Anglo Platinum - Employee Share Scheme
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RNS Number:5971P Anglo Platinum Limited 07 March 2008 Anglo Platinum Limited (Incorporated in the Republic of South Africa) Registration number 1946/022452/06 Share code: AMS ISIN: ZAE000013181 ("Anglo Platinum" or "the Company") ANNOUNCEMENT RELATING TO THE PROPOSED ANGLO PLATINUM EMPLOYEE SHARE PARTICIPATION SCHEME 1. Summary Anglo Platinum is pleased to announce that it has reached consensus with its labour representative organisations ("Recognised Unions") on the key terms and structure of the Anglo Platinum broad-based employee share participation scheme ("the Scheme"). Anglo Platinum has established the Anglo Platinum Kotula Trust ("the Trust") for an eight year duration to facilitate the Scheme on behalf of the beneficiaries and will issue approximately 2.5 million shares to the Trust, representing approximately 1.0% of the Company's issued ordinary share capital. The shares issued to the Trust ("Scheme Shares") will be a combination of Anglo Platinum ordinary shares and a new class of unlisted ordinary shares (""A" Ordinary Shares"). The 1.5% scheme originally contemplated by Anglo Platinum did not envisage the issue of a proportion of fully facilitated (i.e. free) shares to the Trust. Following a thorough consultation process with its Recognised Unions, and to reduce the risk of share price volatility to the Scheme thereby ensuring that sustainable value is created for beneficiaries, Anglo Platinum has structured the Scheme to include 40% fully facilitated shares through the issue of ordinary shares to the Trust. The proposed 1% Scheme is equivalent in cost to placing 1.5% of the Company's issued ordinary share capital into a Historically Disadvantaged South African ("HDSA") trust on a 100% "A" Ordinary Share basis. The Trust will receive the full dividend in respect of the Scheme Ordinary Shares and dividends equal to one-sixth of an ordinary share dividend in respect of the "A" Ordinary Shares. These dividends will be paid out annually to the beneficiaries. In addition, beneficiaries will receive capital distributions at the end of years five, six and seven which may potentially be reinvested to provide ongoing benefits beyond the original term of the Trust. 2. Rationale Anglo Platinum has decided to implement the Scheme to incentivise its employees, and recognises that the Scheme will contribute to the alignment of shareholders' and employees' interests in respect of the value growth of the Company. Anglo Platinum is fully supportive of Black Economic Empowerment ("BEE") as a strategic transformation objective and recognises the importance of the participation of its employees in its transformation initiatives. The Scheme will empower Anglo Platinum employees by enabling them to acquire approximately 1% of the issued ordinary share capital of the Company, subject to the provisions of the Trust. One of the anticipated functions of the Trust will be to evaluate appropriate savings and investment vehicles for the beneficiaries. Anglo Platinum has concluded all agreements necessary to implement the Scheme, which implementation is subject to the fulfilment of the conditions precedent in paragraph 4 below. 3. Details relating to the Scheme 3.1 Creation and issue of Scheme Shares Anglo Platinum will increase its authorised share capital through the creation of 1 512 780 "A" Ordinary Shares. The "A" Ordinary Shares will be issued by Anglo Platinum to the Trust in addition to the 1 008 519 ordinary shares issued to the Trust. The expected cost of the Scheme is approximately R1 803 million. 3.2 Voting Although unlisted, the "A" Ordinary Shares will have full voting rights. The issue of unlisted ordinary shares with full voting rights requires, in terms of the JSE Limited's ("JSE") Listings Requirements, a fairness opinion by an independent professional expert, further details of which are provided in paragraph 6 below. The Trust shall be entitled to exercise all voting rights attaching to all shares of which it is the registered owner until the shares vest in the beneficiaries as contemplated in paragraph 3.6. 3.3 Beneficiaries The beneficiaries of the Trust will include all permanent employees of Anglo Platinum's South African operations, including any South African joint venture in which Anglo Platinum or its subsidiaries have a participation share or interest of at least 50% and which is managed by Anglo Platinum or its subsidiaries ("Employer Companies", and collectively, "the Group"), who do not currently participate in any Anglo Platinum share scheme as at the date the Scheme is approved by shareholders ("Approval Date") and persons who may join the Group as an employee between the Approval Date and the sixth anniversary of the Approval Date. More than 90% of beneficiaries will be HDSAs. Beneficiaries will be allocated notional units in the Trust on an annual basis which will be used to determine a beneficiary's personal vested right to participation in the capital and income of the Scheme Shares held by the Trust. The Trust Deed makes detailed provision for the position of a beneficiary in the event of death, disability, retrenchment, retirement, promotions or appointments into employee categories that participate in other employee incentive schemes as well as dismissal or resignation of beneficiaries. 3.4 Dividends It is anticipated that the dividends and other share distributions received by the Trust in respect of the Scheme Shares shall be paid to the beneficiaries annually on or about the last day of November, subject to the condition that the beneficiaries are employees at the time of the distribution. In addition, Anglo Platinum will pay to the Trust an initial dividend equal to the dividend which would have been payable in respect of the "A" Ordinary Shares and the ordinary shares held by the Trust had these shares been in issue on the most recent Anglo Platinum dividend declaration date. 3.5 Repurchase and cancellation of "A" Ordinary Shares Anglo Platinum will repurchase, at par value, and cancel all or some of the "A" Ordinary Shares on each of the fifth, sixth and seventh anniversaries of the Subscription Date ("Vesting Dates") in accordance with the cancellation formula included in the memorandum and articles of association of the Company ("the Articles"). The "A" Ordinary Shares that are not repurchased and cancelled will be converted into ordinary shares and listed on the JSE after each Vesting Date. The board of directors of Anglo Platinum ("the Board") undertake that they will not implement any such repurchase as contemplated above unless it complies in full with the Companies Act (Act 61 of 1973), the JSE Listings Requirements and the Articles of the Company. An announcement will be released on SENS in the event that the specific repurchase takes place, including a statement as to the source of funds to be utilised. 3.6 Vesting of the Scheme Shares in the beneficiaries The Scheme Shares will vest in three equal tranches on the Vesting Dates. On each Vesting Date, the beneficiaries will become entitled to receive their portion of the Scheme Shares that have vested and will correspondingly realise that portion of their notional units that corresponds to the Scheme Shares to be distributed to them by the Trust. 3.7 Administration The Trust will appoint an independent company to administer the affairs of the Trust. Trust expenses, including administration costs, will be borne by the Trust and paid out of the interest accruing to the Trust and, if required, share distributions paid to the Trust on the Scheme Shares. The Company will contribute to expenses on such basis as may be agreed from time to time between the Trustees and the Company. 3.8 Appointment of trustees The Company will appoint the initial trustee. All Recognised Unions will be entitled to appoint one trustee plus one additional trustee for every complete ten thousand employees represented by such Recognised Union. In addition, the trustees so appointed will elect up to four independent trustees, all of whom will be suitably qualified in terms of an agreed skill profile. The chairperson will be elected from the independent trustees and shall have a casting vote. All trustees appointed by the Company and the Recognised Unions, with the exception of independent trustees, may be employees of the Company and may be beneficiaries of the Trust. The majority of trustees will be HDSAs. 4. Conditions precedent and shareholder approval The implementation of the Scheme is subject to the fulfilment of the following conditions precedent: • the passing of the special resolutions to amend the memorandum and Articles of the Company, create the "A" Ordinary Shares and grant authority for a specific repurchase of "A" Ordinary Shares and the ordinary resolution to authorise the specific issue of shares for cash by the requisite majority of ordinary and preference shareholders at the combined general meeting and the ordinary resolutions to adopt the Scheme and grant authority to the directors to give effect to the proposed resolutions by the requisite majority of ordinary shareholders at the combined general meeting; • the registration of the special resolutions by CIPRO; and • the Master of the High Court of South Africa issuing a letter of authority to the initial trustee. 5. Pro forma financial effects The unaudited pro forma financial effects illustrate the impact of the Scheme on the most recently published annual results as at 31 December 2007 and assuming that the Scheme took effect on 1 January 2007. The information has been prepared for illustrative purposes only and may not, because of its nature, give a fair reflection of the financial position, changes in equity, results of operations of cash flows after completion of the Scheme. The directors of Anglo Platinum are responsible for the unaudited pro forma financial information. For the year ended 31 December 2007 Before the After the Movement Scheme Scheme (%) Net asset value per share1 SA cents 11 974 11 974 0.0 Tangible net asset value per share1 SA cents 11 974 11 974 0.0 Basic earnings per share2, 3 SA cents 5 241 5 148 (1.8) Diluted earnings per share2, 4 SA cents 5 203 5 112 (1.8) Headline earnings per share2, 5 SA cents 5 239 5 146 (1.8) Weighted average number of shares in issue6 millions 234.7 234.7 0.0 Weighted average diluted number of shares in issue7 millions 237.0 237.0 0.0 Number of shares in issue8 millions 236.4 236.4 0.0 Notes: 1. Net asset value per share is computed by dividing total equity attributable to ordinary shareholders by the number of shares in issue. Tangible net asset value per share is equal to net asset value per share as the Company does not hold any intangible assets. 2. Earnings are reduced by the IFRS 2 (AC503) - Share Based Payments expense measured at grant date and spread over the vesting period of seven years. 3. Basic earnings per share is computed by dividing net earnings attributable to ordinary shareholders by the weighted average number of shares in issue. 4. The diluted earnings per share is computed by dividing net earnings attributable to ordinary shareholders by the weighted average diluted number of shares in issue. 5. Headline earnings is calculated in terms of Circular 8/2007 on Headline Earnings issued by the South African Institute of Chartered Accountants. Headline earnings per share is computed by dividing headline earnings attributable to ordinary shareholders by the weighted average number of shares in issue. 6. The weighted average number of ordinary shares in issue was 234.7 million for the year ended 31 December 2007. The Trust is consolidated and consequently the issuance of the Scheme Shares will not increase the weighted average number of shares in issue. 7. The weighted average diluted number of ordinary shares in issue was 237.0 million for the year ended 31 December 2007 and even with the issuance of 2.5 million Scheme Shares, the weighted average diluted number of ordinary shares in issue for that period has remained the same as the shares issued have an insignificant dilutive impact for the period. 8. The number of ordinary shares in issue as at 31 December 2007 was 236.4 million. The Trust is consolidated and consequently the issuance of the Scheme Shares will not increase the number of ordinary shares in issue. 6. Opinions and recommendations In terms of the Listings Requirements, an independent professional expert was required to determine if the terms and conditions of the "A" Ordinary Shares are fair to shareholders. Ernst & Young Advisory Services Limited, the independent professional expert appointed by the Board in terms of the JSE Listings Requirements, has considered the terms and conditions of the "A" Ordinary Shares and is of the opinion that such terms and conditions are fair to shareholders. The full opinion of the independent professional expert is contained in the circular which will be posted to ordinary and preference shareholders on or about 7 March 2008. The Board has considered the terms and conditions of the Scheme and the opinion of the independent professional expert and is of the opinion that the Scheme is in the best interests of Anglo Platinum and its shareholders. 7. Salient dates and times 2008 -------------------------------------------------------------------------- Circular posted to shareholders on Friday, 7 March Form of proxy for the combined general meeting to be Thursday, 27 March received by 14:30 on Combined general meeting to be held at 14:30, or as Monday, 31 March soon thereafter as the Annual General Meeting of Anglo Platinum is concluded, on Results of combined general meeting released on Monday, 31 March SENS on Results of combined general meeting published in Tuesday, 1 April the press on Special resolutions lodged with CIPRO on or about Tuesday, 1 April --------------------------------------------------------------------------- Note: These dates and times are subject to amendment. Any material amendment will be released on SENS and published in the press. 8. Documentation A circular containing the full details of the Scheme, including a notice of combined general meeting, will be posted to Anglo Platinum ordinary and preference shareholders on or about 7 March 2008. The circular will also be available on Anglo Platinum's website at www.angloplat.com. Johannesburg 7 March 2008 Merchant bank and transaction sponsor Rand Merchant Bank (a division of FirstRand Bank Limited) Tax advisors KPMG Services (Pty) Ltd Sponsor Merrill Lynch South Africa (Pty) Ltd Employee ownership corporate advisors The ESOP Shop (Pty) Ltd Corporate law advisors Deneys Reitz Inc Reporting accountants Deloitte & Touche (Registered auditors) Independent professional expert Ernst & Young Advisory Services Limited This information is provided by RNS The company news service from the London Stock Exchange END MSCKDLBBVXBLBBV