Untitled

ln place of the normal oredapping annual share awar& based
on threeyear performance cycles, Mr Berry and Mr Bandier harre
been granted onetime share awards under the SEIP of 1,000,000
and 650,000 shares respectively. these awards wll be released
at the end of a fouFyear performance penod ending on 31 March
2002, the number of shares released depending upon the releuant
business units performance against aggregate profrt grcMith
targe6 o€r the four-year performance period. Release of these
share awards rs also subject to the Total Shareholder Return test
applicable to b€GJtive Dircctors. ln certain arcumsbnces the
awar& may be released before the wsting date, for example on
termination of the executives employment agreement beca$e
of breach by EMl, or follodng a change of control. The awards
lapse il prior to the \€sting date, the executi!€ resigns voluntanly
or his employnent agreement is terminated by the Goup for
cause (as defined in the contract). The Committee consideB that
these on+time share awards reinforce the primary focus of the
business units' top management to achie!€ growth in profis orer
the long run, as well as providing a strong incentive for them to
remain with the Group.
As described in l.lote 15 on page 54, entrtlements to
performancerelated and restricted share awar* under the SEIP
are met from shares purchased in the maket and held by the
EMI Group General Employee Benefit Trust, and therefore do not
dilute shareholders' equity.
While the Executive Directors novv participate only in the SEIB
awards remain ouBtanding under former incentirre plans as
detailed in previous yea6' Annual Reports. The Executi!€ Dirccto6'
share interests arising from the SEIP and the former incentile plans
are noted on page 35.
fiestntted #pres
Mr Berry and Mr Bandier have been granted rcstncted share
awards under the SEIP of, respectively, 725,000 and 350,000
shares. These shares will vest at the end of the fouFyear period
to 31 March 2002. Ihe awarcls are in lieu of addhional base salary
and are not subject to performance requirements. lhe aim of
the awards is to bnng Mr Beny's and Mr Bandier's basic annual
remuneration into line with competiue practice in the usA, where
both executives are based, whilst aligning their interests more
closely with those of the shareholders and providing them whh
a stong incentile to remain with the Group.
Mr Nico{i ha been granted a restricted share award under the SEIP
of 65,000 shares, whidr will ven on 31 March 2002. The award
provides Mr Nicoli with a replacement for lost potential value from
emplqtee share incenti\€s operated by his prwious employer and
is not subject to performance requiremenb.
The restricted share awarch of Mr Nicoli, Mr Berry and Mr Bandier
will lape if, prior to the !€stlng date the o€cutive resigrs
voluntarily or his employment agreement is terminated for cause.
All or part of the awar* may also vest before the planned !€sting
date in certain circumstances, including if the executives
employment agreement is terminated without cause, or upon
a change of conuol. lhe rcstricted share award of Mr Bates will
vest pro rata to the number of rnoritf|s elapd betv\,€en 1 January
2000 and 31 December 2002 if he leares the employrnent of the
Groups music interests.
Since these restricted share arards of Mr Berry Mr Bandier and
Mr Bates are in lieu of base salary a proportion of their value is
included in reported remuneration eadr year, aren though in
certain circumstances the awards may lap6e or be releaed before
the vesting date. A proportion of the restricted share award of Mr
Nicoli is also included in reported remuneration each year, even
though it tm could lape or be released before the vesting date.
Share optias atd shate apryeiation igh5
The Executive Directors and other senior executives who
participate in the SEIP are no longer generally eligible fo the grant
of options under the Executive Share Option kheme. The UKbased
Executive Directon are entrtled, hororer; together with all
other eligibh emplq€es, to appv for optionl nornnlly annually,
under the SavingeRelated Share Option Scireme (ShareSare).
The Executive Directors' share opttons and share appreciation
righG arising from grants in respect of preuious yean or under
prwious incentive schemes are noted on page 36. Executive
share options are normally exercisable betvwen three and ten
years from the date of grant and, if granted on or after 25
August 1995, only if performance targeb set b/ the Remureration
Committee are met. The target set for these options relate6 to
the Groups Total Shareholder Return. The aggregate exercise price
of ouStanding o