The board of directors of Alfesca has today approved the establishment of a performance related equity incentive plan for executive directors and senior management of the Group. Under the Alfesca Incentive Plan, the Company proposes to establish a performance related share scheme (Performance Shares) that will consist of shares in the total nominal amount of ISK 300,000,000, representing approximately 4.75% of the fully diluted share capital of the Company. In accordance with the terms of the plan, the Performance Shares will be awarded to certain executive directors and senior management of the Group subject to fulfilment of performance conditions based on achievement of certain share price and EBITDA targets over a three (3) year period from 1 July 2006 to 30 June 2009. Subject to the approval of the shareholders, it is intended that the Alfesca Incentive Plan be established with effect from today's date and the first allocation of the Performance Shares for the financial year ending 30 June 2007 to be made based on the closing share price of today. Following the shareholders approval, further details relating to the incentive plan will be provided. The terms of the proposed Alfesca Incentive Plan will be put forward for approval by the shareholders of the Company at an extraordinary general meeting to be held on Tuesday 22 May 2007. Details of the shareholders meeting will be published in due course. For further information: Xavier Govare, CEO T: + 354 477 7000 E: xavier.govare@alfesca.com Antony Hovanessian, BDD T: + 354 477 7000 E: ah@alfesca.com