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FLS Industries - share option plan

26.03.2004
15 days after the publication of the Annual Report published 4 March 2004 the second phase of FLS Industries' share option plan for management and executive staff is activated (re. Stock Exchange Message no. 23-2003, 25 September 2003).

The share option plan striking price has now been fixed based on the average price movements ('all deals') of FLS B shares during the 15 dealing days after the 2003 Annual Report was released. The average of 'all deals' for the period 5 March 2004 to 25 March 2004 (inclusive) was calculated at 71,33. This price is increased by 6 per cent every year on the date of publishing the FLS Industries A/S Annual Report - the first time being the Annual Report 2004. This yearly increase, however, is limited to the extent that dividend was distributed at the latest Annual General Meeting prior to the financial report in question, each percentage point of dividend distributed being subtracted from the 6 percentage point increase.

A total of 500,000 share options have been allotted. The share options give the holders the right to buy 500,000 FLS B shares between 5 March 2006 and 5 March 2010 subject to the FLS Group's internal rules on trading in own shares. The share options will be allotted, nil to the Board of Directors, 60,000 distributed among the members of the Corporate Management, and 440,000 options to 44 executive staff. Options that have not been exercised shall become invalid if the holder ceases to be employed by the company.

Based on a simple average of the price changes of the FLS B share during the period of 5 March 2003 to 5 March 2004 (36,7 per cent volatility), risk-free interest at the rate of 4,0 per cent, today's price of 71,50, the value of the option plan based on Black-Scholes is calculated to be around the figure of DKK 10,3m depending on the timing of exercising the options.

FLS Industries A/S
Corporate Public Relations