Directors' Remuneration Report

Bonus Share Retention Plan (BSRP)

The BSRP is an essential element of our total reward programme and has been a key factor in helping and encouraging executives to meet the share ownership guidelines that we apply (see Remuneration policy principles). The BSRP is available to a group of approximately 155 senior executives including the Executive Directors and aims to encourage participants to reinvest a cash award into the Company's shares.

The BSRP enables participants to invest all or part of their AIP award in, or take their AIP Award as an award over, our shares ("deferred shares") together with a Company match of additional shares after three years. During the three year period, the shares are held in trust. If a participant leaves the Group during the three year period, they forfeit some of the additional shares and in certain cases it is possible that all of the deferred shares and the additional shares may be forfeited. Each year the Executive Directors (if eligible) have chosen to invest all their AIP awards into the BSRP.

The number of matching shares that will be provided for grants in 2005 is as follows:

Real compound annual growth in aggregate UEP over the three-year deferral period equivalent to:	Number of additional shares awarded at the end of the period (for every five acquired by the executive)
below 4%	2 (Threshold)
4%	3
7%	4
10% or more	5 (Maximum)

UEP is measured on both an aggregate basis and a 'real' basis (i.e. after allowing for inflation), and the levels of growth required to achieve the highest levels of share match are demanding. From 2006, it is proposed that UEP performance will be measured on an absolute basis, and there will be straight line sliding scale vesting between the threshold and maximum. Awards under the BSRP will vest in full following a change in control but only to the extent that performance targets have been met at the time of the change in control unless the Committee decides that the awards would have vested to a greater or lesser extent had the performance targets been measured over the normal period. In 2005, real annual compound growth in UEP was 7.3%. AIP received by the Executive Directors in respect of the 2005 financial year and reinvested into the BSRP is shown on pages 51 and 55.