Savings related share option schemes

The UK- and US-based Executive Directors may, along with all eligible employees, also participate in the UK Savings Related Share Option Scheme (" SRSOS") and the Employee Share Purchase Plan (" ESPP") respectively. Under the SRSOS, participants who enter into a savings contract for three, five or seven years, to a maximum level of £250 per month, are granted options to subscribe for shares in the Company. Under the ESPP, a US Code 423 Plan, US participants may enter into a one-year savings contract to a maximum level of $400 per month. The Board may determine that the options granted under either scheme may be granted at a discount. The maximum discount, as applied to the 2006 awards, is 20% for the SRSOS and 15% for the ESPP of the average market prices used to determine the price of the award. The following table sets out the number of share options held under the SRSOS and ESPP by the Executive Directors.

Savings related share option schemes 2005/06

Gains made on savings related share options during the year to 31 July 2006

The total number of options exercised by each of Messrs Banks, Hord, Hornsby, Marchbank and Roach under the Employee Share Purchase Plan (“ESPP") was reduced by 2 (which lapsed) from then total of 272 as listed at 1 August 2005, due to exchange rate fluctuations.

Pensions

Mr Webster, as a UK Executive Director, participates in the Wolseley Group Retirement Benefits Plan (the “Plan"). The Plan is a defined benefit scheme and provides benefits based on final pensionable salaries. The Company makes contributions to the Plan based on the recommendation of the Plan actuary. Bonuses payable to UK Executive Directors are not pensionable. Mr Webster currently contributes 7% per annum of his pensionable salary to the Plan.

The Finance Act 1989 introduced an earnings cap (the “Cap") for employees joining the Plan after 31 May 1989. This has the effect of limiting the amount of an employee’s salary that can be pensioned through a tax approved pension scheme. A Plan specific earnings cap was introduced from 6 April 2006 when the Cap was prospectively abolished. The current Plan specific limit, to which Mr Webster is subject, is £107,400 per annum. The Company has agreed to provide Mr Webster with benefits which are broadly comparable with those that would have applied under the Plan had the Cap not been introduced. This was, until 6 April 2006, provided for by payments into a Funded Unapproved Retirement Benefits Scheme (“FURBS").

The Committee approved the Company’s approach in response to the UK pensions simplification, which became effective on 6 April 2006 for those Executive Directors who are, or will become, members of the UK approved pension plan. Such Directors have the option of either maintaining the existing pension promise, in which case the executive would be responsible for any additional taxation arising; or ceasing to accrue pension benefit above the lifetime allowance in respect of service from 6 April 2006 and instead, receiving a cash retirement benefit allowance, subject to income taxation consistent with the Company’s cost neutral objective. The Company will not compensate Board members for any change in their personal tax liability. Mr Webster elected to cease to accrue pension benefit above the lifetime allowance in the Plan and to receive a cash retirement allowance in respect of the excess and in respect of prior underfunding of the FURBS.

Past service benefit would remain linked to future salary increases subject to a cap similar to the existing Cap.

Additionally, the Finance Act 1989 capped life assurance payable through an approved pension scheme in respect of such executives. The Company has taken out an insurance policy to cover that part of the life assurance for Mr Webster which is in excess of the Cap. The amount charged to the profit and loss account during the year in respect of his future obligation was £2,988 (2005: £66,812).

Messrs Banks, Hornsby, Marchbank and Roach, who are US citizens, participate in the defined contribution pension arrangements of Ferguson Enterprises, Inc. In line with US practice, Messrs Banks, Hornsby and Marchbank received contributions at the level of 15% of their earnings (for this purpose $420,000 for Mr Banks and $400,000 for Messrs Hornsby, Marchbank and Roach of bonus was included with base salary). Bonus ceased to be included in the calculation of pension contributions from 1 August 2006. Contributions will increase (but will be limited to base salary) to 20% for Mr Hornsby and to 23% for Messrs Marchbank and Roach.

Mr Hord, also a US citizen, participates in the defined benefit and defined contribution plans of Stock Building Supply, Inc. Mr Hord’s pensionable earnings include his bonus up to a maximum of $742,400 as agreed when the bonus scheme was introduced in order to preserve his pension entitlement at that time. Mr Hord is also a member of a US non-qualified plan, which will provide a benefit for 20 years after retirement at age 60 of 40% of final pensionable salary. At Mr Hord’s choice and with Company consent, the benefit can be paid over a period of 1, 5, 10 or 15 years with the total amount of the benefit, in cash terms, being the same.

The following table shows those Executive Directors participating in money purchase pension plans and the cost of the Group’s contributions thereto:

*Mr Roach was appointed to the Board on 16 December 2005.

A US subsidiary undertaking has a commitment to a former Director, who is a US citizen, to pay a joint survivor pension of $300,000 per annum for 15 years from 1 August 1993. The net present value of the future obligation at 31 July 2006 was £298,000 (2005: £460,110), which has been charged in prior years’ accounts.

Additionally, Brossette, a French subsidiary undertaking, has a commitment to a former Director, who is a French citizen, to pay an annual pension of a221,833 (2005: a215,392), with a widow’s entitlement of 60%, subject to an annual increase based on the agreed French pension index. The full actuarial cost of this arrangement was provided in previous years as part of Brossette’s ongoing pension obligations. The Company is guarantor of this future pension commitment which at 31 July 2006 was approximately £2.3 million (2005: £1.9 million).

The following table shows the Executive Directors in office on 31 July 2006 who participated during the year in the Group’s defined benefits plans and the amounts of benefit accrued at the end of the year as if the Director had left service on 31 July 2006, the change in accrued benefit over the year, the transfer value at both the beginning and end of the year as well as the change in the transfer value over the year as required by the Directors’ Remuneration Report Regulations 2002. The increase in transfer value figures represents an obligation on the pension fund or the Company – they are not sums due or paid to the Director. The Listing Rules of the UK Listing Authority require additional disclosure of the change in accrued benefit net of inflation and the transfer value of this change. These pension liabilities are calculated using the cash equivalent transfer value method prescribed in the Listing Rules.

Pensions