Note 4. 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.

2009 Qualified Incentive Stock Option Plan:

During the year 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 2,3500,000 are vested and 1,000,000 are forfeited as of December 31, 2013. 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, which are fully vested as of December 31, 2013.

No options were issued in the year ended December 31, 2012.

2013 Qualified Incentive Stock Option Plan:

For the year ended December 31 2013, the Board of Directors of Mymetics approved 30,000,000 incentive stock options to the employees and officers of the Company. Incentive stock options were awarded on October 4, 2013, for a total of 20,600,000 shares with an exercise price of USD 0.02 per share, of which 3,300,000 vested immediately and 1,250,000 vest in equal quantities over the next four years.

The Company recognized compensation expense related to the issued option grants of E71 and E32 for the years ended December 31, 2013 and 2012, 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, 2013. As of December 31, 2013, a total of 17,300,000 shares of common stock with unrecognized compensation cost of E186 are unvested. The cost is expected to be recognized ratably through August 2017.

A summary of activity related to stock options under the 2001, 2009 and 2013 Stock Option Plans 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, 2011		4,742,500		$	0.12 to $3.50	$	0.20
Granted		--			--		--
Expired/forfeited		(1,060,000	)	$	0.14 to $3.50	$	3.19

Outstanding, December 31, 2012		3,682,500		$	0.12 to $3.50	$	0.17
Granted		20,600,000		$	0.02	$	0.02
Exercised		(3,100,000	)	$	0.02	$	0.02
Expired/forfeited		(332,500	)	$	0.12 to $3.50	$	0.33

Outstanding, December 31, 2013		20,850,000		$	0.02 to $3.50	$	0.04		9.21		$	--

Exercisable, December 31, 2013		3,550,000		$	0.02 to $0.19	$	0.15		6.36		$	--

The aggregate intrinsic value of the stock options fluctuates in relation to the market price of the Company’s common stock. There was no intrinsic value associated with option exercised during the year at the time of exercise.

Outstanding and exercisable options by price range as of December 31, 2013, were as follows:

		Outstanding options							Exercisable Options
				Weighted		Weighted					Weighted
				Average		Average					Average
Range of Exercise		Number		Remaining		Exercise			Number		Exercise
Prices per Share		Outstanding		Life (Years)		Price			Exercisable		Price

$	0.14		2,350,000		6.0		$	0.14		2,350,000		$	0.14
$	0.19		1,000,000		6.5		$	0.19		1,000,000		$	0.19
$	0.02		17,500,000		9.8		$	0.02		200,000		$	0.02
$	0.02 - $ 0.19		20,850,000				$	0.04		3,550,000		$	0.15

The fair value of the options at the grant date is determined under the Black Scholes option pricing model. The weighted-average grant-date fair value of options granted during the year ended December 31, 2013 was E0.02 per share. During the year ended December 31, 2013, the following wighted-average assumptions were used:

Estimated volatility		157.63	%
Risk free interest rate		0.32	%
Expected dividend rate		--
Expected life	6 years

As of December 31, 2013, the 2013 Stock Option Plan has 8,400,500 shares available for future grants of stock options.

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