under the Code such Option shall automatically be re-designated as a Non-Qualified Stock Option.

          (e) Buyout and Settlement Provisions. The Committee may at any time on behalf of
Advanced Viral Research Corp. offer to buy out any Awards previously granted based on such terms
and conditions as the Committee shall determine which shall be communicated to the Participants at
the time such offer is made.

          (f) Use of Proceeds. The proceeds received by Advanced Viral Research Corp. from the
sale of Common Stock pursuant to Awards granted under the Plan shall constitute general funds of
Advanced Viral Research Corp..

          (g) Modification or Substitution of an Award. Subject to the terms and conditions of
the Plan, the Committee may modify outstanding Awards. Notwithstanding the following, no
modification of an Award shall adversely affect any rights or obligations of the Participant under
the applicable Award Agreement without the Participant’s consent. The Committee in its sole and
absolute discretion may rescind, modify, or waive any vesting requirements or other conditions
applicable to an Award. Notwithstanding the foregoing, without approval of the stockholders of
Advanced Viral Research Corp., an Award may not be modified to reduce the exercise price thereof
nor may an Award at a lower price be substituted for a surrender of an Award, provided that (i) the
foregoing shall not apply to adjustments or substitutions in accordance with Section 5 or Section
13, and (ii) if an Award is modified, extended or renewed and thereby deemed to be in issuance of a
new Award under the Code or the applicable accounting rules, the exercise price of such Award may
continue to be the original Exercise Price even if less than Fair Market Value of the Common Stock
at the time of such modification, extension or renewal.

          (h) Amendment and Termination of Plan. The Board may, at any time and from time to
time, amend, suspend or terminate the Plan as to any shares of Common Stock as to which Awards have
not been granted; provided, however, that the approval by a majority of the votes present and
entitled to vote at a duly held meeting of the stockholders of Advanced Viral Research Corp. at
which a quorum representing a majority of all outstanding voting stock is, either in person or by
proxy, present and voting on the amendment, or by written consent in accordance with applicable
state law and the Certificate of Incorporation and Bylaws of Advanced Viral Research Corp. shall be
required for any amendment (i) that changes the class of individuals eligible to receive Awards
under the Plan, (ii) that increases the maximum number of shares of Common Stock in the aggregate
that may be subject to Awards that are granted under the Plan (except as permitted under Section 5
or Section 13 hereof), (iii) if approval of such amendment is necessary to comply with federal or
state law (including without limitation Section 162(m) of the Code and Rule 16b-3 under the
Exchange Act) or with the rules of any stock exchange or automated quotation system on which the
Common Stock may be listed or traded, or (iv) if such amendment eliminates a requirement provided
herein that the stockholders of Advanced Viral Research Corp. must approve an action to be
undertaken under the Plan. Except as permitted under Section 5 or Section 13 hereof, no amendment,
suspension or termination of the Plan shall, without the consent of the holder of an Award, alter
or impair rights or obligations under any Award theretofore granted under the Plan. Awards granted
prior to the termination of the Plan may extend beyond the date the Plan is terminated and shall
continue subject to the terms of the Plan as in effect on the date the Plan is terminated.

          (i) Notification of 83(b) Election. If in connection with the grant of any Award any
Participant makes an election permitted under Code Section 83(b), such Participant must notify the
Company in writing of such election within ten (10) days of filing such election with the Internal
Revenue Service.

          (j) rDetrimental Activity. All Awards shall be subject to cancellation by the
Committee if the Participant engages in any Detrimental Activity. To the extent that a Participant
engages in any Detrimental Activity prior to, or during the one year period after, any exercise or
vesting of an Award but prior to a Change in Control, the Company shall be entitled to recover from
the Participant at any time within two (2) years after the exercise or vesting of the Award but
prior to a Change in Control, and the Participant shall pay over to the Company with respect to any

10

 

Award previously held by such Participant (i) an amount equal to the excess of the Fair Market
Value of the Common Stock for which any Option was exercised over the Exercise Price paid
(regardless of the form by which payment was made) with respect to such Option; (ii) any shares of
Common Stock granted pursuant to any Award other than an Option, and if such shares are not still
owned by the Participant, the Fair Market Value of such shares on the date they were issued, or if
later, the date all vesting restrictions were satisfied; and (iii) any cash or other property
(other than Common Stock) received by the Participant from the Company pursuant to an Award.

          (k) Disclaimer of Rights. No provision in the Plan, any Award granted or any Award
Agreement entered into pursuant to the Plan shall be construed to confer upon any individual the
right to remain in the employ of or service with the Company or to interfere in any way with the
right and authority of the Company either to increase or decrease the compensation of any
individual, including any holder of an Award, at any time, or to terminate any employment or other
relationship between any individual and the Company. The grant of an Award pursuant to the Plan
shall not affect or limit in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business structure or to merge,
consolidate, dissolve or liquidate, or to sell or transfer all or any part of its business or
assets.

          (l) Unfunded Status of Plan. The Plan is intended to constitute an “unfunded” plan
for incentive and deferred compensation. With respect to any payments as to which a Participant
has a fixed and vested interest but which are not yet made to such Participant by the Company,
nothing contained herein shall give any such Participant any rights that are greater than those of
a general creditor of the Company.

          (m) Nonexclusivity of Plan. The adoption of the Plan shall not be construed as
creating any limitations upon the right and authority of the Board to adopt such other incentive
compensation arrangements (which arrangements may be applicable either generally to a class or
classes of individuals or specifically to a particular individual or individuals) as the Board in
its discretion determines desirable.

          (n) Headings. The section headings in the Plan are for convenience only; they form no
part of the Plan and shall not affect its interpretation.

          (o) Pronouns. The use of any gender in the Plan shall be deemed to include all
genders, and the use of the singular shall be deemed to include the plural and vice versa, wherever
it appears appropriate from the context.

          (p) Successors and Assigns. The Plan shall be binding on all successors of the
Company and all successors and permitted assigns of a Participant, including, but not limited to, a
Participant’s estate, devisee, or heir at law.

          (q) Severability. If any provision of the Plan or any Award Agreement shall be
determined to be illegal or unenforceable by any court of law in any jurisdiction, the remaining
provisions hereof and thereof shall be severable and enforceable in such jurisdiction in accordance
with their terms, and all provisions shall remain enforceable in any other jurisdiction.

          (r) Notices. Any communication or notice required or permitted to be given under the
Plan shall be in writing, and mailed by registered or certified mail or delivered by hand, to
Advanced Viral Research Corp., to its principal place of business, attention: Chief Financial
Officer, and if to the holder of an Award, to the address as appearing on the records of the
Company.

     15. DEFINITIONS

     “Advanced Viral Research Corp.” means Advanced Viral Research Corp., a Delaware corporation.

     “Award” means any Common Stock, Option, Performance Share, Performance Unit, Restricted Stock,
Restricted Stock Unit, Stock Appreciation right or any other award granted pursuant to the Plan.

     “Award Agreement” means a written agreement entered into by Advanced Viral Research Corp. and
a Participant setting forth the terms and conditions of the grant of an Award to such Participant.

     “Board” means the board of directors of Advanced Viral Research Corp..

11

 

     “Cause” means, with respect to a termination of employment or service with the Company, a
termination of employment or service due to a Participant’s dishonesty, fraud, insubordination,
willful misconduct, refusal to perform services (for any reason other than illness or incapacity)
or materially unsatisfactory performance of the Participant’s duties for the Company; provided,
however, that if the Participant and the Company have entered into an employment agreement or
consulting agreement which defines the term Cause, the term Cause shall be defined in accordance
with such agreement with respect to any Award granted to the Participant on or after the effective
date of the respective employment or consulting agreement. The Committee shall determine in its
sole and absolute discretion whether Cause exists for purposes of the Plan.

     “Change in Control” shall be deemed to occur upon:

          (a) any “person” as such term is used in Sections 13(d) and 14(d) of the Exchange Act (other
than Advanced Viral Research Corp., any trustee or other fiduciary holding securities under any
employee benefit plan of the Company, or any the Company owned, directly or indirectly, by the
stockholders of Advanced Viral Research Corp. in substantially the same proportions as their
ownership of common stock of Advanced Viral Research Corp.), is or becomes the “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
Advanced Viral Research Corp. representing fifty percent (50%) or more of the combined voting power
of Advanced Viral Research Corp.’s then outstanding securities;

          (b) during any period of two (2) consecutive years, individuals who at the beginning of such
period constitute the Board, and any new director (other than a director designated by a person who
has entered into an agreement with the Company to effect a transaction described in paragraph (a),
(c), or (d) of this section) whose election by the Board or nomination for election by Advanced
Viral Research Corp.’s stockholders was approved by a vote of at least two-thirds of the directors
then still in office who either were directors at the beginning of the two-year period or whose
election or nomination for election was previously so approved, cease for any reason to constitute
at least a majority of the Board;

          (c) a merger, consolidation, reorganization, or other business combination of the Advanced
Viral Research Corp. with any other entity, other than a merger or consolidation which would result
in the voting securities of Advanced Viral Research Corp. outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than fifty percent (50%) of the combined voting power of
the voting securities of Advanced Viral Research Corp. or such surviving entity outstanding
immediately after such merger or consolidation; provided, however, that a merger or consolidation
effected to implement a recapitalization of Advanced Viral Research Corp. (or similar transaction)
in which no person acquires more than fifty percent (50%) of the combined voting power of Advanced
Viral Research Corp.’s then outstanding securities shall not constitute a Change in Control; or

          (d) the stockholders of Advanced Viral Research Corp. approve a plan of complete liquidation
of Advanced Viral Research Corp. or the consummation of the sale or disposition by Advanced Viral
Research Corp. of all or substantially all of Advanced Viral Research Corp.’s assets other than (x)
the sale or disposition of all or substantially all of the assets of Advanced Viral Research Corp.
to a person or persons who beneficially own, directly or indirectly, at least fifty percent (50%)
or more of the combined voting power of the outstanding voting securities of Advanced Viral
Research Corp. at the time of the sale or (y) pursuant to a spin-off type transaction, directly or
indirectly, of such assets to the stockholders of Advanced Viral Research Corp.

     “Code” means the Internal Revenue Code of 1986, as amended, and the regulations promulgated
thereunder.

     “Committee” means a committee or sub-committee of the Board consisting of two or more members
of the Board, none of whom shall be an officer or other salaried employee of the Company, and each
of whom shall qualify in all respects as a “non-employee director” as defined in Rule 16b-3 under
the Exchange Act, and as an “outside director” for purposes of Code Section 162(m). If no
Committee exists, the functions of the Committee will be exercised by the Board; provided, however,
that a Committee shall be created prior to the grant of Awards to a Covered Employee and that
grants of Awards to a Covered Employee shall be made only by such Committee. Not withstanding the
foregoing, with respect to the grant of Awards to non-employee directors, the Committee shall be
the Board.

     “Common Stock” means the common stock, $.01 par value per share, of Advanced Viral Research
Corp..

     “The Company” means Advanced Viral Research Corp. and all entities whose financial statements
are required to be consolidated with the financial statements of Advanced Viral Research Corp.
pursuant to United States generally

12

 

accepted accounting principles and any other entity determined to be an affiliate as
determined by the Committee in its sole and absolute discretion.

     “Covered Employee” means “covered employee” as defined in Code Section 162(m)(3).

     “Covered Individual” means any current or former member of the Committee, any current or
former officer of the Company, or any individual designated pursuant to Section 4(b).

     “Deferred Compensation Plan” means Advanced Viral Research Corp. Non-Employee Director
Deferred Compensation Plan or any other deferred compensation adopted by the Company.

     “Detrimental Activity” shall mean (i) the disclosure to anyone outside the Company, or the use
in other than the Company’s business, without written authorization from the Company, of any
confidential information or proprietary information, relating to the business of the Company,
acquired by a Participant prior to a termination of the Participant’s employment or service with
the Company; (ii) activity while employed or providing services that results, or if known could
result, in the termination of the Participant’s employment or service that is classified by the
Company as a termination for Cause; (iii) any attempt, directly or indirectly, to solicit, induce
or hire (or the identification for solicitation, inducement or hiring of) any non-clerical employee
of the Company to be employed by, or to perform services for, the Participant or any person or
entity with which the Participant is associated (including, but not limited to, due to the
Participant’s employment by, consultancy for, equity interest in, or creditor relationship with
such person or entity) or any person or entity from which the Participant receives direct or
indirect compensation or fees as a result of such solicitation, inducement or hire (or the
identification for solicitation, inducement or hire) without, in all cases, written authorization
from the Company; (iv) any attempt, directly or indirectly, to solicit in a competitive manner any
current or prospective customer of the Company without, in all cases, written authorization from
the Company; (v) the Participant’s Disparagement, or inducement of others to do so, of the Company
or their past and present officers, directors, employees or products; (vi) without written
authorization from the Company, the rendering of services for any organization, or engaging,
directly or indirectly, in any business, which is competitive with the Company, or which
organization or business, or the rendering of services to such organization or business, is
otherwise prejudicial to or in conflict with the interests of the Company, provided however that
competitive activities shall only be those competitive with any business unit of the Company with
regard to which the Participant performed services at any time within the two (2) years prior to
the termination of the Participant’s employment or service; or (vii) any other conduct or act
determined by the Committee, in its sole discretion, to be injurious, detrimental or prejudicial to
any interest of the Company. For purposes of subparagraphs (i), (iii), (iv) and (vi) above, the
Chief Executive Officer and the General Counsel of the Company shall each have authority to provide
the Participant with written authorization to engage in the activities contemplated thereby and no
other person shall have authority to provide the Participant with such authorization.

     “Disability” means a “permanent and total disability” within the meaning of Code Section
22(e)(3); provided, however, that if a Participant and the Company have entered into an employment
or consulting agreement which defines the term Disability for purposes of such agreement,
Disability shall be defined pursuant to the definition in such agreement with respect to any Award
granted to the Participant on or after the effective date of the respective employment or
consulting agreement. The Committee shall determine in its sole and absolute discretion whether a
Disability exists for purposes of the Plan.

     “Disparagement” means making any comments or statements to the press, the Company’s employees
or any individual or entity with whom the Company has a business relationship which would adversely
affect in any manner: (i) the conduct of the business of the Company (including, without
limitation, any products or business plans or prospects), or (ii) the business reputation of the
Company or any of its products, or its past or present officers, directors or employees.

     “Dividend Equivalents” means an amount equal to the cash dividends paid by the Company upon
one share of Common Stock subject to an Award granted to a Participant under the Plan.

     “Effective Date” shall mean the date that the Plan was approved by the stockholders of
Advanced Viral Research Corp. in accordance with its Bylaws and the laws of the State of Delaware
or such later date as is provided in the resolutions adopting the Plan.

     “Eligible Individual” means any employee, officer, director (employee or non-employee
director) or consultant

13

 

of the Company to whom Awards are granted in connection with an offer of future employment
with the Company.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Exercise Price” means the purchase price of each share of Common Stock subject to an Award.

     “Fair Market Value” means, unless otherwise required by the Code, as of any date, the last
sales price reported for the Common Stock on the applicable date, (i) as reported by the national
securities exchange in the United States on which it is then traded, or (ii) if not traded on any
such national securities exchange, as quoted on an automated quotation system sponsored by the
National Association of Securities Dealers, Inc., or if the Common Stock shall not have been
reported or quoted on such date, on the first day prior thereto on which the Common Stock was
reported or quoted; provided, however, that the Committee may modify the definition of Fair Market
Value to reflect any changes in the trading practices of any exchange or automated system sponsored
by the National Association of Securities Dealers, Inc. on which the Common Stock is listed or
traded. For purposes of the grant of any Award, the applicable date shall be the day prior to the
date on which the Award is granted. If the Common Stock is not readily traded on a national
securities exchange or quoted on any automated quotation system sponsored by the National
Association of Securities Dealers, Inc., the Fair Market Value shall be determined in good faith by
the Committee.

     “Grant Date” means the date on which the Committee approves the grant of an Award or such
later date as is specified by the Committee and set forth in the applicable Award Agreement.

     “Incentive Stock Option” means an “incentive stock option” within the meaning of Code Section
422.

     “Non-Employee Director” means a director of Advanced Viral Research Corp. who is not an active
employee of the Company.

     “Non-qualified Stock Option” means an Option which is not an Incentive Stock Option.

     “Option” means an option to purchase Common Stock granted pursuant to Section 6 of the Plan.

     “Participant” means any Eligible Individual who holds an Award under the Plan and any of such
individual’s successors or permitted assigns.

     “Performance Goals” means the specified performance goals which have been established by the
Committee in connection with an Award. Performance Goals will be based on one or more of the
following criteria, as determined by the Committee in its absolute and sole discretion: (i) the
attainment of certain target levels of, or a specified increase in, Advanced Viral Research Corp.’s
enterprise value or value creation targets; (ii) the attainment of certain target levels of, or a
percentage increase in, Advanced Viral Research Corp.’s after-tax or pre-tax profits including,
without limitation, that attributable to Advanced Viral Research Corp.’s continuing and/or other
operations; (iii) the attainment of certain target levels of, or a specified increase relating to,
Advanced Viral Research Corp.’s operational cash flow or working capital, or a component thereof;
(iv) the attainment of certain target levels of, or a specified decrease relating to, Advanced
Viral Research Corp.’s operational costs, or a component thereof (v) the attainment of a certain
level of reduction of, or other specified objectives with regard to limiting the level of increase
in all or a portion of bank debt or other of Advanced Viral Research Corp.’s long-term or
short-term public or private debt or other similar financial obligations of Advanced Viral Research
Corp., which may be calculated net of cash balances and/or other offsets and adjustments as may be
established by the Committee; (vi) the attainment of a specified percentage increase in earnings
per share or earnings per share from Advanced Viral Research Corp.’s continuing operations; (vii)
the attainment of certain target levels of, or a specified percentage increase in, Advanced Viral
Research Corp.’s net sales, revenues, net income or earnings before income tax or other exclusions;
(viii) the attainment of certain target levels of, or a specified increase in, Advanced Viral
Research Corp.’s return on capital employed or return on invested capital; (ix) the attainment of
certain target levels of, or a percentage increase in, Advanced Viral Research Corp.’s after-tax or
pre-tax return on stockholder equity; (x) the attainment of certain target levels in the fair
market value of Advanced Viral Research Corp.’s Common Stock; (xi) the growth in the value of an
investment in the Common Stock assuming the reinvestment of dividends; and (xii) the attainment of
certain target levels of, or a specified increase in, EBITDA (earnings before income tax,
depreciation and amortization). In addition, Performance Goals may be based upon the attainment by
a subsidiary, division or other operational unit of Advanced Viral Research Corp. of specified
levels of performance under one or more of the measures described above. Further, the Performance
Goals may be based upon the attainment by Advanced Viral Research Corp. (or a subsidiary, division
or other operational unit of Advanced Viral

14

 

Research Corp.) of specified levels of performance under one or more of the foregoing measures
relative to the performance of other corporations. To the extent permitted under Code Section
162(m) of the Code (including, without limitation, compliance with any requirements for stockholder
approval), the Committee may (i) designate additional business criteria upon which the Performance
Goals may be based; (ii) modify, amend or adjust the business criteria described herein or (iii)
incorporate in the Performance Goals provisions regarding changes in accounting methods, corporate
transactions (including, without limitation, dispositions or acquisitions) and similar events or
circumstances. Performance Goals may include a threshold level of performance below which no Award
will be earned, levels of performance at which an Award will become partially earned and a level at
which an Award will be fully earned.

     “Performance Period” means the period during which Performance Goals must be achieved in
connection with an Award granted under the Plan.

     “Performance Share” means a right to receive a fixed number of shares of Common Stock, or the
cash equivalent, which is contingent on the achievement of certain Performance Goals during a
Performance Period.

     “Performance Unit” means a right to receive a designated dollar value, or shares of Common
Stock of the equivalent value, which is contingent on the achievement of Performance Goals during a
Performance Period.

     “Person” shall mean any person, corporation, partnership, joint venture or other entity or any
group (as such term is defined for purposes of Section 13(d) of the Exchange Act), other than a
Parent or Subsidiary.

     “Plan” means this Advanced Viral Research Corp. Stock Incentive Plan.

     “Restricted Stock” means Common Stock subject to certain restrictions, as determined by the
Committee, and granted pursuant to Section 8 hereunder.

     “Restricted Stock Unit” means the right to receive to receive a fixed number of shares of
Common Stock, or the cash equivalent, granted pursuant to Section 8 hereunder.

     “Retirement” means a termination of employment of a Participant (other than for Cause or
within ninety (90) days after an event which would be grounds for a termination of employment for
Cause) who has attained (1) at least age sixty-five (65); (2) at least age sixty-two (62) and
performed ten (10) or more years of service with the Company (or its predecessors); or (3) such
earlier date after age fifty-five (55) as approved by the Committee with regard to such
Participant.

     “Section 424 Employee” means an employee of Advanced Viral Research Corp. or any “subsidiary
corporation” or “parent corporation” as such terms are defined in and in accordance with Code
Section 424. The term “Section 424 Employee” also includes employees of a corporation issuing or
assuming any Options in a transaction to which Code Section 424(a) applies.

     “Stock Appreciation Right” means the right to receive all or some portion of the increase in
value of a fixed number of shares of Common Stock granted pursuant to Section 7 hereunder.

     “Transfer” means, as a noun, any direct or indirect, voluntary or involuntary, exchange, sale,
bequeath, pledge, mortgage, hypothecation, encumbrance, distribution, transfer, gift, assignment or
other disposition or attempted disposition of, and, as a verb, directly or indirectly, voluntarily
or involuntarily, to exchange, sell, bequeath, pledge, mortgage, hypothecate, encumber, distribute,
transfer, give, assign or in any other manner whatsoever dispose or attempt to dispose of.

15EX-10.90 Form of Stock Option Agreement

 

EXHIBIT
10.90

FORM OF STOCK OPTION AGREEMENT

     THE COMMON STOCK OPTION REPRESENTED BY THIS AGREEMENT (THE “OPTIONS”) HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE LAWS OF ANY OTHER JURISDICTION AND
MAY NOT BE SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF IN ANY MANNER: (1)
WITHOUT REGISTRATION UNDER THE ACT AND IN COMPLIANCE WITH THE LAWS OF ANY APPLICABLE JURISDICTIONS;
OR (2) AN OPINION OF COUNSEL (IN FORM AND SUBSTANCE ACCEPTABLE TO ADVANCED VIRAL RESEARCH CORP.)
THAT REGISTRATION IS NOT REQUIRED.

ADVANCED VIRAL RESEARCH CORP.

STOCK OPTION AGREEMENT

     AGREEMENT made as of the ___day of                      20___, by and between Advanced Viral Research
Corp., a Delaware corporation (the “Company”) and                                          (the “Optionee”).

RECITALS

     WHEREAS, pursuant to the 2007 Stock Incentive Plan (the “Plan”), the Company desires to grant
to the Optionee and the Optionee desires to accept an option to purchase shares of common stock,
par value $0.00001 per share, of the Company (the Common Stock) upon the terms and conditions set
forth in this Agreement;

     NOW, THEREFORE, the parties hereto agree as follows:

     1. Grant. The Company hereby grants to the Optionee an option to purchase ___
shares of Common Stock, at a purchase price per share of $___(the “Option”);

     2. Vesting. The Option shall be exercisable, at any time and from time to time,
pursuant to the following vesting schedule:                     

     3. Securities Registration Required. If the shares to be issued upon an exercise of
the Option are not registered under the Securities Act of 1933, then, as a further condition of the
Company’s obligation to issue such shares, the Optionee may be required to give a representation in
writing that the Optionee is acquiring the shares for the Optionee’s own account as an investment
and not with a view to, or for sale in connection with, the distribution of such shares, and the
certificates representing such shares shall bear a legend to such effect as the Company’s counsel
shall deem necessary or desirable. The Option shall in no event be exercisable and shares shall not
be issued hereunder if, in the reasonable opinion of counsel to the Company, such exercise and/or
issuance would result in a violation of federal or state securities laws.

     4. No Employment Agreement. Nothing in this Agreement shall confer upon the Optionee
any right with respect to the continuation of Optionee serving as a director of the Company or a
subsidiary, or interfere in any way with any existing employment or consulting agreement between
the Company and the Optionee.

     5. Miscellaneous.

          (a) This Agreement shall be binding upon and shall inure to the benefit of the parties hereto
and their respective heirs, executors, administrators, successors and permitted assigns.

          (b) This Agreement shall be governed by and construed in accordance with the laws of the State
of Delaware. This Agreement constitutes the entire Agreement between the parties with respect to
the subject matter hereof, and controls and supersedes any prior understandings, agreements or
representations by or between the parties, written or oral between the parties with respect to its
subject matter and may not be modified except by written instrument executed by the parties.

 

 

          (c) Other than the vesting schedule set forth herein, the provisions of the Plan are
incorporated by reference hereby and shall govern if and to the extent that there are
inconsistencies between those provisions and the provisions hereof. The Optionee acknowledges
receipt of a copy of the Plan prior to the execution of this Agreement.

          (d) Residency. Optionee is a resident of the State of                     .

     IN WITNESS WHEREOF, the parties have hereunto put their hand as of the date first above
written.

	 	 	 	 	 
	

	 	ADVANCED VIRAL RESEARCH CORP.,

a Delaware corporation

 	 
	

	

	 	By:  	 	 
	 	 	Stephen Elliston, President 	 
	

	 	 	 	 
	 

	 	 	 	 	 
	

	 	OPTIONEE

 	 
	

	

	 	By:  	 	 
	

	 	 	 	 
	 	 	 	 
	 

2

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