Thorn-EMI 1995 Annual Report

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Notes to the accounts 32. Directors'and employees, emoluments and Directors, interests contjnued diff-erence between the market share price when the option is exercised and the price to be paid lor the shares. The greater the share price growth between grant and exercise, the more valuable the option. Tax is due on the gain either on exercise or on the sale of the resulting shares. The right to exercise normally only arises in the period between three and ten years from the grant, after which the option cannot be exercised. options granted in 1995 and thereafter (under the new Executive Share Option Scheme to be put to shareholders for approval at the 1995 Annual General Meeting) can only be exercised ifperformance targets, as set by the committee, are met. It is intended that the initial performance target will be Total Shareholder Return ("TSR"), i.e. based on share price growth plus dividends, over the measurement period determined by the Committee. For an option to be exercisable, THORN EMI,s TSR must be at least at the median of the companies comprising the FT-SE 100 at the start of the period. A share option is generally granted in relation to its "face value" i.e. the number of shares under option multiplied by the price to be paid on exercise. Each year the uK Executive Directors are typically granted share options with a lace value of1000/o ofbase salary, to a maximum over any ten-year period ofeight times annual earnings. Options with a face value ofup to four times annual earnings are granted under shareholder-approved Executive Share Option Schemes. The remainder may be in the form of SARs whereby, instead of buying the shares on exercise, the executive is paid the "gain" between the market share price at the grant and the exercise. To reinforce its long-term nature, an SAR cannot normally be exercised in part earlier than four years and in lull earlier than six years from grant. For SARS granted on or before July 1994, to ensure that gains reflect true performance and not simply inflationary share price rises, any "gain" is reduced to the amount by which the share price growth exceeds the UK Retail Prices Index ("RPI") over the period between the grant and the exercise. The exercise of SARs granted afterJuly 1994, as with all Executive Options granted after this date, is subtect to the achievement of performance targets as set by the Committee. In addition, the UK Executive Directors and all other eligible employees are entitled to apply for options under the shareholder-approved Savings-Related Share Option Scheme ("ShareSave Scheme"). The number of options granted is related to the value of savings made by the employee under a Save-As-You-Earn contract over frve years. The maximum total monthly savings an employee may make is currently !250. The option price is currently set at 800/o of the market share price prior to the grant and the right to exercise normally only arises for a sixmonth period once the five years savings have been completed. Retirement Benefits UK Executive Directors are members of the Group's UK contributory Pension Fund which, subject to Inland Revenue limits, provides them with a pension of up to two-thirds of base salary after 20 years membership (or 10 years for those who joined before 17 March 1987), together with benehts on death or disability. Mr Fifield is a member of three co-ordinated defined contribution retirement plans operated by EMI Music in the US (see section (v) of this Note). Entitlement to notice Each Executive Director has an employment contract with entitlement to notice. During the year, all the UK Executive Directors voluntarily agreed (without compensation) to reduce their normal notice period to 24 months (increasing to 36 months in the event of a change in control of the Company). It is the Company's intention to limit the normal notice period of future Executive Directors to 24 months. Furthermore, it has been and continues to be the Committee's practice to scrutinise the compensation entitlement of any departing Executive Director with particular focus on his or her legal duty to mitigate loss, thereby reducing any termination payment. Mr Fifleld's employment contract has specific terms covering his obligation to mitigate in the event of the termination ofhis employment. Non-executive Directors do not have contracts, but each appointment is subject to review every three years.
:!2. Directors'and employees'emolumentJ and Directors' interests continued (ll) Directors' emoluments: Incertiveremudation* Rctir@€rl Bcncfrts (i) (it bmefrts 8000 1000 t'ooo foo0 Notes on the Non-executive Directors, sir colin southgate (chairman and highest Paid uKbased Director) and Mr Fifreld are given below to ensure a full understanding of the Directors' emoluments (including all elements ofincentive remuneration) The basis ofremuneration for Mr Duffu and Mr Metcalf broadly follows that for Sir Colin Southgate' (iil) Non-erecutlve Directors Non-executive Directors receive a basic fee plus an additional sum in respect of commlttee membership. Sir PeterWalters, the Deputy Chairman, receives a further fee for his extra duties and responsibilities. The Non-executive Directors do not participate in any of the incentive or share option plans.
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accounts
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Operating profit
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ETHoRN EMt Annual General Meeting T
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It is the Remuneration Committee's
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(d) On exercise of options the Comp
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7. Ordinary Resolution THAT the Dir
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Chairman's statement The year was o
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Chairman's statement economy and to
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Financial review Simon Duffy Group
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Financial review Other exceptional
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EMI a repeat performance Country su
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strong releases Steven Crlftls Chap
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increasing Pace of THORN achieved
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Reshaping business NewZealand was e
Page 30 and 31: HMV customer-driven performance An
Page 32 and 33: lnvestih$ in tomorrow's world...
Page 34 and 35: A ta rg eted programme of community
Page 36 and 37: Prog ress towa rds env:ronmental im
Page 38 and 39: controlling key impacts CO, emifted
Page 40 and 41: Board of Directors Sir Colin Southg
Page 42 and 43: Directors'Report for the year ended
Page 44 and 45: Directors' Report The internal cont
Page 46 and 47: Auditors'report Report of the Audit
Page 48 and 49: Accounting policies Depreciation of
Page 50 and 51: Consolidated profit and loss accoun
Page 52 and 53: Group Fixed arsetr Music publis
Page 54 and 55: Statement of total recognised galns
Page 56 and 57: Notes to the accountr 2. Analysis o
Page 58 and 59: Notes to the accounts 8. Exceptlona
Page 60 and 61: Noter to the accounts I l.Tanglble
Page 62 and 63: Notes to the accounts 12, Flxed ass
Page 64 and 65: Notes to the account3 15. lnvestmen
Page 66 and 67: Noter to the accounts 16. Borrowing
Page 68 and 69: Notes to the accounts of changer i
Page 70 and 71: Notes to the a(counts 23.5hare capi
Page 72 and 73: NoteJ to the accounts 26. tinancial
Page 74 and 75: Notes to the accounts 29, Dispotal
Page 76 and 77: Notes to the a(counts 3O. Purchase
Page 78 and 79: Notes to the accounts 32. Directors
Page 82 and 83: Notes to the accounts 32. Directors
Page 84 and 85: Notes to the a
Page 86 and 87: Notes to the a(counts 32, Directors
Page 88 and 89: Five year summary for the years to
Page 90 and 91: lnvestor information Financial cale
Page 92 and 93: Tlte nz,er and bus;flut otnlaieu pa
Page 95 and 96: "The British music scene is enioyin
Page 97 and 98: From {\ "Alternative music is quick
Page 99: iii0 . ,'.' H'] .I . ar
Page 103 and 104: develop a unique catalogue of recor
Page 105: thc,rcore,rudielceorlttr,rctrl,rrge
Page 109 and 110: to ownership opportunity. The intro
Page 111 and 112: to idcntif,v and exploit synerg-r;
Page 113 and 114: Curtomer 5atisfa
Page 115: Street, HMV's UK 1-lagship store re
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Thorn-EMI 1995 Annual Report

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