• (i) basic salary, reviewed annually;


• (ii) where appropriate, annual performance related bonus. For the Chairman, Chief Executive and Finance Director, this is related to the performance of the Group as a whole and paid in DMGT ‘A’ Ordinary shares through the Executive Bonus Scheme, details of which are given on this page. For the year to 29th September, 2002, no bonus was earned under this scheme. This scheme reaches the end of its ten-year life this year and a similar scheme is being proposed to shareholders at the forthcoming Annual General Meeting. For other executive directors, bonuses are paid at the discretion of the Remuneration and Nominations Committee to reward individual performance;


• (iii) share options, since 1997 only exercisable on achievement of demanding performance criteria as set out on notes below, to provide a long term incentive which aligns their interests to those of shareholders. Options granted until December 1994 under the 1989 Scheme were not subject to performance criteria as this was not standard practice. Options are granted in phased blocks over a number of years; and


• (iv) where appropriate, a long term incentive plan. Under this scheme, established in February 2001, executives are invited to commit shares in the Company at a market price equal to a maximum of twice the value of their basic annual salary. If they hold those shares for five years, they will be eligible to receive matching shares on a sliding scale up to 200% of the value of the shares held, dependent on the total shareholder return of the Company compared with a peer group. The peer group which operates was chosen to reflect a range of listed companies in the businesses and locations principally occupied by DMGT. No award will be made if performance is below median level. Further details are given on this page.

In the event of earlier termination of their contracts, each Director is entitled to compensation equal to their basic salary for the notice period. Mr Sinclair has undertaken that he would seek to mitigate any such payment by obtaining alternative employment and repaying to the Company an amount equal to any remuneration earned therefrom. There is no entitlement to compensation for bonuses which might have been earned during the notice period. Share options would be treated as for any member of the scheme, depending on the reason for termination of the contract. Mr Sinclair is entitled, on a change of control of the Company, to give notice under his contract within 60 days of the change of control, and to receive compensation for this notice period as set out above.

Non-executive directors are appointed for specified terms and are subject to re-election by the shareholders at the Annual General Meeting following appointment, and thereafter every three years. Each appointment can be terminated before the end of the three year period, with no notice or fees due. The dates of the appointment or subsequent re-appointment of the non-executive Directors are set out below:

• (i) The figure given for ‘fees and salary’ for The Viscount Rothermere includes £47,000 (2001 £45,000) paid to him as part of the Funded Unapproved Retirement Benefits Scheme (see Note ii to Directors’ Pension Entitlements below).


• (ii) Benefits in kind include the taxable value of company cars, fuel allowances, company contributions to medical insurance plans and, in the case of Mr Dacre, of accommodation provided for him in Central London.


• (iii) The Viscount Rothermere, Mr Sinclair and Mr Williams are members of the DMGT Executive Bonus Scheme (‘the Scheme’).

• (iv) Pension contributions are those made to money purchase schemes as set out on page 39. The prior year figures in the table also include such contributions made last year.


• (v) In addition to their fees as Directors of the Company, Sir Patrick Sergeant also receives a fee as president of Euromoney Institutional Investment plc and Mr Park as chairman of Northcliffe Newspapers.


• (vi) In February 2001, ordinary shareholders approved the introduction of the Daily Mail and General Trust Long Term Incentive Plan (the ‘LTIP’). The LTIP is designed to align the interests of participants and shareholders by requiring participants to make a substantial investment in the Company as a condition to participating in the LTIP. Further, the LTIP will only provide rewards for participants if the Company achieves exceptional returns for shareholders; this is achieved by calibrating participants’ rewards by reference to the Company’s performance against a peer group of comparable media companies.

The LTIP is supervised by the Committee and is operated in conjunction with an employee discretionary trust (the ‘Trust’). TheTrust will acquire ‘A’ Ordinary Non-Voting Shares in the Company (‘shares’) to satisfy awards under the LTIP. The Committee intends to operate the LTIP annually. Prospective participants are invited by the Committee to agree to commit shares to the LTIP. Usually invitations are made in tranches over a period of one to four years, and individuals are given six months to make commitments in order to allow for them to make purchases of shares, where appropriate. Once an individual has agreed to commit shares which are owned by him or by his close family, the Trustee of the Trust (‘the Trustee’) decides whether to make an award of an equal number of shares to those committed.

Awards under the LTIP have been made to four executive directors. In July 2001, Messrs Sinclair, Williams and Dacre were invited to commit 177,600, 98,100 shares and 185,600 shares respectively in two equal annual tranches in the case of Messrs Sinclair and Dacre, and in three equal annual tranches in the case of Mr Williams. In June 2002, Mr Dutton was invited to commit 30,282 shares in three equal tranches. In July 2002, the Viscount Rothermere was invited to commit 115,200 shares in four equal tranches. Having received agreements to commit shares, the Trustee has made the awards set out in the table below.

Awards under the LTIP are subject to stringent performance conditions, which will determine whether, and to what extent, shares under awards will vest. The performance conditions relate to the total shareholder return (‘TSR’) of the Company initially over a five-year period against a peer group of UK and overseas companies determined by the Committee. TSR is the aggregate of share price growth and dividends paid (assuming that such dividends are reinvested in shares during the five year period), and is commonly adopted as a measure of comparative performance.

Daily Mail and General Trust Long-Term Incentive Plan
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• (i) The DMGT Senior Executives’ Pension Fund, of which certain executive directors are members, is non-contributory for members. The normal retirement age under the Fund for this group is 60. The deferred pension is the pension reflecting service to the relevant date and based on pensionable earnings at that date. A spouse’s/ dependant’s pension equal to two thirds of the director’s pension is incorporated and the director can elect to receive the pension from age 50, subject to a discount if retirement takes place before 60. The pension, when in payment, will receive annual increases in line with inflation, which may be limited when inflation exceeds 5% per annum. The increases in the deferred pension and the transfer value during the year are calculated excluding the effect of inflation.


• (ii) The Viscount Rothermere is subject to the Inland Revenue pensionable earnings cap. To mitigate the impact of this pension restriction, the Company has formulated a policy under which assets are being held under trust and invested in a funded unapproved retirement benefits scheme. During the year, £69,225 (2001 £70,050) was paid into this trust on his behalf.


• (iii) Mr Fallon waived profit share in respect of the current year and of future years of £138,800 (2001 £138,800). This waived profit share was paid into a pension scheme on Mr Fallon’s behalf.


• (iv) The Company does not make any pension contributions on behalf of Mr Dutton.

Total Shareholder Return

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Directors’ Interests

The number of shares of the Company and of securities of other Group companies in which Directors or their families had an interest at the dates shown are stated below.
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Directors' Interests graph cont...

• (i) The table opposite sets out options granted: under the DMGT 1989 Executive Share Option Scheme from January 1993 to December 1994; and under the DMGT 1997 Executive Share Option Scheme from June 1997. All options under both schemes were granted at market value at the date of grant and none required any payment. They are not normally exercisable before the third anniversary of the date of grant and in all circumstances will lapse if not exercised within ten years.


• (ii) No Directors’ options lapsed or had their terms and conditions varied during the year.


• (iii) The mid-market price of the ‘A’ Ordinary Non-Voting shares was £5.015 at 29th September, 2002 and £5.75 at 30th September, 2001. It ranged from £4.605 to £8.05 during the year.


• (iv) Options outstanding under the 1989 Scheme were granted from January 1993 to December 1994 at prices ranging from £1.9625 to £3.1125 per share. These options have all vested and are exercisable before December 2004.


• (v) Since June 1997, all grants have been made under the DMGT 1997 Executive Share Option Scheme at prices ranging from £4.070625 to £10.295. These options are normally exercisable only when two demanding performance conditions have been met. The first condition is that, in respect of four out of six consecutive monthly calculation dates (which start in the thirtieth month following the date of grant of a particular option), the total shareholder return (‘TSR’) of the Company must exceed that of the FTSE 100 index. Secondly, there must be real growth in earnings per share over a period of three consecutive financial years.


• (vi) Options granted in June 1997 under the 1997 Scheme at £4.070625 per share are exercisable as both performance criteria have been met. On 31st October, 2001, the TSR condition was also met in respect of the options granted in December 1998 at £6.475 per share, but since real growth in adjusted earnings per share was not achieved in the prior year, nor in the year ended 29th September, 2002, compared to that of three years previously, there will be a further minimum delay of approximately one year before those options become exercisable. Neither of the performance conditions has been met yet in respect of the options granted in December 1999 at £10.295 per share. Accordingly, there will also be a minimum delay of approximately one year before those options become exercisable.


• (vii) Gains made by Directors from exercises of options in the Company are included in the analysis of Directors’ emoluments, required by the Companies Act, in Note 11 to the Profit and Loss Account. On 16th July, Mr Dacre exercised options over 40,000 shares, retaining the shares when the mid-market price was £4.99; this resulted in a gain of £36,775.


• (viii) There were 3,647,500 options outstanding under both schemes at the end of the year, as set out in Note 33 (iii) to the Balance Sheets Note viii. This represents 0.91% of the Company’s total issued share capital.


• (ix) The Company has been notified that, under sections 198 and 204 of the Companies Act 1985, each of the Viscount Rothermere, Mr Hemingway and Mr Gray were deemed to have been interested as shareholders in 12,556,764 Ordinary shares at 29th September, 2002 and at 30th September, 2001.


• (x) At 29th September, 2002 and at 30th September, 2001, the Viscount Rothermere was beneficially interested in 756,700 ordinary shares of Rothermere Continuation Limited, (‘RCL’), the Company’s ultimate holding company.


• (xi) Directors’ shareholdings in Euromoney Institutional Investor plc (‘Euromoney’) were as follows:



	29th September, 2002	30th September, 2001
Beneficial The Viscount Rothermere C J F Sinclair J P Williams Sir Patrick Sergeant P M Fallon	17,470 7,494 1,825 317,804 901,061	17,470 7,494 1,825 317,804 901,061
	1,245,654	1,245,654
Non-Beneficial Sir Patrick Sergeant	_	82,900



• (xii) The Viscount Rothermere was beneficially interested in 68 ordinary shares in Associated Newspapers North America Inc. at 29th September, 2002 and at 30th September, 2001.


• (xiii) At 29th September, 2002, Mr Fallon, held options in Euromoney, normally exercisable as follows:

Click to see Shareholder Return graph...

• (xiv) The figures in the table on this page include ‘A’ shares awarded to executives under the DMGT Executive Bonus Scheme. For the Viscount Rothermere and Messrs Sinclair and Williams respectively, 20,336, 37,967 and 20,621 of these shares were subject to restrictions, explained on page 37, at 29th September, 2002. The comparable figures at 30th September, 2001 were 20,336, 64,635 and 34,245 shares each respectively.


• (xv) The figures in the table on this page include ‘A’ shares committed by executives under the LTIP, details of which are set out on this page. For the Viscount Rothermere, Messrs Sinclair, Williams, Dutton and Dacre such committed shares amounted to 28,800, 176,600, 65,400, 10,094 and 185,600 at 29th September, 2002. The comparable figures at 30th September, 2001 were nil, 88,800, 32,700, nil and 63,093 shares each respectively.


• (xvi) Messrs Gray and Hakkarainen, as directors of DMGT Trustees Limited, are deemed to have a non-beneficial interest in ‘A’ Ordinary Non-Voting shares, purchased by DMGT Trustees Limited, the Trustee of the DMGT Share Trust. 3,027,687 ‘A’ Ordinary Non-Voting shares were held at 29th September, 2002 and are included in the figures in the tables above for each of these Directors. At 30th September, 2001, the comparable figure was 2,782,871 ‘A’ Ordinary Non-Voting shares.


• (xvii) All shareholdings were unchanged at 27th November, 2002. (xviii) No Director of the Company has or had a disclosable interest in any contract of significance subsisting during or at the end of the year.


• (xix) Disclosable transactions by the Group under FRS 8, Related PartyTransactions, are set out in Note 41. There have been no other disclosable transactions by the Company and its subsidiaries with directors of Group companies and with substantial shareholders since the publication of the last Annual Report.