Incentive programmes

Warrant scheme for the Executive Management and Danish and foreign executives (2005 plan)
In 2005, the company established a warrant programme for the Executive Management and Danish and foreign executives. 76 employees were granted a total of 647,000 warrants, 160,000 of which were allocated to the Executive Management. The warrants had vested fully from the commencement of the scheme and may be exercised during the period from 2 October 2006 to 31 March 2009. The exercise price is DKK 179.00 throughout the exercise period. No warrants have been exercised under this scheme.

At 31 December 2007, the calculated market value per warrant was based on the Black-Scholes formula for valuation of options. The calculation is based on an exercise price of DKK 179.00, a quoted price of DKK 138.00 (DKK 155.83 in 2006), a volatility of 32.13% (24.43% in 2006), a dividend payout ratio of 1.18% (1.44% in 2006) and a risk-free interest rate of 4.35% (4.19% in 2006).

Warrant scheme for the Executive Management and Danish and foreign executives (2007 plan)
In 2007, the company established a warrant programme for the Executive Management and Danish and foreign executives. 80 employees were granted a total of 844,500 warrants, 173,000 of which were allocated to the Executive Management. The warrants had vested fully from the commencement of the scheme and may be exercised during the period from 1 August 2008 to 31 March 2011. The exercise price is DKK 156.00 throughout the exercise period.

The market value per warrant at the time of grant is calculated using the Black-Scholes formula and is based on a volatility of the Lundbeck share of 28.60%, a dividend payout ratio of 1.22%, a risk-free interest rate of 4.25%, an average maturity of approx. 32 months and a quoted price of H. Lundbeck A/S of DKK 132.35. This translates into a market value of DKK 19.44 per warrant.

The warrants granted are recognised in the income statement for 2007 at an expense of DKK 16.4 million, which correspondsto the market value at the time of grant calculated according to the Black-Scholes formula.

At 31 December 2007, the calculated market value per warrant was based on the Black-Scholes formula for valuation of options. The calculation is based on an

exercise price of DKK 156.00, a quoted price of DKK 138.00, a volatility of 30.23%, a dividend payout ratio of 1.18% and a risk-free interest rate of 4.25%.

At 31 December the calculated market value per option was based on the Black-Scholes formula for valuation of options. The calculation is based on an exercise price of DKK 81.00, a quoted price of DKK 138.00 (DKK 155.83 in 2006), a volatility of 21.91% (23.35% in 2006), a dividend payout ratio of 1.18% (1.44% in 2006) and a risk-free interest rate of 4.25% (4.19% in 2006).

Stock Appreciation Rights for employees of US subsidiaries (2004 plan)
In 2004, key employees of US subsidiaries were granted Stock Appreciation Rights (SARs), a share price based plan with conditions similar to those of the warrant scheme granted in 2004 to the company’s Executive Management and a number of key employees. The granted SARs were exercisable during the period from 9 December 2004 to 30 August 2007. The size of the amount depended on how much the price of the Lundbeck share at the exercise date exceeded DKK 108.11 per share (equal to the exercise price of the warrant scheme). The share price based plan for employees of the Group’s US subsidiaries could not be converted into shares because the value of the plan was distributed as a cash amount. In 2007, 46,092 SARs (23,004 SARs in 2006) were exercised under this plan. Unexercised SARs were cancelled at 1 September 2007. The plan is subject to the rules of IFRS 2 Share-based payments. The plan is recognised in the income statement for 2007 at an income of DKK 0.8 million (expense of DKK 1.5 million in 2006). The plan expired in 2007 and the obligation at 31 December 2007 amounted to DKK 0 (DKK 2.4 million in 2006), including social contributions. The intrinsic value of outstanding SARs was DKK 0 at 31 December 2007 (DKK 2.2 million in 2006).