Employment Agreement w/ Charles A. Rice



 





EXHIBIT 10.99




EMPLOYMENT AGREEMENT



AGREEMENT dated as of March 29, 2004 (the “Effective Date”) by and between
VIRAGEN, INC., a Delaware corporation (“Employer” or the “Company”), and
Charles A. Rice (“Employee”).




W I T N E S S E T H:



WHEREAS, Employer desires to employ the Employee upon the terms and conditions
hereinafter set forth and Employee desires to accept employment upon such terms
and conditions; and



WHEREAS, Employer and Employee desire to set forth in writing the terms and
conditions of their agreements and understandings with respect to Employee’s
employment by Employer.




1. EMPLOYMENT



Employer hereby employs Employee, and Employee hereby accepts employment by
Employer, upon all the terms and conditions hereinafter set forth.




2. TERM OF AGREEMENT



This Agreement shall become effective and continue in effect until the third
anniversary of the Effective Date. Commencing on the second anniversary of the
Effective Date and on each anniversary date thereafter, the term of this
Agreement shall automatically be extended for one additional year unless at
least 90 days prior to such anniversary date, the Company or Employee shall
have given notice to the other that this Agreement shall not be extended,
whereupon the term of this Agreement shall expire upon such anniversary date
(the “Employment Term”).




3. EMPLOYEE’S REPRESENTATIONS AND WARRANTIES



Employee represents and warrants to Employer that he is free to accept
employment with Employer as contemplated herein and has no other written or
oral obligations or commitments of any kind or nature which would in any way
interfere with his acceptance of employment pursuant to the terms hereof or the
full performance of his obligations hereunder or the exercise of his best
efforts in his employment hereunder. Employee has made Employer aware of
existence of the separation agreement between Employee and a former employer,
which may require, from time to time, Employee to be interviewed, deposed or
otherwise testify in any ongoing legal proceedings that may pertain to the
Employee’s tenure as President and CEO of the former employer. It is not
anticipated that this separation agreement will interfere with the Employee’s
ability to perform under this Employment Agreement.




4. DUTIES AND EXTENT OF SERVICES



Employee shall be employed as Employer’s President and Chief Executive Officer
and, as such, shall, subject to the direction of the Chairman of the Board
and/or Board of Directors (“Board”), supervise the conduct the Employer’s
operations and affairs as assigned by the Chairman of the Board and/or Board,
and perform such other duties and responsibilities as may be assigned to
Employee from time to time consistent with such title by the Chairman of the
Board and/or Board. Employee shall use his best efforts to be loyal and
faithful at all times and constantly endeavor to improve his ability and his


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knowledge of the business of Employer in an effort to increase the value of his
services for the mutual benefit of Employer and Employee.




5. COMPENSATION





	 	A.	 	Base Salary. For the first full year of this agreement, Employee shall
receive an annual base salary of $300,000. Employee’s salary shall be
payable monthly in arrears, in accordance with the Company’s normal
payroll process. The Compensation Committee of the Board of Directors
(“Compensation Committee”) will recommend subsequent year’s base salary to
the Board. The base salary for the years following the first anniversary
of this Agreement shall be not less than $300,000.






	 	B.	 	Incentive bonus. Employee shall receive an annual incentive bonus
based upon performance against agreed standards. For the calendar year
2004, the target bonus is $75,000. As soon as practical following the end
of the calendar year, the Compensation Committee will evaluate Employee’s
performance against the agreed standards and recommend to the Board an
actual payout which shall range from 0% to 150% of the target bonus. The
procedure for the Compensation Committee’s calculation of the actual bonus
will be detailed in an addendum to this contract (Exhibit “A”) to be
completed not later than April 1, 2004. For subsequent calendar years
(and, if applicable, partial year): (i) the Compensation Committee will
recommend a target bonus to the Board, which will not be less than
$75,000, and; (ii) the criteria in the addendum (Exhibit “A”) will be
updated to reflect current performance expectations and weightings.





6. FRINGE BENEFITS AND EXPENSES





	 	A.	 	Employee Plans. Employee shall be eligible (subject to the terms and
conditions of particular plans and programs) to participate in such
medical, hospitalization, group health, accident, disability and life
insurance programs and plans, such pension, 401K, profit sharing, stock
option, incentive compensation and stock purchase plans and such other
employee benefit programs to the same extent such plans and programs are
made generally available from time to time by Employer to all of its other
similarly-situated employees; provided, however, Employer shall be under
no obligation to make any of such plans or programs available to its
employees or continue any which currently or in the future exist, except
as otherwise required by law.






	 	B.	 	Other Expenses. Employer shall promptly pay directly or reimburse
Employee for his reasonable out-of-pocket costs and expenses incurred in
connection with the performance of his duties and responsibilities
hereunder subject to the submission by Employee of appropriate invoices,
receipts and other supporting documentation, consistent with Employer’s
customary reimbursement policies and procedures.





7. STOCK OPTIONS



Employer hereby grants to Employee, options to acquire 1, 500,000 shares of the
Company’s Common Stock:





	 	A.	 	Options to acquire 1,000,000 shares as reflected in the Stock Option
Agreement attached hereto as Exhibit “B” and made part hereof (the
“Options”) for a period of five (5) years from the date hereof. Such
Options shall vest: (i) one-half (1/2) upon the Effective Date of the
Employment Agreement, and (ii) one-half (1/2) upon the first anniversary
of the Effective Date (the “Time Vested Stock Options”).





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	 	B.	 	Options to acquire 500,000 shares as reflected in the Stock Option
Agreement attached hereto as Exhibit “C” and made a part hereof for a
period of ten (10) years from the date hereof. Such options shall vest:
(i) for 250,000 shares, when the Volume Weighted Average Price (“VWAP”)
of Viragen, Inc. common stock trades at or above $.50 per share for
thirty consecutive trading days (the “$.50 VWAP Options”), and (ii) for
250,000 shares, when the VWAP of Viragen, Inc. common stock trades at or
above $1.00 per share for thirty consecutive trading days (the “$1.00
VWAP Options”) or (iii) in their entirety upon the tenth (10th)
anniversary of the Effective Date. The Options shall be exercisable as
of the closing price of the Company’s quoted stock (current symbol
“VRA”) on the Effective Date.




Upon a change of control (as defined in section 10D(ii) of this Agreement), (a
“Change of Control”), the Time Vested Stock Options shall vest immediately.
Upon a Change of Control if the Effective Transaction Price (as defined in the
Stock Option Agreement) is equal to or greater than $0.50, the $0.50 VWAP
Options shall vest immediately. Upon a Change of Control if the Effective
Transaction Price is equal to or greater than $1.00, the $1.00 VWAP Options
shall vest immediately.



Employer represents and warrants that (i) all shares underlying the Options
will be issued from shares authorized for transfer under the applicable
regulations of the Securities and Exchange Commission on Form S-8 and (ii) such
registration covering the shares underlying the Options will be maintained as
effective for the longer of (a) the Employment Term (including extensions
thereof, if applicable) or (b) the Exercise Period of the Options as defined in
Exhibits B and C.



In the event the Company spin-offs or split-offs any present or future
subsidiaries or affiliated companies (a “Related Company”) or creates a
tracking stock or similar instrument on behalf of a related business (each a
“Transaction”), Employee will be entitled to receive that number of options in
a Related Company equal to the percentage by which the Employee’s options in
the Company at the date of the Transaction date bears to the fully diluted
outstanding Common Stock of the Company at the date of the Transaction. For
the purpose hereof, options and warrants shall be deemed the same security.
The exercise price for such options shall be the price which bears the same
relationship to the fair market value of the Related Company on the date of the
Transaction as each of the Employees Company Option grant exercise prices bear
to the fair market value of the Company’s common stock on the date of the
Transaction i.e.,




	 	 	 	 	 	 	 	 	 	 	 
	Numerator:

	 	Exercise Price(s)	 	 	 	 	 	 	 	 
	

	 	of each	 	 	 	 	 	 	 	 
	

	 	of Employees
	 	 	 	Market value of	 	 	 	 
	

	 	Company Options
	 	 	 	Related Company
	 	 	 	Exercise Price of
	

	 	held on date of
	 	 	 	on date of
	 	 	 	Option in new
	

	 	Transaction
	 	X
	 	Transaction
	 	=
	 	Related Company
	

	 	

	 	(Multiplied by)	 	 	 	 	 	 
	Denominator:

	 	Market Price of	 	 	 	 	 	 	 	 
	

	 	Company common	 	 	 	 	 	 	 	 
	

	 	stock on date of	 	 	 	 	 	 	 	 
	

	 	the Transaction	 	 	 	 	 	 	 	 







8. VACATION



Employee shall be entitled to such normal vacation time off (of not less than
four weeks) as is granted to other members of senior management during each
twelve-month period of the Employment Term. Employee shall not be entitled to
compensation for any unused vacation upon termination of this Agreement. The
periods during which Employee will be absent from work shall be determined by
Employee taking into account the needs of Employer’s business.




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9. FACILITIES



Employer shall provide and maintain (or cause to be provided and maintained)
such facilities, equipment, supplies and personnel as it reasonably determines
is adequate for Employee’s performance of his duties and responsibilities under
this Agreement.




10. TERMINATION OF EMPLOYMENT





	 	A.	 	Termination Events. Notwithstanding any provisions of this Agreement
to the contrary, Employee’s employment may be terminated by Employer with
“Cause” (as hereinafter defined) effective upon the delivery of written
notice to Employee. In addition, Employee’s employment shall terminate
(i) upon Employee’s death or (ii) upon Employee becoming “Disabled” (as
hereinafter defined).






	 	B.	 	Definition of Disabled. For purposes of this Agreement, Employee shall
be deemed to be “Disabled” when, by reason of physical or mental illness
or of injury, he is unable to perform substantially all of the duties and
responsibilities required of him in connection with his employment
hereunder. No disability shall be deemed to exist until after Employee
shall be unable to perform his duties hereunder for ninety (90)
consecutive days (the “Disability Period”). If Employee shall have been
under a disability but shall have returned to work prior to the end of the
Disability Period, any new disability commencing within 30 days of the
termination of the prior disability shall be a continuation of the prior
disability, and the period of all such disabilities shall be added
together to determine whether, or how much of, the Disability Period has
elapsed.






	 	C.	 	Definition of Cause. For purposes of this Agreement, “Cause” shall be:
(a) conviction for fraud or felonious criminal conduct, from which no
appeal can be taken; (b) habitual drunkenness or drug addiction; (c)
material sanctions against Employee, imposed or consented to, in his
capacity as an employee of Employer or previous employers by regulatory
agencies governing Employer or against Employer because of wrongful acts
or conduct of Employee which have a material adverse affect upon the
Employer and its business; (d) material breach or default by Employee of
any of the material terms or conditions of this Agreement, and the
continuation of such material breach or default by Employee for a period
of seven days following the date of receipt of written notice from
Employer specifying the breach or default of Employee; or (e) the
resignation or quitting of Employee prior to the end of the Employment
Term, if applicable, (in this last event, Employee’s employment shall be
deemed terminated with Cause on the date that he resigns or quits).






	 	 	 	If Employee’s employment is terminated by Employer without cause, as
defined in this section, Employee shall be given 60 days written notice of
termination by Employer, and be entitled to receive one year’s
compensation and fringe benefits/expenses as provided for hereinabove.
Additionally, in the event of termination without cause, or non-renewal of
this Agreement at the end of the Employment Term, any vested but
unexercised stock options granted to Employee shall continue to be fully
exercisable through the expiration of 90 days from the date of
termination.





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	 	D.	 	Termination Following a Change of Control.






	 	i.	 	In the event that a “Change of Control” as hereinafter defined,
and the occurrence of a “Good Reason” as hereinafter defined, of the
Company shall occur at any time during the Employment Term or
extensions thereof, the Employee shall have the right to terminate
the Employee’s employment under this Agreement upon 30 days written
notice given at any time within one year after the occurrence of
such events, and such termination of the Employee’s employment with
the Company pursuant to this Subsection 10, then, the Employee shall
be entitled to such Compensation and Benefits as set forth in
Subsection 10C of this Agreement.






	 	ii.	 	For purposes of this Agreement, a “Change of Control” of the
Company shall mean a change in control (A) as set forth in Section
280G of the Internal Revenue Code or (B) of a nature that would be
required to be reported in response to Item 1 of the current report
on Form 8K, as in effect on the date hereof, pursuant to Section 13
or 15(d) of the Securities Exchange Act of 1934 (the “Exchange
Act”); provided that, without limitation, such a change in control
shall be deemed to have occurred at such time as:






	 	(a)	 	any person (as such term is used in Section 13(d) and
14(d) of the Exchange Act) is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the combined
voting power of the Company’s outstanding securities then
having the right to vote at elections of directors; or,






	 	(b)	 	the individuals who at the commencement date of this
Agreement the Board of Directors cease for any reason to
constitute a majority thereof unless the election, or
nomination for election, of each new director was approved by
a vote of at least two thirds of the directors then in office
who were directors at the commencement of this Agreement; or






	 	(c)	 	there is a failure to elect five or more (or such number
of directors as would constitute a majority of the Board of
Directors) candidates nominated by management of the Company
to the Board of Directors; or






	 	(d)	 	the business of the Company for which the Employee’s
services are principally performed is disposed of by the
Company pursuant to a partial or complete liquidation of the
Company, a sale of assets (including stock of a subsidiary of
the Company) or otherwise.




Anything herein to the contrary notwithstanding, this Subsection 10 will not
apply where the Employee gives the Employee’s explicit written waiver stating
that for the purposes of this Subsection 10 a Change in Control shall not be
deemed to have occurred. The Employee’s participation in any negotiations or
other matters in relation to a Change in Control shall in no way constitute
such a waiver which can only be given by an explicit written waiver as provided
in the preceding sentence.



Anything to the contrary notwithstanding, termination shall not be deemed
termination without Cause if there shall not have also occurred at or around a
change in control a second event.


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The second event is that the Employee is given “Good Reason” for choosing to
terminate. Good Reason means, without the Employee’s express written consent,
the occurrence of any of the following events after a Change in Control:





	 	A.	 	a reduction by the Employer of the Employee’s rate of annual
compensation,






	 	B.	 	the failure of the Employer to continue in effect any Employee benefit
plan or compensation plan in which the Employee participating following
the Change in Control, unless the Employee is permitted to participate in
other plans providing substantially comparable benefits, or the taking of
any action by the Employer which would adversely affect the Employee’s
participation in or materially reduce benefits under any such plan,
provided, however, that changes affecting the participation or benefits of
all similarly situated Employees shall not be treated as Good Reason
hereunder,






	 	C.	 	a materially adverse change in the level of the Employee’s employment
responsibilities,






	 	D.	 	a relocation of Employers offices such that Employee would be required
to relocate his primary residence to provide for a reasonable daily travel
distance to such new location.





11. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION




     Confidential Information. Employee acknowledges that Employee has been
informed that it is the policy of Employer to maintain as secret and
confidential all information relating to (i) the financial condition,
businesses and interests of Employer and its affiliates, (ii) the systems,
know-how, products, services, costs, inventions, patents, patent applications,
formulae, research and development procedures, notes and results, computer
software programs, marketing and sales techniques and/or programs, methods,
methodologies, manuals, lists and other trade secrets heretofore or hereafter
acquired, sold, developed and/or used by Employer and its affiliates and (iii)
the nature and terms of Employer’s and its affiliates’ relationships with their
respective customers, clients, suppliers, lenders, vendors, consultants,
independent contractors and employees (all such information being hereinafter
collectively referred to as “Confidential Information”), and Employee further
acknowledges that such Confidential Information is of great value to Employer
and its affiliates and, in and by reason and as a result of Employee’s
employment by Employer, Employee will be making use of, acquiring and/or adding
to such Confidential Information. Therefore, Employee understands that it is
reasonably necessary to protect Employer’s and its affiliates’ trade secrets,
goodwill and business interests that Employee agree and, accordingly, Employee
does hereby agree, that Employee will not directly or indirectly (except where
authorized by the Board of Employer for the benefit of Employer and/or its
affiliate(s) and/or as required in the course of his employment) at any time
hereafter divulge or disclose for any purpose whatsoever to any persons, firms,
corporations or other entities other than Employer or its affiliates
(hereinafter referred to collectively as “Third Parties”), or use or cause or
authorize any Third Parties to use, any such Confidential Information, except
as otherwise required by law. Notwithstanding the foregoing, “Confidential
Information” shall not include information or data that was (a) known to
Employee on the Effective Date or subsequently disclosed to Employee by a Third
Party having the right to do so, or (b) generally known or available to the
public as of the Effective Date or which subsequently entered the public domain
other than by virtue of disclosure by Employee.



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     Employer’s Materials. In accordance with the foregoing, Employee
furthermore agrees that (i) Employee will at no time retain or remove from the
premises of Employer or its affiliates any research and development materials,
drawings, notebooks, notes, reports, formulae, software programs or discs or
other containers of software, manuals, data, books, records, materials or
documents of any kind or description for any purpose unconnected with the
strict performance of Employee’s duties with Employer and (ii) upon the
cessation or termination of Employee’s employment with Employer for any reason,
Employee shall forthwith deliver or cause to be delivered up to Employer any
and all research and development materials, drawings, notebooks, notes,
reports, formulae, software programs or discs or other containers of software,
manuals, data, books, records, materials and other documents and materials in
Employee’s possession or under Employee’s control relating to any Confidential
Information or any property or information which is otherwise the property of
Employer or its affiliates.



12. COVENANT-NOT-TO-COMPETE




     In view of the Confidential Information to be obtained by or disclosed to
Employee, because of the know-how acquired and to be acquired by Employee
relative to the operations disclosed below, and as a material inducement to
Employer to enter into this Agreement and continue to employ Employee, Employee
covenants and agrees that, so long as Employee is employed by Employer and for
a period of one (1) year after Employee ceases to be employed by Employer as
the result of a termination for any reason as provided in Paragraph 10C hereof
or as a result of Employee not renewing pursuant to Paragraph 2. Employee
hereby agrees to refrain from, anywhere in the world (the “Geographical Area”),
directly or indirectly owning, managing, operating, controlling or financing,
or participating in the ownership, management, control or financing of, or
being connected with or having an interest in, or otherwise taking any part as
a stockholder (other than deminimus amounts as a passive investor), director,
officer, employee, agent, consultant, partner or otherwise in any business
engaged in human leukocyte interferon therapy or avian transgenics.


13. EMPLOYER’S REMEDIES FOR BREACH OF SECTIONS 11 OR 12



Employee covenants and agrees that if Employee shall violate or breach any of
Employee’s covenants or agreements provided for in Sections 11 and/or 12
hereof, Employer and/or its affiliates shall be entitled to an accounting and
repayment of all profits, compensation, commissions, remuneration or benefits,
which Employee directly or indirectly has realized or realizes as a result of,
growing out of or in connection with any such violation or breach. In
addition, in the event of a breach or violation or threatened or imminent
breach or violation of any provisions of Sections 11 and/or 12 hereof, Employer
and/or its affiliates shall be entitled to a temporary and permanent injunction
or any other appropriate decree of specific performance or equitable relief,
without posting of bond, from a court of competent jurisdiction in order to
prevent, prohibit or restrain any such breach or violation or threatened or
imminent breach or violation by Employee, by Employee’s partners, agents,
representatives, servants, employers or employees. Employer shall be entitled
to such injunctive or other equitable relief in addition to any damages which
are suffered, and the prevailing party shall be entitled to reasonable
attorneys’ and paralegals’ fees and costs and other costs incurred in
connection with any such litigation, both before and at trial and at all
tribunal levels. Resort by Employer and/or its affiliates to such injunctive
or other equitable relief shall not be deemed to waive or to limit in any
respect any other rights or remedies which Employer or its affiliates may have
with respect to such breach or violation.


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The provisions of this Employment Agreement shall not prevail over any
applicable law, regulation or restriction that may apply to the conduct of the
Company’s business and neither party is compelled to adhere to this Agreement
if, in so doing, a violation of law, regulation or restriction would result.
In the event Employee chooses to terminate his employment as a result of an
unremedied violation of such law or regulation, Employer’s remedies pursuant to
this paragraph 13 would not be applicable.




14. REASONABLENESS OF RESTRICTIONS





	 	A.	 	Reasonableness. Employee acknowledges that any material breach or
violation of Sections 11 and/or 12 hereof will cause irreparable injury
and damage and incalculable harm to Employer and its affiliates and that
it would be very difficult or impossible to measure the damages resulting
from any such breach or violation. Employee further acknowledges that
Employee has carefully read and considered the provisions of Sections 11
and 12 hereof and, having done so, agrees that the restrictions and
remedies set forth in such Sections (including, but not limited to, the
time period, geographical and types of restrictions imposed) are fair and
reasonable and are reasonably required for the protection of the business,
trade secrets, interests and goodwill of Employer and its affiliates.






	 	B.	 	Severability. Employee understands and intends that each provision and
restriction agreed to by Employee in Sections 12 and 13 hereof shall be
construed as separate and divisible from every other provision and
restriction and that, in the event that any one of the provisions of, or
restrictions in, Sections 12 and/or 13 hereof shall be held to be invalid
or unenforceable, the remaining provisions thereof and restrictions
therein shall nevertheless continue to be valid and enforceable as though
the invalid or unenforceable provisions or restrictions had not been
included therein, and any one or more of such valid provisions and
restrictions may be enforced in whole or in part as the circumstances
warrant. In the event that any such provision relating to time period
and/or geographical and/or type of restriction shall be declared by a
court of competent jurisdiction to exceed the maximum or permissible time
period, geographical area or type of restriction such court deems
reasonable and enforceable, said time period and/or geographical and/or
type of restriction shall be deemed to become and shall thereafter be the
maximum time period and/or geographical restriction and/or type of
restriction which such court deems reasonable and enforceable.






	 	C.	 	Survivability. The restrictions, acknowledgments, covenants and
agreements of Employee set forth in Sections 11, 12, and 13 of this
Agreement shall survive any termination of this Agreement or of Employee’s
employment (for any reason, including expiration of the Employment Term,
including extensions thereof, if applicable).






	 	D.	 	Comparable Restrictions. Employer agrees that it will use its best
efforts to have other senior executives execute and observe agreements
containing similar provisions as are contained in Sections 11, 12, 13 and
14 hereof.





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15. EMPLOYEE’S DISCLOSURES AND REPRESENTATIONS AND WARRANTIES.



Employee hereby acknowledges, represents and warrants to, and/or agrees with,
Employer as follows:





	 	(a)	 	Subject to Employee’s right to designate family members to own the
stock acquired through exercise of the Options, if any, that Employee is
acquiring the Options for his own account, for investment purposes only,
and not with a view to the public sale or distribution thereof, except as
applicable under any Form S-8 Registration filed by the Company covering
the Shares underlying the Options.






	 	(b)	 	That Employee has full right, power and authority to perform all
obligations under this Agreement.






	 	(c)	 	Employee hereby agrees to indemnify and hold harmless Employer and its
shareholders, directors, officers, employees and agents from and against
any and all loss, damage, liability, cost or expense (including reasonable
attorneys’ and paralegals’ fees and costs before and at trial and at all
appellate levels) due to or arising out of any material inaccuracy in, or
material breach of, any material representation, warranty or covenant of
Employee contained herein.





16. INDEPENDENT COUNSEL



Employer and Employee agree that each of them have been, or were advised and
fully understand that they are entitled to be represented by independent legal
counsel with respect to all matters contemplated herein from the commencement
of negotiations at all times through the execution hereof.




17. LAW APPLICABLE



This Agreement shall be governed by and construed pursuant to the laws of the
State of Florida, without giving effect to conflicts of laws principles.




18. ARBITRATION



Any dispute, controversy, or claim arising out of or in connection with this
Agreement, including any questions regarding its existence, validity or
termination, shall be finally resolved by arbitration by the American
Arbitration Association or JAMS/Endispute except as otherwise provided
hereafter. Any such dispute, controversy or claim shall be submitted to a
board of arbitrators composed of three competent disinterested persons, one to
be chosen by Employer, one by Employee and the third to be selected by the two
arbitrators so chosen. Such arbitration shall be conducted in English and all
hearings in connection with such arbitration will take place in Broward County,
Florida. The prevailing party shall be entitled to reimbursement of any and
all fees of the arbitration proceedings.



The arbitrators may not award non-monetary or equitable relief of any sort.
They shall have no power to award punitive damages or any other damages not
measured by the prevailing party’s actual damages, and the parties expressly
waive their right to obtain such damages in arbitration or in any other forum.
In no event, even if any other portion of these provisions is held to be
invalid or unenforceable, shall the arbitrators have power to make an award or
impose a remedy that could not be made or imposed by a court deciding the
matter in the same jurisdiction.



No discovery will be permitted in connection with the arbitration unless it is
expressly authorized by the arbitration panel upon a showing of substantial
need by the party seeking discovery.


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All aspects of the arbitration shall be treated as confidential. Neither the
parties nor the arbitrators may disclose the existence, content or results of
the arbitration, except as necessary to comply with legal or regulatory
requirements. Before making any such disclosure, a party shall give written
notice to all other parties and shall afford such parties a reasonable
opportunity to protect their interests.



The result of the arbitration will be binding on the parties, and judgement on
the arbitrators’ award may be entered in any court having jurisdiction.




19. NOTICES



Any notices required or permitted to be given pursuant to this Agreement shall
be sufficient, if in writing, and if personally delivered or sent by certified
or registered mail, return receipt requested, to his residence, in the case of
Employee, or to its then principal office, in the case of Employer.



Employer agrees to notify Employee, by certified mail, 120 days prior to March
28, 2007 and each March 28th anniversary as further described in Paragraph 2 of
this Agreement.




20. SUCCESSION



This Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective legal representatives, heirs, assignees and/or
successors in interest of any kind whatsoever; provided, however, that Employee
acknowledges and agrees that he cannot assign or delegate any of his rights,
duties, responsibilities or obligations hereunder to any other person or
entity.




21. ENTIRE AGREEMENT



This Agreement constitutes the entire final agreement between the parties with
respect to, and supersedes any and all prior agreements, both oral and written,
between the parties hereto, except as related to rights of the Employee and
obligations related thereto of Employer regarding previously granted stock
options and previously purchased stock, as may have been modified from time to
time. The subject matter hereof may not be amended, modified or terminated
except by a writing signed by the parties hereto.




22. SEVERABILITY



If any provision of this Agreement shall be held to be invalid or
unenforceable, and is not reformed by a court of competent jurisdiction, such
invalidity or unenforceability shall attach only to such provision and shall
not in any way affect or render invalid or unenforceable any other provision of
this Agreement, and this Agreement shall be carried out as if such invalid or
unenforceable provision were not contained herein.




23. NO WAIVER



A waiver of any breach or violation of any term, provision or covenant
contained herein shall not be deemed a continuing waiver or a waiver of any
future or past breach or violation. No oral waiver shall be binding.




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24. ATTORNEY’S FEES



In the event that either of the parties to this Agreement institutes suit
against the other party to this Agreement to enforce any of his or its rights
hereunder, the prevailing party in such action shall be entitled to recover
from the other party all reasonable costs thereof, including reasonable
attorneys’ and paralegals’ fees and costs incurred before and at trial and at
all tribunal levels.




25. COUNTERPARTS



This Agreement may be executed in counterparts, each of which shall be an
original, but both of which together shall constitute one and the same
instrument.




26. INDEMNITY OF EMPLOYEE



Employer shall indemnify and hold harmless Employee from and against any and
all claims, judgements, fines, penalties, liabilities, losses, costs and
expenses (including reasonable attorneys’ fees and costs) asserted against or
incurred by Employee as a result of acts or omissions of Employee taken or made
in the course of performing his duties for Employer or by reason of Employee
acting or having acted as a director or officer of Employer, to the maximum
extent permitted by law, including Section 607.0850, Florida Statutes
(including the advancement of expense provisions thereof); provided, however,
that such indemnity shall not apply to acts or omissions of Employee which
constitute misconduct, gross negligence or which were intended by Employee to
personally benefit Employee, directly or indirectly, at the expense of
Employer, unless the matter which benefits Employee was first fully disclosed
to the Board of Directors of Employer and approved by said Board.



Employer further agrees to use its best efforts to maintain Directors and
Officers insurance coverage, for a minimum of $10 million, during the
Employment Term or any extensions thereof.



IN WITNESS WHEREOF, the undersigned have hereunto set their hands on the day
and year first above written.



	 	 	 	 	 
	 	VIRAGEN, INC. 

 	 
	 	By:  	/s/ Carl N. Singer
 	 
	 	 	CARL N. SINGER 	 
	 	 	Chairman of the Board of Directors 	 
	 



	 	 	 	 	 
	 	EMPLOYEE

 	 
	 	/s/ Charles A. Rice
 	 
	 	Charles A. Rice 	 
	 	 	 




11









 






	 	 	 	 	 



Exhibit B




STOCK OPTION AGREEMENT



STOCK OPTION AGREEMENT, dated as of March 29, 2004 (the “Effective Date”)
between Viragen, Inc. a Delaware Corporation (the “Company”) and Charles A.
Rice (“Optionee”).



The Company hereby grants to Optionee an Option to acquire 1,000,000 shares of
Common Stock, par value $.01 per share, of the Company (the “Common Stock”),
subject to the following terms and conditions:





     1. Grant of Option. The Company hereby grants to Optionee (the “Option”)
to purchase up to 1,000,000 shares of Common Stock (the “Shares”), to be
transferred upon the exercise thereof, fully paid and nonassessable.



     2. Exercise Price. The exercise price of the Shares subject to the Option
shall be at market at the date of grant, $0.21 per share. The Company shall
pay all original issue or transfer taxes upon the exercise of the Option by
Optionee.



     3. Exercisability of Option; Rights and Privileges. Subject to the
provisions of Paragraph 6 hereof, the Option shall be exercisable by Optionee ;
(i) one-half (1/2) upon the Effective Date and (ii) one-half (1/2) upon the
first anniversary of the Effective Date (the “Exercise Dates”) for a period of
five (5) years from each Exercise Date.


All granted but unexercised Options shall continue to be fully vested and
exercisable in accordance with the provisions herein:





     (i) if there occurs any corporate transaction (which shall include a
series of corporate transactions occurring within 60 days or occurring pursuant
to a plan), that has the result that shareholders of the Company immediately
before such transaction cease to own at least 66 2/3 percent of the voting
stock of the Company in a (a) reorganization, (b) consolidation, (c) merger,
(d) liquidation or (e) a similar of corporate transaction;




     (ii) if the shareholders of the Company shall approve a plan of merger,
consolidation, reorganization, liquidation or dissolution in which the Company
does not survive (unless the approved merger, consolidation, reorganization,
liquidation or dissolution is subsequently abandoned); or




     (iii) if the shareholders of the Company shall approve a plan for the
sale, lease, exchange or other disposition of all or substantially all the
property and assets of the Company (unless such plan is subsequently
abandoned).



     4. Non-Assignability of Option. The Option shall not be given, granted,
sold, exchanged, transferred, pledged, encumbered, assigned or otherwise
disposed of by Optionee, other than by will, the laws of descent and
distribution or estate planning purposes, and during the lifetime of Optionee,
shall not be exercisable by any other person, but only by Optionee.



     5. Method of Exercise of Option. Optionee shall notify the Company by
written notice, in the form of the Notice of Exercise attached hereto
(Attachment A), delivered to the Company’s principal office, attention: Chief
Financial Officer. The payment for the Shares shall be made by



12









 




Optionee’s check payable to the order to the Company in full payment for the
total exercise price of the number of Shares purchased. As soon as practicable
after the receipt of such Notice of Exercise and accompanying payment for the
purchase of Shares, the Company shall, at its principal office, tender to
Optionee a certificate or certificates issued in Optionee’s name evidencing the
Shares purchased by Optionee hereunder.




     6. Termination of Option. To the extent exercisable but not exercised,
the Option shall terminate upon the first to occur of the following dates:




     (a) five (5) years from the Exercise Date as defined herein if still in
the employ of the Company; or




     (b) the expiration of ninety (90) days following the date Optionee’s
employment terminates with the Company and/or any of its subsidiaries in the
event of normal retirement or termination without cause.



     Subject to the provisions of this paragraph, in the event of Optionee’s
death, the exercisable but unexercised portion of the Option may be exercised
by the estate of Optionee, or by the person who acquired the right to exercise
the Option by bequest or inheritance or by reason of the death of Optionee.



     7. Securities Laws. Employer represents and warrants that (i) all shares
underlying the Options will be registered under the applicable regulations of
the Securities and Exchange Commission on Form S-8; and (ii) such registration
covering the shares underlying the Options will be maintained as effective for
the longer of (a) the Employment Term and any extensions thereof, if
applicable, or (b) the Exercise Period of the Options as defined herein.



     8. Adjustment of Shares. If at any time prior to the expiration or
exercise in full of the Option, there shall be any increase or decrease in the
number of issued and outstanding shares of the Common Stock through the
declaration of a stock dividend or through any recapitalization resulting in a
stock split-up, combination or exchange of the Common Stock, then and in such
event:




     (i) appropriate adjustment shall be made in the maximum number of Shares
available for grant, so that the same percentage of the Company’s issued and
outstanding Shares shall continue to be subject to being so optioned; and




     (ii) appropriate adjustment shall be made in the number of Shares, and the
exercise price per Share thereof, that remain unexercised under the Option, so
that the same percentage of the Company’s issued and outstanding shares of
Common Stock shall remain subject to purchase at the same aggregate exercise
price.


Except as otherwise expressly provided herein, the issuance by the Company of
shares of its capital stock of any class, or securities convertible into shares
of capital stock of any class, either in connection with a direct sale of upon
the exercise of rights or warrants to subscribe therefore, or upon conversions
of shares or obligations the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number of exercise price of the Shares that remain
unexercised under the Option.


13









 







Without limiting the generality of the foregoing, the existence of unexercised
Shares under the Option shall not affect in any manner the right or power of
the Company to make, authorize or consummate (i) any or all adjustments,
recapitalizations, reorganizations or other changes in the Company’s capital
structure or its business; (ii) any merger or consolidation of the Company;
(iii) any issue by the Company of debt securities, or preferred or preference
stock that would rank above the Shares issuable upon exercise of the Option;
(iv) the dissolution or liquidation of the Company; (v) any sale, transfer or
assignment of all or any part of the assets or business of the Company; or (vi)
any other corporate act or proceeding, whether of a similar character or
otherwise.




     9. No Rights as Stockholder. Optionee shall have no rights as a
stockholder of the Company in respect of the Shares as to which the Option
shall not have been exercised and payments made therefore as herein provided.



     10. Binding Effect. Except as otherwise provided herein, this Agreement
shall be binding upon and inure to the benefit of the parties hereto, their
heirs, legal representatives, successors and permitted assigns. Optionee
acknowledges that Optionee has read and understands the Plan and agrees to
abide by its terms.



     11. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to the
conflict of laws principles thereof. All terms not defined in this Agreement
shall have the same meaning as in the Plan.



     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.


	 	 	 	 	 
	 	VIRAGEN, INC.

 	 
	 	By:  	/s/ Carl N. Singer
 	 
	 	 	Carl N. Singer 	 
	 	 	Chairman 	 
	 



	 	 	 	 	 
	 	OPTIONEE

 	 
	 	/s/ Charles A. Rice
 	 
	 	Charles A. Rice 	 
	 	 	 




14









 






	 	 	 	 	 



ATTACHMENT A




NOTICE OF EXERCISE



The undersigned hereby irrevocably elects to exercise the within Option to the
extent of purchasing ___shares of Common Stock of Viragen, Inc., a
Delaware Corporation, and hereby makes payments of $___in payment
therefor.



	 	 	 	 
	 

	 	

Signature
	 
	 

	 	

Date







INSTRUCTIONS FOR ISSUANCE OF STOCK AND CORPORATE RECORDS




	 	 	 	 
	Name:

	 	

(Please type or print in block letters)
	 
	 	 
	Address:

	 	

	 
	 	 
	

	 	

	 
	 	 
	Social Security #:

	 	








Phone #: (____)______________________________




Fax #: (____)________________________________




15









 






Exhibit C




STOCK OPTION AGREEMENT



STOCK OPTION AGREEMENT, dated as of March 29, 2004 (the “Effective Date”)
between Viragen, Inc. a Delaware Corporation (the “Company”) and Charles A.
Rice (“Optionee”).



The Company, hereby grants to Optionee an Option to acquire 500,000 shares of
Common Stock, par value $.01 per share, of the Company (the “Common Stock”),
subject to the following terms and conditions:




     1. Grant of Option. The Company hereby grants to Optionee (the “Option”)
to purchase up to 500,000 shares of Common Stock (the “Shares”), to be
transferred upon the exercise thereof, fully paid and nonassessable.



     2. Exercise Price. The exercise price of the Shares subject to the Option
shall be at market at the date of grant, $0.21 per share. The Company shall
pay all original issue or transfer taxes upon the exercise of the Option by
Optionee.



     3. Exercisability of Option; Rights and Privileges. Subject to the
provisions of Paragraph 6 hereof, the Option shall be exercisable by Optionee ;
(i) one-half (1/2) upon the Volume Weighted Average Price (VWAP) of the
Company’s common stock trading at or above $0.50 per share for thirty (30)
consecutive trading days; (ii) one-half (1/2) upon the VWAP of the Company’s
common stock trading at or above $1.00 per share for thirty (30) consecutive
trading days or (iii) in their entirety on the tenth (10th) anniversary of the
Effective Date.


All granted but unexercised Options shall continue to be fully vested and
exercisable in accordance with the provisions herein:



     (i) if there occurs any corporate transaction (which shall include a
series of corporate transactions occurring within 60 days or occurring pursuant
to a plan), that has the result that shareholders of the Company immediately
before such transaction cease to own at least 66 2/3 percent of the voting
stock of the Company in a (a) reorganization, (b) consolidation, (c) merger,
(d) liquidation or (e) a similar of corporate transaction;




     (ii) if the shareholders of the Company shall approve a plan of merger,
consolidation, reorganization, liquidation or dissolution in which the Company
does not survive (unless the approved merger, consolidation, reorganization,
liquidation or dissolution is subsequently abandoned); or



     (iii) if the shareholders of the Company shall approve a plan for the
sale, lease, exchange or other disposition of all or substantially all the
property and assets of the Company (unless such plan is subsequently
abandoned).



     4. Non-Assignability of Option. The Option shall not be given, granted,
sold, exchanged, transferred, pledged, encumbered, assigned or otherwise
disposed of by Optionee, other than by will, the laws of descent and
distribution or estate planning purposes, and during the lifetime of Optionee,
shall not be exercisable by any other person, but only by Optionee.



16









 





     5. Method of Exercise of Option. Optionee shall notify the Company by
written notice, in the form of the Notice of Exercise attached hereto
(Attachment A), delivered to the Company’s principal office, attention: Chief
Financial Officer. The payment for the Shares shall be made by Optionee’s
check payable to the order to the Company in full payment for the total
exercise price of the number of Shares purchased. As soon as practicable after
the receipt of such Notice of Exercise and accompanying payment for the
purchase of Shares, the Company shall, at its principal office, tender to
Optionee a certificate or certificates issued in Optionee’s name evidencing the
Shares purchased by Optionee hereunder.



     6. Termination of Option. To the extent exercisable but not exercised,
the Option shall terminate upon the first to occur of the following dates:




     (a) Ten (10) years from the Exercise Date as defined herein if still in
the employ of the Company; or




     (b) The expiration of ninety (90) days following the date Optionee’s
employment terminates with the Company and/or any of its subsidiaries in the
event of normal retirement or termination without cause.



     Subject to the provisions of this paragraph, in the event of Optionee’s
death, the exercisable but unexercised portion of the Option may be exercised
by the estate of Optionee, or by the person who acquired the right to exercise
the Option by bequest or inheritance or by reason of the death of Optionee.



     7. Securities Laws. Employer represents and warrants that (i) all shares
underlying the Options will be registered under the applicable regulations of
the Securities and Exchange Commission on Form S-8; and (ii) such registration
covering the shares underlying the Options will be maintained as effective for
the longer of (a) the Employment Term and any extensions thereof, if
applicable, or (b) the Exercise Period of the Options as defined herein.



     8. Adjustment of Shares. If at any time prior to the expiration or
exercise in full of the Option, there shall be any increase or decrease in the
number of issued and outstanding shares of the Common Stock through the
declaration of a stock dividend or through any recapitalization resulting in a
stock split-up, combination or exchange of the Common Stock, then and in such
event:




     (i) appropriate adjustment shall be made in the maximum number of Shares
available for grant, so that the same percentage of the Company’s issued and
outstanding Shares shall continue to be subject to being so optioned; and




     (ii) appropriate adjustment shall be made in the number of Shares, and the
exercise price per Share thereof, that remain unexercised under the Option, so
that the same percentage of the Company’s issued and outstanding shares of
Common Stock shall remain subject to purchase at the same aggregate exercise
price.


Except as otherwise expressly provided herein, the issuance by the Company of
shares of its capital stock of any class, or securities convertible into shares
of capital stock of any class, either in connection with a direct sale of upon
the exercise of rights or warrants to subscribe therefore, or upon conversions
of shares or obligations the Company convertible into such shares or other
securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number of exercise price of the Shares that remain
unexercised under the Option.


17









 







Without limiting the generality of the foregoing, the existence of unexercised
Shares under the Option shall not affect in any manner the right or power of
the Company to make, authorize or consummate (i) any or all adjustments,
recapitalizations, reorganizations or other changes in the Company’s capital
structure or its business; (ii) any merger or consolidation of the Company;
(iii) any issue by the Company of debt securities, or preferred or preference
stock that would rank above the Shares issuable upon exercise of the Option;
(iv) the dissolution or liquidation of the Company; (v) any sale, transfer or
assignment of all or any part of the assets or business of the Company; or (vi)
any other corporate act or proceeding, whether of a similar character or
otherwise.




     9. No Rights as Stockholder. Optionee shall have no rights as a
stockholder of the Company in respect of the Shares as to which the Option
shall not have been exercised and payments made therefore as herein provided.



     10. Binding Effect. Except as otherwise provided herein, this Agreement
shall be binding upon and inure to the benefit of the parties hereto, their
heirs, legal representatives, successors and permitted assigns. Optionee
acknowledges that Optionee has read and understands the Plan and agrees to
abide by its terms.



     11. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to the
conflict of laws principles thereof. All terms not defined in this Agreement
shall have the same meaning as in the Plan.



     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.


	 	 	 	 	 
	 	VIRAGEN, INC.

 	 
	 	By:  	/s/ Carl N. Singer
 	 
	 	 	Carl N. Singer 	 
	 	 	Chairman 	 
	 



	 	 	 	 	 
	 	OPTIONEE

 	 
	 	/s/ Charles A. Rice
 	 
	 	Charles A. Rice 	 
	 	 	 




18









 






	 	 	 	 	 



ATTACHMENT A




NOTICE OF EXERCISE



The undersigned hereby irrevocably elects to exercise the within Option to the
extent of purchasing ___shares of Common Stock of Viragen, Inc., a
Delaware Corporation, and hereby makes payments of $___in payment
therefor.




	 	 	 	 
	 

	 	

Signature
	 
	 

	 	

Date







INSTRUCTIONS FOR ISSUANCE OF STOCK AND CORPORATE RECORDS




	 	 	 	 
	Name:

	 	

(Please type or print in block letters)
	 
	 	 
	Address:

	 	

	 
	 	 
	

	 	

	 
	 	 
	Social Security #:

	 	








Phone #: (____)______________________________




Fax #: (____)________________________________





19