<PAGE>
 
                                                                   Exhibit 10.34

                                   WERKSMANS
                                   ---------
                                   ATTORNEYS



                   THE SAPPI LIMITED SHARE INCENTIVE SCHEME
<PAGE>
 
  TABLE OF CONTENTS

<TABLE> 
<S>                                                                      <C> 
1  INTERPRETATION                                                         1
                                                                           
PART 1 -THE TRUST                                                         7
                                                                           
2  CONSTITUTION OF TRUST AND TRUSTEES                                     7
                                                                           
3  POWERS OF TRUSTEES                                                     8
                                                                           
4  SECURITY                                                               9
                                                                           
5  REMUNERATION OF TRUSTEES                                               9
                                                                           
6  DUTIES OF TRUSTEES                                                     10
                                                                           
7  INDEMNITY AND LEGAL PROCEEDINGS                                        10

8  PURCHASE OF OR SUBSCRIPTION FOR SHARES                                 11
                                                                           
9  FUNDING OF THE TRUST                                                   12
                                                                           
PART 2 - THE CREDIT SALE SCHEME                                           13
                                                                           
10  ACQUISITION OF SCHEME SHARES                                          13
                                                                           
11  PAYMENT FOR SCHEME SHARES AND INTEREST                                14
                                                                           
12  TRANSFER, LISTING AND PLEDGE OF SHARES                                17
                                                                           
13  DIVIDENDS                                                             19
                                                                           
PART 3 - THE SHARE OPTION SCHEME                                          20
                                                                           
14  ACQUISITION OF SHARE OPTIONS                                          20

15  SHARE OPTIONS                                                         20
                                                                           
16  EXERCISE OF SHARE OPTIONS                                             21
                                                                           
17  ALLOTMENT                                                             22
                                                                           
PART 4 - GENERAL PROVISIONS RELATING TO THE CREDIT SALE                    
                                                                           
SCHEME AND THE SHARE OPTION SCHEME                                        22
                                                                           
18  TERMINATION OF EMPLOYMENT                                             22
 
19  RIGHTS AND CAPITALIZATION ISSUES, CONSOLIDATIONS,
    SUB-DIVISIONS, REORGANISATION AND TAKEOVER AND
    SCRIP DIVIDENDS                                                       26
</TABLE> 
 
<PAGE>
 
<TABLE> 
<S>                                                                       <C> 
PART 5 - THE COMBINED OPTION/DEFERRED SALE SCHEME                         31
                                                                           
20  THE SCHEME                                                            31
                                                                           
PART 6 - SWITCHING MECHANISMS                                             37
                                                                           
21  SHARE OPTIONS - CREDIT SALE                                           37
                                                                           
22  CREDIT SALE - SHARE OPTIONS                                           38
                                                                           
23  CREDIT SALE - COMBINED OPTION/DEFERRED SALE                           39
                                                                           
24  SHARE OPTION - COMBINED OPTION/DEFERRED SALE                          41
                                                                           
25  COMBINED OPTION/DEFERRED SALE - CREDIT SALE OR                         
                                                                           
    SHARE OPTIONS                                                         42
                                                                           
PART  7 - GENERAL                                                         45
                                                                           
26  ASSIGNMENT OF RIGHTS OR OBLIGATIONS                                   45
                                                                           
27  TRANSFERS FROM THE EXISTING SCHEME                                    46
                                                                           
28  CERTIFICATES                                                          47
                                                                           
29  AGREEMENT BINDING ON PARTICIPANTS                                     47
                                                                           
30  AMENDMENT                                                             47
                                                                           
31  DISPUTES                                                              48
                                                                           
32  ANNUAL FINANCIAL STATEMENTS                                           51
                                                                           
33  PROFITS AND LOSSES                                                    51
                                                                           
34  TERMINATION                                                           52
</TABLE> 

<PAGE>
 
THE SAPPI LIMITED SHARE INCENTIVE SCHEME

The purpose of the scheme is to provide employees of the group with the
opportunity to acquire an interest in the equity of the company, thereby
providing such employees with a further incentive to advance the group's
interests and promoting an identity of interests between such employees and the
shareholders of the company.

1   INTERPRETATION

1.1       In this deed, unless the context clearly indicates a contrary
          intention, the following words and expressions shall bear the
          following meanings and cognate words and expressions shall bear
          corresponding meanings -

1.1.1         "acceptance date" - the date of acceptance by a participant of an
              offer for the acquisition of scheme shares, share options or
              rights and options in terms of 10, 14 or 20, as the case may be;

1.1.2         "allocation price " - the price per share payable by a participant
              for allocation shares, which price shall be the closing price at
              which shares are traded on the JSE on the trading day immediately
              preceding the date upon which the board will have resolved to
              offer to grant, or direct the trustees to offer to grant, the
              relevant right and option to that participant; provided that such
              price shall, if the date on which it is to be determined falls
              between the date on which the company declared an interim or final
              dividend on such shares and the last day for registration by
              shareholders to participate in such dividend, be reduced by the
              amount of such dividend;

1.1.3         "allocation shares" - shares acquired by a participant pursuant to
              the exercise of a right and option in terms of 20;

1.1.4         "Act  the Companies Act 1 973, as amended;
<PAGE>
 
1.1.5          "board " - the board of directors of the company acting either 
               itself or through any committee constituted from time to time and
               appointed by it for the purpose of administering this scheme;

1.1.6          "company" - Sappi Limited (Registration number 05/08963/06);

1.1.7          "early retirement" - retirement at or after the age of fifty-five
               years but prior to normal retirement age referred to in 1.1 .19;

1.1.8          "eligible applicant" - a person eligible for participation in
               this scheme, namely an officer or other employee of any company
               or other entity or association of persons forming part of the
               group, which person shall be determined from time to time by the
               board in its discretion;

1.1.9          "existing scheme" - the Sappi Limited Share Purchase Scheme
               adopted at a general meeting of the company on 26 June 19791;

1.1.10         "family company" - any company or close corporation, the entire
               issued share capital or member's interests of which is held and
               beneficially owned by all or any of an eligible applicant or
               participant, his lawful spouse, his lawful issue (including
               adopted children) and/or his family trust;

1.1.11         "family trust" - a trust constituted solely for the benefit of
               all or any of an eligible applicant or a participant, his lawful
                                                                     ---       
               spouse and/or his lawful issue (including adopted children);

1.1.12         "group" - the company, the company's subsidiaries for the time
               being and any company, partnership, trust or other entity or
               association of persons which is controlled or jointly controlled
               by the company, whether directly or indirectly, for which purpose
               the word 'controlled' includes the right to direct or otherwise
               control the votes attaching to the majority (or one-half in the
               case of joint control) of the voting shares or other voting
               instruments or voting rights in that company, partnership, trust
               or other entity or association of persons;
<PAGE>
 
1.1.13         "JSE Johannesburg Stock Exchange;

1.1.14         "maximum period"- the period from the acceptance date to the
               tenth anniversary date thereof;

1.1.15         "option period"- the period from the acceptance date to the date
               Of completion of ten subsequent years continuous service in the
               group;

1.1.16         "option price " - the price per share payable by a participant
               upon the exercise of a share option in respect thereof, which
               price shall be the closing price at which shares are traded on
               the JSE on the trading day immediately preceding the date upon
               which the board will have resolved to offer to grant, or direct
               the trustees to offer to grant, the relevant option to that
               participant; provided that such price shall, if the date on which
               it is to be determined falls between the date on which the
               company declared an interim or final dividend on such shares and
               the last day for registration by shareholders to participate in
               such dividend, be reduced by the amount of such dividend;

1.1.17         "option shares" - in respect of which options have been granted
               in terms of 14, for as long as such options have not been
               exercised and have not lapsed;

1.1.18         "participant" - an eligible applicant (or his nominated family
               trust or family company) who has accepted an offer to acquire
               share options, scheme shares or rights and options in terms of
               10, 14 or 20 (as the case may be) including his heirs, executors
               or administrators"

1.1.19         "retirement" - retirement at normal retirement age (and not at
               early retirement age, whether or not such early retirement is
               voluntary) in accordance with any pension or similar scheme of
               the company or other entity in the group from time to time in
               force of which the participant in question is a member or
               participant, it being recorded that such normal retirement age is
               currently either sixty or sixty-three years;
<PAGE>
 
1.1.20          "right and option" - the right and option granted to a
                participant in terms of 20 to enter into an agreement with the
                company or the trust to acquire allocation shares;

1.1.21          "scheme" - the scheme to enable employees of the group to
                acquire and/or fund the acquisition of shares, the terms of
                which are embodied in this document;

1.1.22          "scheme capitalization shares" - shares or other securities in
                the company allotted and issued to a Participant by way of a
                Capitalization of profits, share premium or reserves in respect
                of his holding of scheme shares;

1.1.23          "scheme rights shares" - shares or other securities subscribed
                for in terms or as a consequence of a rights issue and acquired
                by or on behalf of a participant in terms of 19.2;

1.1.24          "scheme shares" - shares acquired by a participant in terms of
                10, including -

1.1.24.1               shares acquired by a participant who held share options
                       and who accepted an offer by the trustees to subscribe
                       for or purchase on his behalf the shares represented by
                       such options in terms of 21;

1.1.24.2               scheme capitalization shares;

1.1.24.3               scheme rights shares; and

1.1.24.4               shares or other securities in the company or in any other
                       company allotted, issued or transferred by way of
                       exchange for scheme shares pursuant to any conversion or
                       redemption of shares in accordance with the company's
                       articles of association and/or pursuant to any takeover
                       of the company or any scheme of arrangement or other
                       proposal having as its object the passing of control or
                       the reconstruction of the capital of the company and/or
                       pursuant to a reduction of capital or deregistration of
<PAGE>
 
                       the company, for so long as those shares or other
                       securities remain the subject to the pledge referred to
                       in 12;

1.1.25          "shares" - ordinary shares of a nominal value of Rl each in the
                capital of the company;


1.1.26          "share debt"- the amount for the time being owing by a
                participant to the trust in respect of scheme shares, which
                amount may be increased from time to time in regard to any
                participant in accordance with the directions of the board, in
                its discretion, by such amount/s which may become payable by the
                participant in question -

1.1.26.1               in respect of any interest liability incurred from time
                       to time by a participant on any amount owing to the trust
                       in terms of this scheme; and/or

1.1.26.2               pursuant to any provision of the Income Tax Act 1962 as
                       amended (or any amendment or substitution thereof)
                       arising out of or pursuant to his participation in the
                       scheme;

1.1.27          "share option" - the right and option granted to a participant
                in terms of 1 4 to acquire option shares;

1.1.28          "share price" - the price per share payable by a participant for
                scheme shares, which price shall be the closing price at which
                shares are traded on the JSE on the trading day immediately
                preceding the date upon which the board will have resolved to
                direct the trustees to offer the relevant scheme shares to that
                participant; provided that such price shall, if the date on
                which it is to be determined falls between the date on which the
                company declared an interim or final dividend on such shares and
                the last day for registration by shareholders to participate in
                such dividend, be reduced by the amount of such dividend;
<PAGE>
 
1.1.29          "trust" - The Sappi Limited Share Incentive Trust constituted in
                terms of 2.1;

l.1.30          "trustees" - the trustees of the trust for the time being, the
                first trustees being the persons referred to in 2.3

1.2        In this deed -

1.2.1           clause headings are used for convenience only and shall be
                ignored in its interpretation;

1.2.2           unless the context clearly indicates a contrary intention, an
                expression which denotes -

1.2.2.1                any one gender includes the other genders;

1.2.2.2                a natural person includes an artificial person (whether
                       corporate or unincorporated and vice versa;
                       
1.2.2.3                the singular includes the plural and vice versa;
          

1.2.3           unless the context clearly indicates a contrary intention, words
                and expressions defined in the Act shall bear the meanings
                therein assigned to them.
          

1.3        If any provision in 1.1 is a substantive provision conferring any
           right or imposing any obligation on anyone, effect shall be given to
           it as if it were a substantive provision in the body of this deed,
           
1.4        When any number of days is prescribed in this deed, same shall be
           reckoned exclusively of the first and inclusively of the last day
           unless the last day falls on a Saturday, Sunday or official public
           holiday, in which case the last day shall be the next succeeding day
           which is not a Saturday, Sunday or official public holiday.
<PAGE>
 
PART 1-THE TRUST


2.     CONSTITUTION OF TRUST AND TRUSTEES


2.1        There is hereby constituted a trust for the benefit of participants,
           to be known as the 'The Sappi Limited Share Incentive Trust, upon the
           terms and conditions of this deed.

2.2        There shall at all times be a minimum of two trustees in office,
          

2.3        David Charles Brink and Thomas Louw De Beer are appointed to be, and
           by their signatures hereto accept appointment as, the first trustees
           of the trust.
           
2.4        If any trustee shall cease to hold office for any reason, the board
           shall appoint a person who is willing to act as trustee in his place.
           
2.5        The board shall have the right to appoint any person qualified for
           appointment as a trustee as an additional trustee or as an alternate
           trustee and shall, if it appoints any person as an alternate trustee,
           designate the trustee to whom he shall act as alternate. An alternate
           trustee shall be entitled to act as trustee in the place of and
           during any temporary absence or incapacity of his principal.
           
2.6        No trustee or alternate trustee shall be entitled to participate
           under this scheme for as long as he holds office as a trustee or as
           an alternate trustee.
           
2.7        A trustee or alternate trustee shall cease to hold office as
           such if he -
          

2.7.1           is removed by resolution of the board; or
          

2.7.2           resigns upon giving the company and his co-trustees not less
                than one calendar month's written notice to that effect; or
<PAGE>
 
2.7.3           becomes disqualified from holding an appointment as a director
                of a company.
                
2.8        All decisions of the trustees shall be taken by a simple majority
           vote.
          
2.9        A quorum for any meeting of trustees shall be two trustees.
          
3      POWERS OF TRUSTEES

       The trustees shall have plenary powers to enable them to carry out and
       give effect to the intent, purposes and provisions of this scheme,
       including the powers set out in Schedule 2 of the Act and such powers as
       may from time to time be expressly conferred on them by the board.
       Without derogating from the generality of the aforegoing, the trustees
       shall have the power, inter alia, to -

3.1        borrow moneys, with or without security, either from the group in
           terms of 9 or from third parties for the purpose of giving effect to
           this scheme;


3.2        lend moneys, with or without security, to participants to enable such
           participants to acquire shares pursuant to this scheme;

3.3        open and operate banking accounts or other accounts appropriate to
           the business of the trust, to draw and issue cheques and to receive
           cheques, promissory notes and/or bills of exchange, and to endorse
           any of the same for collection by the bank and/or other financial
           institution at which the said account was opened;

3.4        invest any surplus moneys of the trust in shares or other securities
           of the company or in such other manner as the board may from time to
           time approve;

3.5        employ and act on the advice of, and pay out of the funds of the
           trust, the reasonable fees and disbursements of the company,
           auditors, attorneys, counsel and other professional consultants in
           connection with the affairs of the trust;
           
<PAGE>
 
<TABLE> 
<S>        <C> 
3.6        delegate any of their powers and functions to any one or more of their
           number,

3.7        subject to 8,2 and 8.3, repurchase and resell scheme shares and
           allocation shares; and

3.8        exercise such further rights, powers and authorities as may from time
           to time be conferred upon them under this scheme or by resolution of
           the board.

4      SECURITY

       No trustee, alternate trustee or successor trustee shall be required to
       furnish any security of any nature to the Master of the Supreme Court or
       to any other official or officer, nor shall any security be required for
       the due performance of any duty under the Trust Property Control Act 1988
       or under any other statutory provision of the Republic of South Africa or
       elsewhere.

5      REMUNERATION OF TRUSTEES


5.1        The trustees and alternate trustees shall be entitled to -

5.1.1          such remuneration (if any) as may from time to time be agreed
               between them and the board, and

5.1.2          reimbursement from the trust of all expenses properly incurred by
               them in and about the execution of their duties as trustees.

           Such remuneration and expenditure shall be borne and paid by the
           company if the trust is unable to pay these amounts from its own
           resources.

5.2        The holding of office of a trustee or alternate trustee shall not
           preclude him or any firm or company of which he is a member from
           rendering and recovering reasonable remuneration for professional
           services on behalf of the trust.

</TABLE> 
<PAGE>
 
<TABLE> 

<S>    <C> 
6      DUTIES OF TRUSTEES

       The duties of the trustees in relation to the trust shall be those
       prescribed by this deed. in this regard, the day to day administration of
       the business of the trust may be delegated to any person, including any
       officer of the company, who shall perform all his duties in accordance
       with the instructions of the trustees. The duties of the trustees shall
       include, without limitation, the duty to -

6.1        subscribe for or purchase shares in accordance with the provisions of
           this deed;

6.2        offer eligible applicants the opportunity to acquire shares purchased
           or subscribed for by the trustees in terms of 8.1 or options in
           respect thereof,-


6.3        invest the funds of the trust in such form as is permitted by the
           provisions of this deed;

6.4        administer the scheme in order to achieve and maintain its
           objectives;

6.5        cause proper records and books of account to be kept of the affairs
           of the trust and their administration thereof and to cause financial
           statements to be prepared to accord with the financial year end of
           the company or such other date as may be determined by the board; and

6.6        carry out such other duties as may, consistent with their off ices as
           trustees, be delegated to them from time to time by resolution of the
           board.

7      INDEMNITY AND LEGAL PROCEEDINGS

7.1        None of the trustees, alternate trustees, successor trustees or
           officers of the trust shall be liable for, and the company
           indemnities each of them against, any loss sustained by the trust or
           by any participant out of whatever cause arising, save and except
           loss sustained as a result of the gross negligence, willful
           misconduct 

</TABLE> 
<PAGE>
 
<TABLE> 
<S>        <C> 
           or dishonesty of the trustee, alternate trustee, successor trustee or
           officer in question.

7.2        Legal proceedings instituted by or against the trust may be
           instituted in its name.

8      PURCHASE OF OR SUBSCRIPTION FOR SHARES

8.1        Subject to the provisions of the Act, the trustees shall, for the
           purposes of the scheme, from time to time -

8.1.1          purchase or subscribe; or

8.1.2          be given options to purchase or subscribe; or
     
8.1.3          be given rights and options to purchase or subscribe,

           for such numbers of shares at such prices as may be agreed upon by
           the trustees and the board from time to time.

8.2        Subject to 8.4, without the prior authority of the company in general
           meeting and the approval of the JSE, the aggregate number of shares
           which may be acquired under or pursuant to this scheme shall be a
           multiple of 100 riot exceeding 10 000 000 shares,, provided that the
           said number shall be increased or reduced in direct proportion to the
           increase or reduction in the number of ordinary shares in the
           company's issued share capital arising from any conversion,
           redemption, consolidation, sub-division, issue for cash, vendor
           placing, rights or capitalisation issue of shares in the capital of
           the company.

8.3        Subject to 8.4, the aggregate number of shares that may be acquired
           by any one participant in terms of or pursuant to this scheme shall
           not exceed 1,000,000 shares; provided that the said number shall be
           increased or reduced in direct proportion to the increase or
           reduction of ordinary shares in the company's 

</TABLE> 
<PAGE>
 
<TABLE> 

<S>        <C>   
           issued share capital arising from any conversion, redemption,
           consolidation, sub-division, issue for cash, vendor placing, rights
           or capitalisation issue of shares in the capital of the company.

8.4        In the determination of the number of scheme shares, option shares or
           allocation shares which may be acquired by participants in terms of
           8.2 or 8.3, the board shall be entitled to direct the trustees to
           refrain from taking into account shares which have been or are
           capable of being released to a participant in terms of this scheme-,
           provided that the board shall only be entitled to give such direction
           in respect of -shares, the acceptance date in respect of which was
           more than ten years prior to the date of such direction.

9.     FUNDING OF THE TRUST

           The purchase or subscription price of shares acquired by the trust in
           terms of 8 or otherwise under this scheme, the costs incurred in the
           acquisition thereof, any administration or other expenses or
           administration fees properly incurred by or on behalf of the trustees
           in the performance of their duties in terms of or to give effect to
           the scheme, the amounts referred to in 11 .1 , any duties payable
           upon the issue or transfer of shares to participants and any moneys
           required to affect loans under this deed or repayment of any previous
           borrowings by the trustees shall be funded, as the board from time to
           time may direct, out of -

9.1            the trust's own resources, if any; and/or

9.2            loans to be made to the trust by companies forming part of the
               group in accordance with section 38(2)(b) of the Act; and/or

9.3            loans by third par-ties to the trust to be procured by the
               company upon such terms as the company is able to arrange; and/or
</TABLE> 
<PAGE>
 
<TABLE> 
<S>        <C>       
9.4            any other resource which is available to the trust from time to
               time.

           The company undertakes to ensure that the trust shall at all times be
           in a position to fund the acquisition of shares under the scheme.

PART 2 - THE CREDIT SALE SCHEME

     
10         ACQUISITION OF SCHEME SHARES

10.1           The trustees shall, if the board so directs and subject to 10.2,
               offer eligible applicants the opportunity to acquire scheme
               shares at the share price, which price may be higher or lower
               than the price at which the shares in question were or are to be
               acquired by the trust.

10.2           An offer made in terms of 10. 1

10.2.1             shall be in writing;

10.2.2             may only be accepted by the eligible applicant to whom it is
                   addressed (or by his family trust or family company in terms,
                   of 26);

10.2.3             shall specify the maximum number of shares (being a multiple
                   of 100) in respect of which the offer may be accepted);

10.2.4             shall be in the form from time to time prescribed by the
                   trustees;

10.2.5             may be accepted for the whole or such lesser number (being a
                   multiple of 100) of the number of shares to which the offer
                   relates, as the eligible applicant may elect.

10.3           Acceptance by an eligible applicant of an offer made to him to
               acquire scheme shares shall -
</TABLE> 
<PAGE>
 
<TABLE> 

<S>                <C>      
10.3.1             be communicated to the trustees in writing by not later than
                   twenty days after the date upon which the offer giving rise
                   thereto is made;

10.3.2             be accompanied by payment of such amount per share (if any)
                   as may be stipulated by the board from time to time.

11         PAYMENT FOR SCHEME SHARES AND INTEREST

11.1           Save for the amount per share (if any) referred to in 10.3.2, the
               trust shall fund the acquisition of scheme shares by a
               participant and, to the extent not covered by any dividends
               accruing to the participant and, if the board so directs in its
               discretion, any taxation liability of a participant specified in
               1.1.26.2.

11.2           Subject to 11.5, any amount paid on the acquisition of scheme
               shares, the portion of dividends referred to in 13.1.2 and any
               payment made in terms of 11.3 shall be applied rateably toward
               payment of the share price of all of the scheme shares which such
               participant holds unless the participant allocates in writing, at
               the time that he makes such payment, the payment to specific
               scheme shares (in multiples of 100 scheme shares). The balance of
               the share debt of a participant shall be paid by not later than
               the tenth anniversary of the acceptance date.

11.3           Unless the board otherwise resolves at any time in its
               discretion, notwithstanding that any scheme shares are paid for
               in wh.Qle or in part at any time by the participant concerned, no
               scheme shares shall be released from the scheme or from the
               pledge under 12 until a period, calculated from the acceptance
               date, of -

11.3.1             more than three years shall have elapsed, in which event not
                   more than 25%;

11.3.2             more than four years shall have elapsed, in which event not
                   more than 50%, cumulatively;
                   
</TABLE> 
<PAGE>
 
11.3.3        more than five years shall have elapsed, in which event not
              more than 75%, cumulatively;
     
11.3.4        more than six years shall have elapsed, in which event all,

          of the relevant scheme shares may, if the share debt in respect of
          them is fully discharged, be released from pledge under the scheme.

11.4      A participant shall, on application to and on subsequent approval
          by the trustees, be entitled to pay the whole of his share debt or any
          portion thereof prior to the due date for payment thereof; provided
          that --
          
11.4.1        in the event of such an early payment --

     
11.4.1.1           the certificates in respect of the relevant scheme shares
                   shall nevertheless continue to be held by the trust; and

11.4.1.2           the relevant scheme shares shall only be released from the
                   restrictions imposed by this deed on the dates or the
                   remaining date and in the proportions stipulated in 11.3;

11.4.2        in the event of the termination of such participant's 
              employment --

11.4.2.1           the participant's entitlement to scheme shares shall be
                   determined by reference to the principles set out in 18;

11.4.2.2           any amounts standing to the credit of any loan by the
                   participant to the trust in terms of 11.5, and not applied in
                   terms of 1 1.2, shall be refunded to the participant.

11.5          Notwithstanding 11. 2 and 11 .4, any payment made by a participant
              which would otherwise have the effect of releasing any scheme
              shares from the scheme and the pledge referred to in 1 2 prior to
              the due dates for such release under 
<PAGE>
 
          11.3 shall, to the extent to which such payment would otherwise result
          in such release, be deemed to be an interest free loan by the
          participant to the trust until such due dates and no reduction of the
          share debt shall result from such payment until those due dates save
          to the extent otherwise provided under this scheme or determined by
          the board in its discretion.
     
11.6      The outstanding balance from time to time of a participant's
          share debt shall bear interest at such rate (if any) as the board
          determines, in its discretion. The board may determine such rate in
          its discretion and may alter such rate from time by giving not less
          than thirty days' prior written notice of such alteration to
          participants; provided that --

11.6.1        such rate of interest shall not exceed the lower of the maximum
              annual rate which may lawfully be charged from time to time and
              the publicly quoted rate of interest (nominal annual compounded
              monthly) at which the company's main commercial bankers in the
              Republic of South Africa lend on overdraft to their prime
              corporate customers in the private sector at the appropriate time,
              reckoned from the due date for payment until the date of actual
              payment thereof,

11.6.2        the amount of such interest shall be calculated from a date which
              is not less than thirty days after the date of such-determination
              or alteration (as the case may be) until the last day of the
              company's financial year in which such date falls, and thereafter
              annually, and shall be paid on dates coinciding with the dates of
              payment by the company of dividends payable on scheme shares for
              each such annual period in respect of which such interest is
              payable;

11.6.3        any deficit between dividends accruing to any participant on his
              scheme shares and the interest payable by him shall, at the
              discretion of the board, be accumulated to and form part of the
              capital amount of his share debt, and such interest shall be
              compounded annually on the last day of each of the company's
              financial years.
<PAGE>
 
11.7          If the full amount of any share debt is not paid on the due date
              for payment thereof, the trustees shall request the participant
              (or, in the event of the participant's death or sequestration, the
              executor, administrator or trustee of his estate) in writing to do
              so. If such request is not complied with within twenty- one days
              of the date thereof, the sale of all of such participant's scheme
              shares for which payment has not been made in full shall be deemed
              to have been canceled on the basis that --
              -------

11.7.1        subject to 11.7.2, the participant or his estate shall, in
              consequence of such cancellation, be refunded the amounts actually
              paid by that participant or his estate on account of his scheme
              shares;

11.7.2        the trust shall not, by reason of any cancellation in terms of
              this 11 .7, be precluded from recovering from the participant or
              his estate all costs, damages and losses sustained by the trust as
              a result thereof and shall be entitled to retain any amounts
              payable to the participant or his estate at the date of such
              cancellation and apply them in discharge of such costs, damages
              and/or losses.

12        TRANSFER, LISTING AND PLEDGE OF SHARES

12.1          The issue of share certificates pursuant to the issue or sale of
              any scheme shares to a participant shall be subject to the
              following conditions --

12.1.1             the scheme shares shall be registered in the name of the
                   participant and the trust shall be obliged to pay any stamp
                   duty payable on the e allotment and issue or transfer of
                   scheme shares to him;

12.1.2             the participant shall execute a pledge of his scheme shares
                   in favour of the trust in such form and upon such terms and
                   conditions as are determined by the trustees and upon the
                   terms and conditions contained in 12.2; and
<PAGE>
 
12.1.3             the trust shall be entitled irrevocably and in rem suam to
                                                                      ----
                   recover possession, from the company's transfer secretaries,
                   of the certificates relating to the relevant scheme shares,
                   including any scheme capitalization shares and scheme rights
                   shares related thereto, as well as share certificates in
                   respect of shares in any other company acquired pursuant to
                   1.1 .24.4.

12.2          The pledge of scheme shares by the participant to the trust shall
              be upon the terms that --

12.2.1             such pledge shall include the pledge of any scheme
                   capitalization shares, scheme rights shares and shares issued
                   to a participant in lieu of a cash dividend on account of his
                   scheme shares;

12.2.2             those scheme shares shall serve as security for the due
                   payment by the participant of his share debt (including his
                   liability in respect of scheme rights shares);

12.2.3             if a participant's estate is surrendered or sequestrated,
                   whether provisionally or finally, the provisions of 18.1.1.2
                   shall apply, mutatis mutandis; provided that --

12.2.3.1                any amounts due to the participant shall be paid by the
                        trustees to the participant; and

12.2.3.2                the board may, in its discretion, include any other
                        amounts in the net amount due to a participant under
                        18.1.1.2, thereby releasing the participant from his
                        obligation to pay the share debt;

12.2.4             subject to 11.3, 11.4 and 11.5, upon payment in full being
                   received by the trust for any scheme shares, those scheme
                   shares shall be released from the operation of that pledge;
<PAGE>
 
12.2.5                  any of the trustees, nominated by them, shall be
                        irrevocably and in rem suam empowered to execute any
                        instrument of transfer in respect of scheme shares to
                        give effect to the implementation by the trust it of the
                        powers conferred upon it in terms of this 12.2;

12.2.6                  the trust shall have the power to pledge any scheme
                        shares pledged to it in terms of this 12.2 for the
                        purpose of raising any moneys required for the purchase
                        of or subscription for shares and/or the discharge of
                        any loan owed by the trust, whether to the company or
                        otherwise.

12.3               By not later than sixty days after the date on which payment
                   in full Is received by the trust for any scheme shares which
                   are capable of being released to a participant in terms of
                   11.3 and the aforegoing provisions of this 1 2, the trustees
                   shall deliver to the relevant participant the certificate in
                   respect of those scheme shares, registered in the name of the
                   participant. If such scheme shares are not already listed,
                   the company shall apply for the listing of those shares on
                   the JSE and any other stock exchange on which the shares of
                   the company may be listed by not later than such delivery
                   date.

13            DIVIDENDS

13.1               Dividends declared in respect of scheme shares shall be 
                   paid --

13.1.1                  firstly to the trustees, pro tanto in satisfaction of
                        interest accrued in terms of 11 .6 in respect of the
                        participant's share debt--,

13.1.2                  secondly, as to any amount determined by the board, in
                        its discretion, not exceeding the balance of the
                        participant's share debt for the tim-e being, to the
                        trust by way of reduction pro tanto of the participant's
                        share debt; and

13.1.3                  as to the balance (if any), to the relevant participant.
<PAGE>
 
<TABLE> 

<S>            <C>  
13.2           Simultaneously with his acceptance of an offer for scheme shares,
               each participant shall execute a dividend, mandate (which shall
               be in a form determined by the trustees) in respect of his scheme
               shares authorising the payment of dividends accruing in respect
               thereof to the trustees, which mandate shall be canceled in
               respect of each tranche of scheme shares referred to in 11.3.1,
               11.3.2, 11.3.3 and 11.3.4 respectively when, the f full share debt
               in respect thereof will have been paid, whereafter such dividends
               shall accrue and be paid to the participant.

13.3           Notwithstanding 13.1 and 13.2, the trustees shall, if the board
               so determines in its discretion, pay to any participant selected
               by the board, all or any part of any dividend declared in respect
               of his scheme shares.

PART 3 - THE SHARE OPTION SCHEME

14         ACQUISITION OF SHARE OPTIONS

14.1           The trustees shall, in respect of share options to be granted in
               terms of the scheme, if the board so directs and subject to 14.2,
               offer eligible applicants the opportunity to acquire share
               options, it being agreed that the option price may be higher or
               lower than the price at which the shares which are the subject
               matter of the share options in question were or are to be
               acquired by the trust.

14.2           An offer in terms of 14.1 shall be made and accepted in
               accordance with 10.2 and 10.3, which shall apply, mutatis
               mutandis.

15         SHARE OPTIONS

15.1           Each share option shall confer the right on the holder thereof to
               subscribe for or purchase one share at the option price.
</TABLE> 
<PAGE>
 
<TABLE> 
<S>            <C>      
15.2           The company shall at all times reserve and keep available, out of
               its authorised but unissued share capital, such number of shares
               as shall become issuable upon the exercise of all the share
               options then outstanding, less the number of shares held by the
               trust and set aside by the trustees for the purpose of satisfying
               the exercise of any share options.

16         EXERCISE OF SHARE OPTIONS

16.1           Share options may not be exercised until after a period,
               calculated from the acceptance date, of -

16.1.1             more than three years shall have elapsed, in which event not
                   more than 25%;

16.1.2             more than four years shall have elapsed, in which event not
                   more than 50%, cumulatively;

16.1.3             more than five years shall have elapsed, in which event not
                   more than 75%, cumulatively;

16.1.4             more than six years shall have elapsed, in which event all,

               or any lesser number, being a multiple of 100, of the relevant
               share options may be exercised; provided that the board may,
               subfect to 1 6.2, permit all or any of the aforesaid exercise
               dates to be anticipated or postponed to such other date/s and to
               the extent determined by the board in its discretion.

16.2           A share option shall lapse -

16.2.1             upon the day following the expiry of the option period, or
     
16.2.2             upon the participant making application for the voluntary
                   surrender of his estate or his estate being otherwise
                   sequestrated or upon any 
</TABLE> 
<PAGE>
 
<TABLE> 

<S>            <C> 
                   attachment of any interest of a
                   participant under the scheme, unless the board passes a
                   resolution to the contrary.

     
16.3           If the company is placed in final liquidation, the secretary of
               the company shall notify the participant thereof in writing and
               he shall be entitled to exercise all or any share options held by
               him within twenty-one days of such notification, failing which
               the share options concerned shall lapse.

16.4           Every exercise of a share option shall - .

16.4.1             be exercised by written notice given by the participant and
                   delivered to the Secretary of the company at the company's
                   registered office;

16.4.2             specify the number of shares in respect of which the share
                   option is exercised;

16.4.3             be accompanied by payment of the full amount of the option
                   price in respect of the share options exercised unless a
                   participant has accepted an offer in terms of 21 for the
                   trustees to subscribe for or purchase shares on his behalf;
                   and

16.4.4             be regarded as complete only when payment in terms of 16.4.3
                   has been received by the trustees.

17         ALLOTMENT

           The company shall issue share certificates, where applicable, for the
           shares allotted and issued as a result of the exercise of any share
           options by not later than sixty days after the exercise thereof and
           shall apply for a listing of the shares in question on the JSE (and
           on any other stock exchange on which shares may be listed), prior to
           or as soon as possible after such data. Shares allotted and issued
           pursuant to the exercise of share options will rank pari passu with
           the then issued shares as from their respective dates of allotment.

</TABLE> 
<PAGE>
 
PART 4 - GENERAL PROVISIONS RELATING TO THE CREDIT SALE SCHEME AND THE
SHARE OPTION SCHEME

<TABLE> 

<S>            <C> 
18             TERMINATION OF EMPLOYMENT

18.1               If the employment by any company in the group of any
                   participant who holds scheme shares terminates -

</TABLE> 
<PAGE>
 
<TABLE> 

<S>            <C> 
18.1.1         prior to the expiry of the maximum period for any reason other
               than any of the reasons referred to in 18.1.2, 18.1.3 and 
               18.1.4 -

18.1.1.1           he shall, within Sixty days after the termination of his
                   employment, make payment of the liability attributable to the
                   number of scheme shares, if any, which are capable of being
                   released to him in terms of 11.3 at the date of termination
                   of his employment;

18.1.1.2           the sale of those scheme shares which are not capable
                   released to him in terms of 1 1.3, at the date of termination
                   of his employment and the sale of any other shares, the
                   liability of the participant attributable to which is not
                   paid to the trustees within the period of sixty days referred
                   to in 18 1.1.1, shall be deemed to have been cancelled on the
                   date of termination of his employment or upon the expiry of
                   such sixty day period (as the case may - be); provided that
                   if the participant will, prior thereto, have paid any amount
                   on account of his share debt in respect of such scheme
                   shares, such amount, other than those payments retained by
                   the trustees and applied the participant's interest liability
                   in terms 13.1.1 will be refunded to him; provided further
                   that the board shall be entitled, in its discretion, to apply
                   other terms or conditions which are more favourable to the
                   participate than the aforegoing provisions of this 18.1.1.2
                   including the payment to the participant of a maximum amount-
                   equal to the share price at the date of termination of his
                   employment minus his share debt at that date;

18.1.2         by reason of his summary dismissal or on the grounds of his
               proven dishonest, fraudulent or grossly negligent conduct
               (whether such termination occurs as a result of notice given to
               or by him or otherwise), the sale of all such participant's
               scheme shares which are not capable of being released in terms of
               11 .3 at the date of termination of his 
</TABLE> 
<PAGE>
 
<TABLE> 

<S>            <C> 

               employment and all of his scheme shares for which full payment
               has not been received by the trustees as at that date shall be
               deemed to have been cancelled on the basis that such participant
               shall be refunded any amount actually paid by him in reduction of
               the liability attributable to his scheme shares other than those
               amounts retained by the trustees and applied in reduction of the
               participant's interest liability in terms of 13.1.1;

18.1.3         as a result of his death or retirement or for any other reason
               approved by the board, he or the executors of his estate shall be
               entitled to make payment of his liability in respect of 11 of his
               scheme shares (whether or not they are capable of being released
               in terms of 11.3 at the date of termination of his employment)
               within twelve months after the date of termination of his
               employment, failing which the provisions of 18.1.1,2 shall apply,
               mutatis mutandis;

18.1.4         as a result of his early retirement, he shall be entitled to make
               payment of his liability in respect of all of his scheme shares
                                                      ---
               within twelve months after the date of such termination of
               employment, failing which the provisions of 1 8.1.1.2 shall
               apply, mutatis mutandis; provided that if the date of his early
               retirement falls on a date which is more than twelve months prior
                                                --
               to the date which would have been his normal retirement date,
               then notwithstanding such payment, h . s scheme shares shall only
               be capable of being released to him on the dates on which they
               would have been capable of being released in terms of 11.3 has
               his employment not terminated; provided further that the board
               shall be entitled, in its discretion, to apply other terms or
               conditions which are more favourable to the participant than the
               aforegoing provisions of this 18.1.4;

18.2       If the employment by any company in the group of any participant who
           holds share options terminates -

</TABLE> 
<PAGE>
 
18.2.1           prior to the expiry of the option period for any reason other
                 than those referred to in 18.2.2, 18.2.3, 18.2.4 and 18.2.5,
                 the participant shall be entitled to exercise all or a multiple
                 of 100 of that number of his share options which he was
                 entitled to exercise in terms of 16.1 immediately prior to the
                 termination of his employment by not later than sixty days
                 after the date of termination of his employment, failing which
                 the said share options shall automatically lapse. Those share
                 options which the - participant is not entitled to exercise in
                 terms of 1 6.1 on the date on which his employment terminates
                 shall automatically lapse, unless the board otherwise resolves
                 in its discretion;

18.2.2           by reason of his summary dismissal or on the grounds of his
                 proven dishonest, fraudulent or grossly negligent conduct
                 (whether such termination occurs as a result of notice given to
                 or by him or otherwise), all of his share options shall
                 automatically lapse;

18.2.3           as a result of his death, the executors or administrators of
                 his estate of his share options (whether or not they are
                 capable of being exercised in terms of 16.1 at the date of
                 termination of his employment) by not later than twelve months
                 after-the date on which his employment terminates, failing
                 which his share options shall automatically lapse;

18.2.4           as a result of his retirement or for any other reason approved
                 by the board, he may, by not later than twelve months after the
                 date of termination of his employment, exercise all or any
                 multiple of 100 of his share options (whether or not they are
                 capable of being exercised in terms of 16.1 at the date of
                 termination of his employment), failing which his share options
                 shall automatically lapse. If such participant dies prior to
                 having exercised all or any of his share options in terms of
                 this 18.2.4, then the provisions of 18.2.3 shall apply with
                 effect from the date of his death, mutatis mutandis;
<PAGE>
 
18.2.5           as a result of his early retirement, he may, by not later than
                 twelve months after the date of termination of his employment,
                 exercise all or any multiple of 100 of his share options
                 (whether or not they are capable of being exercised in terms of
                 16.1 at the date of termination of his employment), failing
                 which his share options shall automatically lapse; provided
                 that if the date of his early retirement is more than twelve
                 months prior to the date which would have been his normal
                 retirement date, then notwithstanding such payment, shares
                 subscribed for or purchased by him as a result of the exercise
                 of such share options shall only be capable of being released
                 to him on the dates on which he would have been entitled to
                 exercise such share options in terms of 16.1 had his employment
                 not terminated. If such participant dies prior to having
                 exercised all or any of his share options in terms of this 1
                 8.2.5, then the provisions of 18.2.3 shall apply with effect
                 from the date of his death, mutatis mutandis.

19     RIGHTS AND CAPITALIZATION ISSUES, CONSOLIDATIONS, SUB-DIVISIONS,
       REORGANISATION AND TAKSOVER AND SCRIP DIVIDENDS

19.1       Share options shall not entitle the participant concerned ("option
           holder") to participate in rights offers by the company. If, however,
           the company undertakes a rights offer, it shall grant to the option
           holder options to acquire the same number of shares or other
           securities to which he would have been entitled in terms of the
           rights offer had he been the holder of the same number of shares as
           the number of share options held by him. The additional options shall
           be granted to the option holder on the following terms and 
           conditions -

19.1.1           the board shall furnish full details of the rights offer to the
                 option holder;

19.1.2           the option holder shall not be entitled to renounce, transfer,
                 cede, pledge, alienate or encumber the additional options thus
                 granted;
<PAGE>
 
19.1.3           the option holder shall be granted the option to subscribe for
                 all or such lesser number of the shares or other securities
                 referred to in 19.1 at an option price which is the same as the
                 subscription price of those shares or other securities, on the
                 basis that -

19.1.3.1               if the securities concerned are shares, the option price
                       shall be payable by the option holder, mutatis mutandis,
                       in accordance with 16 and 18, upon the basis that the
                       acceptance date in relation to those additional share
                       options shall be deemed to be the acceptance date
                       relating to the share options from which the opportunity
                       to subscribe for the underlying shares arose;

19.1.3.2               if the securities concerned are not shares, the option
                       price shall be payable on, and the acceptance date in
                       relation to the additional options shall be, a date or
                       dates determined by the board in its discretion;

                 provided that in all other respects the provisions of this
                 scheme relating to share options shall apply to all options
                 issued in terms of this sub- clause, mutatis mutandis.

19.2       Scheme shares shall rank pari passu with the other issued shares for
           participation in all rights offers of shares or other securities by
           the company. Rights accruing on scheme shares in respect of rights
           offers by the company shall, unless the board in its discretion
           otherwise directs, be followed participants. If a participant is not
           required to follow his rights, then such rights shall be renounced in
           favour of the trust or its nominee/s, in which event the purchase
           price per right shall be the closing market price at which the rights
           are traded on the JSE on the trading day immediately preceding the
           date of such renunciation. Rights followed by a participant shall be
           subscribed for by the trust subject to the following terms and
           conditions -

19.2.1           the shares or other securities subscribed for in this manner
                 shall be scheme rights shares;
<PAGE>
 
19.2.2           the relevant company in the group shall lend to the trust the
                 amount required for the purpose of subscribing for the
                 appropriate number of that participant's entitlement to scheme
                 rights shares, and the trust shall subscribe for those scheme
                 rights shares on behalf of the participant concerned. The
                 scheme rights shares shall be allotted and issued by the
                 company to the participant concerned;

19.2.3           certificates in respect of scheme rights shares shall be
                 delivered to and retained by the trust pursuant to the pledge
                 thereof in terms of 12.2;

19.2.4           the subscription price of scheme rights shares subscribed for
                 by the trust on behalf of a participant in terms of 19.2.2
                 shall be payable by the participant to the trust, mutatis
                 mutandis, in accordance with the provisions of 11, upon the
                 basis that the acceptance date in relation to those scheme
                 rights shares shall be deemed to be the acceptance date
                 relating to the scheme shares from which the entitlement to
                 those scheme rights shares arose.

19.3       Scheme shares shall in all other respects rank pari passu with the
           existing issued shares, including in respect of participation in
           capitalization issues; provided that scheme capitalization shares
           shall be subject to all the restrictions and conditions of the
           scheme.

19.4       In the event of any capitalisation issue or any sub-division or
           consolidation of ordinary shares or any reduction of the ordinary
           share capital of the company ("adjustment event"), the number of
           option shares and/or the option price shall be adjusted by the board
           in such manner as it may deem appropriate with the objective that
           such adjustment should give a participant an option to the same
           proportion of the equity capital as that to which he was entitled
           prior to the adjustment event; provided that the auditors of the
           company, acting as experts and not as arbitrators, shall have
           confirmed in writing that in their opinion such adjustments are fair
           and reasonable.
<PAGE>
 
19.5       If the company at any time before the share debt owing on any
           scheme shares has been paid in full -

19.5.1           is placed in liquidation for purposes of reorganisation; or

19.5.2           is party to a scheme of arrangement affecting the structuring
                 of share capital; or

19.5.3           reduces its share capital; or

19.5.4           sub-divides or consolidates its shares,


           such adjustments shall be made to the purchase price in respect of
           those scheme shares as have not been fully paid as a partner or
           director of the company's auditors for the time being (acting as an
           expert) in his discretion may confirm in writing to the board as
           being fair and reasonable in the circumstances, subject (where
           necessary) to the sanction of the Court.

19.6       The provisions of 1 9.5 shall apply, mutatis mutandis, to
           participants holding share options; provided that the board shall
           have an overriding discretion to determine the rights of such
           participants in the circumstances outlined in 19.5, Notwithstanding
           the aforegoing, any decision by the board under this 1 9.6 shall be
           fair and equitable to the participant concerned.

19.7       If the company becomes an immediate subsidiary of any company (other
           than its immediate holding company, if any, at the acceptance date)
           as a result of a takeover, reconstruction or amalgamation which make
           ion for the participant to receive shares in such other company in
           exchange for his scheme shares on terms which a partner of the
           company's auditors for the time being (acting as an expert)
           determines in his discretion are not less favourable than those to
           which the participants are entitled in terms of this deed, the
           participant shall be obliged to accept such shares in that other
           company upon those terms and conditions,
<PAGE>
 
          then the trustees and the participants shall be obliged to sell,
          exchange or otherwise dispose of the scheme shares at the same price
          and upon the same terms and conditions and in the same proportion as
          the majority shareholders sell or dispose of their shares if those
          majority shareholders so require and the board so resolves.

19.8      Should the provisions of 19.7 become applicable then --

19.8.1         the trustees shall immediately notify each holder of share
               options (option holder') that the provisions of 19.7 have become
               applicable;

19.8.2         within five business days after the receipt of the notice
               referred to in 19.8.1, an option holder shall be entitled to
               exercise all or any share options then granted to him;

19.8.3         to the extent that any option holder does not exercise any share
               option in terms of 19.8.2, that share option shall be deemed to
               have lapsed;

19.8.4         to the extent that any option holder exercises any share option
               in terms of 19.8.2, the shares to be allotted and issued pursuant
               to the exercise of such option shall be subject, mutatis
               mutandis, to the provisions of 19.7.

19.9      Notwithstanding any other provision of this deed, if any participant
          and the trustees so agree in writing and the board passes a resol@on
          approving that agreement --
     
19.9. 1        any transaction under which that participant purchased or
               otherwise acquired shares under this scheme may be cancelled--,

19.9.2         the trust may purchase from that participant any shares purchased
               or otherwise acquired by him under this scheme at a price not
               exceeding the selling or acquisition price of those shares to
               him, provided that the participant shall not receive or become
               entitled, in consequence of such 
<PAGE>
 
               cancellation or acquisition, to receive any compensation or
               consideration other than the repayment of any portion of the
               purchase or acquisition price actually paid by him.

19.10     If, in declaring a dividend to its members at any time, the
          company grants to its members the right to elect to receive either a
          cash amount or shares in lieu of a cash dividend, participants holding
          scheme shares may elect to receive either cash or shares; provided
          that the provisions of 1 3 shall apply, mutatis mutandis, in respect
          of such dividend should the participant elect to receive the cash
          amount.

19.11     Holders of share options and/or allocation shares shall not be
          entitled to any form of participation in or to any rights in respect
          of the issue of shares by the company in lieu of a cash dividend.

PART 5 - THE COMBINED OPTION/DEFERRED SALE SCHEME

20   THE SCHEME

20.1      Notwithstanding any other provision of this scheme, the board and
          the trustees may give effect to the scheme by the company itself,
          without the intervention of the trust or the trustees, offering
          eligible applicants the opportunity to acquire rights and options. Any
          such offer and acceptance thereof shall be made in accordance with
          10.2 and 10.3, which shall apply, mutatis mutandis.

20.2      Each right and option shall confer on the holders thereof the right
          and option to enter into an agreement with the company to acquire one
          allocation share, which agreement shall be upon the following terms
          and conditions --

20.2.1         allocation shares shall be acquired by participants at the
               allocation price;

20.2.2         subject to 20.2.4 --

     
<PAGE>
 
20.2.2.1       the company shall allot and issue or transfer the allocation
               shares and deliver the share certificates in respect of the
               allocation shares to the participant; and

20.2.2.2       the participant shall take delivery of the allocation shares;
               and

20.2.2.3       ownership of the allocation shares shall vest in the participant
               and the allocation shares shall be registered in the name of the
               participant,

          at the times and in the numbers stipulated in 20.2-3. For the sake of
          clarity, it is recorded that, until such times, the participant shall
          not be entitled to exercise any of the votes attaching to the relevant
          allocation shares nor to dividends declared on those allocation
          shares;

20.2.3    unless the board otherwise resolves in its discretion, no allocation
          shares shall be paid for or delivered as contemplated in 20.2.2 until
          a period, calculated from the acceptance date, of --

20.2.3.1       more than three years shall have elapsed, in which event not more
               than 25 %;

20.2.3.2       more than four years shall have elapsed, in which event not more
               than 50% cumulatively,

20.2.3.3       more than five years shall have elapsed, in which event not more
               than 75% cumulatively;

20.2.3.4       more than six years shall have elapsed, in which event all, of
               the relevant allocation shares shall be delivered to the
               participant in accordance with 20.2.2 against payment by the
               participant of the full allocation price in respect thereof;
<PAGE>
 
20.2.4    if the employment by any company in the group of any participant who
          has exercised a right and option terminates prior to the expiry of ten
          years from the date of grant of the right and option--

20.2.4.1       for any reason other than those stated in 20.2.4.2, 20.2.4.3 and
               20.2.4.4, then --

20.2.4.1.1     he shall, within sixty days after the date of termination of his
               employment, make payment of the allocation price attributable to
               the number of allocation shares, if any, for which he is entitled
               to make payment and take delivery in terms of 20,2.3 at the date
               of termination of his employment;

20.2.4.1.2     the agreement shall be deemed to be automatically cancelled in
               respect of those allocation shares in respect of which the
               payment by and delivery to that participant was not competent in
               terms of 20.2.3 at the date of termination of his employment and
               in respect of any other allocation shares, the allocation price
               of which is not paid to the company within the period of sixty
               days referred to in 20.2.4.1.1, and the participant shall receive
               no compensation whatsoever in consequence of the cancellation of
               the agreement; provided that the board shall be entitled, in its
               discretion, to apply other terms or conditions which are morp-
               favourable to the participant than the aforegoing provisions of
               this 20.2.4.1.2 including the payment to the participant of a
               maximum amount equal to the share price at the date of
               termination of his employment minus the allocation price in
               respect of such allocation shares;
<PAGE>
 
20.2.4.2       by reason of his summary dismissal or on the grounds of his
               proven dishonest, fraudulent or grossly negligent conduct
               (whether such termination occurs as a result of notice given to
               or by him or otherwise), the agreement shall be deemed to be
               automatically cancelled at the date of termination of his
               employment in respect of all of that participant's allocation
               shares, and the participant shall receive no compensation
               whatsoever in consequence of the cancellation of the agreement;

20.2.4.3       as a result of his death or retirement or for any other reason
               considered and approved by the board, he or the executors of his
               estate shall be entitled to make payment of the purchase price of
               all or any multiple of 100 of his allocation shares within a
               period of twelve months after the date of termination of his
               employment, failing which the provisions of 20.2.4.1.2 shall
               apply, mutatis mutandis;

20.2.4.4       as a result of his early retirement, he shall payment of the
               allocation price of all or any multiple of 100 of his allocation
               shares within a period of twelve months after the date of such
               termination of employment, failing which the provisions of
               20.2.4.1.2 shall apply, mutatis mulandis; provided that if the
               date of his early retirement falls on a date which is more than
               twelve months prior to the date which would have been his normal
               retirement date, then notwithstanding such payment, such
               allocation shares shall only be delivered to him on the dates on
               which they would have been capable of being delivered to him in
               terms terms of 20.2.3 had his employment not terminated; provided
               further that the board shall be entitled, in its discretion, to
               apply other terms or conditions which are more 
<PAGE>
 
                   favourable to the participant than the aforegoing provisions
                   of this 20.2.4.4;

20.2.5         subject to the provisions of this 20, the provisions of 19 shall
                                                     ---   
               apply to rights and to allocation shares, mutatis mutandis;

20.2.6         notwithstanding any other provision of this 20.2, all allocation
               shares shall be delivered to and paid for in full by the
               participant concerned by not later than the tenth anniversary of
               the acceptance date thereof.

20.3      A right and option shall be exercised by the participant concerned at
          any time within twelve months after the date of grant of the right and
          option, failing which the right and option shall automatically lapse.
          If the employment with titled to make the group of any participant who
          has not exercised a right and option terminates--

20.3.1         for any reason other than those stated in 20.2.4.3 and 20.2.4.4,
               then such right and option shall automatically lapse;

20.3.2         for any of the reasons stated in 20.2.4.3 and 20.2.4.4, then the
               provisions of 18-2.3, 18.2.4 or 18.2.5 (as the case may be) shall
               apply, mutatis mutandis, on the basis that the provisions of
               20.2.4.3 or 20.2.4.4 (as the case may be) shall thereafter apply,
               mutatis mutandis, in respect of those rights and options which
               are exercised.
     
20.4      Every exercise of a right and option --

20.4.1         shall be effected by written notice given by the participant and
               delivered to the secretary of the company at the company's
               registered office;

20.4.2         shall specify the number of allocation shares (being a multiple
               of 100) in respect of which the right and option is exercised;

     
          
<PAGE>
 
20.4.3         shall be accompanied by a deposit ("deposit") of such amount per
               share (if any) as may be determined by the board from time to
               time in its discretion; provided that such amount shall not
               exceed 5% of the allocation price. The deposit shall --

20.4.4         be held by the trustees as security for the fulfilment by the
               participant of his obligations under this deed and the trustees
               shall at any time be entitled to appropriate and apply the
               deposit or any part thereof to any amount owed by the participant
               to the trust,

20.4.5         unless the board otherwise resolves in its discretion, be
               forfeited by the participant to the trust should the agreement
               pursuant to the exercise of a right and option be cancelled for
               any reason other than in terms of 25, in which event it shall be
               held by the trustees as security for the repayment of the share
               price or option price, as the case may be;

20.4.6         only be refunded to the participant by the trustees once he has
               fulfilled all of his obligations in terms of this deed.
     
20.5      The company shall at all times reserve and keep available out of its
          authorised but unissued share capital, such number of shares as shall
          become issuable upon the date of issue of allocation shares, less the
          number of shares held by the trust and set aside by the trustees for
          the purposes of this 20.

20.6      The company shall issue share certificates for the shares allotted
          pursuant to this 20 within sixty days after payment of the allocation
          price of the allocation shares in question is made by the participant
          and shall apply for a listing of the shares in question as soon as
          possible after such date on the JSE (and on any other stock exchange
          on which shares are listed). The shares so issued shall rank pari
          passu with the then issued shares of the same class in the company as
          from their respective dates of issue.
     
20.7      Notwithstanding any other provision of this 20, the board and trustees
          may give effect to this 20 --
<PAGE>
 
20.7.1         by the trustees, upon being directed to do so by the board,
               causing the trust to grant to participants the right and option
               to enter into an agreement with the trust to purchase shares from
               the trust or causing the trust to enter into an agreement with
               participants, mutatis mutandis, in accordance with the provisions
               of 20.1 to 20.6 inclusive. If the trustees grant to a participant
               a right and option as aforesaid, it shall be so granted on the
               basis that if such right and option is exercised by the
               participant, the resultant agreement shall be in accordance with
               those provisions;

20.7.2         by any variation of the method referred to in 20.1 to 20.6
               inclusive or 20.7.1 or any other method which will not prejudice
               any eligible applicant or participant or the company.

PART 6 - SWITCHING MECHANISMS

21   SHARE OPTIONS - CREDIT SALE

21.1      The trustees, on the authority of a resolution of the board, may at
          any time by written notice offer to subscribe for or purchase, on
          behalf of a participant who is permitted to exercise his share options
          under 16, in lieu of such share options, the shares represented by his
          share options.

21.2      A participant to whom an offer has been made in terms of 21.1 may, by
          written notice given to the trustees within 21 days of the date of the
          offer, accept such offer. Such notice shall --

21.2.1         specify the name of the participant, the number of share options
               to be exercised and the option price;

21.2.2         be accompanied by payment of the amount, if any, specified in
               terms of 10.3.
<PAGE>
 
21.3      The trustees shall, forthwith on receiving the notice referred to in
          21.2 subscribe for or purchase, on behalf of the participant
          concerned, the number of shares specified in 21.2.2. Such subscription
          shall be made subject to the provisions of 12 and the participant
          shall, ipso facto, in respect of the shares concerned, be bound by the
          provisions of the scheme relating to scheme shares; provided that the
          original acceptance date shall, unless the board otherwise resolves,
          remain unaltered.

21.4      Any taxes and/or duties payable as a result of any transaction in
          terms of the provisions of this 21 shall, unless the board otherwise
          resolves, be borne and paid by the participant.

22   CREDIT SALE - SHARE OPTIONS

22.1      The trustees, on the authority of a resolution of the board, may at
          any time prior to the expiry of the maximum period, by written notice
          offer to purchase on behalf of the trust all or any of a participant's
          scheme shares which are not yet capable of release from the scheme in
          accordance with 11.3 at a price per scheme share equal to the original
          share price of such scheme shares on the basis that the trustees
          shall, simultaneously with such purchase, grant to such participant
          the option to purchase or subscribe for the same number of shares at a
          price per share ("offer price") equal to such original share price.

22.2      A participant to whom an offer has been made in terms of 22.1
          may, by written notice given to the trustees within 21 days of the
          date of the offer, accept such offer. Such notice shall specify, inter
          alia --

22.2.1         the name of the participant;

22.2.2         the number of scheme shares concerned, and
<PAGE>
 
22.2.3         the original share price.

22.3      Forthwith on receiving the notice referred to in 22.2 --

22.3.1         the trustees shall apply the purchase price payable by the trust
               to the participant (being the original share price) in discharge
               of the outstanding balance of the participant's share debt and
               the balance, if any, shall be paid to the participant,

22.3.2         the participant shall, ipso facto, in respect of the share
               options, concerned, be bound by the provisions of the scheme
               relating to share options; provided that the original acceptance
               date of the participant's application for the relevant scheme
               shares shall, unless the board otherwise resolves in its
               discretion, be deemed to be the acceptance date of such share
               options.

22.4      Any taxes and/or duties payable as a result of any transaction in
          terms of the provisions of this 22 shall, unless the board otherwise
          resolves, be borne and paid by the participant.

23 CREDIT SALE - COMBINED OPTION/DEFERRED SALE

23.1      The trustees, on the authority of a resolution of the board, may
          at any time prior to the expiry of the maximum period, by written
          notice offer to purchase all or any multiple of 100 of a participant's
          scheme shares on the basis that --

23.1.1         if the closing market price of a share on the JSE on the trading
               day immediately preceding the date of such request ("current
               price") exceeds the original share price payable by the
               participant for the scheme shares, then --

23.1.1.1           the purchase price per scheme share payable by the trust to
                   the participant shall be not less than the current price;
<PAGE>
 
23.1.1.2           the trustees shall, simultaneously with such purchase, grant
                   such participant the right and option to enter into an
                   agreement with the trust to acquire the same number of
                   allocation shares;

23.1.1.3           the price payable by the participant in consideration for the
                   grant of such right and option to him ("grant price") shall
                   be an amount equal to the current price less the original
                   share price payable by him to the trust for the scheme shares
                   in question;

23.1.1.4           the allocation price per allocation share payable by the
                   participant shall be the original share price payable by the
                   participant for the scheme shares purchased by the trust from
                   him;

23.1.2         if the current price is equal to or less than the original share
               price payable by the participant for the scheme shares in
               question, then --

23.1.2.1           the price per scheme share payable by the trust shall be the
                   original share price payable by the participant for those
                   scheme shares;

23.1.2.2           the provisions of 23.1.1.2 and 23.1.1.4 shall apply, mutatis
                   mutandis.

23.2      A participant to whom an offer has been made in terms of 23.1 may, by
          written notice given to the trustees within 21 days of the date of the
          offer, accept such offer. Such notice shall specify --

23.2.1         the name of the participant;


     
<PAGE>
 
23.2.2           the number of scheme shares concerned;
     
23.2.3           the share price payable by the participant for such scheme
                 shares.

23.3       Forthwith on receiving the notice referred to in 23.2 -

23.3.1           if 23.1.1 is applicable, the trustees shall apply the current
                 price payable to the participant in reduction of the
                 participant's share debt and the grant price;

23.3.2           if 23.1.2 is applicable, the trustees shall apply the original
                 share price payable to the participant in reduction of the
                 participant's share debt;

23.3.3           the provisions of 20 shall apply, mutatis mutandis, to such
                 allocation shares, save that -

23.3.3.1               the date of grant of the right and option, unless the
                       board otherwise resolves in its discretion, be deemed to
                       be the original acceptance date for the relevant scheme
                       shares;

23.3.3.2               if more than twelve months has elapsed since the original
                       acceptance date of the relevant scheme shares, then the
                       right and option shall be exercised within sixty days
                       after the date on which the trustees receive the
                       participant's notice in terms of 23.2, failing which such
                       right and option shall lapse.

23.4       Any taxes and/or duties payable as a result of any transaction in
           terms of the provisions of this 23 shall, unless the board otherwise
           resolves, be borne and paid by the participant.
<PAGE>
 
24     SHARE OPTION - COMBINED OPTION/DEFERRED SALE

24.1       The trustees, on the authority of a resolution of the board may at
           any time prior to the exercise of any share option in terms of 16, by
           written notice offer to cancel all or any multiple of 100 of a
           participant's share options on the basis that, simultaneously with
           such cancellation -

24.1.1           the trustees shall grant to such participant the right and
                 option to enter into an agreement with the trust to acquire
                 the, same number of allocation shares;

24.1.2           the allocation price payable by such participant for such
                 allocation shares shall be an amount equal to the original
                 option price of the share options so cancelled.

24.2       A participant to whom an offer has been made in terms of 24.1 may, by
           written notice given to the to the trustees within 21 days of the
           date of the offer, accept such offer. Such notice shall specify -

24.2.1           the name of the participant;

24.2.2           the number of share options concerned;

24.2.3           the option price payable in respect of such share options.

24.3       Forthwith on receiving the notice referred to in 24.2, the trustees
           shall grant to such participant the right and option to enter into an
           agreement with the trust to acquire allocation shares. The Provisions
           of 20 shall apply, mutatis mutandis, to such allocation shares, save
           that -

24.3.1           the date of grant of the right and option shall, unless the
                 board otherwise resolves in its discretion, be deemed to be the
                 original acceptance date by the participant of the share option
                 in question;
<PAGE>
 
24.3.2           if more than twelve months has elapsed since the original
                 acceptance date of the participant's share option, then the
                 right and option shall be exercised within sixty days after the
                 date on which the trustees received the participant's notice in
                 terms of 24,2, failing which such right and

24.4       Any taxes and/or duties payable as a result of any transaction in
           terms of the provisions of this 24 shall, unless the board otherwise
           resolves, be borne and paid by the participant.

25     COMBINED OPTION/DEFERRED SALE - CREDIT SALE OR SHARE OPTIONS

25.1        The trustees, on the authority of a resolution of the board, may by
            written not ice offer to a participant who has exercised a right and
            option granted to him pursuant to 20, at any time prior to delivery
            to and payment by the participant for the allocation shares in
            question to either -

25.1.1           cancel the agreement referred to in 20 on the basis that,
                 simultaneously with such cancellation, the trust shall sell to
                 the participant or advance moneys to the participant to enable
                 the participant to subscribe for the same number of scheme
                 shares upon the following terms and conditions

25.1.1.1               the share or subscription price of such scheme shares
                       shall be the original allocation price in respect of the
                       allocation shares forming the subject matter of the
                       agreement so cancelled;

25.1.1.2               subject to the aforegoing, the provisions of this scheme
                       relating to scheme shares shall apply, mutatis mutandis,
                       in respect of such shares;
<PAGE>
 
25.1.1.3               the original date of grant of the right and option shall,
                       unless the board otherwise resolves, be deemed to be the
                       acceptance date of his application for those scheme
                       shares; or

25.1.2           purchase all or any of such participant's allocation shares in
                 respect of which delivery is not competent in terms of 20.2.3
                 at that time on The basis that, the trustees shall,
                 simultaneously with such purchase, grant such participant the
                 option to acquire the same number of share options upon the
                 following terms and conditions -

25.1.2.1               if the closing market price of a share on the JSE on the
                       trading day immediately preceding the date of such
                       request ("current price") exceeds the original allocation
                       price in respect of the allocation shares forming the
                       subject matter of such purchase, then -

25.1.2.1.1                   the purchase price per allocation share payable by
                             the trust to the participant shall be not less than
                             the current price;

25.1.2.1.2                   the price payable by the participant in
                             consideration for the grant of such option shall be
                             an amount equal to the current price less the
                             original allocation price of the allocation shares
                             forming the subject matter of such purchase;

25.1.2.1.3                   the option price per option share payable by the
                             participant shall be the original allocation price
                             of the allocation shares forming the subject matter
                             of such purchase-,
<PAGE>
 
25.1.2.1.4                   the original date of grant of the right and option
                             shall, unless the board otherwise resolves, be
                             deemed to be the acceptance date of such share
                             option;

25.1.2.1.5                   subject to the aforegoing, the provisions of this
                             scheme relating to the share options shall apply,
                             mutatis mutandis, in respect of such shares;

25.1.2.2               if the current price is equal to or less than the
                       original allocation price in respect of the allocation
                       shares forming the subject matter of such purchase -

25.1.2.2.1                   the price per allocation share payable by the trust
                             shall be not less than the allocation price;

25.1.2.2.2                   the provisions of 25.1.2.1.3, 25.1.2.1.4 and 25-
                             1.2.1.5 shall apply, mutatis mutandis.

25.2       A participant to whom an offer has been made in terms of 25.1 may, by
           written notice given to the trustees within 21 days of the date of
           the offer, accept such offer. Such notice shall specify -

25.2.1           the name of the participant;

25.2.2           the number of allocation shares concerned;

25.2.3           the allocation price payable in respect of such allocation
                 shares.

25.3       The trustees, on the authority of a resolution of the board, may by
           written notice offer to cancel a right and option granted to a
           participant to acquire allocation shares pursuant to 20 or 23 at any
           time prior to the exercise of such right and option on the basis
           that, simultaneously with such cancellation, the trust shall either
           sell to him the same number of scheme shares or grant him the same
<PAGE>
 
          number of share options to acquire the same number of shares, on the
          same bases, mutatis mutandis, set out in 25.l. A participant who
          accepts such offer shall do so in accordance with 25.2.

25.4      Any taxes and/or duties payable as a result of any transaction in
          terms of the provisions of this 25 shall, unless the board otherwise
          resolves, be borne and paid by the participant,

PART 7 - GENERAL

26   ASSIGNMENT OF RIGHTS OR OBLIGATIONS

26.1      Save as is provided in 26.3, it shall not be competent for any
          participant to cede any of his rights or delegate any of his
          obligations pursuant to the acquisition of share options, scheme
          shares, rights and options or allocation shares by him except to the
          trust or, in the case of the participant's death, to such
          participant's estate.

26.2      Save as otherwise expressly provided in this deed -

26.2.1            share options and rights and options may not be exercised by
                  any person other than the participant; and

26.2.2            no participant may alienate or encumber any of his share
                  options, scheme shares, rights and options or allocation
                  shares.

26.3      Eligible applicants and participants shall have the following rights -

26.3.1            an eligible applicant may, with the prior approval of the
                  trustees, nominate a family trust or a family company to
                  accept an offer in terms of 10.1, 14.1, 20.1 or 20.3 on his
                  behalf on the basis that such family trust or family company
                  may accept all (and not part only) of the rights in relation
                  thereto. All obligations in relation thereto shall be assumed
<PAGE>
 
                  and accepted in writing by the eligible applicant concerned,
                  failing which acceptance of the rights by such eligible
                  applicant's family trust or family company shall be invalid
                  and unenforceable,

26.3.2            a participant who did not avail himself of his rights in terms
                  of 26-3.1 may, with the prior approval of the trustees, at any
                  later date cede all (and not part only) of his rights (but not
                  assign any of his obligations) in terms of this scheme to a
                  family trust or a family company, in which event the
                  provisions of 26.3,1 shall apply, mutatis mutandis,

          In either event, the nominee or assignee in question shall bind itself
          in writing to abide by the terms of the scheme and the provisions of
          the scheme relating to participants shall be construed as referring to
          the participant and/or the family trust and/or the family company
          and/or all or any of them, as the context may require.

26.4      Notwithstanding 26.3, the trustees may permit a participant to
          discharge the whole or any portion of the share price, the option
          price or the allocation price (as the case may be) by the allotment
          and issue of preference shares in the share capital of a family
          company to the trustees, which preference shares shall be subject to
          such rights, privileges and conditions as may be acceptable to the
          trustees, in their discretion.

27   TRANSFERS FROM THE EXISTING SCHEME

     All rights and obligations under the existing scheme of the Sappi Limited
     Share Purchase Trust, the trustees thereof, the company and participants
     shall be deemed to have been cancelled on the date of registration of this
     dead and be substituted by the respective rights and obligations of the
     trust, the trustees, the company and participants respectively under this
     deed on the basis that -
<PAGE>
 
27.1      shares held by participants under the existing scheme shall become
          "scheme shares" and their indebtedness under the existing scheme shall
          become their share debt";

27.2      the share price of such scheme shares shall be equal to the share
          price payable by the participant under the existing scheme;

27.3      the date on which an application to acquire shares under the
          existing scheme was accepted shall be deemed to be the acceptance date
          of such scheme shares; and

27.4      such cancellation and substitution of the rights of participants shall
          not affect any of their vested rights under the existing scheme which
          shall remain of force and effect.

28   CERTIFICATES

     Certificates in respect of shares sold to or subscribed for by participants
     in terms of this scheme shall be retained by the trustees until such time
     as the shares are paid for and are capable of being released in terms of
     this scheme.


29   AGREEMENT BINDING ON PARTICIPANTS

     No share options, scheme shares, rights and options or allocation shares
     which it is proposed will be granted, sold or issued to any participant
     will be granted, sold or issued otherwise than --


29.1      in writing; and

29.2      on the terms set out in this scheme and in terms of which the
          participant irrevocably and unconditionally undertakes to adhere to
          and be bound by all the terms of this scheme.

30   AMENDMENT
<PAGE>
 
     It shall be competent for the board and the trustees to amend any of the
     provisions of this scheme subject to the prior approval (if required) of
     the JSE and of any other competent authority; provided that --

30.1      no such amendment shall affect the vested rights of any participant;
          and
<PAGE>
 
34              TERMINATION

     The trust shall terminate as soon as there are no longer any participants
     who hold or have acquired scheme shares, share options, rights and options
     or allocation shares and the board so resolves. Upon such termination, the
     assets (if any) of the trust shall be realised and any surplus remaining
     after the discharge of the trust's liabilities shall be paid over to the
     company. Any deficit arising from the winding-up of the trust shall be
     borne by the company.

Signed at Johannesburg on _____ March 1997
                                                   for Sappi Limited

                                                   -----------------------------
                                                   who warrants that he is duly
                                                   authorised hereto


We, the undersigned, David Charles Brink and Thomas Louw De Beer do hereby
accept our appointment as trustees of The Sappi Limited Share Incentive Trust.

Signed at Johannesburg on _____ March 1997

                                                   -----------------------------
                                                   David Charles Brink


Signed at Johannesburg one March 1997

                                                   -----------------------------
                                                   Thomas Louw De Beer


This scheme was duly adopted at a general meeting at Sappi Limited held at
Johannesburg on ____ March 1997.

Signed at Johannesburg on _____March 1997

                                                   -----------------------------
                                                   Chairman of the meeting