Document:

Exhibit 4.14

 

RULES

 

OF

 

THE SAPPI LIMITED
PERFORMANCE SHARE INCENTIVE PLAN

 

AS APPLICABLE TO ALLOCATIONS FROM JANUARY 1, 2011 ONWARDS

 

 

 

TABLE OF CONTENTS

 

	
  PART 1 - INTRODUCTION

  	
  1

  
	
   

  	
   

  	
   

  
	
  1

  	
  DEFINITIONS AND
  INTERPRETATION

  	
  1

  
	
   

  	
   

  	
   

  
	
  2

  	
  PURPOSE

  	
  8

  
	
   

  	
   

  	
   

  
	
  PART 2 - THE
  TRUST

  	
  8

  
	
   

  	
   

  	
   

  
	
  3

  	
  CONSTITUTION OF
  TRUST

  	
  8

  
	
   

  	
   

  	
   

  
	
  4

  	
  TRUSTEES

  	
  8

  
	
   

  	
   

  	
   

  
	
  5

  	
  POWERS OF TRUSTEES

  	
  10

  
	
   

  	
   

  	
   

  
	
  6

  	
  SECURITY

  	
  11

  
	
   

  	
   

  	
   

  
	
  7

  	
  REMUNERATION OF
  TRUSTEES

  	
  11

  
	
   

  	
   

  	
   

  
	
  8

  	
  DUTIES OF TRUSTEES

  	
  12

  
	
   

  	
   

  	
   

  
	
  9

  	
  INDEMNITY AND LEGAL
  PROCEEDINGS

  	
  12

  
	
   

  	
   

  	
   

  
	
  10

  	
  ACQUISITION OF
  SHARES BY THE TRUSTEES

  	
  13

  
	
   

  	
   

  	
   

  
	
  11

  	
  FUNDING OF THE TRUST

  	
  14

  
	
   

  	
   

  	
   

  
	
  12

  	
  MAXIMUM NUMBER OF
  SHARES WHICH MAY BE ACQUIRED BY PARTICIPANTS

  	
  14

  
	
   

  	
   

  	
   

  
	
  PART 3 – THE
  PERFORMANCE SHARE PLAN

  	
  16

  
	
   

  	
   

  	
   

  
	
  13

  	
  CONDITIONAL
  CONTRACTS

  	
  16

  
	
   

  	
   

  	
   

  
	
  14

  	
  PERFORMANCE SHARES

  	
  17

  
	
   

  	
   

  	
   

  
	
  15

  	
  RESTRICTION

  	
  18

  
	
   

  	
   

  	
   

  
	
  16

  	
  SHARE CERTIFICATES
  PURSUANT TO A CONDITIONAL CONTRACT

  	
  19

  
	
   

  	
   

  	
   

  
	
  PART 4 - GENERAL

  	
  19

  
	
   

  	
   

  	
   

  
	
  17

  	
  TERMINATION OF
  EMPLOYMENT

  	
  19

  
	
   

  	
   

  	
   

  
	
  18

  	
  LISTING, TAX, LEGAL
  REQUIREMENTS AND CASH ALTERNATIVE

  	
  20

  
	
   

  	
   

  	
   

  
	
  19

  	
  ADJUSTMENTS

  	
  22

  

 

 

	
  20

  	
  SALE AND ASSIGNMENT

  	
  24

  
	
   

  	
   

  	
   

  
	
  21

  	
  AMENDMENT OF THE
  PLAN

  	
  24

  
	
   

  	
   

  	
   

  
	
  22

  	
  ADMINISTRATION

  	
  25

  
	
   

  	
   

  	
   

  
	
  23

  	
  ANNUAL ACCOUNTS

  	
  26

  
	
   

  	
   

  	
   

  
	
  24

  	
  STRATE

  	
  26

  
	
   

  	
   

  	
   

  
	
  25

  	
  DISPUTES

  	
  26

  
	
   

  	
   

  	
   

  
	
  26

  	
  DEALINGS IN
  SECURITIES

  	
  29

  
	
   

  	
   

  	
   

  
	
  27

  	
  VOTES AT ANNUAL
  GENERAL MEETING

  	
  29

  
	
   

  	
   

  	
   

  
	
  28

  	
  PROFITS AND LOSSES
  AND TERMINATION OF THE PLAN

  	
  29

  
	
   

  	
   

  	
   

  
	
  29

  	
  DOMICILIUM AND
  NOTICES

  	
  30

  
	
   

  	
   

  	
   

  
	
  30

  	
  AMERICAN DEPOSITORY
  SHARES

  	
  31

  
	
   

  	
   

  	
   

  
	
  31

  	
  COMPLIANCE

  	
  31

  

 

ii

 

THE SAPPI LIMITED PERFORMANCE SHARE
INCENTIVE PLAN

 

PART 1 - INTRODUCTION

 

1                                                                                                    DEFINITIONS AND
INTERPRETATION

 

1.1                                                                                                                                          In this Deed, unless expressly
stipulated to the contrary or 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                                                                                                         “Act” - the RSA Companies Act 61 of 1973 as amended
or any other act which may in the future replace the Companies Act of 1973;

 

1.1.2                                                                                                         “ADSs” – American Depository Shares each of which
represent one Share or the right to receive one Share.  It is recorded that American Depository
Shares are evidenced by American Depository Receipts (“ADRs”) issued by the Bank of New York (“the Depository”) in terms of the provisions
of the Amended and Restated Deposit Agreement, dated October 23, 1993 and
amended and restated as of October 26, 1999, between the Company, the
Depository and all owners from time to time of ADRs, as the same may be
amended, modified or restated from time to time;

 

1.1.3                                                                                                         “Allocated” – for purposes of setting the Plan
limits referred to in clause 12, shall mean in respect of Conditional Awards granted in terms of this Plan, one Share
Allocated per each Conditional Award granted, and the words “Allocation” and “Allocate”
shall be construed accordingly;

 

1.1.4                                                                                                         “Allocation Date” – the date on which the Board
resolves to award a Conditional Contract to an Eligible Employee;

 

1.1.5                                                                                                         “Applicable Laws” – all and any -

 

1.1.5.1                                                                                                                  statutes, subordinate
legislation and common law;

 

1.1.5.2                                                                                                                  regulations;

 

1.1.5.3                                                                                                                  ordinances and by-laws;

 

1

 

1.1.5.4                                                                                                                  directives, codes of practice,
circulars, guidance notices, judgements and decisions of any competent
authority,

 

compliance with which is
mandatory in relation to the participation in this Plan by any Eligible
Employee and/or any Group Company;

 

1.1.6                                                                                                         “Arbitration Act” - the RSA Arbitration Act 42 of
1965;

 

1.1.7                                                                                                         “Auditors” - the auditors of the time
being of the Company;

 

1.1.8                                                                                                         “Board” - the board of directors of the Company
acting either itself or through any committee of its members appointed by it
from time to time which is charged with the administration of the Plan;

 

1.1.9                                                                                                              “Business Day” - any day on which the JSE is open
for the transaction of business;

 

1.1.10                                                                                                       “Change of Control” – means -

 

1.1.10.1                                                                                                           all circumstances where a party
(or parties acting in concert), directly or indirectly, obtains -

 

1.1.10.1.1                                                                                                 de facto control of the Company;
or

 

1.1.10.1.2                                                                                                 beneficial ownership of the
specified percentage or more of the Company’s issued Shares; or

 

1.1.10.1.3                                                                                                 control of the specified
percentage or more of the voting rights at meetings of the Company; or

 

1.1.10.1.4                                                                                                 the right to control the
management of the Company or the composition of the Board; or

 

1.1.10.1.5                                                                                                 the right to appoint or remove
directors holding a majority of voting rights at Board meetings; or

 

1.1.10.2                                                                                                           the approval by the Company’s
shareholders of, or the consummation of, a merger or consolidation of the
Company 

 

2

 

with any other business or
entity, or upon a sale of the whole or a major part of the Company’s assets or
undertaking.

 

For the purposes of this 1.1.10
the expression “specified percentage” shall bear the meaning assigned to it
from time to time in the Code read with the Act, presently being 35%;

 

1.1.11                                                                                                                “Code” – the Securities Regulation Code and Rules of
the Securities Regulation Panel, promulgated under section 440C of the Act;

 

1.1.12                                                                                                                “Company” – Sappi Limited (registration number
1936/008963/06), a company incorporated in accordance with the laws of the RSA;

 

1.1.13                                                                                                                “Conditional Award” – an award of a Conditional
Contract made to an Eligible Employee pursuant to 13.1 and 13.2;

 

1.1.14                                                                                                                “Conditional Contract” – a contract between the
Company and a Participant which comes into existence as a result of the
acceptance by an Eligible Applicant of a Conditional Award;

 

1.1.15                                                                                                                “Date of Termination of Employment” - the earlier of
the date on which -

 

1.1.15.1                                                                                                                          the contract of employment
(whether oral or written) of a Participant with a Group Member is terminated;
or

 

1.1.15.2                                                                                                                          the Participant leaves the
service of a Group Member;

 

provided that where the
employment of a Participant is terminated (irrespective of the reason
therefore) and that Participant is serving out a notice period, then the Date of
Termination of Employment shall be deemed to be the date on which such notice
period commences;

 

1.1.16                                                                                                                “Deed” – this Deed, as amended from time to time;

 

1.1.17                                                                                                                “Early Retirement” – termination of the
participant’s employment by reason of retirement before the participant has
reached the age of 60 (sixty) years.  For
these purposes the retirement date is 

 

3

 

determined as the date on which
the participant ceases to be employed in his or her position, whether or not he
or she receives a salary under part-time retirement;

 

1.1.18                                                                                                                “Eligible Employee” - an officer or other
employee of a Group Member (including any director holding salaried employment
or office);

 

1.1.19                                                                                                                “Existing Plan” – the Sappi Limited Share Incentive
Scheme adopted by the Company on March 5, 1997, as amended from time to
time;

 

1.1.20                                                                                                                “Fair Market Value” – in relation to a Share on any
particular day, shall be the closing price at which Shares are traded on the
JSE on the trading day immediately preceding such date;

 

1.1.21                                                                                                                “Group” - the Company and any other company, body
corporate or other undertaking which is or would be deemed to be, a subsidiary
of the Company in terms of the Act;

 

1.1.22                                                                                                                “Group Member” – means any company, body corporate or
other undertaking which forms part of the Group;

 

1.1.23                                                                                                                “JSE” - the JSE Limited (registration number
2005/022939/06), a public company duly registered and incorporated with limited
liability in accordance with the company laws of South Africa, licensed as an
exchange under the Securities Services Act No. 36 of 2004;

 

1.1.24                                                                                                                “Lawful Dismissal for Operational Reasons” – the
dismissal of a Participant for Operational Reasons as contemplated in the LRA
(more commonly referred to as retrenchment) or, insofar as a Participant’s
employment by any Group Member is not regulated by the LRA, the dismissal of
such Participant for analogous reasons;

 

1.1.25                                                                                                                “Liquidation Date” - the date on which any successful
application for the final or provisional liquidation of the Company is lodged
at the relevant court;

 

1.1.26                                                                                                                “LRA” – the RSA Labour Relations Act 66 of 1995;

 

4

 

1.1.27                                                                                                                     “Normal
Retirement”– termination of the participant’s employment by reason
of retirement on or after the date on which that participant has reached the
age of 60 (sixty) years. For these purposes, the retirement date is determined
as the date on which the participant ceases to be employed in his or her
position, whether or not he or she receives a salary under part-time
retirement;

 

1.1.28                                                                                                                     “Participant” - an Eligible Employee who has accepted
a Conditional Award in terms of 13.3;

 

1.1.29                                                                                                                     “Performance Criteria” – the Performance Criteria
from time to time determined by the Human Resources Committee or Compensation
Committee of the Board as specified in the Conditional Contract to which a
Conditional Award is subject.  It is
recorded that the Performance Criteria shall benchmark the net return to
shareholders of the Company against an appropriate “peer group” of companies
from time to time;

 

1.1.30                                                                                                                     “Performance  Shares” – shall
have the meaning ascribed thereto in 14.2;

 

1.1.31                                                                                                                     “Performance Period” - the period in respect of which
the Performance Criteria is to be satisfied;

 

1.1.32                                                                                                                     “Plan” – The Sappi Limited Performance Share
Incentive Plan, the terms of which are embodied in this Deed;

 

1.1.33                                                                                                                     “Provisional Shares” – the maximum number of Shares
provisionally awarded to a Participant in terms of a Conditional Contract, as
contemplated in 13.1.3;

 

1.1.34                                                                                                                     “RSA” – the Republic of South Africa;

 

1.1.35                                                                                                                     “Secretary” – the secretary for the time being of the
Company;

 

1.1.36                                                                                                                     “Shares” – ordinary shares with a par value of ZAR1
in the Company;

 

5

 

1.1.37                                                                                                                     “Tax Act” – the RSA Income Tax Act 58 of 1962;

 

1.1.38                                                                                                                     “Taxes” – all present and future taxes and other
charges of any kind or nature whatsoever imposed, levied, collected, withheld
or assessed by any competent authority, and includes all income taxes (whether
based on or measured by income/revenue or profit of any nature or kind or
otherwise and whether levied under the Tax Act or otherwise), capital gains
taxes, value-added taxes, stamp duties, uncertificated securities taxes and all
charges in the nature of taxation, and all interest, penalties, fines and other
payments on, or in respect thereof;

 

1.1.39                                                                                                                     “Trust” - The Sappi Limited Performance Share
Incentive Trust, constituted in terms of 3;

 

1.1.40                                                                                                                     “Trust Act” – the RSA Trust Property Control Act 57
of 1988;

 

1.1.41                                                                                                                     “Trustees” – the persons who are, from time to time,
the Trustees of the Trust, initially being those persons referred to in 4.2.

 

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 gender includes the other
genders;

 

1.2.2.2                                                                                                                  a natural person includes an
artificial person (whether corporate or unincorporate) 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;

 

6

 

1.2.4                                                                                                                   any reference to any statute
shall be to that statute, as amended from time to time and to any statutory
substitution of that statute;

 

1.2.5                                                                                                                   a Participant who ceases to be
employed by a Group Member on the basis that he is -

 

1.2.5.1                                                                                                                                                                       immediately thereafter employed
by another Group Member;

 

1.2.5.2                                                                                                                                                                       thereafter re-employed by such
Group Member pursuant to it being determined that his employment was on a basis
which was not lawful in terms of the LRA;

 

shall be deemed not to have
terminated his employment for the purposes of this Plan and his rights shall be
deemed to be unaffected;

 

1.2.6                                                                                                                   a Participant who is a director
of any Group Member who retires and/or resigns on the basis that he is
immediately re-elected in accordance with the articles of association or other
constitutional documents of that Group Member shall be deemed not to have
terminated his employment with that Group Member.

 

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                                                                                                                                          Save for the purpose of
determining whether or not a Change of Control has occurred in accordance with
1.1.10 any term which refers to a RSA legal concept or process shall be deemed
to include a reference to the equivalent or analogous concept or process in any
other jurisdiction in which this Deed may apply or to the laws of which a party
may be or become subject; furthermore, references to the following statutes
and/or provisions therein, namely the Act, the LRA, the Tax Act and the Trust
Act, shall be deemed to be references to analogous legislation and/or
provisions therein in any other jurisdiction in which this Deed may apply.

 

1.5                                                                                                                                          The use of the word “including” or “includes” or “include”
followed by a specific example/s shall not be construed as limiting the meaning
of the general wording preceding it and the eiusdem
generis rule shall not be 

 

7

 

applied in the interpretation of
such general wording or such specific example/s.

 

2                                                                                                    PURPOSE

 

The purpose of the Plan is to
provide Eligible Employees with the opportunity to acquire an interest in the
equity of the Company, thereby providing them with a further incentive to
advance the Group’s interests and promoting an alignment of interests between
them and the shareholders of the Company.

 

PART 2 - THE TRUST

 

3                                                                                                    CONSTITUTION OF TRUST

 

3.1                                                                                                                                          There is hereby constituted a
trust for the benefit of Participants, to be known as “The Sappi Limited
Performance Share Incentive Trust”, on the terms and conditions of this
document.

 

3.2                                                                                                                                          The Company shall irrevocably
donate R100 (or the equivalent amount in another currency) to the Trustees on
behalf of the Trust.

 

3.3                                                                                                                                          The Trust shall be formed in
such jurisdiction as the Board may determine.

 

4                                                                                                    TRUSTEES

 

4.1                                                                                                                                          There shall at all times be a
minimum of two and a maximum of three Trustees in office; provided that if for
any reason whatever one or more Trustees ceases and/or fails to act as such,
the other Trustee/s in office shall, until the Board has made a further
appointment/s in terms of 4.4, be entitled to continue to administer the Trust
and to act to protect and preserve the Trust’s assets.

 

4.2                                                                                                                                          Mr David Charles Brink and
Professor Meyer Feldberg were appointed to be the initial Trustees of the
Trust. The current trustees are Daniël Christiaan Cronjé and Meyer Feldberg.

 

4.3                                                                                                                                          The Board shall be entitled at
any time to appoint any person qualified for appointment as a Trustee as a further
Trustee in addition to the initial Trustees referred to in 4.2.

 

8

 

4.4                                              Subject to the provisions of the
Trust Act and 4.5, if any Trustee ceases to hold office for any reason the
Board shall appoint a person, willing to act as such, as Trustee in his place.

 

4.5                                              No person shall be entitled to
participate under this Plan for as long as he holds office as a Trustee of the
Trust.  Furthermore, no executive
director of the Company may at any time hold office as a Trustee of the Trust.
A non-executive director, subject to any restriction as contained in the Act,
may be appointed as a Trustee of the Trust, provided that he or she does not
benefit from the Plan.

 

4.6                                              A Trustee shall cease to hold
office as such if he -

 

4.6.1                                              is removed by resolution of the
Board; or

 

4.6.2                                              resigns on giving the Company
and his co-Trustees not less than one calendar month’s prior written notice to
that effect; or

 

4.6.3                                              becomes disqualified from
holding an appointment as a director of any company.

 

4.7                                              The Trustees shall elect one of
their number to act as Chairman for the purpose of meetings of Trustees and for
all other purposes that a Chairman may be required in terms of this Deed or
otherwise.

 

4.8                                              All decisions (ie resolutions)
of the Trustees shall be taken unanimously with each Trustee exercising one
vote; provided that, if at any meeting of Trustees there are three Trustees
present, decisions (ie resolutions) shall be taken by a simple majority vote
with each Trustee being entitled to one vote.

 

4.9                                              Subject to the proviso in 4.1, a
quorum for any meeting of Trustees shall be two Trustees.

 

4.10                                            Subject to the Trustees giving
effect to the terms and conditions of this Deed, in administering the Trust and
its affairs, the Trustees shall adopt such procedures and take such
administrative steps as they from time to time deem necessary and advisable.  They shall meet together for the dispatch of
the business of the Trust, adjourn and otherwise regulate their meetings as 

 

9

 

they, in their discretion, deem
fit.  Any Trustee shall be entitled to
summon a meeting of the Trustees by giving written notice to that effect to the
other Trustee/s.

 

4.11                                            Meetings of the Trustees may be
held by tele-conferencing, telephonically or by any other medium as the
Trustees deem fit.

 

4.12                                            The Trustees shall procure that
minutes of their meetings are taken and shall, if appropriate, certify same as
correct.

 

4.13                                            A resolution which has been
signed by all of the Trustees shall be valid and effective as if it had been
adopted at a duly convened meeting of the Trustees.  Unless the contrary is stated therein, any
such resolution shall be deemed to have been passed on the date on which it was
signed by the Trustee who signed it last. 
Further, any such resolution may consist of one or more documents each
signed by one or more Trustees.

 

5                                 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 the Plan, including all the powers set out in Schedule 2 of the
Act and such powers as may 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 -

 

5.1                                              borrow moneys and/or to raise
funding strictly for the purpose of giving effect to the Plan;

 

5.2                                              make Conditional Awards;

 

5.3                                              open and operate banking
accounts, savings 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 any
bank or other deposit-taking institution at which an account has been opened;

 

5.4                                              invest any surplus moneys of the
Trust (if any) in Shares or other securities of the Company or in such other
manner as the Board may from time to time approve;

 

10

 

5.5                                              employ and act on the advice of
and pay out of the funds of the Trust the reasonable fees and disbursements of
auditors, attorneys, counsel and other professional consultants in connection
with the affairs of the Trust;

 

5.6                                              exercise such further rights,
powers and authorities as may from time to time be conferred upon them by
resolution of the Board;

 

5.7                                              delegate the day to day
administration of the Trust to an officer or employee of any company in the
Group, which officer or employee shall perform all of his duties in accordance
with the instructions of the Trustees and subject to the provisions of this
Deed;

 

5.8                                              subject to 12, purchase and sell
Shares and/or to dispose of the Trust’s assets;

 

5.9                                              subject to the provisions of the
Act, enter into any one or more transactions to hedge against or otherwise
protect the assets of the Trust and/or the Trust itself from incurring any
losses of whatever nature;

 

5.10                                            transact with Group Members and
recover amounts from them as contemplated in 11.

 

6                                 SECURITY

 

No Trustee shall be required to
furnish any security of any nature to the Master of the High Court or to any
other official or officer, nor shall any security be required for the due
performance of any duty under the Trust Act or under any other statutory
provision of the RSA or elsewhere.

 

7                                 REMUNERATION OF TRUSTEES

 

7.1                                              The remuneration, if any,
payable to the Trustees in their capacities as such shall be determined from
time to time by the Board.  The Trustees
shall, in addition, be entitled to reimbursement from the Trust for all
expenses properly incurred by them in and about the execution of their duties
as Trustees.  Such remuneration and
reimbursement of expenditure shall be borne and paid by the Company if the
Trust is unable to pay these amounts from its own resources.

 

11

 

7.2                                              No Trustee or firm or company of
which such Trustee is a member or director shall be disqualified from acting as
adviser, agent, banker, broker or attorney to, or contracting with, the Trust,
nor from recovering any reasonable remuneration in respect of any services
performed as such on behalf of the trust by such Trustee or his firm or
company.

 

8                                 DUTIES OF TRUSTEES

 

The duties of the Trustees in
relation to the Trust shall be those prescribed by this Deed and shall include
the duty to -

 

8.1                                              subscribe for or purchase Shares
in accordance with the provisions of this Deed;

 

8.2                                              make Conditional Awards;

 

8.3                                              invest the funds of the Trust in
such form as is permitted by this Deed;

 

8.4                                              administer the Plan in order to
achieve and maintain the purpose set out in 2;

 

8.5                                              without derogating from their
obligations in terms of 4.12, 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 made up to accord with the financial year end of the
Company or such other date as may be determined by the Board; and

 

8.6                                              carry out such other duties as
may, consistent with their offices as Trustees and in terms of the provisions
of this Deed, be delegated to them from time to time by resolution of the
Board.

 

9                                 INDEMNITY AND LEGAL
PROCEEDINGS

 

9.1                                              None of the Trustees or officers
of the Trust shall be liable for, and the Company indemnifies each of them
against, any loss sustained out of whatever cause arising if -

 

9.1.1                                                           in the case of the Trustee, he
has performed his duties and exercised his powers in compliance with section 9(1) of
the Trust Act;

 

12

 

9.1.2                                                           in the case of an officer of the
Trust, he has performed his duties in a manner which is neither grossly
negligent nor fraudulent.

 

9.2                                              Legal proceedings instituted by
or against the Trust may be instituted or defended in its name.

 

10                               ACQUISITION OF SHARES BY THE
TRUSTEES

 

10.1                                            Subject to the Act and 12, the
Trustees shall be entitled, for the purposes of the Plan, to purchase or
subscribe for or be given options to purchase or subscribe for -

 

10.1.1                                                        such numbers of Shares at such
prices as may be agreed from time to time by the Trustees and the Board; and

 

10.1.2                                                        such number of Shares at the
relevant exercise or issue prices, as may be required pursuant to any
adjustment in terms of 19.

 

10.2                                            The Trustees shall only purchase
or subscribe for shares once an Eligible Employee or group of Eligible
Employees to whom they will be Allocated, has been formally identified.

 

10.3                                            The Shares held in the Trust may
only be sold by the Trust:

 

10.3.1                                                        once the employment of a
Participant has been terminated or a Participant is deceased; or

 

10.3.2                                                        on behalf of a Participant, once
the rights of ownership of the Participant has vested in terms of the
provisions of the Plan.

 

10.4                                            The Company shall at all times
reserve and keep available, free from pre-emptive rights, out of its authorised
but unissued share capital, such number of Shares as shall (together with any
treasury shares held by Group Members which may be utilised for the purposes of
this Plan) then be issuable in terms of this Plan.

 

13

 

11                               FUNDING OF THE TRUST

 

11.1                                            The purchase or subscription
price of Shares (if any) acquired by the Trust in terms of 10.1 or otherwise
under this Plan, 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 in
order to give effect to the Plan (including in terms of 22.2.3) and any duties
payable upon the issue or transfer of Shares to Participants (all of such
costs, expenses and fees hereinafter referred to as “Participation Costs”) may temporarily be funded, as the Board
may from time to time direct, out of -

 

11.1.1                                                        the Trust’s own resources, if
any, including without limitation, money raised by any company or companies
incorporated by the Trust for the purpose of raising funding through the issue
of preference shares or other securities, whether convertible or otherwise, on
such terms and conditions as the Trustees may decide; and/or

 

11.1.2                                                        loans to be made to the Trust by
Group Members in accordance with the provisions of section 38(2)(b) of the
Act;

 

11.1.3                                                        loans by third parties to the
Trust to be procured, subject to 38(2)(b) of the Act, by the Company on
such terms as the Company is able to arrange; and/or

 

11.1.4                                                        any other resource which is
available to the Trust from time to time.

 

11.2                                            The Trust shall recover from
each Group Member which employs a Participant, and the Company shall procure
that each Group Member which is the employer of a Participant pays to the
Trust, such Participation Costs as may be attributable to the participation of
that Participant plus an appropriate share of any other administration costs,
expenses and fees incurred by the Trust.

 

12                               MAXIMUM NUMBER OF SHARES
WHICH MAY BE ACQUIRED BY PARTICIPANTS

 

12.1                                            Subject to 12.5, the prior
authority of the shareholders of the Company in general meeting shall be
required if the aggregate number of Shares which may be Allocated to all
Participants under this Plan and the Existing Plan is 

 

14

 

to exceed 42,700,870 (forty two
million seven hundred thousand eighth hundred and seventy) Shares being 7,95%
(seven comma nine five percent) of the Company’s issued Share capital as at 30 September 2009.
In the event of a discrepancy between the number of shares and the percentage
of issued shares it represents, the number of shares shall prevail over the
stated percentage.

 

12.2                                            Subject to 12.5, the aggregate
number of Shares that may be allocated to any one Participant in terms of this
Plan and the Existing Plan shall not exceed 2,200,000 (two million two hundred
thousand) Shares being 0,05% (nil comma nil five percent) of the Company’s
issued Share capital as at 30 September 2009. In the event of a
discrepancy between the number of shares and the percentage of issued shares it
represents, the number of shares shall prevail over the stated percentage.

 

12.3                                            The limit referred to in clause
12.1 shall include new Shares allotted and issued by the Company in settlement
of this Plan and the Existing Plan.

 

12.4                                            The aggregate result of clauses
12.1 and 12.3 shall exclude the following:

 

12.4.1                                                        Shares purchased in the market
in settlement of this Plan and the Existing Plan; and

 

12.4.2                                                        Shares in respect of grants and
offers under this Plan and the Existing Plan which are not subsequently settled
to a Participant as a result of the forfeiture thereof.

 

12.5                                            Subject to clause 19.1, the
limits referred to in clauses 12.1 and 12.2 shall be adjusted in such manner as
the Board shall determine (and which the Auditors shall confirm in writing to
be in their opinion fair and reasonable) following the sub-division or consolidation
of the Shares, reduction of share capital or the issue of additional Shares
whether by way of a capitalisation of the Company’s profits and reserves
(including the share premium account and the capital redemption reserve fund),
or a rights issue. The objective of such an adjustment shall be to give a
Participant entitlement to the same proportion of the Share capital as to which
he or she was previously entitled. The Auditors shall further confirm to the
JSE in writing that these adjustments are calculated in accordance with the
provisions of this Plan.

 

15

 

PART 3 – THE PERFORMANCE SHARE
PLAN

 

13                               CONDITIONAL CONTRACTS

 

13.1                                            The Board may, from time to
time, determine -

 

13.1.1                                                        that the Trustees should, on
behalf of the Company, award Conditional Contracts to be given Shares (for no
cash consideration) to Eligible Employees;

 

13.1.2                                                        the particular Eligible
Employees to whom such Conditional Contracts should be awarded;

 

13.1.3                                                        the maximum number of Shares to
be awarded provisionally to each such Eligible Employee;

 

13.1.4                                                        the Performance Criteria
applicable to each Conditional Contract; and

 

13.1.5                                                        the Performance Period
applicable to each Conditional Contract;

 

provided that when the Board
decides that a Conditional Contract should be awarded to an Eligible Employee
who is a director, then that director must recuse himself of the decision
making by the Board for that particular award.

 

13.2                                            As soon as practicable after a
determination is made by the Board in terms of 13.1 or at such time as is
specified by the Board, a written notice (“Conditional
Award Notice”) shall be delivered to each Eligible Employee to whom
the Board has determined that Shares are to be awarded pursuant to a
Conditional Contract.  The Conditional
Awarded Notice shall -

 

13.2.1                                                        be in writing in the form from
time to time prescribed by the Board and shall specify such matters in relation
to the Plan as the Board may determine;

 

16

 

13.2.2                                                        specify the maximum number of
Shares to which such Eligible Employee will become entitled if the Performance
Criteria under the Conditional Contract are satisfied or exceeded;

 

13.2.3                                                        specify the Allocation Date in
respect thereof;

 

13.2.4                                                        contain and stipulate
Performance Criteria subject to which the award of the Conditional Contract is
made and the manner in which the number of Shares referred to in 13.2.2 shall
be adjusted downwards if the Performance Criteria are not satisfied (whether in
whole or in part);

 

13.2.5                                                        specify the Performance Period;

 

13.2.6                                                        state that a Participant shall
not be required to pay any cash consideration in respect of the award and
acceptance of a Conditional Award or in respect of the transfer of Shares in
terms of this Plan;

 

13.2.7                                                        specify such other terms and
conditions as the Board may determine.

 

13.3                                            Acceptance by an Eligible
Applicant of a Conditional Contract shall be communicated to the Trustees, in
writing, by not later than 30 days after the date of delivery of the relevant
Conditional Award Notice to such Eligible Applicant and shall nominate a
beneficiary for the purposes of receiving his Performance Shares (if any) in
terms of 17.1.1.  A Conditional Contract
which is not accepted by an Eligible Applicant as aforesaid shall automatically
lapse and be of no force or effect, subject to re-instatement or extension by
the Board.

 

14                               PERFORMANCE SHARES

 

14.1                                            Subject to 14.5, on the fourth
anniversary of the Allocation Date of Conditional Awards, the Company shall in
terms of such Conditional Contract allot and issue and/or procure the transfer
to Participants of such number of Shares as is equal to the number of
Provisional Shares specified in the Conditional Award Notice relating to the
relevant Conditional Contract. A Participant shall not be required to pay any
cash consideration in order to receive Shares as aforesaid.

 

17

 

14.2                                            Shares to be allotted and issued
and/or transferred to Participants pursuant to the provisions of 14.1 (read
with 14.5) shall be “Performance Shares”.

 

14.3                                            Except to the extent a
Conditional Award Notice provides that this 14.3 shall be inapplicable to the
Conditional Contract specified therein, then notwithstanding anything to the
contrary contained herein, the Board may by resolution, cause the four year
period referred to in 14.1 to be anticipated or, with the consent of a
Participant adversely affected thereby, postponed to such extent as the Board
may determine. In the event of such acceleration or postponement the number
which is D in the formula in 17.1.1 and the reference to the fourth anniversary
of the Allocation Date shall be deemed to be varied appropriately. The
Performance Periods in respect of Conditional Awards awarded on or after 1 January 2011
shall not be anticipated or postponed in any circumstances.

 

14.4                                            In the case of any Conditional
Contract with a Participant whose compensation in terms of such Conditional
Contract is or shall become subject to taxation in the United States of
America, any postponement referred to in 14.3 shall not extend beyond the December 20
following the end of the Performance Criteria period with respect to such
Conditional Contract (or, if earlier, the last day of the calendar year in
which such period ends).

 

14.5                                            If the Board, in its sole and
absolute discretion, determines that the Performance Criteria embodied in a
Conditional Contract have not been satisfied or exceeded, the number of Shares
to be allotted and issued and/or transferred to a Participant under and in
terms of such Conditional Contract shall be adjusted downwards in the manner
set out in the Conditional Award Notice pertaining to such Conditional
Contract; that is, the allotment and issue and/or transfer of Provisional
Shares (or any portion thereof) specified in the Conditional Award Notice is
conditional upon the Performance Criteria being satisfied or exceeded.

 

15                                               RESTRICTION

 

For the sake of clarity and the
avoidance of any doubt, it is recorded that until such time as an Eligible
Employee becomes entitled to have Shares allotted and issued and/or transferred
to him (ie he has received Performance Shares), an Eligible

 

18

 

Employee shall not have any
ownership interest in, or receive any dividends and/or exercise any voting
rights attached to, the Provisional Shares awarded to him.

 

16                                                                                             SHARE CERTIFICATES PURSUANT
TO A CONDITIONAL CONTRACT

 

16.1                                                                                                                                   Subject to 24, the Company shall
issue share certificates for the Shares allotted and issued and/or transferred
to a Participant as a result of the acquisition by such Participant of Shares
in terms of 14 by not later than 60 days after such acquisition.

 

16.2                                                                                                                                   Shares allotted and issued
and/or transferred to Participants in terms of 14 will rank pari passu with the
then issued Shares.

 

PART 4 - GENERAL

 

17                                                                                             TERMINATION OF EMPLOYMENT

 

17.1                                                                                                                                   Subject to 1.2.5, if the
employment by any Group Member of any Participant who is a party to a Conditional
Contract (and is therefore conditionally entitled to Provisional Shares)
terminates as a result of -

 

17.1.1                                                                                                                                                                         (a) disability or ill
health (as certified by an appropriate medical practitioner nominated by the
Trustees); or (b) the transfer/sale of the undertaking or part undertaking
in which such Participant is employed to a person which is not a Group Member
other than pursuant to a Change of Control; or (c) his Lawful Dismissal
for Operational Reasons; or (d) the Group Member by which he is employed
ceasing to be a Group Member; or (e) death; or (f) his retirement on
or after normal retirement in terms of the Group’s retirement/pension fund,
then such Participant (or in the case of his death, the beneficiary nominated
by him in terms of 13.3) shall be entitled, on the fourth anniversary of the
Allocation Date (and not before then irrespective of the Date of Termination of
Employment), to receive such number of Performance Shares as calculated in
accordance with the following formula -

 

A = B x C / D

 

where -

 

19

 

A                                         =           the number of Performance Shares
to be allotted and issued or transferred (as the case may be) to the
Participant as stipulated in 17.2;

 

B                                        =           a number equal to the number of
Provisional Shares specified in the Conditional Award Notice relating to such
Participant;

 

C                                       =           a number equal to the number of
days that have passed from the Allocation Date until the Date of Termination of
Employment of the Participant for any reason specified in 17.1.1; and

 

D                                       =           1 460;

 

17.1.2                                                                                                                                                                         any reason other than a reason
contemplated in 17.1.1 (including his voluntary resignation or his early
retirement or his lawful dismissal (eg his lawful dismissal for dishonest,
fraudulent or grossly negligent conduct)), then his Conditional Contract shall
automatically lapse and cease to be of any further force or effect and he shall
forfeit all of his rights to Provisional Shares/Performance Shares.

 

17.2                                                                                                                                   Notwithstanding the Date of Termination
of Employment, if a Participant ceases to be employed by any Group Member by
reason of any of the circumstances contemplated in 17.1.1, the number of
Performance Shares to be allotted and issued or transferred (as the case may
be) to such Participant shall be the number determined mutatis mutandis in
accordance with the provisions of 14 (including 14.5 ) on the assumption that
such Participant is still in the employ of a Group Member on the fourth
anniversary of the Allocation Date.

 

18                                                                                             LISTING, TAX, LEGAL
REQUIREMENTS AND CASH ALTERNATIVE

 

18.1                                                                                                                                   The Company shall procure the
listing of any Shares allotted and issued and/or transferred to a Participant
in terms of this Plan on the JSE (or other appropriate exchange) within a
reasonable time (not exceeding 30 days) after the acquisition thereof.

 

20

 

18.2                                                                                                                                   Notwithstanding 18.1, if a Group
Member or the Trustees are obliged (or would suffer a disadvantage of any
nature if they were not) to account for, withhold or deduct any (a) tax in
any jurisdiction which is payable in respect of, or in connection with, the
making of any Conditional Award, the conclusion of a Conditional Contract
and/or by virtue of any Provisional Shares becoming Performance Shares and/or
otherwise in connection with this Plan and/or (b) any amount in respect of
any social security or similar contributions which would be recoverable from a
Participant in respect of the making of any Conditional Award, the conclusion
of a Conditional Contract and/or by virtue of any Provisional Shares becoming
Performance Shares and/or otherwise in connection with this Plan (the
obligations referred to in (a) and (b) hereinafter referred to as a “Tax/Social Liability”), then the Company
and/or the Trustees shall be relieved from the obligation to allot and issue
and/or transfer Shares in accordance with 18.1 until that Participant has
either -

 

18.2.1                                                                                                                                                                         made payment to the relevant
Group Member or the Trustees of an amount equal to the Tax/Social Liability; or

 

18.2.2                                                                                                                                                                         entered into an arrangement
which is acceptable to that Group Member or the Trustees to secure that such
payment is made (whether by authorising the sale of some or all of the Shares
acquired by him and the payment to the relevant person of the relevant amounts
out of the proceeds of the sale or otherwise).

 

18.3                                                                                                                                   Notwithstanding anything to the
contrary contained in this Plan but subject to 18.2, on any Provisional Shares
becoming Performance Shares, the obligations of the Company and/or the Trust
may be discharged by the Group Member by which the Participant is employed
paying, in cash, an amount equal to the Fair Market Value of the Performance
Shares as opposed to allotting and issuing and/or procuring the transfer of
Shares to a Participant.  If the Board
determines that the obligations of the Company and/or Trust are to discharged
in cash, it shall not be necessary to allot and issue and/or transfer Shares to
a Participant and the Group Member by which the Participant is employed shall
instead be entitled to pay to such Participant, in cash, an amount equal to the
Fair Market Value of such Shares on the date on which the Participant became
entitled to receive such Shares.

 

21

 

18.4                                                                                                                                   Notwithstanding any other
provision of this Plan, no Shares will be issued and/or transferred to any
Participant pursuant to this Plan if the Board determines, in its sole
discretion, that such issuance and/or transfer will or may violate any
Applicable Laws or the listings requirements of any securities exchange on
which the Shares are listed.  The Company
may condition the issuance and/or transfer of any Shares upon the delivery by
the Participant to the Company of any certificates, representations, legal
opinions and agreements that the Board, in its sole discretion, may deem
necessary for such issuance and/or transfer to comply with any Applicable Laws
or listings requirements.

 

19                                                                                             ADJUSTMENTS

 

19.1                                                                                                                                   Notwithstanding anything to the
contrary contained herein but subject to 19.5, if the Company restructures its
capital in that it -

 

19.1.1                                                                                                                                                                         undertakes a rights offer; or

 

19.1.2                                                                                                                                                                         is placed in liquidation for
purposes of reorganisation; or

 

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

 

19.1.4                                                                                                                                                                         reduces its share capital
(including by a share repurchase),

 

such adjustments shall be made
to the rights of Participants as may be determined to be fair and reasonable to
the Participants concerned by an independent firm of auditors of international
repute or a merchant bank of international repute appointed by the Board;
provided that any adjustments pursuant to this 19.1 should give a Participant
the entitlement to the same proportion of the equity capital as he was
previously entitled.

 

19.2                                                                                                                                   The issue of equity securities
as consideration for an acquisition, the issue of securities for cash and the
issue of equity securities or a vendor consideration placing will not be
regarded as a circumstance requiring adjustment in terms of the provisions of
this 19.

 

22

 

19.3                                                                                                                                   When any adjustments in terms of
the provisions of this 19 are finalised, the Auditors or other independent
advisors shall confirm to the JSE in writing that these are calculated in
accordance with the provisions of this Plan.

 

19.4                                                                                                                                   Any adjustments made in terms of
the provisions of this 19 will be reported on the Company’s annual financial
statements in the year during which the adjustment is made.

 

19.5                                                                                                                                   If -

 

19.5.1                                                                                                                                                                         the Company undergoes a Change
of Control after an Allocation Date other than a Change of Control initiated by
the Board itself; or

 

19.5.2                                                                                                                                                                         the person/s (or those persons
acting in concert) who has/have Control of the company as at an Allocation Date
take/s any decision, pass/es any resolution and/or take/s any action the effect
of which is to delist the Company from the JSE and the Company becomes aware of
such decision, resolution and/or action,

 

the Company shall notify every
Participant in writing in which event each Participant shall, within a period
of one month (or such longer period as the Board may permit) of such
notification, take delivery of all of his Performance Shares (ie all of his
Provisional Shares shall be deemed to become Performance Shares as if the Performance
Criteria in respect thereof had been satisfied in full). In the case of any
Conditional Contract with a Participant whose compensation in terms of such
Conditional Contract is or shall become subject to taxation in the United
States of America, any longer period referred to in this 19.5.2 shall not
extend beyond the December 20 of the calendar year in which the Company
shall give such notification.

 

19.6                                                                                                                                   If, in the event of a Group
Member (other than the Company), ceasing to be a subsidiary of the Company, the
Board may take such action as it considers appropriate to protect the interests
of Participants of that Group Member (including converting Conditional Awards
into grants in respect of shares in one or more other companies or permitting a
portion of the Conditional Awards to vest early, taking into consideration the
period that has elapsed since the Allocation Date), and calculate the number of
Conditional Awards to vest in each Participant accordingly.

 

23

 

19.7                                                                                                                                   If the Company is placed into
liquidation for purposes other than reorganisation, the Conditional Awards
shall ipso facto lapse as from
the Liquidation Date and any Conditional Awards in respect of which the
underlying Shares has not yet been transferred to Participants shall ipso facto lapse on the Liquidation Date.

 

20                                                                                             SALE AND ASSIGNMENT

 

Save as otherwise expressly
provided in this Deed, without the prior written consent of the Trustees, no
Participant shall be entitled to cede or delegate any of his rights or
obligations in terms of this Plan to any third party and/or to encumber any of
his rights in terms of this Plan. 
Without derogating from the generality of the aforegoing, no Participant
may, without the prior written consent of the Trustees, sell, alienate or
otherwise dispose of Provisional Shares and/or Conditional Contracts to any
third party.

 

21                                                                                             AMENDMENT OF THE PLAN

 

21.1                                                                                                                                   It shall be competent for the
Board and the Trustees, with the approval of the JSE, to amend any of the provisions
of this Plan; provided that no such amendment affecting any of the matters set
out below shall be competent unless it is sanctioned by an ordinary resolution
of 75% (seventy five percent) of the shareholders of the Company in general
meeting (excluding all the votes attaching to all Shares owned and controlled
by persons who are existing Participants in the Plan and which have been
acquired in terms of the Plan) –

 

21.1.1                                                                                                                                                                         the eligibility of Participants
under this Plan;

 

21.1.2                                                                                                                                                                         the calculation of the total
number of Shares which may be acquired for the purpose of or pursuant to this
Plan;

 

21.1.3                                                                                                                                                                         the maximum number of Shares
which may be acquired by any Participant in terms of this Plan; and

 

21.1.4                                                                                                                                                                         the voting, dividend, transfer
and other rights (including those arising in the event of the curatorship of
the Company, rights and capitalization issues, consolidations, sub-divisions,
reorganizations and takeovers as envisaged in 19) attaching to the Shares;

 

24

 

21.1.5                                                                                                                                                                         the procedure to be adopted on
termination of employment of a Participant under the Plan;

 

21.1.6                                                                                                                                                                         the basis upon which Conditional
Awards are made;

 

21.1.7                                                                                                                                                                         the amount, if any, payable in
respect of the award and acceptance of a Conditional Award or in respect of the
transfer of Shares in terms of this Plan; and

 

21.1.8                                                                                                                                                                         the provisions of this 21.

 

21.2                                                                                                                                   Without derogating from 21.1 and
provided that no amendment affecting any of the matters referred to in 21.1.1
is affected in which event the sanction of the Company in general meeting will
be required, it shall be competent for the Board and the Trustees to -

 

21.2.1                                                                                                                                                                         establish further plans based on
the Plan; or

 

21.2.2                                                                                                                                                                         to implement this Plan,

 

with such modifications as may
be necessary or desirable to take account of the securities laws, exchange
control laws and tax laws of foreign jurisdictions in which Participants are
employed by Group Members.  For the
purposes of this 21.2 the term “foreign jurisdictions” shall mean jurisdictions
other than the RSA.

 

22                                                                                             ADMINISTRATION

 

22.1                                                                                                                                   Subject to the provisions of
this Plan and to the approval of the Board, the Trustees shall be entitled to
make and establish such rules and regulations, and to amend the same from
time to time, as they may deem necessary or expedient for the proper
implementation and administration of this Plan.

 

22.2                                                                                                                                   The Company shall -

 

22.2.1                                                                                                                                                                         bear all costs of and incidental
to the implementation and administration of this Plan and shall, as and when
necessary, provide all requisite funds and facilities for that purpose;

 

25

 

22.2.2                                                                                                                                                                         provide all secretarial,
accounting, administrative, legal and financial advice and services, office
accommodation, stationery and so forth for the purposes of this Plan;

 

22.2.3                                                                                                                                                                         be entitled to recover from the
Trust all the abovementioned costs and, in addition, shall be entitled to be
paid a fee to be determined by the Board, after consultation with the Trustees,
for performing the duties and providing the services set out in 22.2.2.

 

23                                                                                             ANNUAL ACCOUNTS

 

The Board shall ensure that a
summary appears in the annual financial statements of the Company of the number
of Provisional Shares awarded, any changes in such numbers during the financial
year under review, the number of Shares held by the Trust which may be acquired
by Eligible Employees and the number of Shares under the control of the Board
for allotment and issue in terms of this Plan.

 

24                                                                                             STRATE

 

Notwithstanding any provision in
this Deed, if share certificates of the Company are dematerialised, the
Trustees shall not be obliged to deliver the Participant share certificates in
respect of the Shares acquired by him in terms of this Deed but shall instead
be obliged to procure such electronic transactions and/or entries and to
deliver to the Participant such documents (if any) as may be required to
reflect his rights in and to such Shares pursuant to the provisions of the Act,
the Security Services Act 36 of 2004,, the Rules of the Central Securities
Depository (being Share Transactions Totally Electronic Limited) and the
requirements of the JSE.

 

25                                                                                             DISPUTES

 

25.1                                                                                                                                   Save as otherwise expressly
provided in this Deed (including 25.13), should any dispute of whatever nature
arise in regard to the interpretation or effect, or the validity,
enforceability or rectification (whether in whole or in part) of, or the
respective rights or obligations of the parties under, or a breach or
termination or cancellation of, this Deed, then the dispute shall, unless the
parties thereto otherwise agree in writing, be referred for determination to an
expert (“Expert”) in accordance
with the remaining provisions of this 25.

 

26

 

25.2                                            The Expert shall -

 

25.2.1                                                      if the matter in issue is
primarily an accounting matter, be an independent practising chartered
accountant of not less than fifteen years standing;

 

25.2.2                                                      if the matter in issue is
primarily a legal matter, be a practising senior counsel of not less than five
years’ standing as such and practising at the Johannesburg bar;

 

25.2.3                                                      if the matter in issue is any
other matter, be an independent accountant or be a senior counsel as envisaged
in 25.2.1 or 25.2.2 or be any other independent person,

 

agreed upon by the parties to
the dispute or, failing agreement within fourteen days after the dispute
arises, appointed by the President for the time being of the South African
Institute of Chartered Accountants or his successor-in-title at the request of
any party to the dispute.

 

25.3                                          The Expert selected as aforesaid
shall in all respects act as an expert and not as an arbitrator.

 

25.4                                          The Expert shall be vested with
entire discretion as to the procedure to be followed in arriving at his
decision.  It shall not be necessary for
the Expert to observe or carry out either the strict rules of evidence or any
other legal formalities or procedures, but the Expert shall be bound to follow
principles of law in deciding matters submitted to him.

 

25.5                                          The Expert shall have the power,
inter alia, to -

 

25.5.1                                                      investigate or cause to be
investigated any matter, fact or thing which he considers necessary or
desirable in connection with the dispute and, for that purpose, shall have the
widest powers of investigating all the books, records, documents and other
things in the possession of any party to the dispute or the Company, the right
to take copies and/or make extracts therefrom and the right to have them
produced and/or delivered at any place reasonably required by him for the
aforesaid purposes;

 

27

 

25.5.2                                                      interview and question under
oath any of the parties to the dispute or other parties, including the right to
cross examine such parties;

 

25.5.3                                                      summon witnesses;

 

25.5.4                                                      record evidence;

 

25.5.5                                                      make an interim award;

 

25.5.6                                                      make an award regarding legal
fees/costs and the Expert’s remuneration. 
If he fails or declines to do so, then each of the parties to the
dispute shall bear and pay its own costs. 
Until such time as the Expert’s decision is given, the parties to the
dispute shall bear and pay such costs in equal Shares;

 

25.5.7                                                      call for the assistance of any
other person who he may deem necessary to assist him in arriving at his decision;

 

25.5.8                                                      exercise any additional powers
which may be exercised by an arbitrator in terms of the Arbitration Act as
amended.

 

25.6                                          Any hearing by the Expert shall
be held in Johannesburg unless the Expert determines that it is more convenient
or equitable that the hearing or any part thereof (including, but without
limitation, the taking of evidence) be held elsewhere, in which event the
hearing (or the relevant part thereof) shall be held in the place so determined
by the Expert.

 

25.7                                          The parties shall use their best
endeavours to procure that the decision of the Expert shall be given within
thirty days or so soon thereafter as is possible after it has been demanded.

 

25.8                                          The decision of the Expert shall
be final and binding on all parties affected thereby, shall be carried into
effect and may be made an order of any competent court at the instance of any
party to the dispute.

 

25.9                                          This clause constitutes an
irrevocable consent by the Company, the Trustees and all Participants and
Eligible Employees to any proceedings in terms thereof and no such party shall
be entitled to withdraw therefrom or to claim at any such proceedings that it
is not bound by this clause.

 

28

 

25.10                                       This clause shall not preclude any
party from obtaining relief by way of motion proceedings on an urgent basis or
from instituting any interdict, injunction or any similar proceedings in any
court in the RSA (and not in any other jurisdiction) pending the decision of
the Expert.

 

25.11                                       Subject to 25.5.8, the
provisions of the Arbitration Act as amended shall not apply in respect of this
clause or any other provision of this Deed.

 

25.12                                       This clause is severable from
the rest of this Deed and shall remain in effect even if this Deed is terminated
for any reason.

 

25.13                                       Notwithstanding anything to the
contrary contained herein, any dispute as to whether or not a Participant has
met the Performance Criteria specified in a Conditional Contract determined by
the Board in their sole and absolute discretion shall not be referred to an
expert in terms of this 25 and the decision of the Board shall be final and
binding.

 

26                             DEALINGS IN
SECURITIES

 

The
Company will ensure compliance with paragraphs 3.63 – 3.74 (director dealings)
of the Listings Requirements of the JSE in terms of share dealings by the
Company relating to the Plan.

 

27                             VOTES AT ANNUAL
GENERAL MEETING

 

The votes of shares held by the
Trust will not be taken into account for Listings Requirements of the JSE
resolution approval purposes at general or annual meetings. Such Shares shall
also not be taken into account for purposes of determining categorisations as
detailed in section 9 of the JSE Listings Requirements.

 

28                             PROFITS AND LOSSES AND
TERMINATION OF THE PLAN

 

28.1                                          The Company shall, to the extent
not recovered by the Trust from Group Members in terms of 11.2, bear any losses
sustained by the Trust which are not recovered from Group Members in terms of
11.  Furthermore, the Company shall be entitled
to receive and be paid any profits made, by the Trust in respect of the
purchase, acquisition, sale or disposal of Shares.

 

29

 

28.2                                          The Plan shall terminate if
there are no longer any Conditional Contracts in force and the Board and the
Trustees so resolve.  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, to the extent not
recovered by the Trust from Group Members in terms of 11.2.

 

29                             DOMICILIUM AND NOTICES

 

29.1                                          The parties choose domicilium
citandi et executandi for the purposes of this Plan is as follows -

 

	
  29.1.1

  	
  the Company and the Trustees

  	
  :

  	
   

  	
  The physical address and
  telefax number of the Registered Office of the Company from time to time;

  
	
   

  	
   

  	
   

  	
   

  
	
  29.1.2

  	
  each Participant:

  	
   

  	
  The physical address, telefax
  number and electronic mail address from time to time reflected as being his
  address, telefax number and/or electronic address in the Group’s payroll
  system from time to time.

  

 

Notwithstanding that the parties
may have chosen telefacsimile numbers and/or electronic mail addresses for
their respective domicilia citandi et executandi, each of the parties
acknowledges that to the extent that its domicilium citandi et executandi is to
be used for the purpose of the payment of any sum or the serving of any process
such payment or service shall be made at its physical address.

 

29.2                                          Each of the parties shall be
entitled from time to time, by written notice to the other, to vary its
domicilium to any other physical address and/or its facsimile number and/or (in
the case of a Participant) his electronic mail address; provided in the case of
a Participant such variation is also made to his details on the Group’s payroll
system.

 

29.3                                          Any notice given and any payment
made by any party to the other which -

 

29.3.1                                                      is delivered by hand during the
normal business hours of the addressee at the addressee’s domicilium for the
time being shall be 

 

30

 

rebuttably presumed to have been received by the addressee at the time of
delivery;

 

29.3.2                                                      is posted by prepaid registered
post to the addressee at the addressee’s domicilium for the time being shall be
rebuttably presumed to have been received by the addressee on the tenth day
after the date of posting.

 

29.4                                          Any notice given by any party to
any other party which is transmitted by electronic mail and/or facsimile to the
addressee at the addressee’s electronic address and/or facsimile address (as
the case may be) for the time being shall be presumed, until the contrary is
proved by the addressee, to have been received by the addressee on the date of
successful transmission thereof.

 

29.5                                          For the sake of clarity and the
avoidance of any doubt it is recorded that a Participant shall not be entitled
to give any notice or serve any process on the Company and/or the Trustees by
electronic mail.

 

30                             AMERICAN DEPOSITORY SHARES

 

30.1                                          Notwithstanding any other
provision in this Deed but subject to all Applicable Laws, Eligible Employees
may if the Board deems it to be appropriate be granted the opportunity to
participate in the Plan by way of ADSs (as opposed to Shares), in which
event Eligible Employees may be awarded Conditional Contracts to be given
ADSs (as opposed to Shares).

 

30.2                                          If an Eligible Employee is
granted an opportunity to participate in this Plan as set out in 30.1, all
references in this Deed to “Shares” shall be deemed to apply mutatis mutandis
to ADSs.

 

31                             COMPLIANCE

 

31.1                                          The Company shall comply with
(and procure compliance by all Group Members with) all Applicable Laws.  This Plan shall at all times be operated and
administered subject to all Applicable Laws. 
Without derogating from the generality of the aforegoing, the Company
shall -

 

31

 

31.1.1                                                      adhere to and comply with the
provisions of section 93 of the Act; and

 

31.1.2                                                      appoint the Secretary as
Compliance Officer of the Plan in terms of section 144A of the Act and comply
with the provisions of section 144A of the Act.

 

32QuickLinks
 -- Click here to rapidly navigate through this document

 

 
 

  EXHIBIT 10.5    
    

 
    RESTRICTED SHARES AGREEMENT    
    

        RESTRICTED SHARES AGREEMENT, dated as of [                ], by and between BRT Realty Trust, a
Massachusetts
business trust, having its principal place of business at 60 Cutter Mill Road, Great Neck, New York 11021 (the "Trust") and the person named on the
signature page of this Agreement ("Holder"). 

 
 

  W I T N E S S E T H    
    

        A.    The
Board of Trustees of the Trust adopted, and the shareholders of the Trust approved, the BRT Realty Trust 2009 Incentive Plan, a copy of which is annexed hereto as  Exhibit A and made a part hereof
(the "Plan"); 

        B.    The
Compensation Committee of the Board of Trustees ("Committee") and the Board of Trustees have approved an award of
restricted shares of the Trust's common shares of beneficial interest, $3.00 par value per share (the "Restricted Shares") to the Holder, all in
accordance with the terms and conditions of the Plan and this Agreement; and 

        C.    Unless
otherwise defined herein, the defined terms used in this Agreement shall have the meanings set forth in the Plan 

        NOW
THEREFORE, in consideration of the foregoing and the mutual promises herein contained, the Trust and the Holder hereby agree as follows: 

        1.    Participant.    Holder (a) performs services on behalf of the Trust, either directly or indirectly, or
pursuant to a Shared Services Agreement among the Trust, One Liberty Properties, Inc., Gould Investors L.P. and other entities and is deemed an employee of the Trust for all purposes of
the Plan and this Agreement, or (b) is a member of the Board of Trustees of the Trust. 

        2.    Award.    Holder is hereby awarded the number of Restricted Shares set forth opposite Holder's name on the
signature page hereof. A stock certificate representing the Restricted Shares will be issued in the name of the Holder as soon as practicable following the execution of this Agreement by both of the
parties hereto. 

        3.    Stock Certificate.    The stock certificate representing the Restricted Shares registered in the name of the
Holder shall remain in the custody of the Trust and the Holder shall execute, deliver to and deposit with the Trust a stock power, duly endorsed in blank, so as to permit the retransfer to the Trust
of the Restricted Shares if it shall be forfeited or otherwise does not vest in accordance with the Plan and this Agreement. The certificate representing the Restricted Shares shall bear the following
restrictive legends: 

        "The
transferability of this certificate and the shares represented by this certificate are subject to the terms and conditions of the BRT Realty Trust 2009 Incentive Plan and to the
terms and conditions of an Agreement entered into between the registered owner of the shares and BRT Realty Trust." 

        "The
shares represented by this certificate have been registered under the Securities Act of 1933, as amended, but may not be sold, transferred, assigned, hypothecated or otherwise
disposed of except pursuant to Rule 144 promulgated under the said Act or receipt by the Trust of an opinion of counsel, satisfactory to its counsel, to the effect that the said shares may be
disposed of without restriction." 

        4.    Vesting of Restricted Shares.    

        (a)   Unless
the Restricted Shares are forfeited pursuant to this Agreement or the Plan, the Restriction Period (as defined in the Plan) for the Restricted Shares shall
terminate upon the earlier of (such date, the "Vesting Date,") (i) the death, Disability (as defined in the Plan) or Retirement (as defined in
Section 4(b)) of the Holder, (ii) an Approved Transaction, a Board Change or a Control 

Purchase
(as each term is defined in the Plan), subject to Section 7 below and the Plan, and (iii) [five years from the date hereof]. On the Vesting Date,
(x) the Restriction Period shall terminate, (y) the Restricted Shares shall vest and (z) Retained Distributions (as defined in Section 5), if any, with respect to the
Restricted Shares shall vest and be delivered to Holder. 

        (b)   As
used herein, "Retirement" means (i) a Trustee who has served as a Trustee, but not an officer, of the Trust for
at least three years and resigns his position as a Trustee or does not stand for re-election as a Trustee, such Trustee's Retirement shall be deemed to have occurred on the expiration of
such Trustee's term of office; and (ii) an executive officer who has served for the past five years as an executive officer of Trust and is at least 65 years old, resigns from his
position at the Trust and does not take a position with, or act as a consultant to, a company engaged in activities that are the same or similar to the Trust's activities, such executive officer's
Retirement shall be deemed to have occurred on the date of his resignation; provided, however, that a Retirement shall not be deemed to have occurred if
the Trustee or executive officer, as the case my be, has at any time during his service to the Trust acted contrary to the bests interest of the Trust, as determined by the Committee in its sole
discretion. 

        5.    Rights During Restriction Period.    During the Restriction Period, if the Restricted Shares have not been
forfeited, Holder will have the right to vote the Restricted Shares, to receive and retain dividends and distributions paid or distributed on the Restricted Shares by the Trust in the ordinary course
of its business as a real estate investment trust and to exercise all other rights, powers and privileges of a holder of the Trust's Beneficial Shares (as defined in the Plan) with respect to the
Restricted Shares; except that (a) the Holder will not be entitled to delivery of the stock certificate representing the Restricted Shares until the Vesting Date, (b) the Trust will
retain custody of the stock certificate until the Vesting Date, (c) other than regular and special distributions paid by the Trust in the ordinary course of its business as a real estate
investment trust, the Trust will retain custody of all distributions made or declared with respect to the Restricted Shares (the "Retained
Distributions") until the Vesting Date, and such Retained Distributions shall not vest or bear interest or be segregated in a separate account, (d) the Holder may not
sell, assign, transfer, pledge, encumber or dispose of the Restricted Shares or any Retained Distributions or his or her interest in any of them until the Vesting Date, and (e) a breach of any
restrictions, terms or conditions provided herein or in the Plan will cause a forfeiture of the Restricted Shares and any Retained Distributions with respect thereto. 

        6.    Forfeiture.    In the event that the Holder's relationship with the Trust as a Trustee, officer, employee or
consultant (including the relationship of any employee who is employed by an affiliate of the Trust) shall terminate during the Restriction Period for any reason other than Holder's death, Disability
or Retirement, an Approved Transaction, a Board Change or a Control Purchase, then the Holder's rights to the Restricted Shares and to any Retained Distributions shall be forfeited immediately, the
Trust shall transfer the certificate representing the Restricted Shares to the Trust and the Holder shall not
have any rights whatsoever (including the right to receive any dividends and voting rights) with respect to the Restricted Shares and the Retained Distributions. 

        7.    Approved Transaction, Board Change or Control Purchase.    The Restricted Shares shall not vest upon an Approved
Transaction, a Board Change or a Control Purchase notwithstanding Section 4 above, if the Committee, in its sole discretion, determines effective provision has been made for the taking of such
action which, in the opinion of the Committee, is equitable and appropriate to substitute a new award for the Restricted Shares, or for the assumption of the Restricted Shares or the awarding of a new
award, equivalent, as nearly as is practicable, to the Restricted Shares, taking into account, to the extent applicable, the kind and amount of securities, cash or other assets into or for which the
Restricted Shares may be changed, converted or exchanged in connection with the Approved Transaction, Board Change or Control Purchase. The Vesting Date for the Restricted Shares (or the new or
substituted award) shall occur upon the earlier of (a) the death, Disability or Retirement of the Holder and (b) [five years from the date hereof]. 

        8.    Changes in Employment.    If Holder is deemed an employee of the Trust pursuant to Section 1(a) above,
the Restricted Shares shall not be affected by any change of Holder's employment if Holder continues to be an employee of the Trust, its subsidiaries or affiliates. Nothing contained in 

the
Plan or in this Agreement, and no action of the Trust or the Committee, shall confer or be construed to confer on the Holder any right to continue in the employ of the Trust, its subsidiaries or
affiliates. Nothing contained in the Plan or in this Agreement, and no action of the Trust or Committee, shall interfere in any way with the right of the Trust, its subsidiaries or affiliates to
terminate the employment of the Holder at any time, with or without cause, or terminate the relationship of the Trust (or any affiliate) with the Holder at any time, with or without cause. 

        9.    Pledge, Sale Assignment, Etc.    Holder shall not permit the Restricted Shares to be subject to anticipation,
alienation, sale, assignment, hypothecation, pledge, exchange, transfer, encumbrance or charge and any attempt to anticipate, alienate, sell, assign, hypothecate, pledge, exchange, transfer, encumber
or charge shall be deemed void by the Trust, and the Committee may, at its sole discretion cause the Restricted Shares to be forfeited upon such event. No right or benefit hereunder shall in any
manner be liable for or subject to the debts, contracts, liabilities or torts of the Holder. 

        10.    Beneficiaries.    The Holder shall have the right to designate a beneficiary or beneficiaries of the Restricted
Shares and may change such designation from time to time by filing a written designation of beneficiary with the Committee on a form prescribed by the Committee, provided that no such designation
shall be effective unless filed with the Committee prior to the death of the Holder. 

        11.    Administration.    The Plan shall be administered by the Committee in accordance with the terms and conditions
of the Plan. Any decisions made by the Committee relating to the administration of the
Plan, or to the construction or interpretation of the Plan or this Agreement, shall be final and binding upon the Trust and the Holder. Any dispute relating to the Plan or this Agreement (including
any dispute relating to forfeiture) shall be resolved by the Committee using such procedures as the Committee shall deem appropriate and the decision of the Committee (including the resolution of any
dispute relating to forfeiture) shall be final and unappealable in all respects. 

        12.    Share Registration.    The Holder acknowledges that the Restricted Shares have been registered under the
Securities Act of 1933, as amended, pursuant to a Registration Statement on Form S-8, and that at such time as the Restriction Period has been satisfied or accelerated, the
Restricted Shares may not be sold, assigned, transferred, pledged, exchanged, encumbered or disposed of, except pursuant to the Securities Act of 1933 and the rules and regulations thereunder and the
rules and regulations of any securities exchange or association on which the Restricted Shares may be listed or quoted. The Trust agrees that for so long as any Restricted Shares are registered under
the Securities Exchange Act of 1934, as amended, the Trust will use its reasonable efforts to comply with any legal requirements to maintain a registration statement in effect under the Securities Act
of 1933 with respect to all Restricted Shares that may be issued to holders under the Plan and to file in a timely manner all reports required to be filed by it under the Securities Exchange Act of
1934. 

        13.    Board's Authority.    The adoption of the Plan by the Trust shall not be construed as creating any limitations
on the power of its Board of Trustees to adopt such other incentive arrangements as it may deem desirable, including without limitation the granting of stock options and the awarding of stock and cash
otherwise then under the Plan and such arrangements may be either generally applicable or applicable only in specific cases. 

        14.    Incentive Compensation.    By acceptance of the Restricted Shares and the execution of this Agreement, the
Holder agrees that the Restricted Shares are special incentive compensation that will not be taken into account, in any manner, as salary, compensation or bonus in determining the amount of any
payment under any pension, retirement or other employee benefit plan, program or policy of the Trust or any subsidiary of the Trust. In addition, each beneficiary of a deceased Holder shall be deemed
to have agreed that the Restricted Shares will not effect the amount of any life insurance, if any, provided by the Trust on the life of the Holder which is payable to such beneficiary under any life
insurance plan covering employees of the Trust or any subsidiary of the Trust. 

        15.    No Segregation.    Neither the Trust nor any subsidiary of the Trust shall be required to segregate any cash or
Restricted Shares which may at any time be represented by awards under the Plan and the Plan shall constitute an "unfunded" plan of the Trust. Neither the Trust nor any 

subsidiary
of the Trust shall by any provisions of the Plan be deemed a trustee of any Restricted Shares or any other property, and the liabilities of the Trust and any subsidiary of the Trust to the
Holder pursuant to the Plan shall be those of a debtor pursuant to such contract obligations as are created by or pursuant to the Plan and this Agreement and the rights of the Holder or his/her
beneficiary under
the Plan shall be limited to those of a general creditor of the Trust or the applicable subsidiary of the Trust, as the case may be. 

        IN
WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written. 

BRT
REALTY TRUST 

 

 

					
	 By:
	 	  

 	 	 

 

 

 

					
	Name of Holder

 
	 	Number of Restricted Shares

Awarded to Holder 	 

 

 

 

			
	

  Signature of Holder	 	 

 

 

 

			
	

  Holder's Address	 	 

 

 

 

			
	

  Holder's Social Security	 	 

 

 

QuickLinks

EXHIBIT 10.5

RESTRICTED SHARES AGREEMENT

W I T N E S S E T H

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00182-of-00352.parquet"}]]