STOCKHOLM, Sweden, March 18, 2005 (PRIMEZONE) -- The shareholders in Pergo AB (publ) are hereby invited to attend the Annual General Meeting on Monday 18 April 2005 at 3.00 PM at the Headquarters, Strandridaregatan 8, Trelleborg, Sweden.
A. RIGHT TO ATTEND AND NOTIFICATION
Shareholders who wish to attend the General Meeting must be recorded in the share register maintained by the Swedish Securities Register Centre ("VPC") as of Friday 8 th of April 2005, and notify the company of their intent to attend the General Meeting by noon Tuesday 12 th of April 2005, at the latest, by: mail to Pergo AB (publ), att: Helena Bergstrom, P.O. Box 1010, SE-231 25 Trelleborg, Sweden or by e-mail: agm@pergo.com, or by fax +46 410-36 33 00 or by phone +46 410-36 33 76.
When notifying the company the shareholder shall state name, address, telephone number (daytime) and personal code number or organisation registration number as well as the number of counsel the shareholder wishes to bring to the meeting (maximum of two counsels). Proxy and representative of juridical person shall submit papers of authorisation with notice of participation to the company prior to the meeting.
Shareholders who have placed their shares in trust must, through the trustee, re-register the shares in their own names to allow them to participate in the General Meeting. Such re-registration must have been executed not later than Friday 8 th of April 2005 and accordingly the trustee should be informed thereof in due time before said date.
The company will confirm receipt of notice of participation by sending an admission card to be shown at the General Meeting.
B. AGENDA
Proposed Agenda
1. Opening of the Meeting.
2. Election of the Chairman to preside at the Meeting.
3. Preparation and approval of a voting list.
4. Approval of the agenda.
5. Election of two persons to approve the minutes.
6. Examination of whether the General Meeting has been
properly convened.
7. Managing Director's report.
8. Presentation of the Annual Report, the Auditors' Report
on the Parent Company, the Consolidated Accounts and the
Auditors' Report on the Group.
9. Resolutions in respect of the following:
a) the adoption of the Parent Company Income Statement, the
Parent Company Balance Sheet, the Consolidated Income
Statement and the Consolidated Balance Sheet;
b) the appropriation of the company's profit according to the
adopted Balance Sheet as well as record date; and
c) the Directors' and the Managing Director's discharge from
liability.
10. Determination of the number of Directors of the Board.
11. Determination of the fees for the Board of Directors and
the Auditors.
12. Election of the Board of Directors and the Chairman of
the Board.
13. Election of Auditors and Deputy Auditors.
14. Proposal regarding Nomination Committee.
15. Proposal regarding personnel option scheme
16. Closing of the meeting.
Proposals of the Nomination Committee (item 2 and 10-14)
The Nomination Committee, which consists of Petter Odhnoff (Andra AP-fonden), chairman, Roger Buehler (Laxey Partners Ltd), Fredrik Gradin (Explorer Group Inc.), Peter Rudman (Nordea Fonder), Peter Ronnstrom (Lannebo Fonder), and Bertil Villard, Chairman of the Board, has expressed that it intends to present proposals regarding item 2 and 10-14 on the agenda in good time ahead of the General Meeting.
Dividend proposal (item 9)
The Board of Directors proposes that no dividends shall be distributed for the financial year 2004.
Proposal on personnel option scheme (item 15)
The Board of Directors proposes that the General Meeting passes a resolution to implement a performance related personnel option scheme consisting of an issue of promissory notes combined with options for subscription in accordance with the following main conditions
Allotment of and conditions for personnel options
At the most 2,700,000 personnel options shall, free of charge, be issued to approximately 20 management employees in the Pergo group.
Allotment shall be made by the Board of Directors with a maximum of 100,000 -- 300,000 options per person depending on the employment position.
Each personnel option shall entitle to an acquisition of one share in Pergo during the period from the 1st of May 2007 to the 1st of March 2008 at an exercise price corresponding to 130 per cent of the average market value during a period in connection with the point of allotment. The exercise price and the number of shares for which each option entitles acquisition to shall be converted in the event of a split, merger, issue etc. in accordance with customary conditions.
The options shall not constitute marketable security and shall not be transferable to third parties.
The right to utilize the options is conditional upon that the option holder at the time of utilization is still employed in the Pergo group. Utilization shall however also be possible for a limited time following death or retirement with a pension from the company. The right to utilize the options is further conditioned upon that the Pergo group achieves a certain total operating profit before financial items and taxes (EBIT) during the financial years 2005 -- 2006.
It shall be possible to exercise the options at an earlier stage in case of a compulsory purchase of shares, liquidation or merger whereby Pergo is absorbed by another company. In case of a premature exercise of the options the exercise price shall be reduced to an estimated present value of original exercise price.
Should the Board of Directors, due to the result and financial position of the group, the conditions on the stock market and other factors, assess that the number of options which could be exercised determined from the earnings trend to be clearly exorbitant, the Board of Directors shall have the authority to reduce the number of options to be exercised.
Security arrangements with respect to the commitments for the personnel option scheme -- issue of promissory notes combined with options for subscription
It is proposed that the company secures its commitments according to the personnel option scheme through issue of promissory notes combined with options for subscription directed towards wholly-owned subsidiaries in the Pergo group. The subsidiaries shall have the right to dispose of and, free of charge, transfer detached options for the purpose of executing the commitments according to the personnel option scheme.
Promissory notes of not more than 2,700 SEK combined with not more than 2,700,000 options for subscription shall be issued at nominal amount. Promissory notes shall carry no interest and be due for payment on the 30th of September 2005.
Each option shall entitle to the subscription of one share in Pergo up and until the 1st of March 2008 at a rate of 80 per cent of the average market value during the period from the 20th of April to the 26th of April 2005.
The share capital may be increased by a maximum of 27,000,000 SEK subject to any increase due to recount following as a result of issues etc.
Effects of dilution and costs for the scheme
The number of shares will increase at a utilization of proposed options. These new shares will constitute, at full utilization, approximately 4.8 per cent of the outstanding shares and votes, determined on the outstanding shares as well as the proposed options.
Further, the options could lead to costs such as social security contributions at utilization, as well as accounting costs during the term of the options.
Reasons for the proposal and cause for deviation from the shareholders preferential right
Presently Pergo does not have any share related incentive scheme.
The Board of Directors has, in an evaluation of a long-term remuneration scheme, found reasons to include a share related incentive scheme in the remuneration package for the management and key employees. The employees' remuneration can be linked to the company's future development in result and value through share related incentive schemes. The long-term increase in value is in that way awarded and shareholders and affected employees will share the same objective. Share related incentive schemes further create a group-wide focus for affected employees in different parts of the group and by that give priority to a long-term performance. Incentive schemes are also considered to facilitate for the company to recruit and maintain key employees.
After comparing different alternatives the Board of Directors has found that the most suitable and efficient scheme for Pergo is a utilization of personnel options which will be exercisable provided that established profitability goals are met. Allotment of options will be taken into account when establishing other remuneration to the affected employees.
Considering the terms, the size of the allotment, the lack of existing incentive schemes and other circumstances the Board of Directors considers the proposed option scheme to be reasonable and to the advantage of the company and its shareholders.
Majority condition
A decision according to the above is conditioned of the support of at least nine tenths of the given votes and shares represented at the General Meeting.
Documents, etc.
The Accounts and the Auditors' Report along with the Board of Directors' complete proposal for a personnel option scheme will be available at the company as well as on its website (www.pergo.com) as from Monday the 4th of April 2005 and will be sent to all shareholders upon request and to the shareholders who have notified their intention to attend the General Meeting.
Trelleborg, March 2005
The Board of Directors
Pergo is a leading flooring company with strong market positions, particularly in Europe and the US. Net sales amounted to MSEK 2,780 in full-year 2004 and the number of employees is around 800. Pergo developed laminate flooring at the end of the 1970s and launched the product in Europe during the 1980s. The company started sales in the U.S. in 1994 and later also in Asia and Latin America. The company's products have been marketed under the PERGO(R) brand name since 1989. The company is listed on the Stockholm Stock Exchange's O-list. For further information about Pergo, please visit our homepage www.pergo.com.
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