2007 Annual Report - Sappi

Notes to the group annual financial statements continued
for the year ended September 2007
30. Share-based payment continued
and for allocations subsequent to November 2004 as follows:
(i) 25% 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 50% 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 75% of the total number of shares after three years have elapsed from the date of acceptance by the participant of
the grant;
(iv) the balance of the shares after four years have elapsed from the date of acceptance by the participant of the grant;
provided that the board may, at its discretion, anticipate or postpone such dates. Prior to the annual general meeting held
on 02 March 2000, the Trust provided that Share Options will lapse, among other reasons, if they remain unexercised after
the tenth anniversary of the acceptance and that Trust Shares and Allocation Shares must be paid for in full by participants
by no later than the tenth anniversary of the acceptance. However, the annual general meeting approved an amendment to
decrease the aforesaid ten-year period to eight years, in respect of offers made since 03 December 1999. The board has
resolved that the benefits under the Trust of Participants will be accelerated in the event of a change of control of the company,
as defined in the Trust, becoming effective (a) if, in concluding the change of control, the board in office at the time immediately
prior to the proposed change of control being communicated to the board ceases to be able to determine the future
employment conditions of the group’s employees or (b) unless the change of control is initiated by the board. Participants
are entitled to require such acceleration by written notice to the company within a period of 90 days after the date upon which
such change of control becomes effective.
The Sappi Limited Performance Share Incentive Plan
Under the rules of the Plan, participants who will be officers and other employees of the company may be awarded conditional
contracts to acquire Shares for no cash consideration. If the performance critieria from time to time determined by the human
resources committee or compensation committee of the board (Performance Criteria) applicable to each Conditional Contract,
are met or exceeded, then Participants shall be entitled to receive such number of shares as specified in the Conditional
Contract for no cash consideration after the fourth anniversary of the date on which the board resolves to award a Conditional
Contract to that Participant. The Performance Criteria shall entail a benchmarking of the company’s performance against an
appropriate peer group of companies.
If the board determines that the Performance Criteria embodied in a Conditional Contract have not been satisfied or exceeded,
the number of shares to be allotted and issued and/or transferred to a Participant under and in terms of such Conditional
Contract shall be adjusted downwards.
Provision is made for appropriate adjustments to be made to the rights of Participants in the event that the company, inter
alia, undertakes a rights offer, is a party to a scheme of arrangement affecting the structuring of its issued share capital or
reduces its share capital if, (a) the company undergoes a change in control after an Allocation date other than a change in
control initiated by the board itself, or (b) the person/s (or those persons acting in concert) who have control of the company
as at an Allocation date, take/s any decision, pass/es any resolution and/or take/s any action the effect of which is to delist
the company from the JSE Limited and the company becomes aware of such decision, resolution and/or action, the company
is obligated to notify every Participant thereof on the basis that such Participant may within a period of one month (or such
longer period as the board may permit) take delivery of those shares which he/she would have been entitled to had the
Performance Criteria been achieved.
Allocations (number of shares) 2007 2006
During the year the following offers were made to employees:
Performance shares** 1,713,000 1,920,400
Declined (1,500) (4,000)
Restricted shares** 45,000 –
1,756,500 1,916,400
138
sappi limited | 07 | annual report