Carphone Warehouse 2004 Annual Report Download - page 24

Remuneration Report continued
Performance Share Plan
It will be proposed at the Annual General Meeting that the Company introduce a Performance Share Plan for Executive Directors and senior
management. Under the plan, selected Executive Directors and members of senior management will receive shares in the Company that will only vest
when certain targets have been achieved. Further details of the plan are contained in the Notice of the Annual General Meeting accompanying this Report.
Amendments to share option schemes
The Board is seeking approval for amendments to The Carphone Warehouse Group Company Share Option Plan and to The Carphone Warehouse
Group PLC Executive Incentive Scheme (‘the Schemes’).
At the Annual General Meeting, shareholders will be asked to approve an amendment to each of the Schemes to enable greater flexibility with
regard to the allocation of incentives under discretionary employees’ share schemes.
The current rules of both of the Schemes, adopted prior to the flotation of the Company in 2000, impose an overriding limit on the allocation in any
ten year period of 10% of the ordinary share capital of the Company under Employees’ Share Schemes and the Schemes.
A further restriction preventing more than 5% of the ordinary share capital of the Company being allocated in any ten year period under discretionary
employees’ share schemes and the Schemes is also imposed under the current rules. Updated guidelines published by the Association of British
Insurers in 2002 now indicate that, provided that the overriding 10% limit on the allocation of shares is maintained, companies may allow the
proportion of such shares allocated under discretionary schemes to exceed 5% where the vesting of options under such discretionary schemes
is dependent on the achievement of more stretching performance criteria.
The Remuneration Committee will continue to ensure that no more than 10% of the ordinary share capital of the Company is allocated under all
employees’ schemes in any ten year period. The Remuneration Committee considers, however, that to enable the Company to reward employees
achieving more stretching performance criteria it is appropriate for the 5% restriction under both Schemes on the allocation of shares to such
employees under discretionary schemes be withdrawn.
Share options*
Details of Directors’ interests in options to buy shares in the Company are as follows:
Granted Exercise
29 March during the 27 March price per Exercisable Expiry
Director 2003 period 2004 share £ from date
R W Taylor 250,000 250,000 0.80 14/07/00 29/01/10
500,000 500,000 1.00 14/07/00 29/01/10
200,000 200,000 1.50 19/05/02 19/05/10
200,000 200,000 2.00 19/05/02 19/05/10
240,000 240,000 1.25 21/05/04 21/05/11
500,000 (i) 500,000 0.83 11/06/05 11/06/12
444,444 (ii) 444,444 0.90 06/06/06 06/06/13
1,890,000 444,444 2,334,444
G Roux de Bezieux 3,500,000 3,500,000 1.50 19/05/02 19/05/10
120,000 120,000 1.25 21/05/04 21/05/11
475,000 (i) 475,000 0.83 11/06/05 11/06/12
422,222 (ii) 422,222 0.90 06/06/06 06/06/13
4,095,000 422,222 4,517,222
J H Dale 200,000 200,000 0.50 14/07/00 03/10/09
200,000 200,000 1.50 19/02/02 19/05/10
200,000 200,000 2.00 19/02/02 19/05/10
96,000 96,000 1.25 21/05/04 21/05/11
300,000 (i) 300,000 0.83 11/06/05 11/06/12
222,222 (ii) 222,222 0.90 06/06/06 06/06/13
996,000 222,222 1,218,222
Hans Roger Snook 1,000,000 1,000,000 0.80 23/03/05 25/03/12
1,000,000 1,000,000
Notes
(i) Options granted in June 2002 are subject to performance conditions. 100% are exercisable if the Group achieves upper quartile TSR
performance over the three year performance period, 50% for median performance, and 25% for performance between median and lower
quartile. None will be exercisable for lower quartile performance. The interests in options listed above assume upper quartile performance.
(ii) Options granted in June 2003 have the same performance conditions as those granted in June 2002, except that if the TSR performance
is below the median the award is cancelled. The interests in options listed above assume upper quartile performance.
The market price per share was 144p as at 27 March 2004. The market price during the period varied between 61p and 153p.
Executive Directors’ service contracts
All Executive Directors have service contracts that are terminable by the Company or the Executive Director with twelve months’ notice or less.
The dates of each contract are set out below and one of the contracts specifically provides for compensation for early termination. Executive
Directors are allowed to hold other Non-Executive positions at the discretion of the Board.
Fees for Non-Executive Directors
The fees for each of the Non-Executive Directors are determined by the Board after considering external market research. The Non-Executive
Directors do not take part in discussions on their remuneration.
Each of the Non-Executive Directors except Hans Roger Snook may have their appointment terminated by the Company with immediate effect
and are not entitled to receive any compensation for loss of office. Hans Roger Snook has a service contract which is terminable by either party
on twelve months’ notice with no provision for compensation on early termination.
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