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 175,000 warrants are awarded for subscription of up to
175,000 shares 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 75,000 warrants 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) and Gerard
Van Odijk (4,000 warrants). CEO and President Anders Hedegaard
(20,000 warrants), members of executive management Anders Gram
(15,000 warrants), 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.


Kvistgård, 17 October 2008


Asger Aamund
Chairman


Contact: Anders Hedegaard, President & CEO | +45 23 20 30 64