The Annual General Meeting in 2003 approved Employee Stock Option Program
2003/2009 entitling employees to acquire up to 2,525,000 shares in Intrum
Justitia AB (publ) for SEK 57 per share, intended as an incentive program for
around twenty persons in senior positions in the Intrum Justitia Group.
The stock options are allocated as follows: to the President of Intrum Justitia
AB a maximum of 500,000 options and to others eligible to participate between
75,000 and 150,000 options. Allotments take into consideration each
employee's performance and position within, and efforts on behalf of, the Intrum
Justitia Group.
Allotments were made in May 2004, when the majority of those entitled to
options were offered the opportunity to participate in the program, and in 2004
and 2005 in connection with a limited number of new hires and promotions. In
total, 19 persons are participating in the employee stock option program and
75,000 options have been retained for distribution by the Board.
The right to acquire new shares through the Employee Stock Option Program
is related to the average annual percentage increase in the Intrum Justitia Group's
earnings per share (before goodwill amortization) from fi scal year 2003 through
fi scal year 2006, with earnings per share (before goodwill amortization) for fi scal
year 2002 as a basis. The negative effect on earnings per share from any extraordinary
dividend, meaning a dividend that exceeds Intrum Justitia's stated
dividend objective at the time, is eliminated by equating such a dividend with a
share repurchase. The following table shows the relationship between the increase
in earnings according to the above and the highest allowable utilization ratio for
allotted employee stock options.

Average annual increase in earnings                   Highest allowable utilization ratio
per share (before goodwill amortization)            for allotted employee stock
in 2003-2006, % options, %
                                                0 - <6                     0
                                                6 - <7                   20
                                                7 - <8                   40
                                                8 - <9                   60
                                                9 - <10                 80
                                                10                       100
Employee stock options are issued free of charge. The Intrum Justitia Group
pays all social security contributions in connection with the benefi t. In order to
cover the liquidity effect that may arise from any social security contributions,
warrants for a total of 833,250 shares were issued to a subsidiary of the Group.
The Annual General Meeting in 2003 approved the issue of 3,358,250
detachable warrants entitled to subscribe for shares in Intrum Justitia AB (publ),
where each warrant permits subscription for one share at a price of SEK 57 per
share, thereby hedging the shares that can be transferred to employees in
accordance with the Employee Stock Option Program 2003/2009 as well as the
liquidity effect of the social security contributions in connection with the program.
After the redemption of shares in 2005, the current price of new subscriptions is
SEK 54.60 per share. If fully exercised, the warrants would raise the share
capital by SEK 67,165, corresponding to approximately four percent of both the
share capital and voting rights. The warrants expire on July 1, 2009. The market
value of the options on the issuance date amounts to SEK 20.0 M. The same
amount is accrued as a staff cost over the vesting period of the options. The
company thereby values the services received from employees in exchange for
allotted options on the basis of the value of the allotted options. The cost in
2005 was SEK 7.5 M (5.0), of which SEK 1.1 M (0.7) corresponds to the
President's options. The theoretical market value of the options on the issuance
date, May 7, 2004, has been calculated according to the Black-Scholes model
assuming an interest rate of 4.5 percent, 21.0 percent volatility (based on
historical volatility), a share price of SEK 40.50, a strike price of SEK 57 and an
expiration day of July 1, 2009.
The reason for introducing Intrum Justitia AB's Employee Stock Option
Program 2003/2009 was that the Board of Directors felt that it is important to
recruit and retain competent executives and key personnel within the Group and
to provide current and future senior executives and key personnel the
opportunity to become owners of Intrum Justitia AB. The Board believes that
this will align their interests with those of the Group and strengthen loyalty to the
company in the years ahead, especially since option holders are required to remain
employees to exercise their options. Since the program is an incentive for senior
executives and key personnel within the Intrum Justitia Group, it is expected to
positively affect the Group's development and thereby benefi t shareholders.