ANNUAL REPORT 2008
  FINANCIAL STATEMENTS
 
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DIRECTORS’ REMUNERATION
   

This report on remuneration and related matters covers issues which are the concern of the board as a whole, in addition to those which were dealt with by the transformation, human resources, remuneration and nomination committee (TREMCO).

Remuneration policy

TREMCO has a clearly defined mandate from the board aimed at:
  • ensuring that the company’s chairman, directors and senior executives are fairly rewarded for their individual contributions to the company’s overall performance;
  • ensuring that the company’s remuneration strategies and packages, including the incentive schemes, are related to performance, are suitably competitive and give due regard to the interests of the shareholders and the financial and commercial health of the company.


Directors’ service contracts

There are no restraints of trade associated with the contracts of executive directors. Non-executive directors are not bound by service contracts. The service contract of Mr MJ Kilbride terminated on
31 August 2008 and the service contract of Mr DJ van Staden will terminate on 28 February 2009.
 
  Summary of remuneration for the year ended 31 December 2008  
 
  Basic  
salary  
R  		 Fees for  
services  
R  		 Performance  
bonuses1 
R  		 Benefits and  
allowances2 
R  		 Retirement  
fund  
contributions  
R  		 Medical  
fund  
contributions  
R  		 Gains on  
management  
share option  
scheme3 
R  		 Compensation  
on retirement  
from executive  
office  
R  		 Other  
R  		 Total  
R  
Executive directors                      
SA Nkosi   3 940 689     1 868 425   141 925   324 773   13 248       4 375   6 293 435  
MJ Kilbride4   1 921 492     3 556 731   359 779   199 583   11 776   263 715   5 414 223   2 138   11 729 437  
DJ van Staden   2 986 122     5 772 393   284 288   301 816   13 248   2 229 942   3 128 218   3 263   14 719 290  
  8 848 303     11 197 549   785 992   826 172   38 272   2 493 657   8 542 441   9 776   32 742 162  
Less gains on share scheme                     (2 493 657) 
Add share-based payment expense                     1 856 744  
Total remuneration paid by Exxaro                     32 105 249  
Non-executive directors                      
PM Baum5     181 570                 181 570  
JJ Geldenhuys     267 083     23 427             290 510  
U Khumalo     146 427                 146 427  
Dr D Konar (chairman)    540 686                 540 686  
VZ Mntambo     206 990                 206 990  
RP Mohring     307 146     21 357             328 503  
PKV Ncetezo6     68 997     7 314             76 311  
NMC Nyembezi-Heita7     38 125                 38 125  
NL Sowazi     193 284                 193 284  
D Zihlangu     206 990     8 735             215 725  
J van Rooyen8     64 545                 64 545  
SEA Mngomezulu8     55 642                 55 642  
    2 277 485     60 833             2 338 318  
 
 
1 All incentive schemes are performance related and were approved by the board. The three-tier short-term incentive scheme applies to all employees throughout the group.
2 Includes travel allowances.
3 Includes interest accrued on gains held in trust until vested.
4 Retired on 31 August 2008.
5 Fees paid to the respective employer and not the individual.
6 Retired on 30 April 2008.
7 Retired on 29 February 2008.
8 Appointed on 13 August 2008.
   
Retirement amounts paid or received by executive directors are paid or received under defined contribution retirement funds.  
 
     
  Summary of remuneration for the year ended 31 December 2007  
 
  Basic  
salary  
R  		 Fees for  
services  
R  		 Performance  
bonuses1 
R  		 Benefits and  
allowances2 
R  		 Retirement  
fund  
contributions  
R  		 Medical  
fund  
contributions  
R  		 Gains on  
management  
share option  
scheme3 
R  		 Compensation  
on retirement  
from executive  
office  
R  		 Other  
R  		 Total  
R  
Executive directors                      
Dr CJ Fauconnier4   2 784 242     4 248 157   324 313     10 856   216 691   4 248 157   2 043   11 834 459  
SA Nkosi   3 270 291     1 332 094   71 309   277 110   17 564       5 524   4 973 892  
MJ Kilbride   2 375 206     2 939 037   314 740   271 960   16 284   130 678     1 916   6 049 821  
DJ van Staden   2 441 726     2 939 037   303 820   271 960   16 284   114 490     4 918   6 092 235  
  10 871 465     11 458 325   1 014 182   821 030   60 988   461 859   4 248 157   14 401   28 950 407  
Less gains on share scheme                     (461 859) 
Add share-based payment expense                     958 837  
Total remuneration paid by Exxaro                     29 447 385  
Non-executive directors                      
PM Baum5     191 657                 191 657  
JJ Geldenhuys     240 659     3 676             244 335  
U Khumalo     154 562                 154 562  
Dr D Konar     253 481                 253 481  
VZ Mntambo     176 201                 176 201  
RP Mohring     183 414     5 737             189 151  
M Msimang6,7     23 852                 23 852  
PKV Ncetezo     176 201     7 383             183 584  
NMC Nyembezi-Heita     197 840                 197 840  
NL Sowazi     183 414                 183 414  
D Zihlangu     179 292     9 233             188 525  
    1 960 573     26 029             1 986 602  
 
     
 

At 31 December 2007, Exxaro Resources Limited did not have a chairperson of the board.  

The chairman for board meetings is nominated from the ranks of the independent non-executive directors.  

  
 
1 All incentive schemes are performance related and were approved by the board. The three-tier short-term incentive scheme applies to all employees throughout the group. 
2 Includes travel allowances.  
3 Includes interest accrued on gains held in trust until vested.  
4 Retired on 31 August 2007.  
5 Fees paid to the respective employer and not the individual.  
6 Appointed as non-executive director on 28 February 2007.  
7 Resigned as non-executive director on 28 May 2007.  
   
Retirement amounts paid or received by executive directors are paid or received under defined contribution retirement funds.  
 
     
  Directors’ beneficial interest in Exxaro shares at 31 December 2008  
 
  Direct   Indirect  
SA Nkosi     8 016 068  
DJ van Staden   565    
PM Baum      
JJ Geldenhuys      
U Khumalo      
Dr D Konar   168    
SEA Mngomezulu      
VZ Mntambo     5 529 881  
RP Mohring      
NL Sowazi     2 181 590  
J van Rooyen      
D Zihlangu     2 818 552  
 
     
  Directors’ beneficial interest in Exxaro shares at 31 December 2007  
     
 
  Direct   Indirect  
SA Nkosi     7 607 567  
MJ Kilbride   586    
DJ van Staden   565    
PM Baum      
JJ Geldenhuys      
U Khumalo      
Dr D Konar   168    
VZ Mntambo     5 248 077  
RP Mohring      
AJ Morgan      
PKV Ncetezo     724 564  
NMC Nyembezi-Heita   1 000    
NL Sowazi     2 181 590  
D Zihlangu     2 818 552  
 
     
 

There has been no change to the interest of directors in share capital since the year-end.

On 31 December 2008 Mr SA Nkosi held 2,3% (2007: 2,2%) and Mr MZ Mntambo held 1,6%
(2007: 1,5%) directly or indirectly in the share capital of the company.

No director held any non-beneficial interest in Exxaro shares at either 31 December 2008 or 2007.

Directors’ share options and restricted share awards

The following options and rights in shares in the company were outstanding in favour of directors
of the company under the company’s share option schemes:

Management share option scheme for the year ended December 2008

 
 
  Options  
held at  
31 December  
2008  		 Exercise  
price2 
R  		 Exercisable  
period  		 Proceeds if  
exercisable at  
31 December  
2008  
R  		 Pre-tax gain if  
exercisable at  
31 December  
20081 
R  		 Options  
exercised  
during  
the year  
 Exercise  
price  
R  		 Sale price/  
market  
price  
R  		 Pre-tax  
gain  
R  		 Date  
exercised  
Executive director                      
DJ van Staden   12 440   12,90   16/03/2011   894 436   733 960            
Total   12 440       894 436   733 960            
 
  1 Based on a share price of R71,90 which prevailed on 31 December 2008.  
     
  Management share option scheme for the year ended December 2007  
 
  Options  
held at  
31 December  
2007  		 Exercise  
price2 
R  		 Exercisable  
period  		 Proceeds if  
exercisable at  
31 December  
2007  
R  		 Pre-tax gain if  
exercisable at  
31 December  
20071 
R  		 Options  
exercised  
during  
the year  
 Exercise  
price  
R  		 Sale price/  
market  
price  
R  		 Pre-tax  
gain  
R  		 Date  
exercised  
Executive director                      
DJ van Staden   12 440   12,90   16/03/2011   1 286 918   1 126 442            
Total   12 440       1 286 918   1 126 442            
 
  1 Based on a share price of R103,45 which prevailed on 31 December 2007.    
     
 

Management cash-settled options for the year ended December 2008

The cash-settled options represent phantom option awards made to executive directors and a
number of senior managers as compensation for not being eligible to receive share option grants
due to their involvement in the empowerment transaction.

The phantom option awards also have a grant price, vesting periods and lapse periods as other
share option awards but are classified as cash settled since shares will not be issue when exercised.

 
 
  Options  
held at  
31 December  
2008  		 Exercise  
price2  
R  		 Exercisable  
period  		 Proceeds if  
exercisable at  
31 December  
2008  
R  		 Pre-tax gain if  
exercisable at  
31 December  
20081  
R  		 Options  
exercised  
during  
the year  
 Exercise  
price  
R  		 Sale price/  
market  
price  
R  		 Pre-tax  
gain  
R  		 Date  
exercised  
Executive director                      
DJ van Staden             17 550   19,62   136,00   2 042 469   13/06/2008  
 
  1 Based on a share price of R71,90 which prevailed on 31 December 2008.    
     
  Management cash-settled options for the year ended December 2007  
 
  Options  
held at  
31 December  
2007  		 Exercise  
price2 
R  		 Exercisable  
period  		 Proceeds if  
exercisable at  
31 December  
2007  
R  		 Pre-tax gain if  
exercisable at  
31 December  
20071 
R  		 Options  
exercised  
during  
the year  
 Exercise  
price  
R  		 Sale price/  
market  
price  
R  		 Pre-tax  
gain  
R  		 Date  
exercised  
Executive director                      
DJ van Staden   17 550   19,62   22/04/2012   1 815 548   1 471 217            
 
  1 Based on a share price of R103,45 which prevailed on 31 December 2007.    
     
  Management share appreciation right scheme for the year ended December 2008  
 
  Options  
held at  
31 December  
2008  		 Exercise  
price2 
R  		 Exercisable  
period  		 Proceeds if  
exercisable at  
31 December  
2008  
R  		 Pre-tax gain if  
exercisable at  
31 December  
20081 
R  		 Options  
exercised  
during  
the year  
 Exercise  
price  
R  		 Sale price/  
market  
price  
R  		 Pre-tax  
gain  
R  		 Date  
exercised  
Executive director                      
SA Nkosi   38 680   60,60   01/03/2014   2 781 092   437 084            
  41 780   112,35   01/04/2015                
  80 460       2 781 092   437 084            
 
  1 Based on a share price of R71,90 which prevailed on 31 December 2008.
2 It is assumed that directors will not exercise rights which are out of the money.  		  
     
  Management share appreciation right scheme for the year ended December 2007  
 
  Options  
held at  
31 December  
2007  		 Exercise  
price2 
R  		 Exercisable  
period  		 Proceeds if  
exercisable at  
31 December  
2007  
R  		 Pre-tax gain if  
exercisable at  
31 December  
20071 
R  		 Options  
exercised  
during  
the year  
 Exercise  
price  
R  		 Sale price/  
market  
price  
R  		 Pre-tax  
gain  
R  		 Date  
exercised  
Executive director                      
SA Nkosi   38 680   60,60   01/03/2014   4 001 446   1 657 438            
 
  1 Based on a share price of R103,45 which prevailed on 31 December 2007.  
     
  Management share scheme – long-term incentive plan for the year ended December 2008  
 
  Options  
held at  
31 December  
2008  		 Exercise  
price2 
R  		 Exercisable  
period  		 Proceeds if  
exercisable at  
31 December  
2008  
R  		 Pre-tax gain if  
exercisable at  
31 December  
20081 
R  		 Options  
exercised  
during  
the year  
 Exercise  
price  
R  		 Sale price/  
market  
price  
R  		 Pre-tax  
gain  
R  		 Date  
exercised  
Executive director                      
SA Nkosi   38 682     01/03/2010   2 781 236   2 781 236            
  41 782     01/04/2011   3 004 126   3 004 126            
  80 464       5 785 362   5 785 362            
 
  1 Based on a share price of R71,90 which prevailed on 31 December 2008.   
     
  Management share scheme – long-term incentive plan for the year ended December 2007  
 
  Options  
held at  
31 December  
2007  		 Exercise  
price  
R  		 Exercisable  
period  		 Proceeds if  
exercisable at  
31 December  
2007  
R  		 Pre-tax gain if  
exercisable at  
31 December  
20071 
R  		 Options  
exercised  
during  
the year  
 Exercise  
price  
R  		 Sale price/  
market  
price  
R  		 Pre-tax  
gain  
R  		 Date  
exercised  
Executive director                      
SA Nkosi   38 682     01/03/2010   4 001 653   4 001 653            
 
  1 Based on a share price of R103,45 which prevailed on 31 December 2007.  
     
  Management share scheme – deferred bonus plan for the year ended December 2008  
 
  Options  
held at  
31 December  
2008  		 Exercise  
price2 
R  		 Exercisable  
period  		 Proceeds if  
exercisable at  
31 December  
2008  
R  		 Pre-tax gain if  
exercisable at  
31 December  
20081 
R  		 Options  
exercised  
during  
the year  
 Exercise  
price  
R  		 Sale price/  
market  
price  
R  		 Pre-tax  
gain  
R  		 Date  
exercised  
Executive director                      
SA Nkosi   361   86,45   01/10/2010                
  718   111,88   01/04/2011                
  2 573   111,88   01/04/2011                
  213   89,61   01/10/2011                
  3 865                    
 
  1 Based on a share price of R71,90 which prevailed on 31 December 2008.
2 It is assumed that directors will not exercise rights which are out of the money.		  
     
  Management share scheme – deferred bonus plan for the year ended December 2007  
 
  Options  
held at  
31 December  
2007  		 Exercise  
price  
R  		 Exercisable  
period  		 Proceeds if  
exercisable at  
31 December  
2007  
R  		 Pre-tax gain if  
exercisable at  
31 December  
20071 
R  		 Options  
exercised  
during  
the year  
 Exercise  
price  
R  		 Sale price/  
market  
price  
R  		 Pre-tax  
gain  
R  		 Date  
exercised  
Executive director                      
SA Nkosi   361   86,45   01/10/2010   37 345   6 137            
 
  1 Based on a share price of R103,45 which prevailed on 31 December 2007.    
     
 
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