SAPPI LIMITED

SAPPI
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS (Continued)
for the year ended September 2010
27. POST-EMPLOYMENT BENEFITS—PENSIONS AND OTHER BENEFITS (Continued)
Reconciliation of gains and losses in Group statement of comprehensive income
2010 2009 2008
(US$ million)
2007 2006
Net (losses) gains from pensions ................... (73) (207) (16) 101 100
Net gains (losses) from other defined benefits ..........
Net (losses) gains in Group statement of comprehensive
2 (22) 23 — (1)
income .................................... (71) (229) 7 101 99
28. SHARE-BASED PAYMENTS
The Sappi Limited Share Incentive Trust and The Sappi Limited Performance Share Incentive Trust
Shareholders, at prior annual general meetings, fixed the aggregate number of shares which may
be acquired by all participants under the Sappi Limited Share Incentive Trust (‘‘Scheme’’) and The Sappi
Limited Performance Share Incentive Trust (‘‘Plan’’) at 19,000,000 shares (equivalent to 7.95% of the
shares then in issue). Subsequent to the December 2008 rights offering, this number of shares increased
to 42,700,870 shares (still equivalent to 7.95% of the shares in issue).
The Sappi Limited Share Incentive Trust (‘‘Scheme’’)
Certain managerial employees are eligible to participate in the Scheme. Under the rules of the
Scheme, participants (a) may be offered options to acquire ordinary shares (‘‘Share options’’), (b) may
be offered the opportunity to acquire ordinary shares (‘‘Scheme shares’’), or (c) may be granted options
to enter into agreements with the company to acquire ordinary shares (‘‘Allocation shares’’). In recent
years, only Share Options have been offered to participants.
Under the rules of the Scheme:
– Share options entitle the participant to purchase one ordinary share per share option.
– Scheme shares entitle the participant to enter into a loan with the Scheme to acquire Sappi
Limited shares at a specific issue price. The Scheme shares are registered in the participant’s
name and pledged to the Scheme as security for the loan. Upon payment of the loan, the Scheme
shares become unsecured Sappi Limited shares owned by the participant.
– Allocation shares entitle the participant to accept an option to acquire one Allocation share per
option. These options must be exercised by the participant within 12 months, failing which the
option will automatically lapse. The Allocation shares entitle the participant to pay for one ordinary
share per allocation share.
The amount payable by a participant 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 authorized the grant
of the opportunity to acquire relevant Share options, Scheme shares, or Allocation shares, as the case
may be.
The Share options, Scheme shares and Allocation shares vest in blocks of 25% per annum on the
anniversary date of the offer and expire 8 years after the offer date. Only once the shares vest may Share
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