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.




	 	1.	 	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
	 
	 






	 	2.	 	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).






	 	3.	 	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.