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Report & Accounts 2005

Directors' Remuneration Report

Unaudited information
Option grants made to Executive Directors in 2005 are shown in table eight of the Directors' remuneration tables. No rights to subscribe for shares or debentures of any Group company were granted to or exercised by any member of any of the Director's immediate families during 2005. All our discretionary share option plans which apply to Executive Directors use the following criteria:

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  Annual grants made prior to 2004 AGM Annual grants made after 2004 AGM
Market value of option grant made to Executive Directors Customary grant was 300% of base salary and the maximum was 400% of base salary Maximum of 200% of base salary. From 2006 onwards, we propose that no such grants are made other than in exceptional circumstances
Performance condition Exercise is subject to UEPS growth of at least the rate of inflation plus 2% per annum over three years Exercise is subject to real compound annual growth in UEPS of 4% for half the award to vest and 6% real growth for the entire award to vest over three years, measured by comparison to the UEPS in the year immediately preceding grant
Re-tests If required, re-testing has been on an annual basis on a rolling three-year base for the life of the option If the performance condition is not met within the first three years, the option will be re-tested in year five with actual UEPS growth in year five measured in relation to the original base year

The growth in UEPS for these purposes is calculated on a 'point to point' basis, using a formula which incorporates the UEPS for the year prior to the start of the first performance period and for the last year of the performance period based on a weighted average inflation index (as for the LTIP). The UEPS is measured on a real basis after allowing for inflation. The following table shows our performance against the measures explained above. The actual vesting of awards will be based on performance over the full vesting period and future results will be reflected in the outcome.

Cycle Real compound
annual growth
in UEPS
since grant		 TSR percentile
ranking as at
1 January 2006		 Current
status (% of
maximum
award)
2000 – 2002 6.8% 41 Lapsed
2001 – 2003 6.3% 22 Extended
2002 – 2004 4.7% 43 Extended
2003 – 2005 3.7% 49 Extended
2004 – 2006 6.2% 81 Would pay 71.5%
2005 – 2007 6.4% 81 Would pay 73%

All outstanding options granted prior to 2002 have achieved their UEPS targets.