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go to Form 20-F 2002 Contents Introduction and cautionary statement Item 1 : identity of directors, senior management and advisers Item 1A : identity of directors, senior management and advisers : directors and senior management Item 1B : identity of directors, senior management and advisers : advisers Item 1C : identity of directors, senior management and advisers : auditors Item 2 : offer statistics and expected timetable Item 2A : offer statistics and expected timetable : offer statistics Item 2B : offer statistics and expected timetable : method and expected timetable Item 3 : key information Item 3A : key information : selected financial information Item 3B : key information : capitalisation and indebtedness Item 3C : key information : reasons for the offer and use of proceeds Item 3D : key information : risk factors Item 4 : information on the Company Item 4A : information on the Company : history and development Item 4B : information on the Company : business overview Item 4C : information on the Company : organisational structure Item 4D : information on the Company : property, plant and equipment Item 5 : operating and financial review and prospects Item 6 : directors, senior management and employees Item 6A : directors, senior management and employees : directors and senior management Item 6B : directors, senior management and employees : compensation Item 6C : directors, senior management and employees : board practices Item 6D : directors, senior management and employees : employees Item 6E : directors, senior management and employees : share ownership Item 7 : major shareholders and related party transactions Item 7A : major shareholders and related party transactions : major shareholders Item 7B : major shareholders and related party transactions : related party transactions Item 7C : major shareholders and related party transactions : interests of experts and counsel Item 8 : financial information Item 8A : financial information : consolidated statements and other financial information Item 8B : financial information : significant changes Item 9 : the offer and listing Item 9A : the offer and listing : offer and listing details Item 9B : the offer and listing : plan of distribution Item 9C : the offer and listing : markets Item 9D : the offer and listing : selling shareholders Item 9E : the offer and listing : dilution Item 9F : the offer and listing : expenses of the issue Item 10 : additional information Item 10A : additional information : share capital Item 10B : additional information : memorandum and articles of association Item 10C : additional information : material contracts Item 10D : additional information : exchange controls Item 10E : additional information : taxation Item 10F : additional information : dividends and paying agents Item 10G : additional information : statement by experts Item 10H : additional information : documents on display Item 10I : additional information : subsidiary information Item 11 : quantitative and qualitative disclosure about market risk Item 12 : description of securities other than equity securities Item 12A : description of securities other than equity securities : debt securities Item 12B : description of securities other than equity securities : warrants and rights Item 12C : description of securities other than equity securities : other securities Item 12D : description of securities other than equity securities : American depositary shares Item 13 : defaults, dividend arrearages and delinquencies Item 14 : material modifications to the rights of security holders and use of proceeds Item 15 : controls and procedures Item 17 : financial statements Item 18 : financial statements Item 19 : exhibits Signatures Section 302 - certification : Nigel Northridge Section 302 - certification : Mark Rolfe Index to financial statements Notes to the financial statements

Introduction

The following information sets out the remuneration policy and details the remuneration of our executive and non-executive directors for the year ended 31 December 2002.

Composition and terms of reference

The remuneration committee is chaired by Sir Graham Hearne. As at 31 December 2002 it comprised three independent non-executive directors, Sir Graham Hearne, John Gildersleeve and Tony Portno (following the resignations of Richard Brooke in May 2002 and Caroline Marland in October 2002, both non-executive directors). Alison Carnwath was appointed as a non-executive director of the Group and as a member of the remuneration committee with effect from 1 January 2003.

The remuneration committee is responsible for determining remuneration policy, as well as the remuneration arrangements of individual executive directors (and the company secretary), operating within clear, written terms of reference from the board. The remuneration committee also oversees the Company's employee share schemes.

During the period under review, internally the remuneration committee sought the assistance of the chairman, chief executive, group legal director (Chris Fielden until his retirement on 30 November 2002) and company secretary (Nigel Bulpitt until his retirement on 30 June 2002, thereafter Tom Keevil) on matters relating to performance and remuneration. No executive was present at any meeting or any part of a meeting when their own specific arrangements were being discussed. Externally, Towers Perrin provide independent market information and remuneration advice on an ongoing basis, and representatives from Towers Perrin attend remuneration committee meetings as and when required. In 2002 Towers Perrin attended two of the five remuneration committee meetings. During 2002 Towers Perrin also provided a limited amount of advice to the Group related to general compensation and benefits matters.

Remuneration policy statement

In an increasingly competitive environment and with an enlarged international spread of operations, our approach remains to attract and retain people of the highest quality throughout the Company. We believe that the level of remuneration and other benefits must be set appropriately to achieve this in each business region / country in which we operate. The remuneration committee's goal is to provide and operate a remuneration policy, which is consistent with our objectives. The policy is kept under review in light of emerging best practice and market conditions. Thus, the policy aims to attract and retain high calibre senior executives, align executive rewards with shareholder value creation, motivate executives to achieve challenging performance levels and consider both individual and Company performance.

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Policy on remuneration

It is the present intention of the remuneration committee that, for 2003 and subsequent years, our policy on the remuneration of any person who serves as a director of the Company will remain within the above policy guidelines. The remuneration committee will, however, keep the policy under consideration. In determining policy and giving effect to it the remuneration committee reviews the remuneration practices of a comparator group consisting of other FTSE 100 consumer-orientated companies on an annual basis to ensure that the remuneration committee's approach is consistent with best practice amongst that peer group. The details of all elements of the actual remuneration package for each director are outlined below.

In order to achieve the remuneration policy goals, the executive remuneration package consists of basic salary, incentives, and benefits. Remuneration is also structured to align the interests not only of directors, but also of employees, with those of shareholders. Accordingly, in addition to directors, certain senior executives across the Group are invited by the remuneration committee to participate in two long-term performance-based plans. The basic salary, pension, medical and life assurance elements are fixed. By contrast, the annual cash bonus and awards under the two long-term incentive plans are related to the performance of the Group. It is also the Company's policy to provide a significant portion of the total potential rewards through the performance-based schemes and, at least, half of the total value of the package for senior executives is performance-related. A significant proportion of the remuneration of many employees is also related to profits. Employees are encouraged to build up shareholdings in the Group through participation in the Company's savings-related share option scheme (the 'SRSOS') which is open to all UK employees and employees in certain overseas locations. It is intended to extend eligibility to participate in the SRSOS to additional overseas locations in 2003. UK employees can also participate in an Inland Revenue-approved share incentive plan (the 'SIP').

Payments under the annual cash bonus arrangements depend on achievement of profit targets set by the remuneration committee. Following amendments approved at the 2002 annual general meeting ('AGM'), rewards under the two long-term incentive plans from 2002 onwards relate to achievement of real growth in earnings per share ('EPS') targets set by the remuneration committee (see below for details of the performance share plan schemes in place prior to 2002). Growth in EPS is considered an appropriate measure by which to assess the performance of executives in the tobacco sector because it more closely aligns a key shareholder requirement, a robust income stream from which to fund dividends, with management's interests. Unlike total shareholder return ('TSR'), i.e. dividend flow and capital growth in a share's value over performance periods, EPS is not subject to factors outside management's control which impact upon the performance of the tobacco sector as a whole. The remuneration committee considers that annual earnings growth should be expected, but that measures to ensure longer-term growth in earnings also need to be encouraged. The remuneration committee also considers that three-year cycles for earnings growth are appropriate to reward executives for continuing long-term earnings. Against this background the remuneration committee uses adjusted EPS within three-year cycles as the appropriate measure of performance. Adjusted EPS is considered to be an appropriate measure which is independently verifiable from the annual report and financial statements. The vesting of awards, including for the 2002-2004 period, are contingent upon the achievement of minimum and maximum levels of adjusted EPS targets set by the remuneration committee annually, details of which are set out below.

Non-executive directors

The board, as a whole, determines the fees paid to the chairman and other non-executive directors taking into account market norms, comparisons with companies of equivalent size and the duties required of non-executive directors, based on information provided by Towers Perrin and, where appropriate, the recommendations of the chairman (on matters other than his own remuneration) and chief executive, supported by the company secretary. Fees are reviewed annually. The non-executive directors have letters of appointment specifying three-year fixed terms of office, with three-month notice periods. They are not eligible for Company pension scheme membership, nor do they participate in any of the Group's bonus or long-term incentive plans (with the exception of the chairman, who participated in incentive plans while in the executive employ of the Company and as a retired executive is a member of the management pension scheme).

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Service contracts

The service contracts of all executive directors are with Gallaher Limited. Since July 2001, except in the event of termination following a change of control the policy of the Group is that all executive directors have a one-year notice provision in their contracts, such notice period not extending beyond their normal retirement age of 60 years. Nigel Simon has a service contract with Austria Tabak (now part of our continental European division) in respect of his services to that company. He also retains his Gallaher Limited contract, the terms of which have been adjusted so that his remuneration, albeit divided between the two contracts, is settled in aggregate by the committee.

Details of the contracts of service or letters of appointment of each person who has served as a director of the Company at any time during the 2002 financial year are set out below :

	Date of appointment	Date of current contract / letter of appointment	Expiry date / unexpired term of contract / appointment on 31 Dec 2002	Notice period under contract / appointment letter
Executive directors
Nigel Northridge	15 Apr 1997	1 Nov 2002	13 yrs 1 mnth	12 months
Bill Curry	8 May 1997	12 Dec 2000	Exp 31 May 2002	n / a
Neil England	1 Jan 2002	1 Nov 2002	11 yrs 5 mnths	12 months
Chris Fielden	8 May 1997	1 Nov 2002	Exp 30 Nov 2002	n / a
Mark Rolfe	1 July 2000	1 Nov 2002	15 yrs 11 mnths	12 months
Heinz Schiendl	1 Jan 2002	1 Jul 1996	Exp 31 Dec 2002	n / a
Nigel Simon	13 May 1997	25 Feb 2003	13 yrs	12 months
Non-executive directors
Peter Wilson	1 Jul 2001	1 Jul 2001	1 yr 6 mnths	3 months
Sir Graham Hearne	13 May 1997	13 May 2000	4½ mnths	3 months
Richard Brooke	13 May 1997	13 May 2000	Exp 15 May 2002	n / a
Richard Delbridge	24 Jan 2002	24 Jan 2002	2 yrs 3 wks	3 months
John Gildersleeve	13 May 1997	13 May 2000	4½ mnths	3 months
Thomas Hays	13 May 1997	13 May 2000	Exp 31 May 2002	n / a
Caroline Marland	1 Jun 2002	1 Jun 2002	Exp 22 Oct 2002	n / a
Tony Portno	13 May 1997	13 May 2000	4½ mnths	3 months

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There is no pre-determined level of compensation on termination under any of the service contracts. As a guideline, normal termination payments under directors' contracts are not intended to exceed 100% of annual base salary plus bonus, in line with the one-year notice period. However, in limited circumstances, for two years following a change in control of Gallaher Limited and the subsequent termination of an executive's employment, an executive director with a Gallaher Limited contract will be entitled to be paid a sum equal to two years of his basic salary at the then current rate and two times the average percentage of annual executive directors' bonus received in the three-years prior to the change of control, applied to the then current rate of basic salary, plus twice the value of the benefits in kind received in respect of the 12-month period preceding the change of control. An executive director cannot, however, unilaterally elect to resign upon a change of control with the benefit of these arrangements. The remuneration committee is fully aware of the need, in all other circumstances, to ensure that an appropriate settlement is reached, should a director's employment be terminated with or without notice.

Basic salary

In setting the basic salary for each executive director (and the company secretary), the remuneration committee reviews market data provided by Towers Perrin of an appropriate FTSE 100 comparator group, comprising primarily companies in the fast-moving consumer goods sector, and considers each director's experience, performance and responsibilities. The remuneration committee also considers the levels of increase awarded to the Group's UK employees and the overall performance of the Group. Basic salaries are generally reviewed on an annual basis or following a significant change in responsibilities.

Incentive arrangements

Awards under the annual cash bonus scheme, while remaining in the absolute discretion of the remuneration committee, are based on the remuneration committee's assessment of the annual performance of the Group, focusing on growth in profits. As a matter of practice, bonuses are not awarded unless the targets set by the remuneration committee are met. In respect of 2002 the maximum possible bonus for all executive directors was 50% and the actual bonus awarded to directors amounted to 42.56% of basic salary. Following advice received from Towers Perrin that annual bonus targets had become out of line with the comparator group the remuneration committee reviewed the level of potential bonuses for 2003 onwards and revised the maximum bonus level for 2003 to 65% of basic salary with an additional incentive of 5% for the chief executive.

Long-term incentive plans

These consist of a deferred bonus plan ('DBP') and a performance share plan ('PSP'). The two plans are designed to align the interests of the participants with those of the shareholders over the long-term through the allocation of ordinary shares in the Group, contingent upon the Group's performance. The incentive plan targets are applied uniformly to all executive directors, the company secretary and certain senior executives reporting to them. The aim is to encourage a team approach and a focus on the well-being of the Group as a whole.

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Deferred bonus plan

The purpose of the DBP is to encourage senior executives, invited to participate, to invest in the Group's shares and remain committed to the Group's growth and future performance. Following the resolution passed at the May 2002 AGM of the Group, for awards made from 2003 onwards, if, upon invitation, a participant pledges shares up to a maximum value equal to 100% of his / her annual bonus (which shares must be held by the employee throughout the performance period) and the Group achieves pre-determined targets for real growth in adjusted EPS over a three-year period (as set by the remuneration committee), the Group will award the participant, at no cost to the participant (other than taxation charges), additional shares. The minimum number, which the participant will receive, having held shares for the full three-year cycle, will be one half of the number originally pledged. If the performance targets are met in full the participant will receive the maximum number of additional shares, namely one and a half times the number originally pledged. Awards between the minimum and maximum are calculated on a linear basis and depend upon the extent to which the Group achieves its targets. Details of the shares awarded to directors under the DBP are set out in the 'deferred bonus plan' table included elsewhere in this section.

Real growth in adjusted EPS over the 2000-2002 performance period was within the target range of between 2% and 10%, and thus 145.5% of the original conditional award was payable. The gain attributable to each director will be disclosed in the 2003 remuneration report. Awards were made in 2002 to a number of senior executives, including the executive directors, under the DBP. The vesting of these awards is conditional upon the achievement of targets set by the remuneration committee over the three financial years 2002-2004.

Performance share plan

The purpose of the PSP is to reward executives for delivering growth in shareholder value through an annual award of shares, in the case of executive directors, up to a maximum value of 100% (varied from 75% to 100% of salary by virtue of resolution 9 passed at the Group's 2002 AGM) of salary at the discretion of the committee.

For the cycles ending 2002 and 2003 performance continues to be measured by reference to TSR and real growth in adjusted EPS. The TSR of the Group is ranked against the relative TSR of each of those companies included in the FTSE 100 share index at the time the award is made. An upper quartile ranking will produce vesting of half of the total award, a median ranking, 10%. The proportion vested for each ranking between these two levels is calculated on a linear basis. No award will be earned by a ranking at or below the 49th percentile. The committee considers that an upper quartile ranking demonstrates a challenging level of TSR. The extent to which the remaining half of the shares vest is determined by the real growth in adjusted EPS over the measurement period compared with a target range, again, set by the committee. Achievement at or above the top of the range will produce vesting of half of the total award. Achievement of the bottom of the range will provide 10% of the total award and the proportion vested for achievement between the top and bottom of the range is again calculated on a linear basis. No award is made if performance is below the bottom of the range.

Real growth in adjusted EPS over the 2000-2002 performance period was within the target range and therefore contributed 48.2% to the total award. In the 2000-2002 performance period the TSR of the Group was top of the FTSE i.e. at the 100th percentile as measured against the FTSE 100 and accordingly TSR contributed 50% to the total award. Therefore an aggregate of 98.2% of the 2000-2002 original conditional awards will vest. The gain attributable to each director will be disclosed as remuneration in 2003 and details of awards to directors under the PSP are detailed in the 'performance share plan' table included elsewhere in this section. Awards were made in 2002 to a number of senior executives, including the executive directors, under the PSP, in accordance with the rules of the plan.

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Targets set for performance periods

The remuneration committee has discretion to set targets for real growth in adjusted EPS for each performance period. The targets set for real growth in adjusted EPS for the DBP and PSP for the performance periods 2002-2004 and 2003-2005 are 2% real growth per annum for the minimum threshold and 10% real growth per annum to achieve the maximum applicable award.

Savings-related share option scheme

The executive directors are eligible to participate in the SRSOS. The SRSOS was established in 1997. Participants, who enter into a savings contract to a maximum level of £250 per month, are granted options to subscribe for shares in the Group. The board may determine that an option is to be granted at a discount. The maximum discount is 20% of the then prevailing share price. The options held by directors under the SRSOS are included in the disclosure of directors' interests in shares elsewhere in this section.

Share incentive plan

Following approval at the 2001 AGM, a SIP (formerly called an AESOP) was launched in February 2002. UK employees have the opportunity to invest up to £125 per month in the Group's shares out of their pre-tax income. These shares are then held in trust and each separate purchase of shares will become free of income tax and national insurance, if held for five years. Employees can participate in the SIP, in addition to the SRSOS. The shares held by directors under the SIP are included in the disclosure of directors' interests in shares elsewhere in this section.

Pensions

With the exception of Heinz Schiendl (who remained within the defined contribution pension arrangements provided by Austria Tabak), executive directors have contractual pension entitlements under their service agreements, which continue after their employment and are members of the Group's principal management pension scheme. This is an Inland Revenue-approved, defined benefit occupational pension scheme based on final salary (excluding annual bonus payments and awards under the long-term incentive plans). In common with all members executive directors do not make contributions to the scheme, other than additional voluntary contributions ('AVCs'). In addition the scheme provides executive directors with life cover of four times basic salary.

Other benefits

All executive directors are provided with a Company mobile phone, a Company car (or an allowance in lieu), personal accident insurance and medical insurance. The taxable value of these benefits and any free issues of tobacco products are included in the directors' emoluments table. Nigel Simon's benefits also include costs relating to his continental European duties in Vienna. None of the non-executive directors have these benefits other than personal accident insurance and life assurance while conducting company business, with the exception of the chairman, who additionally is provided with a mobile phone and, as a retired executive employee, medical insurance.

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Directors' contracts and compensation

The total salaries, fees and benefits paid to or receivable by each person who served as a director of the Company at any time during the year appear below. These include all payments for services as a director of the Company, its subsidiaries or otherwise in connection with the management of the Company's business and any other directorship he / she holds because of the Company's nomination.

	Total salary £000	Fees £000	Bonuses £000	Incentive plans £000	Value of any other non-cash benefits £000	Total remuneration for 2002 £000	Total remuneration for 2001 £000
Executive directors
Nigel Northridge	525	-	223	228	10	986	786
Bill Curry	108	-	46	196	16	366	515
Neil England	275	-	117	-	46	438	-
Chris Fielden	267	-	114	290	23	694	655
Mark Rolfe	340	-	145	69	17	571	447
Heinz Schiendl	228	-	239	-	7	474	-
Nigel Simon	332	-	139	192	37	700	651
Non-executive directors
Peter Wilson	-	200	-	585	1	786	791
Sir Graham Hearne	-	66	-	-	-	66	66
Richard Brooke	-	15	-	-	1	16	35
Richard Delbridge	-	33	-	-	-	33	-
John Gildersleeve	-	32	-	-	-	32	31
Thomas Hays	-	13	-	-	1	14	31
Caroline Marland	-	13	-	-	-	13	-
Tony Portno	-	32	-	-	-	32	31
Total	2,075	404	1,023	1,560	159	5,221	4,039

Notes

1. In relation to the value of non-cash benefits, where received, the values indicated relate to the following benefits received by those directors : Company car, mobile phone, private health care and limited supplies of tobacco products. In addition, directors are covered by personal accident and life insurance while on Company business. There are no expense allowances chargeable to UK income tax.
2. Mr Wilson was invited to participate in the long-term incentive plans while employed as chief executive of the Group (ie, the awards granted in March 1998 and March 1999, and vesting in March 2001 and March 2002 respectively). The value of the award shown above reflects the final maturity due to Mr Wilson under these arrangements. There are no further awards available to vest to him.
3. Mr Schiendl received a termination payment of £137,043, which was a contractual entitlement under the terms of his employment contract with Austria Tabak at the time the Group acquired that company. This amount is included in the bonus figure set out above.
4. Mr Simon has elected to waive part of his basic pay in 2002 and part of his bonus entitlements, if any, for 2003 and 2004. The decision relates to restrictions on pension AVCs caused by his employment in Vienna and is in exchange for improved pension terms.
5. Included in Mr England's non-cash benefits is the taxable benefit arising from the contributions paid to his funded unapproved retirement benefits ('FURB') resulting from the restrictions imposed by the Inland Revenue earnings cap.

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Directors' long-term incentive plan awards

The long-term incentive plan ('Ltip') awards of each person who has served as a director of the Company which were outstanding at any time in the financial year are as set out below :

Performance share plan

	Performance period	Maximum potential share awards outstanding at 1 Jan 2002	Awards vesting during 2002 (vesting share price £5.0375 on 12 Mar 02; share price at award on 1 Apr 99, £3.75)	Lapsed during the 2002 year (see note below)	Maximum potential share awards granted during the 2002 year	Maximum potential share awards outstanding at 31 Dec 2002
Nigel Northridge	1999 - 2001	41,667	(40,333)	(1,334)	-	-
	2000 - 2002	110,944	-	-	-	110,944
	2001 - 2003	74,220	-	-	-	74,220
	2002 - 2004	-	-	-	104,321	104,321
Total		226,831	(40,333)	(1,334)	104,321	289,485
Bill Curry	1999 - 2001	35,570	(34,431)	(1,139)	-	-
	2000 - 2002	59,531	-	(11,576)	-	47,955
	2001 - 2003	40,337	-	(21,289)	-	19,048
	2002 - 2004	-	-	(44,489)	51,664	7,175
Total		135,438	(34,431)	(78,493)	51,664	78,178
Nigel Dunlop	1999 - 2001	13,550	(13,116)	(434)	-	-
	2000 - 2002	19,032	-	-	-	19,032
	2001 - 2003	11,887	-	-	-	11,887
	2002 - 2004	-	-	-	18,527	18,527
Total		44,469	(13,116)	(434)	18,527	49,446
Neil England	2002 - 2004	-	-	-	54,645	54,645
Total		0	0	0	54,645	54,645
Chris Fielden	1999 - 2001	52,439	(50,760)	(1,679)	-	-
	2000 - 2002	72,520	-	(2,015)	-	70,505
	2001 - 2003	45,177	-	(16,314)	-	28,863
Total		170,136	(50,760)	(20,008)	-	99,368
Mark Rolfe	1999 - 2001	11,924	(11,542)	(382)	-	-
	2000 - 2002	23,452	-	-	-	23,452
	2001 - 2003	48,404	-	-	-	48,404
	2002 - 2004	-	-	-	67,561	67,561
Total		83,780	(11,542)	(382)	67,561	139,417
Heinz Schiendl	2002 - 2004	-	-	(29,788)	44,681	14,893
Total		0	0	(29,788)	44,681	14,893
Nigel Simon	1999 - 2001	35,570	(34,431)	(1,139)	-	-
	2000 - 2002	81,179	-	-	-	81,179
	2001 - 2003	50,663	-	-	-	50,663
	2002 - 2004	-	-	-	64,977	64,977
Total		167,412	(34,431)	(1,139)	64,977	196,819
Peter Wilson	1999 - 2001	105,691	(102,308)	(3,383)	-	-
Total		105,691	(102,308)	(3,383)	0	0

Note : Lapses refer to those awards that did not vest under the 1999-2001 PSP. However, for Messrs Curry, Fielden and Schiendl, the lapses also include those awards to which they are no longer entitled following their retirements from the Company.

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Deferred bonus plan

	Performance period	Maximum potential share awards outstanding at 1 Jan 2002	Awards vesting during 2002 (vesting share price £5.0375 on 12 Mar 02; share price at award on 23 Apr 99, £3.72)	Lapsed during the 2002 year (see note below)	Maximum potential share awards granted during the 2002 year	Maximum potential share awards outstanding at 31 Dec 2002
Nigel Northridge	1999 - 2001	4,981	(4,981)	-	-	-
	2000 - 2002	25,423	-	-	-	25,423
	2001 - 2003	14,959	-	-	-	14,959
	2002 - 2004	-	-	-	9,189	9,189
Total		45,363	(4,981)	0	9,189	49,571
Bill Curry	1999 - 2001	4,530	(4,530)	-	-	-
	2000 - 2002	16,329	-	(3,176)	-	13,153
	2001 - 2003	8,026	-	(4,236)	-	3,790
	2002 - 2004	-	-	(4,300)	4,993	693
Total		28,885	(4,530)	(11,712)	4,993	17,636
Nigel Dunlop	2001 - 2003	3,537	-	-	-	3,537
	2002 - 2004	-	-	-	2,329	2,329
Total		3,537	0	0	2,329	5,866
Chris Fielden	1999 - 2001	6,823	(6,823)	-	-	-
	2000 - 2002	21,331	-	(593)	-	20,738
	2001 - 2003	9,742	-	(3,518)	-	6,224
	2002 - 2004	-	-	(3,885)	5,593	1,708
Total		37,896	(6,823)	(7,996)	5,593	28,670
Mark Rolfe	1999 - 2001	2,163	(2,163)	-	-	-
	2000 - 2002	5,979	-	-	-	5,979
	2001 - 2003	6,330	-	-	-	6,330
	2002 - 2004	-	-	-	5,992	5,992
Total		14,472	(2,163)	-	5,992	18,301
Nigel Simon	1999 - 2001	3,675	(3,675)	-	-	-
	2000 - 2002	-	-	-	-	-
	2001 - 2003	10,945	-	-	-	10,945
	2002 - 2004	-	-	-	6,273	6,273
Total		14,620	(3,675)	-	6,273	17,218
Peter Wilson	1999 - 2001	13,756	(13,756)	-	-	-
Total		13,756	(13,756)	0	0	0

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Performance conditions relating to Ltip awards :

	Calculation of award			Award based on :
Plan period	PSP	DBP	Performance target range	PSP basic salary	DBP annual bonus
2000-2002	50% EPS + 50% TSR	100% EPS	2% to 10%(1)	75%	33.3%
2001-2003	50% EPS + 50% TSR	100% EPS	2% to 10%(2)	75%	33.3%
2002-2004	100% EPS	100% EPS	2% to 10%	100%	100%
2003-2005	100% EPS	100% EPS	2% to 10%	100%	100%

1. The EPS element was initially 3-6% but adjusted by the remuneration committee first to 3-8% to take into account the impact of share buybacks and then revised to 2-10% consistent with using 'adjusted' EPS as opposed to 'basic' EPS.
2. The EPS element was initially 3-8% but was revised to 2-10% consistent with using 'adjusted' EPS as opposed to 'basic' EPS.

Share options

	Options under SRSOS (10p shares)
	Date of grant	Earliest exercise date	Expiry date	Option price	Number of shares at 1 Jan 2002	Lapsed in year	Granted in year	Number of shares at 31 Dec 2002
Executive directors
Nigel Northridge	15/07/1997	1/9/2004	28/2/2005	234p	8,333	-	-	8,333
	04/10/2002	1/12/2007	31/5/2008	559p	-	-	2,938	2,938
Bill Curry	10/10/2000	1/1/2004	30/6/2004	297p	3,261	(3,261)	-	-
Nigel Dunlop	10/10/2000	1/12/2003	31/5/2004	297p	3,261	-	-	3,261
Chris Fielden	15/07/1997	1/9/2004	28/2/2005	234p	8,333	-	-	8,333
Neil England	04/10/2002	1/12/2005	31/5/2006	559p	-	-	1,690	1,690
Mark Rolfe	15/07/1997	1/9/2004	28/2/2005	234p	8,333	-	-	8,333
	04/10/2002	1/12/2009	31/5/2010	559p	-	-	3,175	3,175
Heinz Schiendl	-	-	-	-	-	-	-	-
Nigel Simon	-	-	-	-	-	-	-	-
Total	-	-	-	-	31,521	(3,261)	7,803	36,063

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Directors' interests in shares

The register kept by the Company pursuant to section 325 of the Companies Act 1985 shows that the directors in office at 31 December 2002, and those appointed with effect from 1 January 2003, and their families had the under mentioned interests in ordinary shares of the Company. No such interests were held in any other Group company.

Number of shares beneficially owned	At 30 April 2003	At 31 Dec 2002	At 31 Dec 2001
Executive directors
Nigel Northridge(1)	161,303	81,057	53,661
Nigel Dunlop(1)	25,849	14,554	6,500
Neil England(1)	23,225	3,142	-
Mark Rolfe(1)	46,404	29,024	20,593
Nigel Simon(1)	110,137	62,307	39,445
Non-executive directors
Peter Wilson	299,709	299,709	230,072
Sir Graham Hearne	5,092	5,092	5,092
Alison Carnwath	-	-	-
Richard Delbridge	10,000	10,000	-
John Gildersleeve	26,573	26,573	25,410
Tony Portno	5,000	5,000	5,000
Total	713,292	536,458	385,773

1. Participates in the SIP with a contribution of £125 per month.

The share price at 31 December 2002 was 617p and the recorded highest and lowest prices in the year were 707.50p and 444.75p respectively.

Directors hold no options over shares in the Company, other than those under the SRSOS, details of which are set out above.

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Pensions

Details of the executive directors' pensions are shown in the table and notes below. These amounts exclude any benefits attributable to AVCs. The transfer values shown below represent an obligation of the Group, not a sum paid or due to the individual and cannot meaningfully be added to annual remuneration.

Note :					(1)		(2)
	Gross increase in accrued pension £000 (pa)	Increase in accrued pension net of inflation £000	Total accrued pension at 31 Dec 2002 £000 (pa)	Value of net increase in accrual over period £000	Transfer value of accrued pension at 31 Dec 2002 £000	Transfer value of accrued pension at 31 Dec 2001 £000	Total change in value during period £000	Money purchase schemes £000
Nigel Northridge	37	33	234	342	2,396	1,768	628	-
Bill Curry(3)	4	2	151	27	2,153	2,106	47	-
Neil England(4)	2	2	2	18	18	-	18	62
Chris Fielden(3)	13	9	203	166	3,352	3,275	77	-
Mark Rolfe	21	19	128	173	1,145	811	334	-
Heinz Schiendl	-	-	-	-	-	-	-	23
Nigel Simon	12	10	137	103	1,413	1,130	283	-

Notes :

1. Transfer values have been calculated in accordance with version 1.5 of guidance note GN11 issued by the actuarial profession in the UK.
2. The change in the transfer value includes the effect of fluctuations in the transfer value due to factors beyond the control of the Company and directors, such as stock market movements. The value also reflects the change in the transfer calculation basis over 2002.
3. Messrs Curry and Fielden respectively retired on 31 May 2002 and 30 November 2002. Both elected to take a lump sum, in lieu of part of their pension entitlement. The figures in the table include allowance for these figures.
4. Contributions due to Mr England's FURB resulting from the restrictions imposed by the Inland Revenue earnings cap.