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the travel and leisure sector that have a market capitalisation of greater
than R1 billion (2006) or 10% of Sun International’s market capitalisation
(2007 to 2010).
The conditional awards are subject to vesting conditions as follows:
� within the upper quartile of the comparator group, then the whole
conditional award, which is subject to the TSR condition, will become
unconditional and will vest;
� at the median TSR of the comparator group, then 30% (thirty
percent) of the conditional award will become unconditional and will
vest. The remainder of the conditional award subject to the TSR
condition, will lapse and will be of no further force or effect;
� less than the upper quartile rank of the comparator group and
ranks greater than the median of the comparator group, then the
percentage of the conditional award, subject to the TSR condition,
which becomes unconditional and will vest, will be linearly
apportioned between 30% and 100% as the ranking of the TSR
increases from the median to the upper quartile of the comparator
group. The remainder of the conditional award, subject to the TSR
condition will lapse and will be of no further force or effect; and
� less than the median TSR of the comparator group then the whole of
the conditional award, subject to the TSR condition will lapse and will
be of no force or effect whatsoever.
In the event that the performance condition is not met at the end of
the performance period, the conditional award will lapse and re-testing
is not applied.
The conditional awards granted in 2006 and 2007 did not meet the TSR
performance condition imposed over the three-year performance period,
as the TSR over the performance period ranked less than the median TSR
of the respective comparator group. Accordingly, the 2006 and 2007
conditional awards have lapsed in their entirety.
Deferred Bonus Plan (DBP)
The purpose of the DBP is to encourage senior executives to use part of
their after tax annual bonus (EBS) awarded to acquire shares in the
company in exchange for an uplift in the number of shares received.
Limits are imposed on the value of the bonus which can be deferred and
the related matching award. The DBP is structured to have a retention
effect and encourages share ownership in the company. Awards under
the DBP have been made annually, since 2006 and subsequent to the
financial year end.
The committee simultaneously invites participation in a conditional
matching award. The matching award entitles the executive to an equal
number of free shares matching the number of DBP shares still held
on the vesting date. The matching award is conditional on continued
employment until the vesting date which is for a three year period and
the DBP shares remain in a separate controlled account for the duration.
The executive remains the full owner of the DBP shares for the duration
of the period and enjoys all shareholder rights. DBP shares may be
withdrawn from the controlled account at any time, but the matching
award will not be made on DBP shares withdrawn.
The vesting of the matching award is conditional on the participant being
in the employ of the company on the vesting date and is not subject to
any additional performance conditions, as the DBP shares are acquired
from the EBS bonus payment, which has already been subject to the
satisfaction of performance conditions. As the main purpose of the DBP
is to encourage senior executives to invest in the company and align their
interests with those of shareholders, it is not considered appropriate to
subject the matching award to additional performance conditions.
All conditional matching awards granted relative to the DBP shares
acquired in 2007 will be delivered to participants subsequent to the year
end in 2010.
Restricted Share Plan (RSP)
Shareholders approved the adoption of a RSP at the 2008 annual general
meeting.
The RSP is operated in conjunction with the EGP, CSP and DBP, to
complement and enhance Sun International’s ability to retain key staff
and to assist in securing the services of key new senior executives. The
RSP is considered necessary:
� to permit the issue of awards from time to time as a retention
mechanism, particularly under circumstances where the group faces
significant retention risks with respect to key talent. This is particularly
relevant at a time when market conditions have impaired the ability
of the existing share plans to act as a retention mechanism; and
� to permit once-off awards for new appointments to assist in the
recruitment of key executives which invariably requires compensation
to address value forfeited on resignation from a previous employer.
Rewards under the RSP are therefore not intended to be regular annual
awards, but are made in the case of the appointment of a new employee
or, in the case of specific retention, to key employees, including executive
directors and executives of the group.
Awards under the RSP comprise the grant of ‘forfeitable’ shares in Sun
International, on the basis that the employee will forfeit the shares if he
ceases to be employed by the group due to resignation or dismissal before
the expiry of a three-year to five-year vesting period. In the case of a
three-year vesting period, 100% of the award will vest subject to the
vesting condition that the participant is still in the employ of the group on
the expiry of the three-year vesting period. In the case of awards subject
to a five-year vesting period, the awards will be subject to staggered
vesting and continued employment on the expiry of the following vesting
periods:
� 50% after three years;
� 25% after four years; and
� 25% after five years.
REMUNERATION REPORT continued
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