2006 Incentive Bonus Calculation Agreement for Charles A. Rice, CEO of Viragen, Inc.

Summary

This agreement outlines the 2006 annual incentive bonus calculation for Charles A. Rice, CEO of Viragen, Inc. The bonus, targeting $75,000, is based on three factors: Multiferon sales, international development milestones, and qualitative performance evaluations, each with specific weightings and payout formulas. The agreement details thresholds, target dates, and maximum payouts for each factor. The Compensation Committee, with Board approval, has discretion over the criteria. Procedures for future years will be set annually by the Committee and Board.

EX-10.1 3 g00817exv10w1.htm 2006 INCENTIVE BONUS CALCULATION 2006 Incentive Bonus Calculation

EXHIBIT 10.1

EXHIBIT A

2006 INCENTIVE BONUS CALCULATION

The annual bonus payout for Charles A. Rice, Chief Executive Officer, shall be calculated by applying the target bonus to performance against agreed standards. For the calendar year 2006 payout, targeting $75,000, the standards shall include three factors, each with its respective weighting: (i) Multiferon^® sales (50%); (ii) International Multiferon Development (25%), and; (iii) qualitative performance evaluations (25%). The total payout shall be the sum of the payout determined for each of the three performance factors.

Multiferon Sales — If consolidated Multiferon net sales (as reported in U.S. dollars in the Viragen, Inc. consolidated financial statements) (“Multiferon Sales”) are less than $500,000, the bonus payout shall be $0.00. For Multiferon Sales between $500,000 and $1,500,000, the bonus payout shall be 3.750% (.0375) of Multiferon Sales. For sales above $1,500,000, the bonus payout shall be $56,250. Using this formula, representative payouts ahll be as follows:

Multiferon

Bonus Payout

Comments

499,999

0.0

Does not meet $500,000 threshold

500,000

18,750

50% payout

1,000,000

37,500

Target payout

1,500,000

56,250

150% — maximum payout

International Multiferon Development — Filing for Mutual Recognition in the EU and gaining approval are critical to the Company during 2006 and into 2007, in order to open up significant markets for the Multiferon product. This objective is broken down into three subparts, with three separate target dates for accomplishments:

			a.) If successful in negotiations with an appropriate Contract Research Organization (CRO) to provide regulatory services of a sufficient quality to enable the preparation of the regulatory application to be filed with the EMEA for MRP no later than September, 2006, the bonus payout will be $9,375 (50% of $18,750).

			b.) If successful in licensing Multiferon marketing rights to a suitable European marketing company on a exclusive basis no later than November 30, 2006 in preparation for a 2007 MRP approval, the bonus payout will be $9,375 (50% of $18,750).

			c.) If successful in licensing Multiferon marketing rights to a suitable European marketing company for an “upfront” licensing fee in excess of $5,000,000, the bonus payout will be $28,125 (150% of $18,750).

Qualitative Performance Evaluation — At the end of calendar year 2006, a performance evaluation will be conducted by surveying two sets of constituents: Viragen employees and Viragen Board of Directors. If the composite rating is “Below Expectations,” the payout shall be $0.00; “Meets Expectations” the payout shall be $18,750 (100%), and; “Exceeds Expectations” the payout shall be $28,125 (150%).

The Compensation Committee, with the approval of the Board shall have discretion in applying the performance criteria to reflect extenuating circumstances.

For years after calendar year 2006, prior to the beginning of each year, Incentive Bonus Calculation Procedures shall be prepared by the Compensation Committee and approved by the Board.