Pergo Calls Extraordinary General Meeting

Trelleborg, Sweden, July 25--Shareholders in Pergo AB have been summoned to an Extraordinary General Meeting on August 17, at 3.00 PM at the Head Office at Strandridaregatan 8 in Trelleborg, Sweden. The shareholders will consider a proposal regarding a change to the 2005 employee stock option program. The Board proposes that the General Meeting decide to change the 2005 employee stock option program as follows: Since the Annual General Meeting of shareholders in Pergo held on April 18, 2005, voted in favor of the Board's proposal of an employee stock option program, the composition of the Board has changed. There have also been changes in the Company's executive management. In light of this, the new Board composition no longer supports implementing the employee stock option program in accordance with the allocation structure adopted by the Annual General Meeting. The Board has therefore not allocated any stock options. Accordingly, Pergo has no share-based incentive program. In considering the possibility of implementing a long-term compensation system, the Board found reason to include a share-related incentive program in the compensation package to senior executives and key personnel. A share-related incentive program can link employee compensation to the Company's future earnings and value appreciation. This establishes long-term value appreciation as the top priority, since it creates a common goal for shareholders and the employees involved. Share-related incentive programs also create a Group-wide focus for the affected employees in different parts of the Group, establishing long-term action as a priority. It is also believed that incentive programs make it easier for the company to recruit and retain key personnel. The Board found the most appropriate and efficient program for Pergo to be an allocation of employee stock options that can be exercised, provided established profitability targets are met, and provided the said allocation is taken into consideration in the setting of all other compensation to the employees involved. The new Board believes that it is essential to allocate a larger individual number of employee stock options -- in relation to the employee stock option program adopted by the 2005 Annual General Meeting -- to a small circle of executives who are expected to stand the best chance of influencing the Group's earnings outcome. The Board therefore proposes the following changes to the employee stock option program adopted at the 2005 Annual General Meeting. Given the conditions, size of the allocation, lack of existing incentive programs and other circumstances, the Board finds that proposed stock option program is reasonable and advantageous for the company and its shareholders. It shall be possible for the Board to allocate stock options with no more than 600,000 stock options to the President and no more than 500,000 stock options to each of about ten other senior executives. A maximum of 2,700,000 employee stock options are to be available for allocation.