Aviva 2006 Annual Report Download - page 95

Overview Business review Governance Financial statements Other information
Aviva plc
Annual Report and Accounts 2006 91
UK all employee share plans
Senior executives are eligible to participate in a number of HMRC approved all-employee share plans in the United Kingdom on the
same basis as other eligible employees. These include the Free Share element of the Aviva All-Employee Share Ownership Plan (AESOP).
Under this plan, eligible employees can receive up to a maximum of £3,000 per annum in the form of shares from the profits of the
Company’s UK business, free of tax, subject to a retention period. The partnership element of the AESOP allows participants to invest up
to £125 per month out of their gross salary in the Company’s shares.
The Aviva Savings Related Share Option Scheme allows eligible employees to acquire options over the Company’s shares at a discount of
up to 20% of their market value at the date of grant. In order to exercise these options, participants must have saved the consideration
through a three, five or seven-year approved savings contract, subject to a maximum savings limit of £250 per month.
Executive directors’ service contracts
Service contracts agreed with each executive director incorporate their terms and conditions of employment. Contracts were reviewed
during the year and new contracts issued, bringing them into line with good market practice in respect of mitigation and phased
payments. The main objective of the contracts is to strike a fair balance between the Company’s and the employee’s interests taking
into account good market practice. The key terms areas follows:
Provision Policy
Notice period
By the director Six months
By the Company 12 months, rolling. No notice or payment in lieu to be paid where the Company terminates for cause.
Termination payment Pay in lieu of notice up to a maximum of 52 weeks’ basic salary. This may be increased by a discretionary
redundancy payment (whereappropriate) but any such further termination payment is capped at
52 weeks’ basic salary.Any amount is subject to mitigation and phased payments.
Remuneration and benefits As described in this Report. The detailed operation of the annual bonus and LTIP plans is at the Company’s
discretion and in the case of the long-term savings plans at the trustees discretion.
Expenses Reimbursement reasonably incurred in accordance with their duties.
Holiday entitlement 30 working days plus public holidays.
Sickness In line with senior management terms ie 100% basic salary for 52 weeks, and 75% thereafter.
Non-complete During employment and for six months after leaving.
Contract dates Director Date current contract commenced
Richard Harvey 6 December 2006
Andrew Moss 16 January 2007
Philip Scott 22 January 2007
Patrick Snowball 15 November 2006
Policy on external Board appointments
The Company recognises that its senior executives can benefit by serving in a personal capacity as non-executive directors of non-Aviva
Group companies. It therefore has a policy of allowing senior executives to serve as a non-executive director of an external company,
subject to approval by the Board, and to retain any fee. However, during the year no executive director served in a personal capacity on
the Board of a non-Aviva Group company.
Share ownership requirements
In line with investor guidelines, the Group Chief Executive and the executive directors are required to build, over a five-year period,
ashareholding in the Company equivalent to 1.75 times annual salary and 1.5 times annual salary respectively.