Bavarian Nordic awards warrants to management and certain employees and introduces incentive programme for all employees

The Board of Directors in Bavarian Nordic A/S has decided to award warrants to management, certain members of management in subsidiaries and the Board of Directors. The Board decision is made in accordance with the shareholder authorisation for the Board of Directors adopted as Article 5f of the Articles of Association and the Company's guidelines regarding incentive programs. The award is made by the Board of Directors and exercise is limited by and governed by the Danish Act on Options for Employees (the Stock Option Act/aktieoptionsloven) regarding termination of employment prior to exercise of warrants.

A total of 175,000warrants are awarded for subscription of up to 175,000shares of a nominal value of DKK 10 at an exercise price of DKK 156 per share. The exercise price is established as the average share price ("closing price") for the Company's share in a period of 15 business days prior to this day added a 15 % premium.The warrants can be exercised wholly or partly in a period of 14 days commencing from the day of publication of the Company's half-year Report in the year of 2011, from the day of publication of the Company's Annual Results for 2011 (spring 2012), from the day of publication of the Company's half-year Report 2012 and/or in a period of 14 days commencing from the day of publication of the Company's Annual Results for 2012 (spring 2013).

Under this program the Board of Directors will receive a total of 20,000 warrants, CEO & President 20,000 warrants, members of executive management 75,000warrants and Managerial Staff a total of 60,000 warrants.

The value of each warrant equals DKK 49 and is calculated on the Black-Scholes model with a risk-free interest rate of 4.5 per cent and on the historical volatility of the shares. The calculation is based on a market value of the share of DKK 156 per share.

The award of warrants will incur consequential amendments to the Articles of Association.

Referring to the Danish Securities Act, Section 28a it is announced that the following people, obliged to notify the Company of transactions involving Bavarian Nordic securities, are awarded warrants:

Chairman of the Board Asger Aamund (4,000 warrants), other members of the Board of Directors Erling Johansen (4,000 warrants), Flemming Pedersen (4,000 warrants), Claus Bræstrup (4,000 warrants) andGerard Van Odijk (4,000 warrants). CEO and President Anders Hedegaard (20,000 warrants), members of executive management Anders Gram (15,000warrants), Morten Max Rasmussen (15,000 warrants), Nicolai Buhl Andersen (15,000 warrants), Ole Larsen (15,000 warrants) and Paul Chaplin (15,000 warrants).

Incentive program for employees in Bavarian Nordic A/S, Bavarian Nordic GmbH and Bavarian Nordic Inc.
In accordance with a board decision of today, 17 October 2008, a three year incentive program is introduced in November for all employees in the company, Bavarian Nordic GmbH and Bavarian Nordic Inc. The program is a cash bonus program based on so-called phantom shares (bonus program based on the company's shares). This means that each employee in the program will be entitled to exercise a number of phantom shares when the program expires in 2011 and, thus, receive a cash bonus calculated from the increase in the company's share price.

With effect from 1 November 2008 every month each employee is awarded up to three phantom shares per month of employment until November 2011 and can during the term of the program receive a maximum of 108 phantom shares. New employees employed after commencement of the program will participate in the program after 3 months employment. The exercise price has been established to be DKK 156, on the basis of the same terms that apply to the abovementioned warrants. At the time of exercise each employee in the program will receive a cash bonus per phantom share equivalent to DKK 1 per share point the company's share price exceeds the exercise price. The cash bonus is subject to taxation.

The exercise period is a two week period in connection with the company's release of its quarterly report for third quarter in 2011. Exercise of phantom shares is subject to the company's share price exceeding the exercise price by at least 10 per cent at the time of exercise in 2011.

Based on the current number of employees in the company, Bavarian Nordic GmbH and Bavarian Nordic Inc this 3 year incentive program will comprise up to 28,296 phantom shares, of which the CEO & President will receive up to 108 phantom shares and members of executive management will receive up to 648 phantom shares. The average value of each phantom share equals DKK 30 for existing employees in the company. The value is calculated on the basis of the Black-Scholes model subject to the same conditions that applies to the warrants.