Page 31 - Suncorp_Review

Suncorp Group Limited Annual Report 2010/11 29

2.6 Contractual arrangements

Group CEO

Mr Snowball was appointed Managing Director and CEO effective 1 September 2009, with a position title change to Group CEO effective 17 April 2010. Mr Snowball is employed by Suncorp Staff Pty Limited, a wholly‑owned subsidiary of the Company. His contract of employment provides for a four‑year term (Term). At the expiry of the Term, the parties can agree to extend the Term for a further 12 months. The Term may be extended in this way on more than one occasion. The following table summarises the notice periods and payments required upon termination:

NOTICE

PERIOD PAYMENT IN LIEU OF NOTICE

TREATMENT OF STI ON TERMINATION

TREATMENT OF LTI ON TERMINATION

Employer‑initiated termination

In cases other than misconduct or other circumstances justifying summary dismissal

12 months When notice is required,

the Company may make a payment in lieu of notice of all or part of any notice period, calculated based on a percentage of the Group CEO’s fxed remuneration.

Board discretion* Board discretion*

Where individual becomes incapacitated, is of unsound mind or health deteriorates to a certain degree

9 months Board discretion* Board discretion*

For poor performance 3 months Deferred STI award

forfeited

Unvested awards under Initial Grant forfeited

Misconduct or other circumstances justifying summary dismissal

None Deferred STI award

forfeited

Unvested awards under Initial Grant forfeited

Employee‑initiated termination

Generally 6 months Deferred STI award

forfeited

Unvested awards under Initial Grant forfeited

* Any deferred STI award and any unvested LTI performance rights under the Initial Grant (defned below) will continue until the relevant vesting dates and subject to the performance measures, unless the Board exercises its discretion otherwise. In the case of the Initial Grant of performance rights, the number of performance rights that will continue to be available will depend on when the termination of employment occurs: after one year of service 300,000 will be available, after two years’ service 600,000 will be available and after three years’ service 900,000 will be available.

Where a change of control occurs, subject to the satisfaction of applicable performance measures: –– deferred STI and a pro rata award of current year STI may be awarded; and –– unvested LTI may vest pro rata. STI terms

Of any STI awarded to the Group CEO, 50% will be paid in cash and the balance will be deferred for two years. The deferred component will be subject to reduction or forfeiture in certain circumstances (including where there has been a failure to follow risk management policies and practices). LTI entitlement

The Group CEO’s full LTI entitlement for the 2010, 2011 and 2012 fnancial years comprises an initial grant of 900,000 performance rights to shares in the Company (Initial Grant) under the EPSP. The Initial Grant of performance rights was made in three equal tranches.

Vesting of the Initial Grant will be subject to the performance conditions outlined in section 2.3 and will be tested over a three to fve‑year period.