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Bavarian Nordic Introduces Incentive Program and Issues Warrants

KVISTGAARD, Denmark, December 13, 2013 – Bavarian Nordic A/S (OMX: BAVA) announced today that the Company, in accordance with a board decision of today, introduces a three year incentive program in January 2014 for all employees in the Bavarian Nordic Group. The program is a cash bonus program based on so-called phantom shares (bonus program based on the Company’s share price). This means that each employee in the program will be entitled to exercise a number of phantom shares when the program expires in 2017 and, thus, receive a cash bonus calculated from the increase in the Company’s share price. The incentive program will not have a dilutive effect on the shareholders.

With effect from 1 January 2014 every month each employee is awarded up to six phantom shares per month of employment until 31 December 2016 and can during the term of the program receive a maximum of 216 phantom shares. Awards will terminate if the employment is terminated. New employees will participate in the program after 3 months employment. The exercise price is DKK 96.5 and has been established as the average share price (“closing price”) for the Company’s share in a period of 15 business days prior to today added a 15 % premium. 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 share price of the Company’s shares exceeds the exercise price. The cash bonus is subject to taxation. 

The phantom shares may be exercised from 16 January 2017 to 29 January 2017 (both dates inclusive). Exercise of phantom shares is subject to the price of the Company’s shares exceeding the exercise price by at least 10 % at the time of exercise in 2017. 

Based on the current number of employees in the Group, this 3 year incentive program will comprise up to 94,608 phantom shares, of which the President & CEO will receive up to 216 phantom shares and other members of executive management will receive up to a total of 648 phantom shares. The average present value of each phantom share equals DKK 9.3 calculated on the basis of the Black-Scholes model with a risk-free interest rate of 0.74 per cent and on the historical volatility of the shares. The calculation is based on a market value of the share of DKK 82 per share. 

Furthermore, the Board of Directors in Bavarian Nordic A/S has today decided to award warrants to certain new employees in the Bavarian Nordic Group. The Board decision is made in accordance with the shareholder authorization for the Board of Directors adopted as Article 5b 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 70,000 warrants are awarded for subscription of up to 70,000 shares of a nominal value of DKK 10 each at an exercise price of DKK 96.5 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. 24.550 of the issued warrants are reissued in accordance with Article 5b and Articles 5n, 5o, 5p and 5r of the Articles of Association. 

The warrants can be exercised wholly or partly in a period of 14 days commencing from the day of publication of the Company’s annual report for 2016, from the day of publication of the Company’s half-year report for 2017, from the day of publication of the Company’s annual report for 2017 and/or in a period of 14 days commencing from the day of publication of the Company’s half-year report for 2018. 

The value of each warrant equals DKK 16.6 and is calculated on the Black-Scholes model with a risk-free interest rate of 0.74 per cent and on the historical volatility of the shares. The calculation is based on a market value of the share of DKK 82 per share. 

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

 

Asger Aamund
Chairman of the Board

Contacts
Anders Hedegaard, President & CEO. Phone +45 23 20 30 64 

About Bavarian Nordic
Bavarian Nordic is an international biotechnology company developing and manufacturing novel cancer immunotherapies and vaccines for infectious diseases. Lead product candidates are PROSTVAC®, an immunotherapy product candidate for advanced prostate cancer that is the subject of an ongoing pivotal Phase 3 clinical trial and IMVAMUNE®, a non-replicating smallpox vaccine candidate in Phase 3 development, which is being developed and supplied for emergency use to the U.S. Strategic National Stockpile under a contract with the U.S. Government. IMVAMUNE is approved in the European Union under the trade name IMVANEX®

Bavarian Nordic's shares are listed on NASDAQ OMX Copenhagen under the symbol BAVA (Reuters: BAVA.CO, Bloomberg: BAVA.DC). The company has a sponsored Level 1 ADR program listed in the US (OTC) under the symbol BVNRY. 

For more information, visit www.bavarian-nordic.com.

Forward-looking statements
This announcement includes forward-looking statements that involve risks, uncertainties and other factors, many of which are outside of our control that could cause actual results to differ materially from the results discussed in the forward-looking statements. Forward-looking statements include statements concerning our plans, objectives, goals, future events, performance and/or other information that is not historical information. We undertake no obligation to publicly update or revise forward-looking statements to reflect subsequent events or circumstances after the date made, except as required by law.

Company Announcement no. 24 / 2013