Termination payments.

Our policy on termination or in the event that an executive leaves for reasons of death, disability, ill health, redundancy or retirement are set out in the Policy Section.

Retirement of Tim Breedon

Tim Breedon stepped down from the Board on 30 June 2012. From 1 July to 31 December 2012, he continued to work on specific objectives relating to Solvency II and a smooth handover of his Chief Executive role to Nigel Wilson. He retired from the Company on 31 December 2012. In line with normal policy, he received base salary and normal benefits up to and including 31 December 2012. These then ceased with effect from this date. His shares were dealt with in line with the share scheme rules.

The table below shows the remuneration paid to him during the period after he stepped down from the Board from 1 July to 31 December 2012.

Remuneration for period 1 July 2012 to 31 December 2012 £000s

(XLS:) Remuneration – Tim Breedon

Executive Director



Cash in lieu of pension2

Annual Bonus3 Cash



Car allowance and private medical insurance.


In line with contractual terms, Tim Breedon received a cash allowance of 22% of base salary in lieu of pension contributions. See the Policy Section. This is subject to normal payroll deductions of income tax and National Insurance.


Annual Bonus awarded to Tim Breedon between the period 1 July and 31 December 2012 was based on specific objectives relating to handover of Group Chief Executive duties and the outcome of issues relating to Solvency II. The Remuneration Committee determined that these objectives had been fully achieved. His bonus relating to this period is paid in cash, in line with our policy.

Tim Breedon






Deferred shares

Outstanding shares under the share plans were dealt with under the plan rules. The Committee determined Tim to be a ‘Good Leaver’ upon his retirement and therefore the following shares vested:

Share Bonus Plan (SBP)

(XLS:) Share bonus plan (SBP)

Plan cycle

Number of shares

Value at date of vest – note 1

Note 1: Share price used was 145.6p as at the date of vest 31 December 2012










Total SBP shares vesting






1. Nil Cost Options: part of deferred annual variable pay under the Share Bonus Plan. Tim has six months in which to exercise these options from date of leaving. Value shown is at 31 December 2012 using share price of 145.6p. The figure shown above includes these.







Number of shares

Value at date of vest

Employee share plan (ESP) – note 1



Performance Share Plan (PSP)

Under the rules of the plan, the performance conditions were tested as at the date of his retirement 31 December 2012. The Remuneration Committee also looked at the underlying Company performance. To the extent that the performance conditions were met, the Remuneration Committee agreed that Tim’s outstanding awards should vest. The number of shares vesting were then paid on a pro-rata basis in line with his service during the performance periods. The number of shares that vested together with the share price and value on the date of vesting is shown below.

(XLS:) Performance share plan (PSP)

Plan cycle

Pro-rated shares vesting

Value at date of vest

Share price used for indicating value is 145.6p as at the date of vest 31 December 2012

2010 Award



Pro-rated Nil Cost Options vesting



2011 Award



Pro-rated Nil Cost Options vesting



2012 Award



Pro-rated Nil Cost Options vesting



Total PSP shares vesting



The performance of the plans as at 31 December 2012 is shown in the Variable pay section. Note that Tim Breedon has not yet exercised any of the above options at time of reporting. Under the plan rules, he has six months from date of leaving, i.e. to 30 June 2013, to exercise.