Offer Booklet. October 2016 (Africa)

Transcription

1 Offer Booklet October 2016 (Africa)

2 It s our future to share all together AllShare Plan Helping you understand your 2016 AllShare Plan Offer WHAT YOU NEED TO KNOW AND DO Understand how the AllShare Plan benefits you p 3 Understand how the AllShare Plan works p 3 Understand what happens if you leave South32 p 4 Understand the effect of accepting this Offer p 5 Get answers to some common questions p 5 Glossary of Terms p 8 DETAILS OF YOUR OFFER South32 Limited is pleased to invite you to participate in a grant of Rights (Offer) under the AllShare Plan on the terms outlined in this booklet, dated October 2016, and the Equity Incentive Plan Rules. A copy of the Rules is available either through the Plan Manager Employee Online website ( or from your HR Business Partner. By accepting this Offer you are agreeing to the terms (see Section 4 of this document). Please therefore read this booklet carefully. How do I participate? This Offer is being made to you in October If you are eligible for the AllShare Plan, you will receive a grant of South32 Rights without any further action required on your part. However, should you not wish to receive South32 Rights under the AllShare Plan, you can opt-out through Employee Online ( or by completing and returning the opt-out form (available from your HR Business Partner) by 5.00pm, Australian Western Standard Time on 4 November Your opt-out form must be received by the Company by this time to be effective. The terms that apply to the 2016 AllShare Offer are outlined in this booklet and the Equity Incentive Plan Rules available through the Plan Manager Employee Online website ( or from your HR Business Partner. Different terms and conditions may apply to offers made under the AllShare Plan in future years. Any future offers to you under the AllShare Plan will be made at the Board s discretion. Any advice given by the Company in connection with this Offer is general advice only and does not take into account your objectives, financial situation and needs. The Company makes no recommendation about whether you should participate in the Offer. This booklet does not constitute investment advice, nor any recommendation by the Company regarding participation in the Offer. You should consider obtaining your own financial product and tax advice from an independent person who is licensed in your jurisdiction to give such advice. Any securities issued in accordance with this Offer are issued as an incentive to promote mutual interdependence between you and the Company and to further align your interests with the interests of the Company s shareholders. They are not issued by the Company for the purpose of fundraising or onsale AllShare Plan Offer Booklet Page 2

3 1. HOW THE ALLSHARE PLAN BENEFITS YOU It s our future to share all together All our employees are members of one South32 team. By working together we determine the future of our company and can create a brighter future for all. The AllShare Plan allows each of us to become part-owners of the company and share in the growth and success of South32. In October, as a permanent employee of South32, you will receive an Offer for Rights in South32. Each Right will entitle you to receive one fully-paid ordinary share in South32 (Share) on vesting, subject to the terms of this Offer. Participants in Mozambique will always receive a cash payment instead of Shares due to local restrictions. In addition, in certain circumstances, the Board retains discretion to make a cash payment of an equivalent value to you instead. The Board will normally only exercise this discretion for Good Leavers (see Section 3 of this document). These share or cash Rights will be held for three years until the vesting date, at which point they are transferred into the name of the employee. Benefits of participating in the AllShare Plan: You own a piece of South32 All participant 1 in the AllShare Plan receive the same number of Rights Because all employees receive Rights, this reinforces our value of Togetherness You share in our financial future, along with all South32 employees who participate in a South32 share plan 1 Note definition for Participants in Section 6 The value of the Share (or cash equivalent) at the time they vest in three years, will depend on the value of the South32 share price at that time. The value of the share price, which can go up or down, depends on a number of factors, such as company performance and commodity prices. As employees we are all part of the team that influences the performance of South32 which in turn influences the share price. 2. HOW THE ALLSHARE PLAN WORKS 2.1 Participation All permanent employees of the Group who do not participate in any other South32 employee share plan (e.g. the Management Share Plan) are eligible to participate in the AllShare Plan. 2.2 Key Events in the AllShare Plan a. Offer and grant of Rights In October each year, the Board will determine the number of Rights that will be granted to each participant in the AllShare Plan based on the South32 share price at the end of September. Each eligible participant will receive an Offer that includes the following documentation: An invitation /letter from the CEO inviting you to participate in the AllShare Offer Offer document (this booklet) An /letter from Computershare with your Personal Identification Number (PIN) Employees that would prefer not to participate in the AllShare Plan, and do not want to receive Rights, should complete the opt-out form that is available either online or available from their HR Business Partner by 5.00pm, Australian Western Standard Time (AWST) on 4 November Your form must be received by this time to be effective AllShare Plan Key Events October 2016 Offer and grant made to eligible employees Aug 2019 Rights vest and Shares allocated or cash paid to participants. Dividend equivalent payments made Participant able to sell or hold Shares Dividends paid (if Shares held) 2016 AllShare Plan Offer Booklet Page 3

4 The 2016 AllShare Offer Your 2016 AllShare Offer will be made in the form of Rights to South32 Shares. Each Right will entitle you to receive a South32 Share (or receive an equivalent cash payment) at no cost to you, at the time of vesting. You will not be able to sell your Rights and you will not receive dividends until after vesting. All eligible employees who do not elect to optout, will be granted Rights shortly after the end of the opt-out period in November. For the 2016 AllShare Offer, you will receive 720 Rights. The number of Rights you receive under the AllShare Plan may vary from year to year, subject to the discretion of the Board. However, it is intended that you will be granted Rights to the value of at least US$1,250 each year. b. Vesting of Rights Vesting will take place after approximately three years (i.e. in 2019) and is when your Rights will be converted to Shares, or you will be paid an equivalent cash amount. For example, if you are granted Rights in October 2016, these Rights will vest and you will receive South32 Shares or a cash equivalent payment in approximatley August Vesting will take place as long as you remain employed by South32 from the Grant Date to the date of vesting. You will not have to take any further action for the Rights to vest into South32 Shares or, for participants in Mozambique, to receive the cash equivalent payment. c. Dividend Equivalent Payment (DEP) You will also receive a cash payment that is equal to the dividends that were paid to shareholders from the time your rights were granted to the time they vest. This is referred to as a Dividend Equivalent Payment. d. Taxing point The taxing point will generally be at the time the Rights vest. Please refer to the tax guides for more information. e. Hold or sell Shares you receive on vesting will be held on your behalf by the Plan Trustee in the Share Plan Account Service as long as you remain employed by South32. The current Plan Trustee for South32 is Computershare. Shares received on vesting will initially be held on your behalf by the Plan Manager. You will be able to direct the Plan Manager to transfer the Shares into your name at any time. If you choose to retain the Shares, you will receive future dividends. Alternatively, once vested, you will be able to sell the Shares at any time, subject to South32 s Securities Dealing Policy and Procedure. 3. WHAT HAPPENS IF YOU LEAVE SOUTH32 If you cease employment with South32 before the Grant Date you will not receive any Rights. If you cease employment with South32 on or after the Grant Date, the treatment of your Rights will depend on whether or not you are a Good Leaver. As a Good Leaver, (unless the Board decides otherwise), you will be allowed to retain all or a portion of your Rights, with vesting occurring on the date you cease employment. The Board may also exercise its discretion to settle your Rights in cash instead of shares on vesting if you are a Good Leaver. You have 30 days from the cessation of your employment to either sell your shares or transfer them out of the Share Plan Account. Computershare will contact you in relation to this. What is a Good Leaver? Typically, you will be considered a Good Leaver if you cease employment because of one of the following reasons: Retirement, Redundancy, Death and TPD (total & permanent disablement), Other appropriate circumstances at the Board s discretion (which could include termination by mutual agreement). If you are not a Good Leaver, all of your Rights will lapse, unless the Board decides otherwise in its absolute discretion. Note, if you resign from South32, you will not be considered a Good Leaver AllShare Plan Offer Booklet Page 4

5 4. EFFECT OF ACCEPTING THIS OFFER By allowing the Company to grant Rights to you under this Offer, you are deemed to have: agreed to be bound by the Equity Incentive Plan Rules (as applicable and as varied from time to time) and the additional terms of this Offer; agreed to be bound by the Company s Constitution in relation to any Shares allocated to you on the Vesting of your Rights; agreed to the personal information that you have provided to the Company or any plan manager being used for the purposes of administering the Allshare Plan, including the disclosure of such information to the Plan Trustee or Plan Manager; acknowledged that the Company is subject to obligations in relation to the handling of your personal information and you have rights in relation to accessing and updating your personal information and raising queries and concerns. You can refer to the South32 Privacy Policy for further information; acknowledged that the Company may be required or authorised to collect your personal information under laws including tax and corporations legislation, and that limited details about shareholders are available to members of the public on request; irrevocably appointed the Company Secretary as your attorney in accordance with the Equity Incentive Plan Rules; acknowledged that the rights you have in relation to the Rights granted to you are limited to those conferred on you pursuant to the terms of this Offer and the Equity Incentive Plan Rules; and acknowledged that, unless your employment contract expressly contemplates otherwise, the terms of this Offer do not form part of your employment contract and participation in this Offer does not give you any entitlement to participate in future year offers. 5. COMMON QUESTIONS AND ANSWERS Who can participate in the AllShare Plan? The AllShare Plan is offered once a year, to all individuals who are permanently employed by South32 on 1 September of that year, who are not under notice to leave the company and who are not participating in any other South32 employee share plan in the same year. What is a share? A share is a piece of ownership of a company. Shares can be bought and sold and are usually traded on a stock exchange which keeps track of the value of shares for all companies listed on that stock exchange. What is a share right? A share Right is a promise to give you South32 shares at a future date (i.e. after three years), as long as you remain an employee of the Company. The share Right belongs to you only, and cannot be traded (bought or sold). Do I have to pay any money to acquire the Rights? No, the Rights will be granted to you at no cost. Can the Rights be issued in someone else s name such as the name of a family member? No, they can only be issued in the name of the intended Participant who will be an employee of South32. How many Rights will I receive? You will receive 720 Rights if you participate in the 2016 AllShare Offer. Why do some Participants get Shares and others an equivalent cash payment upon vesting? Participants in Mozambique will always receive an equivalent cash payment on vesting instead of Shares. This is because of local laws in Mozambique that limit South32 s ability to issue shares in these countries. The Board also has discretion to determine that any other Participant will receive a cash payment instead of Shares on vesting. The Board will normally only exercise this discretion for Good Leavers AllShare Plan Offer Booklet Page 5

6 Once I am granted Rights, am I able to view these online? Yes, you will be able to view your account by visiting using your Security holder Reference Number (SRN) (provided in the invitation letter or a Computershare letter shortly after grant) and PIN (provided in the /letter from Computershare). What is a dividend? A dividend is when the company pays out some of its profits to shareholders. Will I receive any dividends on my Rights or be able to vote in shareholder meetings? You will not receive any dividends in respect of your unvested Rights. Your Rights will also not entitle you to vote at shareholder meetings. However, once your Rights vest and are converted to Shares, for as long as you hold the Shares (i.e. do not sell them) you will receive any dividends that may be paid on those Shares after vesting and will be entitled to vote at shareholder meetings. At vesting, you will also receive a cash payment that is equal to the dividends that were paid to shareholders from the time your rights were granted to the time they vest (called a Dividend Equivalent Payment). This payment will have an amount of tax withheld. Can I forfeit my Rights? Yes, you will forfeit your Rights if you cease employment and are not a Good Leaver (unless the Board determines otherwise). In addition, you may voluntarily elect to surrender your Rights at any time prior to vesting. Do I have to pay any money to have my Rights vest and convert to Shares? No, they will vest and be converted to Shares (or an equivalent cash payment) at no cost. How will I be taxed? If you receive a cash equivalent amount instead of Shares, the cash will be paid through payroll and subject to usual tax and social security withholding as applicable. If you receive Shares on vesting, information on the tax treatment is available through Employee Online or via your HR Business Partner if not attached to this Offer document. Please also refer to the tax guides that are available or speak to your financial planner or accountant. How much will my Shares be worth on vesting? The value of any Shares that you will receive on vesting will depend on the Share price on the What determines the value of the AllShare benefit? The value of the AllShare to a participant is impacted by the value of the share price at the time of vesting (and the ongoing share price if you choose to hold these shares i.e. not sell). Eligible participants for the 2016 AllShare will be granted 720 Rights. If the South32 share price in August 2019 (the time of vesting) is R30.00, the value of these 720 Rights that vest into Shares will be worth R21,600. However, if the South32 share price in August 2019 is R15.00, the value of these 720 Rights will worth R10,800. What influences our share price? The South32 share price is primarily determined by the market, based on investors views regarding the value of a company. The investors views are partly influenced by factors outside our control, such as commodity prices and exchange rates. However, the investors views are also influenced by factors that we can control, such as the performance of South32 and how efficiently we run our company. How we perform as a company is up to all of us. The way we work (i.e. an inclusive workplace, well-designed work and continuous improvement) will collectively influence the performance of the company and ultimately the South32 share price. That is how, by working together, we determine the future of our company and can create a brighter future for all. What is the value of the 2015 AllShare? At the time the 2015 AllShare was granted in November 2015, the share price was R13.04, which meant that the 1,200 Rights (the number granted in 2015) were worth R15,650. On 30 September 2016, the South32 share price was R ,200 Rights were therefore worth R31,620 on that day. It should be noted, however, that this is just indicative, as these Rights will vest in August The value to the participants will be based on the share price at that time AllShare Plan Offer Booklet Page 6

7 Vesting Date. This may be more or less than the initial value of the grant of Rights depending on whether South32 s Share price has increased or decreased between the Grant Date and the Vesting Date. How will my cash equivalent amount be calculated? For each Right you hold on the Vesting Date you will receive a cash amount equal to the value of one South32 Share, based on the current market price on the ASX for each Right you hold. Where can I find the current market price of South32 Shares? Details of the current market price of Shares are available on the portal, the Company s website and: ASX website: JSE website: Will the Shares I receive on vesting be registered in my name? No. Initially your Shares will be held on your behalf by the Plan Trustee in the Share Plan Account Service following vesting. You will, however, be able to exercise all the rights of ownership attached to the Shares from the time of vesting including receiving dividends, exercising voting rights and directing the Plan Trustee to transfer the Shares into your name or sell them on your behalf. Further information including the Trust Deed and terms and conditions of the Share Plan Account Service are available online at Once I am allocated Shares on vesting, can I sell them at any time? Yes, Shares you are allocated on vesting can be sold at any time subject to compliance with South32 s Securities Dealing Policy and Procedure, which can be found at What happens if I take extended leave during the Vesting Period? If you take extended leave, paid or unpaid, after the Rights have been granted, you will continue to participate in the AllShare Plan on the same basis as all other Participants. However, if you are still on extended leave at the time the next offer of Rights is made, you may not be eligible to participate in that offer. What happens if I terminate employment? Please refer to the What happens if you leave South32 section of this booklet (Section 3). Do I have to participate in the Offer? You are not obliged to participate in this Offer. If you do not wish to participate, however, you will need to complete the opt-out form. There will be no other advantages or disadvantages to your employment, whatever your decision. The decision whether or not to participate is yours to make based on your own circumstances and after you have obtained any further advice you feel you require. Are there any financial risks? There are no risks to you until the Rights vest. Once they vest you will be liable to pay tax (please refer to the tax guides). After vesting, it will be up to you to decide whether you hold the Shares or sell them. In this regard, you should be aware of the following: there is no guarantee that Shares will grow in value they may decline in value. Stock markets are subject to fluctuations and South32 s share price may rise and fall, depending on the Company s performance and other internal and external factors; there are tax implications involved in acquiring and holding Rights and Shares in the Company and the tax regime applying to you may change (please refer to the tax guides). Should I obtain financial and tax advice? This booklet contains general advice only. Offers to employees under the AllShare Plan do not take into account the investment objectives, financial situation and particular needs of any employee. You should consider obtaining financial and tax advice from an independent person who is licensed in your jurisdiction to give such advice as you feel necessary. Who is the AllShare Plan Manager? South32 has appointed Computershare as the Plan Manager of the AllShare Plan. Who do I contact if I have further questions? If you have any further questions, or would like a copy of the legal documents that underpin the AllShare Plan, such as the Equity Incentive Plan Rules, you can contact Computershare through Employee Online at or on the following numbers and address: South Africa (local) South Africa (International) Australia (local) Australia (International) South32@computershare.com.au 2016 AllShare Plan Offer Booklet Page 7

8 6. TERMINOLOGY Board Company Secretary Equity Incentive Plan Equity Incentive Plan Rules or Rules The Board of directors of South32 or any person or persons acting with authority delegated by the Board. The company secretary of South32 or his or her delegate. The South32 Limited Equity Incentive Plan as amended from time to time. The rules of the South32 Limited Equity Incentive Plan dated 7 May Grant Grant Date Group Offer Opt-out Participant Plan Manager Plan Trustee Right Share Share Plan Account Service The allocation of Rights to participating employees. The Grant Date is the date the Rights will be granted to Participants under the 2016 AllShare Offer, which is expected to be in October The Company and each related body corporate of the Company (as that term is defined in section 50 of the Corporations Act 2001). The offer to receive Rights under the South32 AllShare Plan on the terms outlined in this booklet dated October 2016 and the Equity Incentive Plan Rules. Employees that elect not to participate in the AllShare Plan, have the option to opt-out, which means that they will not be granted Rights in that year. Opting-out will only apply for the grant in that year (i.e. the employee may still be eligible to receive future offers of Rights). An employee who has accepted this Offer and received an award of Rights. The plan manager appointed by the Company to administer the Allshare Plan, currently Computershare. The trustee of the Trust, currently Computershare. A Right is an entitlement to a fully paid ordinary share in South32 at the end of the Vesting Period, if you continue to satisfy the terms of this Offer. A fully paid ordinary share in South32. A service operated by South32 s share Plan Manager or Plan Trustee for the benefit of employees who hold Shares under a South32 employee share plan. The terms and conditions of the Share Plan Account Service will be available at the time of vesting through or the Plan Manager on the details provided on page 7. South32 or the Company South32 Limited (ACN ) Trust Trust Deed Vest or vesting Vesting Date Vesting Period The trust established to hold Shares for the benefit of South32 employees, including Participants in the AllShare Plan. The legal document establishing and governing the operation of the Trust. The process by which a participant of the Plan (who is a holder of a Right) becomes entitled to be allocated a Share, or to receive an equivalent cash payment. The relevant conditions outlined in this Offer, such as continued employment, need to be satisfied for vesting to occur. The date on which your Rights Vest. Vesting will usually take place after the release of the Company s financial results in August in the relevant year. The period from the Grant Date until the Vesting Date AllShare Plan Offer Booklet Page 8