Option plans

Warrants and stock options
Medivir had three outstanding stock option plans at year-end (see table). At 1 January, there were 676,995 outstanding options, with 142,408 options converted to class B shares in the year, 44,587 options expiring and 480,000 options added through the new stock option plan designated 2007-2012. At year-end there were 970,000 stock options, corresponding to 1,102,300 class B shares. The number of outstanding options could increase shareholders' equity by sek 82.9 m, and upon full conversion, the total number of shares would be 21,945,847.

As a result of the new issue completed at the beginning of 2007, the stock option plans launched in 2004 and 2006 have been restated, whereupon the stock options confer rights to the conversion of 1.27 shares per option and the exercise price has been restated, see the table.

Outstanding option plans, 31 December 2007

The 2002-2007 plan
This plan, encompassing 200,000 staff stock options at a subscription price of sek 46.40, matured on 31 December 2007. 142,408 options were converted to class B shares in the year, while 44,587 options matured without any conversion occurring. Due to the new issue completed in 2007, this plan has been restated, whereupon one option conferred the right to 1.4 shares at the exercise price of sek 46.40.

The 2004-2009 plan
The Annual General Meeting on 22 April 2004 resolved to raise a subordinated debenture of sek 1,000 through the issuance of debt instruments with 210,000 detachable warrants. The debenture was subject to 5% interest and has been repaid. Of the 210,000 options, 156,000 were granted to staff, with the remainder held by Medivir Personal AB to cover social security costs. Medivir's hedge for its various staff stock option plans do not mean that Medivir is utilizing what is termed hedge accounting according to IAS 39. For a review of Medivir's hedge, please refer to the section on accounting policies under 'staff stock option plans' on page 37, and the section 'rights to acquire shares' on page 10 in the Annual Report.

The stock options are only to be utilized to the extent that total profit upon conversion does not exceed an amount corresponding to the product of the number of stock options and 500% of the stock options' exercise price. Subscription for class B shares is possible from 1 May 2005 - 30 June 2009 inclusive, at a price of sek 126. The subsidiary Medivir Personal AB controls these detachable warrants in order to fulfill undertakings relating to stock options issued within the framework of the stock option plan 2004 - 2009. Each stock option is exercisable to acquire one share in Medivir AB through the agency of the subsidiary, against the payment of a redemption fee equivalent to at least 130% of the closing price of the Medivir class B share quoted on OMX Stockholm Exchange's Small Cap-list at the grant date (albeit subject to a minimum of sek 126) for each share. These stock options have been issued to staff of the Medivir group, free of charge. The theoretical market value according to the Black & Scholes equation was sek 19.90 per option at the grant date, and sek 0.15 as of year-end 31 December 2007.

Upon full conversion of the detachable warrants, Medivir's liquid assets and shareholders' equity would increase by approximately sek 26.5 m, whereupon the company's share capital would increase by sek 1.33 m. The number of class B shares would increase by 266,700. As a result of the new issue completed in 2007, the plan has been restated, whereupon one option confers the right to conversion to 1.27 shares at an exercise price of sek 99.30.

The 2005-2010 plan
The Annual General Meeting of 21 April 2005 resolved to raise a subordinated debenture of sek 1,000 through the issuance of debt instruments with 280,000 detachable warrants. The debenture was subject to 5% interest and has been repaid. Of the 280,000 options, 183,600 were granted to staff, with the remainder held by Medivir Personal AB to cover social security costs. Subscription for class B shares is possible from 1 July 2005 to 31 December 2010, at a price of sek 87.

The subsidiary Medivir Personal AB controls these detachable warrants in order to fulfill undertakings relating to stock options issued within the framework of the stock option plan 2005-2010. Each stock option is exercisable to acquire one Medivir AB share through the agency of the subsidiary, against the payment of a redemption fee equivalent to at least 130% of the closing price of the Medivir class B share quoted on OMX Stockholm Exchange's Small Cap-list at the grant date (albeit subject to a minimum of sek 87.00). These stock options have been issued to staff of the Medivir group, free of charge. The theoretical market value accord­ing to the Black & Scholes equation was sek 11.60 per option at the grant date, and sek 4.93 as of year-end 31 December 2007.

Upon full conversion of the detachable warrants, Medivir's liquid assets and shareholders' equity would increase by approximately sek 24.4 m, whereupon the company's share capital would increase by sek 1.78 m. The number of class B shares would increase by 355,600. As a result of the new issue completed in 2007, the plan has been restated whereupon one option confers the right to conversion to 1.27 shares at an exercise price of sek 68.60.

The 2007-2012 plan
The Annual General Meeting of 24 April 2007 resolved to raise a subordinated debenture of sek 1,000 through the issuance of debt instruments with 480,000 detachable warrants. The debenture was subject to 5% interest and has been repaid. Of the 480,000 options, 360,000 were granted to staff, with the remainder held by Medivir Personal AB to cover social security costs.

Subscription for class B shares is possible from 18 June 2007 to 30 April 2012, at a price of sek 66.64. The subsidiary Medivir Personal AB controls these detachable warrants in order to fulfill undertakings relating to stock options issued within the framework of the stock option plan 2007-2012. Each stock option is exercisable to acquire 1.0 Medivir AB share through the agency of the subsidiary, against the payment of a redemption fee equivalent to at least 115% of the closing price of the Medivir class B share quoted on OMX Stockholm Exchange's Small Cap-list at the grant date (albeit subject to a minimum of sek 64.64) for each share. These stock options have been issued to staff of the Medivir group, free of charge.

The theoretical market value according to the Black & Scholes equation was sek 11.90 per option at the grant date, and sek 9.28 as of year-end 31 December 2007.

Upon full conversion of the detachable warrants, Medivir's liquid assets and shareholders' equity would increase by approximately sek 32.0 m, whereupon the company's share capital would increase by sek 2.4 m. The number of class B shares would increase by 480,000.