Note 5. Stock Options

2001 Qualified Incentive Stock Option Plan

The Company's board of directors approved a Stock Option Plan on June 15, 2001, which provides for the issuance of up to 5,000,000 shares of the Company's common stock to employees and non-employee directors.

No options were issued in the year ended December 31, 2011.

For the year ended December 31 2010, the Board of Directors of Mymetics awarded 4,350,000 incentive stock options to the employees and officers of the Company. Incentive stock options were awarded on June 30, 2010, for a total of 3,350,000 shares with an exercise price of USD 0.14 per share, of which 1,850,000 vested immediately and 1,500,000 vest in equal quantities over the next three years. As part of the employment contract with the CFO of Mymetics, 1,000,000 employee incentive stock options were issued on July 1, 2010 with an exercise price of USD 0.19 per share, of which 250,000 vested immediately and 750,000 vest in equal quantities over the next two years.

The Company recognized compensation expense related to the issued option grants of E88 and E238 for the years ended December 31, 2011 and 2010, respectively. These amounts were recognized as research and development expense and general and administrative expense based on the specific recipient of the award for the years ended December 31, 2011 and 2010, respectively. As of December 31, 2011, a total of 1,500,000 shares of common stock with E53 unrecognized compensation cost are unvested.

A summary of activity related to stock options under the 2001 Stock Option Plan is represented below:

	Number of Shares			Exercise Price Range		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value


Outstanding,December 31, 2009		442,500		$	0.12 to $3.50	$	0.97
Granted		4,350,000		$	0.14 to $0.19	$	0.15
Forfeited		--			--		--

Outstanding,December 31, 2010		4,792,500		$	0.12 to $3.50	$	0.23
Granted		--			--		--
Forfeited		(50,000	)	$	2.50	$	2.50

Outstanding,December 31, 2011		4,742,500		$	0.12 to $3.50	$	0.20		7.55	$	--

Exercisable,December 31, 2011		3,242,500		$	0.12 to $0.19	$	0.22		7.27	$	--

The aggregate intrinsic value of the stock options fluctuates in relation to the market price of our common stock.

The range of exercise prices for options outstanding under the 2001 Stock Option Plan at December 31, 2011 are as follows:

Number of shares	Exercise Price

17,500	$	3.50
50,000	$	3.15
100,000	$	0.55
1,000,000	$	0.19
3,425,000	$	0.14
150,000	$	0.12

A summary of the status of the Company's nonvested options as of December 31, 2011 and changes during the year ended December 31, 2011 are presented below:

	Number of
	Shares			Weighted Average
	Underlying			Grant Date Fair
Nonvested options	Options			Value

Nonvested at December 31, 2010		2,250,000		$	0.12
Granted		--
Vested		(750,000	)	$	0.16

Nonvested at December 31, 2011		1,500,000		$	0.10

The estimated fair value of the options on the date of grant was calculated using Black Scholes option pricing model and the following assumptions for 2010 issuances:

Closing market price of common stock	$	0.135 - $ 0.16
Estimated volatility		140.31% -140.40	%
Risk free interest rate		3.00	%
Expected dividend rate		--
Expected life	1.5 - 3.9 years

As of December 31, 2011, the 2001 Stock Option Plan has 207,500 shares available for future grants of stock options.

Not included in the above table are 19,218,450 options issued as part of the acquisition of Bestewil described in Note 7. Also not included is a warrant for 32,000,000 shares of common stock exercisable at $0.25 per share issued to Round Enterprises as part of a loan agreement in 2010.

The Company will issue new shares upon the exercise of any options.