Document:

exv10w4

 

Exhibit 10.4

[SIMS GROUP LIMITED LETTERHEAD]

[Insert
date]

[insert name]

[insert address]

Dear [insert name],

F08 Long Term Incentive Plan

Sims Group Limited (ACN 114 838 630) (Sims Group) is pleased to invite you to participate in the
new Sims Group Long Term Incentive Plan (LTI Plan) on the terms and conditions set out in this
letter (the Grant).

The Company is giving you the opportunity to share in the growth of Sims Group, and to provide you
with an incentive to remain with Sims Group and to reward you for achievement of the Group’s goals.

	1.	 	F08 LTI Grant

You have been granted the right (referred to as Performance Rights or Rights) to be issued or
provided with fully paid ordinary shares in Sims Group (Shares) which will be automatically vested
upon specific performance hurdles being achieved, subject to the terms of this Grant.
Alternatively, the Performance Rights may be satisfied by a payment of an equivalent cash value, at
the discretion of the Board, even if you have elected to receive Rights instead of cash. For
participants located in the United States, the term Performance Rights when used herein, will be
read as Restricted Stock Units.

Your F08 LTI Reward is based on x% of your total fixed remuneration, effective 1 July, 2007.

Transition Arrangements

Your participation in the Company’s previous LTI Plan commenced in F03 and currently you
potentially enjoy receiving rewards annually if hurdles are met. So that you are not disadvantaged
in transitioning to the new LTI Plan, you will receive a special one-off grant for F08. This Grant
will be provided over ___Tranches and represents ___times your new LTI %.

	 	 	 	 	 	 	 	 	 
	Tranche	 	Award Type	 	Performance Hurdle	 	Performance Period	 	Vesting
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 

In the case of Tranches ___and _, you need to elect to receive your LTI Reward in either Shares or a
fixed cash amount upon vesting. Please refer to the Application Form at the end of this document.

1

 

As your F08 LTI % has increased from x% in F03 to x% in F08, a minimum of x % of your LTI % for
Tranches ___and ___must be taken as Rights.

Following a valuation of the Share Based Payments and in accordance with the Australian Accounting
Standards (AASB 2) the Rights for the       tranches have been valued as follows:

	 	 	 
	Tranche	 	Value
	Tranche 1:      
	 	 
	Tranche 2:      
	 	 
	Tranche 3:      
	 	 
	Tranche 3:      
	 	 

The value of a Right subject to the       hurdle and the       Hurdles vary given the probability of
achieving the Hurdle.

Note: Please complete the Application Form at the end of this document and return via email PDF or
fax number                      to                      by                      in order to make your election between
cash and Rights. If you do not make an election by completing and returning the
Application Form, you will be deemed to have elected to take the maximum amount of cash instead of
Rights to Sims Shares upon vesting.

These Performance Rights have been granted at no cost to you. You do not have to take any action
to accept the Grant. If you do not wish to participate in the LTI Plan and receive the Performance
Rights, then you may refuse them by notifying                      within                      of the date of this
letter.

The number of Performance Rights may be adjusted in accordance with the Plan Rules.

	2.	 	Vesting Conditions

	 	 	 	 	 
	For your LTI Reward to vest, Sims Group needs to                     
its performance hurdles over the
specified Performance Period.
	 
	 	 	 	 
	 
	 
	 	 	 	 
	
 

	 	 	.	 
	Your LTI Reward is subject to the continued employment vesting condition described below.

	(a)	 	Performance periods

Tranche 1                     

The Performance Period for Tranche 1                      is the       year period commencing                      and
ending                     , using the                                 as the                     
for calculating      .
No retesting applies to Tranche 1                     .

Tranche 2                     

The Performance Period for Tranche 2                      is the       year period commencing                      and
ending                     , using the                           
as the                      for calculating      . No
retesting applies to Tranche 2                     .

Tranche 3                     

The initial Performance Period for Tranche 3       starts on            (Start Date).

2

 

The First Performance Period is the period from the Start Date to the            of the
Start Date (the First Test Date i.e                     ). The Second Performance Period is the period from
the Start Date to the            of the Start Date (the Second Test Date i.e.
                    ). The Third Performance Period is the period from the Start Date to the           
of the Start Date (the Third Test Date i.e.                     ).

Your Tranche 3                      and your Tranche 3                           will be tested for satisfaction of their
respective vesting conditions at the First Test Date based on the First Performance Period.

If either your Tranche 3                      or Tranche 3                      did not fully vest at the First Test
Date, the relevant rights will be re-tested at the Second Test Date based on the Second Performance
Period. If this re-testing results in a higher percentage of either your Tranche 3                      or
Tranche 3                      vesting, then those additional rights will vest.

If either your Tranche 3                      or Tranche 3                      still did not fully vest at the
Second Test Date, the relevant rights will be re-tested again at the Third Test Date based on the
Third Performance Period. If this re-testing results in a higher percentage of either your Tranche
3                      or Tranche 3                      vesting, then those additional rights will vest.

No downwards adjustment will be made as a result of re-testing to the percentage of rights which
vested in a prior Performance Period.

Note that the vesting of any or all of your Tranche 3                      is not dependent on the vesting of
any or all of your Tranche 3                     , and vice-versa.

Cash and All Performance Rights

Any Cash Rights and Performance Rights which have not vested at the end of the final Performance
Period will immediately lapse.

	(b)	 	      performance hurdle

In order for any or all of your Tranche 3                     
to vest under the       performance hurdle, Sims
Group’s       for the relevant Performance Period must be                      against the
                     comparator companies listed in the Schedule to this letter (Comparators) for the same
period. The Comparator group may be adjusted from time to time by the Board in its discretion (for
example, if one of those companies is delisted in the future or its       is no longer
ascertainable).

Based on Sims Group’s relative       performance over the relevant Performance Period, your Tranche 3
                     will vest in accordance with following table:

	 	 	 
	      of Sims Group relative to	 	Proportion of Tranche 3
	                Comparators	 	                     vesting
	 
	 	 
	 
	 	 
	 
	 	 
	 
	 	 

3

 

      is calculated in each case on the following basis:

	 	•	 	dividends are re-invested at the ex-dividend date
	 
	 	•	 	share prices are calculated as a volume weighted average sale price of shares on ASX for
the                      preceding the Start Date and the relevant Test Date
	 
	 	•	 	tax and any franking credits (or similar) will be ignored.

	(c)	 	      performance hurdle

Tranche 1 and Tranche 2 Cash/Rights — compound                     

                     in respect of your Tranche 1 and Tranche 2                      is determined by reference to
                      in                      of Sims Group over the relevant Performance Period, being the
                                         of the Performance Period compared with the                     .
 This is calculated slightly differently from the       hurdle that applies to
Tranche 3                      (see below).

The Board has discretion to make reasonable adjustments to the                      figure in appropriate
circumstances, for example where it is calculated over a                       period or where there is a
significant or abnormal event including one-off costs associated with a restructure which, in the
opinion of the Board, distorts                      unduly.

Based on the Sims Group                      over the relevant Performance Period, your
Tranche 1 or Tranche 2                      (calculated separately) will vest in accordance with the following
table:

	 	 	 
		 	Proportion of Cash/Rights
	                                        	 	                     vesting
	 
	 	 
	 
	 	 
	 
	 	 
	 
	 	 

Tranche
3                      —      

                     in respect of your Tranche 3                      is determined by reference to                      of Sims Group over the relevant Performance Period measured against a specified
       target.

Based on the Sims Group       in the relevant Performance Period, your Tranche 3
                     will vest in accordance with the following table:

	 	 	 
		 	Proportion of Tranche 3
	                                        	 	                     vesting
	 
	 	 
	 
	 	 
	 
	 	 
	 
	 	 

4

 

Further detail regarding this       performance hurdle applying to Tranche 3                     , and an
example of how this performance hurdle is calculated, is set out in your Participant Guide.

Calculating      

                     during a Performance Period is defined as                      divided by the                                         . The Board has
discretion to make reasonable adjustments to the                      figure in appropriate circumstances, for
example where it is calculated over a                      period or where there is a significant or abnormal
event including one-off costs associated with a restructure which, in the opinion of the Board,
distorts                           unduly.

	(d)	 	Continued employment condition

In addition to Sims Group meeting the applicable       or            performance conditions specified
above, you must also continue to be an employee or director of Sims Group or its related bodies
corporate (Employee) at the Vesting Date for your Cash/Performance Rights to vest.

Unvested Cash/Performance Rights lapse upon you ceasing to be an Employee, subject to there being a
Qualifying Cessation during the Performance Period (for Tranche 1 Cash/Rights and Tranche 2
Cash/Rights) or First Performance Period (for Tranche 3 Rights). A Qualifying Cessation is ceasing
to be an Employee by reason of:

	 	(i)	 	death,
	 
	 	(ii)	 	total or permanent disablement which prevents you from carrying
out your previous employment functions,
	 
	 	(iii)	 	retirement,
	 
	 	(iv)	 	redundancy, or
	 
	 	(v)	 	other circumstances determined at the discretion of the Board.

Where there is a Qualifying Cessation during the relevant Performance Period (for Tranche 1
Cash/Rights and Tranche 2 Cash/Rights) or First Performance Period (for Tranche 3 Rights), your
unvested Cash/Performance Rights will not immediately lapse, but instead will be retained and
tested for satisfaction of vesting conditions at the end of that Performance Period. However,
subject to the Board’s discretion to allow otherwise, there will be no re-testing of Tranche 3
Rights at the Second Test Date or Third Test Date, so any Performance Rights which have not vested
at the end of the relevant Performance Period specified above will lapse.

All Cash/Performance Rights will lapse and be immediately forfeited in cases of fraud, gross
dishonesty or termination of your employment for cause.

	(e)	 	Vesting Date and automatic exercise date

Vested Cash/Performance Rights will vest and be automatically exercised (Vesting Date), with no
further action required on your part, on the day that                      after the relevant Performance Period. For example, if Performance Rights vest on
the basis of       and/or       performance hurdles for the period ending 30 June 2011 then they
automatically vest and are exercised when
                    .

In accordance with the terms of the LTI Plan, the obligations of Sims Group upon the vesting of the
Performance Rights may be fulfilled by a trustee appointed for this purpose.

5

 

You have no beneficial or other proprietary right in the Shares which are the subject of the
Performance Rights (including any right to dividends or voting rights in respect of the Shares)
until the Performance Rights are both vested and exercised.

Should the Board exercise its discretion to satisfy your vested Performance Rights by way of cash
payment, the amount of cash payable will be the market price of the Shares (as defined in the LTI
Plan Rules), less any tax and / or social security payment the Sims Group is required to withhold.

	3.	 	Share Trading Policy

Please note that the sale of any Shares acquired on vesting of Performance Rights can only occur
within the trading windows and subject to the requirements of Sims Group’s Share Trading Policy at
the relevant time.

	4.	 	Taxation advice and other independent advice

You should note that the taxation laws covering Performance Rights awards are complex and change
from time to time. You should seek professional advice on the tax implications for you and your
particular circumstances. Further, any advice given on behalf of Sims Group or a Trustee of the
LTI Plan is general advice only and does not take into account your particular financial position
or needs. You should consider obtaining your own financial product advice from an independent
person who is licensed by the Australian Securities and Investments Commission to give such advice.

A copy of Sims Group’s latest Annual Report, its financial statements, and other stock exchange
announcements can be accessed via Sims Group’s website at: www.sims-group.com

	5.	 	General terms and further queries

This letter is accompanied by a Participant Guide, which includes a summary of the LTI Plan Rules
(Rules). A copy of the full terms of the Rules is available to you, free of charge, by contacting
                    . You should read this letter which, together with the Rules, sets out all the terms of
the issue of the Performance Rights. Capitalised terms used in this letter have, unless the context
otherwise permits, the same meaning as in the Rules. If there is any inconsistency between this
letter and the Rules then the terms of this letter prevail. You should retain your copy of this
documentation in a safe place for future reference.

You can often obtain a more up to date share market price of Sims Group by going to the ASX
website: www.asx.com.au and looking up the code SGM.

Participation in the LTI Plan has been extended to                    .
The LTI Reward and grant of Performance Rights gives you the chance to become a prospective owner
of equity in Sims Group and to share personally in the Group’s growth and success.

If you have any questions in relation to this document, please contact                      on
                          or email                     @au.sims-group.com

 

Yours sincerely,
 
 

Jeremy

Sutcliffe
 
 

Group

Chief Executive

Sims Group Limited

6

 

Schedule: Comparator group companies

7

 

APPLICATION FORM

	 	 	 	 	 	 	 
	I,

	 	 	 	of (address)	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 
	 	 	 

hereby apply for the following percentages of the F08 Reward for

	 	 	 
	Tranche 1:
	 	 
	 
	 	 
	Option 1 : 100% as a cash payment

	 	o
	 
	 	 
	Option 2: 50% as a cash payment and 50% as a Performance Right allocation

	 	o
	 
	 	 
	Option 3: 100% as a Performance Right allocation

	 	o
	 
	 	 
	and
	 	 
	 
	 	 
	Tranche 2:
	 	 
	o
	 	 
	Option 1 : 100% as a cash payment

	 	o
	 
	 	 
	Option 2: 50% as a cash payment and 50% as a Performance Right allocation

	 	o
	 
	 	 
	Option 3: 100% as a Performance Right allocation

	 	o

Please tick one box for each Tranche. If you do not tick a box, or fail to return this Application
Form then, subject to the following Note, you will be deemed to have elected to apply for cash
payments. Note: You may be obliged to take a certain percentage of the Reward as Rights ...if so,
then the application above only refers to the balance thereof.

By signing this Application Form, I hereby acknowledge that I have read and understood the terms of
the Invitation made to me and the Plan Rules and agree to be bound by them.

	 	 	 
	 
	 	 
	 

	 	 
	Signed by the Employee

	 	          Full Name

	 	 	 
	 

	 	 
	 
Date
	 	 

Please complete the Application Form at the end of this document and return via PDF
                    @au.sims-group.com or fax number                           to                           by
                                         .

8exv10w5

 

Exhibit 10.5

	 	 	 
	PRIVATE AND CONFIDENTIAL
	 	 
	 
	 	 
	5 September 2005
	 	 
	 

	 	
	 

	 	Level 6    Sims Group House
	 

	 	41 McLaren Street North Sydney NSW 2060 Australia
	Mr Jeremy Sutcliffe

	 	GPO Box 4155 Sydney NSW 2001
	26 Prince Albert Street

	 	Phone 612 9956 9100    Facsimile 612 9954 9680
	Mosman NSW 2088

	 	www.sims-group com
	 
	 	 
	 

	 	Sims Group Limited ABN 37 008 634 526

Dear Jeremy,

RE: OFFER OF EMPLOYMENT WITH SIMS CO LIMITED

Further to our recent discussions, I am pleased to offer you, on behalf of Sims Co Limited,
employment with Sims Co Limited ACN 114838630 (‘Company’) on the following terms and conditions in
relation to your expanded role as Group Chief Executive, Sims Group. This offer is subject to the
completion of the Scheme of Arrangement contemplated by the Company and Sims Group Limited to
facilitate the merger of the recycling assets of Hugo Neu Corporation
with the Company (‘Scheme’).
The Retention Incentive component of your new terms will be subject to shareholder approval which
will be sought as part of the series of resolutions to be put to shareholders at the same time as
they are asked to approve the Scheme.

	1.	 	POSITION

Your current role as Group Chief Executive will continue to be based at the North Sydney Sims
Group Head Office or any subsequent head office location within the Sydney metropolitan area or any
other location mutually agreed on.

	2.	 	COMMENCEMENT AND TERM

Except for clause 4 and Schedule 1 (which provide for the Retention Incentive), the terms and
conditions set out in this letter will become effective immediately following the date of Closing
under the Contribution Agreement (‘Contribution Agreement’) dated 24 June 2005 between (among
others) the Company and Hugo Neu Corporation (‘Start Date’). The anticipated Start Date is 1
October 2005. Clause 4 and Schedule 1 (providing for the Retention Incentive) will become effective
on the earlier of the Start Date and the day 28 days after shareholders approve the grant to you of
the Retention Incentive (‘Grant Date’).

This Agreement (including clause 4 and Schedule 1) shall be void and shall be deemed never to
have been of any force or effect, if Closing under the Contribution Agreement does not occur and
the Contribution Agreement is terminated. In this event neither party will be entitled to any
compensation or payment of any nature whatsoever.

METAL RECYCLING | MANUFACTURING | ALUMINIUM | ENERGY | INTERNATIONAL | STEEL | PLASTICS | INDUSTRIAL | RECYCLING SOLUTIONS

1

 

This Agreement is for a term of five (5) years commencing on the Start Date. This
Agreement will incorporate the terms of the Employment Agreement between you and Simsmetal Limited
(ACN 008 634 526) dated 28 February 2002 (‘Employment Agreement’), and references in that document
to your employer will be understood to be references to Sims Co Limited. However, the terms
incorporated from the Employment Agreement will also expire upon
expiry of this Agreement.

On the commencement of your employment with the Company under this Agreement, the Employment
Agreement and your employment with Sims Group Limited will terminate
by mutual consent. Sims Co
Limited will recognise your service with Sims Group Limited for the purpose of calculating any
leave and superannuation entitlements.

	3.	 	REMUNERATION

	 	(i)	 	Fixed Remuneration Package (“Package”)
	 
	 	 	 	You will be entitled to a total Package (referred to in the Employment Agreement as Base
Remuneration) of $1,350,000 per annum commencing from the Start Date
but backdated to 1 July 2005. Your Package includes the total cost to the Company of all Package
components including salary, benefits, and the cost of fringe benefits tax payable by the
Company on benefits provided.
	 
	 	 	 	In years 2006 and 2007, your Package will be subject to increases consistent with
the Group’s approved average salary increase budget for Australian employees. Your first
review and any resultant increase will be effective 1 July 2006. Your Package will be
increased at a level exceeding the Group average increase only if there is a significant
change in circumstances.
	 
	 	(ii)	 	Annual Executive Bonus
	 
	 	 	 	You will continue to be eligible for inclusion in the executive annual bonus program
(STI) under the Group category with a maximum bonus potential of 70% of your Package.
Payment of any bonus is based on the achievement of personal priorities (20%) and the
profitability (ROCCE) of the Company (50%).
	 
	 	(iii)	 	Long Term Incentive
	 
	 	 	 	You will continue to be eligible for inclusion in the Sims Group’s Long Term
Incentive Program and your maximum LTI potential is equivalent to 50% of Package. The
Company is modifying the program commencing 1 July 2005 to allow participants to also
elect to take shares in lieu of cash. With the increase in your potential LTI reward, it
is a condition that you elect to take at least 35% of your total potential LTI reward in
shares. It should be noted that the cash component of the LTI scheme will expire in June
2008. Thereafter, it is intended the LTI scheme become 100% share based.

	4.	 	RETENTION INCENTIVE
	 
	 	 	Subject to shareholder approval, you will be entitled to participate in a Retention
Incentive on the terms and conditions set out in Schedule 1 (‘Retention Incentive’) with the
intent that the maximum benefit provided is equivalent to $2,000,000 (calculated at the Grant
Date) over the Retention Incentive term. The Incentive will be by way of a grant of
performance rights (‘Rights’) to Shares. A Right is a contractual right to acquire a pre-set number of
Shares, provided specific performance hurdles are met.
	 
	 	 	In this clause, “Shares” means shares in Sims Group Limited until such time as Sims Co
Limited is admitted to the Official List of ASX, and from that time
it shall mean shares in Sims
Co Limited.

2

 

	5.	 	TAXATION AND VISA

	 	(i)	 	It is the Company’s view, based on advice, that if you spend
approximately 25% of your time in the United States, that you will have no liability to
US federal or state income or other taxes. The Company will bear the cost of any tax
advice in this regard, from time to time, and will also bear the costs associated with
the filing of any US income tax returns. In the event that any tax liability does arise
which would increase your tax burden above Australian levels, the Company will reimburse
any losses incurred as a result.
	 
	 	(ii)	 	If required, the Company will arrange for and bear
the cost of obtaining any US immigration visas.

	6.	 	TERMINATION
	 
	 	 	Neither party may terminate your employment during the first 2 years from the Start Date
and thereafter your employment may be terminated by either party by providing 12 months’
notice in writing, provided that the Company may terminate your employment at any time for
Cause. “Cause” means any reason for which the Company may terminate your employment under
clause 15.2 of the Employment Agreement. Clause 15. 1 of the Employment Agreement will not be
incorporated into this Agreement.
	 
	 	 	If your employment is terminated by the Company after the first 2 years following the
Start Date for any reason other than Cause, the Company may provide, in lieu of notice, a
payment equal to the current Package, plus any additional superannuation contribution required
to make your superannuation benefit equivalent to the benefit that you would have received if
you had remained in employment with the Company for the whole of your notice period.
	 
	7.	 	TAKE OVER
	 
	 	 	In the case of a take over of the Company, and if you are still in the employ of the
Company 6 months following the completion of the take over, you will be entitled to a payment
equivalent to 6 months of your current Package (‘Retention Payment’). The Company shall not be
entitled to terminate your employment during the 6 month period without payment of the
Retention Payment. Clause 10.2 of the Employment Agreement is not incorporated into this
Agreement. If a take over occurs, you will also be entitled to a pro rata vesting of Rights
under the Retention Incentive in accordance with clause 1.13 of Schedule 1.
	 
	 	 	In this clause, “take over” means any transaction (whether by scheme, takeover bid under
the Corporations Act or other arrangement) under which a party acquires more than 50% of the
issued share capital of the Company.
	 
	8.	 	CODE OF CONDUCT
	 
	 	 	The Group’s Code of Conduct document defines the Group’s basic principles of business
conduct and outlines minimum standards of behaviour expected from our employees. You are
expected to follow the terms of the Code.

All terms and conditions of employment as stated in the Employment Agreement will be deemed
incorporated into, and form part of, this letter. To the extent that the terms and conditions of
your employment set out in this letter are inconsistent with the terms and conditions in the
Employment Agreement, the provisions of this letter will prevail.

3

 

If you are in agreement with the contents of this letter and accept the terms offered, please
acknowledge your agreement by signing the enclosed duplicate copy of this letter and returning it
to me.

I wish you every success in your expanded role.

Yours sincerely,

/s/ Paul Mazoudier

PAUL MAZOUDIER

Chairman

Sims Group Limited

For and on behalf

Sims Co Limited

4

 

Schedule 1 — Retention Incentive

	1.1	 	In the interests of the Company, shareholders and continuity of business,
participation in a Retention Incentive equivalent at the Grant Date to $2,000,000 in the form of
Performance Rights to acquire Shares will be provided, subject to performance hurdles detailed in
Table 1 (‘Performance Hurdles’). The Retention Incentive, if achieved, will be
delivered via 5 tranches (‘Tranches’) as set out in Table 1.
	 
	1.2	 	The Retention Incentive will commence on the Grant Date.
	 
	1.3	 	The Retention Incentive will be subject to shareholder approval sought in addition to the
shareholders’ overall approval of the Scheme.
	 
	1.4	 	The Retention Incentive will be administered by the Board.
	 
	1.5	 	The number of shares that are the subject of the Rights will be calculated by
dividing $2,000,000 by the weighted average market price at which the shares in Sims Group Limited
were traded on the ASX during the five trading days immediately preceding the Start Date.
	 
	1.6	 	‘Jeremy Sutcliffe’ will be the nominated beneficiary of the Rights.
	 
	1.7	 	You will not pay to acquire the Rights. If the Rights become exercisable and have not
lapsed, you will be able to acquire Shares for nil consideration.
	 
	1.8	 	The Retention Incentive is subject to achieving Performance Hurdles including service and EPS
growth targets in respect of Shares. The Rights will vest if Performance Hurdles are achieved at
the end of the relevant period identified in Table 1 and you are in the employ of the Company on
the date of the relevant vesting. (Except in respect of Tranche A), for Tranches B, C and D if
the Performance Hurdles are not satisfied, each Tranche can be retested at the end of the next or
any subsequent period to determine whether the annual 8% compound growth since the first
anniversary of the Grant Date has been achieved. If a later Performance Hurdle is achieved, the
earlier unvested Tranche or Tranches will then vest. This will provide further retention incentive
to achieve and exceed the Hurdle.
	 
	1.9	 	In the case of your employment being terminated with or without Cause, all unvested Rights
lapse immediately other than accrued and pro rata Rights to the date of termination. If
Performance Hurdles are subsequently met in respect to those Rights, you may exercise those Rights
on vesting.
	 
	1.10	 	Prior to the acquisition of Shares by the exercise of Rights, you will not receive dividends
or have other shareholder benefits including voting rights in respect of such Shares.
	 
	1.11	 	Vested Rights may be exercised during a two year period from the date on which they vest and,
to the extent they are not exercised within that period, they will lapse. However, your disposal
of vested Rights will be subject to the policy “Dealing in Sims Group Limited Securities” and any
other applicable policy. To exercise vested Rights, you must notify the Company in writing of your
intention to exercise those Rights, stating how many Rights you are exercising and from what
Tranche the Rights arise.
	 
	1.12	 	The Retention Incentive provides for the possibility of accelerated vesting of Rights in
the event that the EPS compound growth equals or exceeds 12% as outlined in Table 1.
	 
	1.13	 	If a
take over of the Company occurs and you are in the employ of the Company on the date on which the
take over occurs and you have not given notice of termination, a portion of the Rights will vest on
the date the take over occurs, without the need for any Performance
Hurdle to be met. The Rights
that vest on that date will be the accrued and pro rata portion of the Rights that would vest on
the next vesting. An accrued and pro rata vesting under this clause 1.13 will be subject to any
restriction imposed by an applicable rule of any relevant market of securities or by the
Corporations Act 2001, and the Company will not be obliged to obtain any approval that may be
required to avoid such a restriction.
	 
	1.14	 	“Shares” means shares in Sims Group Limited until such time as Sims Co Limited is admitted to
the Official List of ASX, and from that time it shall mean shares in Sims Co Limited and “take
over” means any transaction (whether by scheme, takeover bid under the Corporations Act or other
arrangement) under which a party acquires more than 50% of the issued share capital of the
Company.

5

 

Table 1 — Retention Incentive Schedule

The table
below assumes a Grant Date of 1 October 2005. The Vesting Date and the Performance Period
will be based on the period from the Grant Date to the month end closest to the anniversary of the
Grant Date.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	Allocation	 	Vesting Date	 	Performance	 	Performance Period
	 	 	of Rights	 	 	 	Hurdles	 	(assumes a Grant Date of 1
	 	 	 	 	 	 	 	 	 	 	October 2005)
	Tranche A 

Year 1

	 	 	20	%	 	30/09/06
	 	-     Nil, unless

employment terminated with

Cause by the Company

	 	-     Period commencing 1
October 2005 and ending 30 September 2006.

	 
	 	 	 	 	 	 	 	 	 	 
	Tranche B 

Year 2

	 	 	20	%	 	30/09/07
	 	-     EPS compound
growth since 1 October 2006
must equal or exceed 8% per
annum

	 	-     Period commencing 1 October 2006 and
ending 30 September 2007 subject to further retesting as per Schedule 1, 1.8.

	 
	 	 	 	 	 	 	 	 	 	 
	Tranche C 

Year 3

	 	 	20	%	 	30/09/08
	 	-     EPS compound
growth since 1 October 2006
must equal or exceed 8% per
annum

	 	-     Period commencing 1 October 2006 and ending
30 September 2008 subject to further retesting.

	 
	 	 	 	 	 	 	 	 	 	 
	Tranche D 

Year 4

	 	 	20	%	 	30/09/09
	 	-     EPS compound

growth since 1 October

2006 must equal or exceed

8% per annum

	 	-     Period commencing 1 October 2006 and ending
30 September 2009 subject to further retesting.

	 
	 	 	 	 	 	 	 	 	 	 
	Tranche E 

Year 5

	 	 	20	%	 	The fifth
anniversary of
the Start Date
	 	-     EPS compound
growth since 1 October 2006
must equal or exceed 8% per
annum

	 	-     Period commencing 1 October 2006 and ending
30 September 2010
-     If EPS compound growth
as at 30 September 2009 equals or exceeds 12% per annum after 3 years,
all Tranche E Shares vest on 30 September 2009.

6

 

I hereby accept the above terms and conditions:

	 	 	 
	/s/ Stacey Bryce
 

Signature of witness

	 	/s/ Jeremy Sutcliffe

 

JEREMY SUTCLIFFE
	 
	 	 
	/s/ Stacey Bryce
 

Name of witness (print)
	 	 

7

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