Xstrata: Retention Awards For All Recipients Will Be Paid Entirely In Shares In Combined Group
06/27/2012| 10:11am US/Eastern
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LONDON-- Xstrata PLC (>> Xstrata PLC), a mining company, said Wednesday regarding the merger with Glencore International (>> Glencore International Plc) that retention awards for all recipients will be paid entirely in shares in the Combined Group, further aligning management's interests with shareholders
MAIN FACTS:
-100% of retention awards for Xstrata Executive Directors and the other Executive Committee members will be subject to performance criteria based on realising additional cost savings as a result of the Merger in the two years following the effective date.
-For Xstrata's senior management, excluding the Executive Directors and six other Executive Committee members, awards will be paid in equal tranches at the first and second anniversaries of the closing of the transaction.
-The number of shares in the Combined Group to be awarded under the amended retention arrangements will be determined by reference to the average of the closing prices of Xstrata shares over the seven dealing days immediately before the shareholder meetings.
-All of the retention awards for the members of Xstrata's Executive Committee, including the three Executive Directors, will now be subject to the realisation of additional cost savings arising from the Merger.
-The previously announced EBITDA synergy estimate of at least $500 million per annum includes approximately $50 million of cost synergies.
-Vesting of retention awards for Xstrata's Management will now only occur if additional cost savings are achieved over and above the $50 million cost savings already identified in the synergy estimate.
-Merger-related cost savings will be realised from initiatives including reorganising the Combined Group's assets, the reduction of any duplicated costs not already identified in its synergy estimate, financial synergies and other cost savings.
-For the members of Xstrata's Management other than Mick Davis, Xstrata plc CEO, up to 50% of the total award will be available to vest at the first anniversary of the Effective Date.
-Shares at 1352 GMT at 789 pence, valuing the company at GBP23.6 Billion.
-Write to Mark Shapland at mark.shapland@dowjones.com
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