Note 24 - Share-based payment, and remuneration

Novozymes has established stock option programs for the Management, managers and other employees. The purpose of the stock option programs is to ensure common goals for Management, employees and shareholders. Allocation of options is and has been dependent on profit and value-creation targets being achieved.

The Management has previously been granted stock options with a maturity period between six and eight years, which after three years give the holder the right to purchase one stock with a nominal value of DKK 10 per option. For managers and other employees the stock options have been granted with a maturity period of eight years and after three years give the holder the right to purchase one stock with a nominal value of DKK 10 per option.

A new stock option program for all employees was launched in 2007. The programs cover the period 2007-2010 with annual allocations. The allocations are made according to the basic salary and on the basis of targets set by the Board of Directors for each year. The exercise price is calculated on the basis of the average closing price on the OMX Nordic Exchange Copenhagen A/S on the first five trading days after publication of the financial statements. The stock options have a binding period of three years, followed by an exercise period of five years. In order to exercise the options, the employee must still be employed. This does not apply to persons who have retired, taken a voluntary early retirement pension or been given notice.

All the financial targets set for 2007 were achieved, while not all the non-financial targets were achieved. Options corresponding to 95% of the maximum number available for 2007 will be allocated at the beginning of 2008.

The above-mentioned stock option programs are primarily equity-settled, and no liability is recognized for these. In the case of allocations in countries where ownership of foreign stock is not permitted, the value of the stock options is settled in cash, and a liability of DKK 33 million (2006: DKK 37 million) was recognized for this in 2007. The intrinsic value of the programs in 2007 was DKK 32 million (2006: DKK 37 million).

At December 31, 2007 the Group's outstanding Novo Nordisk A/S stock options totaled 348,186, with an average exercise price of DKK 99 per share of DKK 1 and a market value of DKK 82 million, which is recognized as a liability. These options are hedged by the Group's holding of Novo Nordisk A/S shares, which are recognized at market value. In 2007 the Management and managerial staff exercised 196,720 Novo Nordisk A/S options.

The Group is obliged to divest stocks to Novo A/S with regard to options allocated to employees who were transferred to Novo A/S in connection with the Demerger. The stocks will be divested when the employees exercise their options, and Novozymes A/S is committed to reimburse expenses equivalent to the value of the stocks at the time of the transition of the employees to Novo A/S. A total of 5,100 stocks were divested in 2007, such that the obligation at December 31, 2007 totaled 2,300 stocks. This obligation is hedged by the holding of treasury shares.

					Number	Exercise	Remaining
		Other			of options	price per	term to
		managerial	Other		that can be	option	maturity
Stock options in Novozymes A/S	Management	staff	staff	Total	exercised	in DKK	(years)

Outstanding at January 1, 2006	115,250	1,078,122	1,893,497	3,086,869	800,787	158*	5**

Additions during the year	8,279	417,906	-	426,185
Options exercised in 2006	(47,150)	(264,080)	(369,518)	(680,748)		167*
Terminations in 2006	(9,000)	(18,569)	(14,250)	(41,819)
Outstanding at December 31, 2006	67,379	1,213,379	1,509,729	2,790,487	857,939	183*	5**

Additions during the year	179,374	244,642	200,034	624,050
Changes in Management	(19,005)	19,005	-	-
Options exercised in 2007	(17,600)	(205,125)	(532,529)	(755,254)		153*
Terminations in 2007	-	(25,418)	(22,578)	(47,996)
Outstanding at December 31, 2007	210,148	1,246,483	1,154,656	2,611,287	1,623,842	266*	5**

					Number	Exercise	Remaining	Market
		Other			of options	price per	term to	value in
		managerial	Other		that can be	option	maturity	DKK
Stock options in Novozymes A/S	Management	staff	staff	Total	exercised	in DKK	(years)	million

Outstanding program 1999	-	5,502	-	5,502	5,502	101	0	3
Outstanding program 2000	2,200	15,017	-	17,217	17,217	101	1	8
Outstanding program 2000	-	44,200	-	44,200	44,200	150	1	19
Outstanding program 2001	6,300	80,118	-	86,418	86,418	159	2	37
Outstanding program 2001	-	-	225,586	225,586	225,586	186	2	90
Outstanding program 2002	7,700	91,000	181,352	280,052	280,052	169	3	116
Outstanding program 2003	33,600	365,530	565,737	964,867	964,867	148	4	420
Outstanding program 2006	10,437	374,691	-	385,128	-	344	7	104
Outstanding program 2006	-	4,290	-	4,290	-	400	7	1
Outstanding program 2007	149,911	225,947	181,981	557,839	-	495	8	105
Outstanding program 2007	-	31,490	-	31,490	-	585	10	1
Outstanding program 2007	-	8,698	-	8,698	-	596	8	1
Outstanding at December 31, 2007	210,148	1,246,483	1,154,656	2,611,287	1,623,842			905

*	The exercise price is an average of several option programs.
**	Remaining term to maturity is stated as a weighted average of the outstanding options.

Market value is calculated on the basis of the Black-Scholes model for valuation of options. The historical volatility for the last year is used when calculating the value of the options at year-end. The risk-free interest is based on Danish government bonds with a period of maturity equivalent to the option's expected remaining term to maturity. The expected period of maturity is fixed at one year after the expiry of the binding period, or the option's expiry date if this is within one year.

The following assumptions are used when calculating market value at the end of the period:

	2007	2006

Dividend per share, DKK	5.00	4.50
Volatility, %	25.8	26.5
Average risk-free interest, %	4.2	3.9
Share price	582	486

Holdings of and trading in Novozymes A/S stocks by the Board of Directors and Management

Number of stocks	Board of Directors	Management	Total

Stock portfolio at January 1, 2006	11,997	9,019	21,016
Change in Management	-	(1,705)	(1,705)
Purchase of stocks during the year	-	48,150	48,150
Sale of stocks during the year	(4,000)	(54,553)	(58,553)
Stock portfolio at December 31, 2006	7,997	911	8,908

Change in Management	-	(14,420)	(14,420)
Purchase of stocks during the year	7,668	5,100	12,768
Allocation of stocks during the year	-	152,145	152,145
Sale of stocks during the year	-	(121,325)	(121,325)
Stock portfolio at December 31, 2007	15,665	22,411	38,076

The stock portfolio had a market value of DKK 4 million at December 31, 2006 and DKK 22 million at December 31, 2007, based on the listed prices at year-end 2006 and 2007 respectively.


Holdings, exercise and allocations of Novozymes A/S share options by the Board of Directors and Management

	Options at	Additions	Exercised	Options at	Market
	January 1,	during	during	Dec. 31,	value in
Number of stock options	2007	the year	the year	2007	DKK million

Steen Riisgaard	31,800	48,919	-	80,719	22.9
Per Falholt	9,000	32,614	-	41,614	10.1
Benny D. Loft	8,279	32,614	(4,800)	36,093	7.1
Peder Holk Nielsen	9,300	32,614	(300)	41,614	10.1
Thomas Videbæk *	8,279	1,575	(4,800)	5,054	1.2
Thomas Nagy *	11,179	1,575	(7,700)	5,054	1.2
Holdings of stock options	77,837	149,911	(17,600)	210,148	52.6

* Joined Management in 2007

The employee-elected board members also hold stock options in Novozymes A/S, granted in connection with stock option allocations in previous years covering all employees in Novozymes A/S on the relevant dates.

	2007	2006
	DKK million	DKK million

Remuneration to Management:
Salaries	20	20
Pensions	5	4
Total remuneration to the Management	25	24

Total remuneration to the Board of Directors	4	3

A stock-based incentive program has been adopted for the Management for the period 2004-2006. The targets for the program, which were based on the economic value added, were achieved in 2006, and the allocation of stocks took place in 2007. The Management received a total of 152,145 B shares in 2007.

In 2007 a new four-year stock option program was adopted with annual allocations to the Management. A general condition for the annual allocations is that the budget for the coming year will in all probability lead to sales of DKK 10 billion in 2010. Further, the allocation is based on acheivement of financial and non-financial targets that are set each year. The exercise price is calculated on the basis of the average closing price on the OMX Nordic Exchange Copenhagen A/S on the first five trading days after the publication of the financial statements.

The program contains a maximum clause that allows the Board of Directors to limit the number of stock options that are allocated to the Management over the 4 years. This limitation can be implemented if the intrinsic value of the total allocated stock options exceeds DKK 200 million at the time of computation in January 2011.

In 2007 the financial targets had a weighting of 0-75% and the non-financial targets had a weighting of 0-25%. As the financial targets were acheived but some of the non-financial targets were not, the Board of Directors has decided to allocate 179,374 stock options, corresponding to 95% of the maximum available allocation, to Management and Arne W. Schmidt, who retired from the Management in 2007. The allocation applies to the Management team in place at the time the program was adopted.

The total value of the options allocated for 2007, based on the Black-Scholes-model, is DKK 25 million, of which DKK 6 million has been recognized in the income statement for 2007. The intrinsic value of the 146,761 stock options which have been allocated to the current Management over the four-year program was DKK 13 million at December 31, 2007.

Members of the Management have contracts of employment containing standard conditions for members of the Management of Danish listed companies, including with regard to the periods of notice that both parties are required to give and competition clauses. If the executive officer's contract of employment is terminated by the company, without there having been misconduct on the part of the executive officer, the executive officer has the right to compensation, which, depending on the circumstances, may amount to a maximum of three years' salary and pension contributions.