2007 Annual Report - Sappi

30. Share-based payment
The Sappi Limited Share Incentive Trust and the Sappi Limited Performance Share Incentive Plan
At the annual general meeting of shareholders held on 07 March 2005, shareholders adopted the Sappi Limited Performance
Share Incentive Plan (“Plan”) in addition to the Sappi Limited ShareIncentive Trust (“Trust”) which had been adopted on
02 March 2000, and fixed the aggregate number of shares which may be acquired by all participants under the Plan together
with the Trust at 19,000,000 shares, which constitute 7.9% of the issued share capital of Sappi Limited.
The Sappi Limited Share Incentive Trust
Under the rules of the Trust, participants may be offered the opportunity to acquire ordinary shares (“Trust shares”). This
entails that Trust shares are sold by the Trust to participants on the basis that ownership thereof passes to the participant
on conclusion of the contract but the purchase price is not payable immediately. Trust shares are registered in the name of
the participants and will be pledged in favour of the Trust as security for payment of debt. Subject to certain limitations, a
participant’s outstanding share debt will bear interest at such rate as determined by the board of directors. Dividends on Trust
shares are paid to the Trust and will be applied in the payment of such interest. Trust shares may only be released to
participants as described below.
Under the rules of the Trust, participants may be offered options to acquire ordinary shares (“Share options”). This entails that
employees are offered options to purchase or subscribe for shares. Each share option will confer to the holder the right to
purchase or subscribe for one ordinary share. This is based on the terms and conditions of the Trust. Share options may only
be released to participants as described below.
Under the rules of the Trust, participants may be granted options to enter into agreements with the company to acquire
ordinary shares (“Allocation shares”). These options need to beexercised by the employee within 12 months, failing which
the option will automatically lapse. The exercise of the option must be accompanied by a deposit as determined by the
board (if any). The participant will be entitled to take delivery of and pay for allocation shares which are subject to the rules
as described below.
Certain managerial employees are eligible to participate in the Trust. The amount payable by a participant for Trust Shares,
Share Options or Allocation Shares is the closing price at which shares are traded on the JSE Limited on the trading date
immediately preceding the date upon which the board authorised the grant of the opportunity to acquire relevant Trust
Shares, Share Options or Allocation Shares, as the case may be, to a participant. Pursuant to resolutions of the board of
directors of Sappi (the “board”) passed in accordance with the rules of the Trust, Trust Shares may be released from the Trust
to participants, Share Options may be exercised by participants and Allocation Shares may be delivered to participants as
follows for allocations prior to November 2004:
(i) 20% of the total number of shares after one year has elapsed from the date of acceptance by the participant of the grant;
(ii) up to 40% of the total number of shares after two years have elapsed from the date of acceptance by the participant of
the grant;
(iii) up to 60% of the total number of shares after three years have elapsed from the date of acceptance by the participant of
the grant;
(iv) up to 80% of the total number of shares after four years have elapsed from the date of acceptance by the participant of
the grant and
(v) the balance of the shares after five years have elapsed from the date of acceptance by the participant of the grant;
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