FLS Industries - share option plan

At its meeting held in connection with the publishing of the FLS Industries A/S Interim Report on 29 August 2003, the Board of Directors decided on a new share option plan.

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 Interim Report was released. The average of 'all deals' for the period 1 September 2003 to 19 September 2003 (inclusive) was calculated at 61.67. This price is increased by 6 per cent every year on the date of publishing the FLS Industries A/S financial report for the first half of the calendar year - the first time being the Interim Report for the first half of 2004. This yearly increase, however, is limited to the extent that dividend was distributed at the latest Annual General Meeting prior to the halfyearly report in question, each percentage point of dividend distributed being subtracted from the 6 percentage point increase.

A total of 480,000 share options have been allotted. The share options give the holder the right to buy 480,000 FLS B shares between 1 September 2005 and 1 September 2009 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 420,000 options to 42 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 19 September 2002 to 19 September 2003 (11.5 per cent volatility), risk-free interest at the rate of 4 per cent, today's price of 69.50 and treated as an American option, the value of the option plan based on Black-Scholes is calculated to be around the figure of DKK 5m depending on the timing of exercising the options.

FLS Industries A/S
Corporate Public Relations