DIRECTORS’ REMUNERATION REPORT performance achieved by the FTSE 100, of which Reed Elsevier PLC is a member, and the Reed Elsevier NV performance with the performance achieved by the Amsterdam Stock Exchange (“AEX”) Index, of which Reed Elsevier NV is a member, for the four years 2000–2003. This period reflects the implementation of the new strategy, announced in February 2000, by the current management team. The other two graphs, which have been prepared in accordance with the Regulations, show the performance over the five years 1999-2003 compared to the performances of the FTSE 100 and the AEX. As Reed Elsevier PLC and Reed Elsevier NV are members of the FTSE 100 and AEX respectively, the Committee considers these indices to be appropriate for comparison purposes. For the four year period since 1 January 2000, the total shareholder return for Reed Elsevier PLC was 24%, significantly outperforming the FTSE 100 which saw a negative return of 26%. For Reed Elsevier NV, in the same four year period total shareholder return was 2%, also significantly outperforming the AEX Index which had a negative return of 41%. The total shareholder return set out above is calculated on the basis of the average share price in the 30 trading days prior to the respective year ends and on the assumption that dividends were reinvested. As a condition of receiving an award under the 2003 LTIS, each executive director will be required to enter into a new service contract. The new contract will have a notice period of 12 months and will contain strengthened covenants that will apply for 12 months after leaving employment, preventing a director from working with specified competitors, recruiting Reed Elsevier employees and soliciting Reed Elsevier clients. Each of the executive directors has a service contract, the notice periods of which are described below: G J A van de Aast was appointed a director in December 2000. His service contract, which is dated 15 November 2000, is subject to English law and provides for a notice period of twelve months. M H Armour was appointed a director in July 1996. His service contract, which is dated 7 October 1996, is subject to English law and since 10 June 2003 his contract has provided for a notice period of twelve months, when Mr Armour agreed to a reduction in his notice period from twenty-four months. Mr Armour did not receive any compensation in return for agreeing to this change in his notice period. REED ELSEVIER ANNUAL REPORTS & FINANCIAL STATEMENTS 2003 31 SERVICE CONTRACTS Source: FTSE International Reed Elsevier PLC total shareholder return v FTSE 100 2000–2003 40 60 80 100 120 140 160 180 Dec 99 Dec 00 Dec 01 Dec 02 Dec 03 FTSE 100 Reed Elsevier PLC Reed Elsevier PLC total shareholder return v FTSE 100 1999–2003 60 80 100 120 140 160 Dec 99 Dec 00 Dec 01 Dec 02 Dec 03 FTSE 100 Reed Elsevier PLC Dec 98 Reed Elsevier NV total shareholder return v AEX Index 1999–2003 60 80 100 120 140 160 Dec 99 Dec 00 Dec 01 Dec 02 Dec 03 AEX Index Reed Elsevier NV Dec 98 Reed Elsevier NV total shareholder return v AEX Index 2000–2003 40 60 80 100 120 140 160 180 Dec 99 Dec 00 Dec 01 Dec 03 Dec 02 AEX Index Reed Elsevier NV Source: Datastream