- Q: WHAT IS ESOP?
A: ESOP stands for the Employee Share Ownership Programme.
Q: WHAT IS TRANSFORMATION?
A: Broadly speaking, transformation refers to the need to increase
Black representation in the workplace in key areas where there has
been historically very little Black representation. The goals and
guidelines to transforming the workplace are spelt out by the
Department of Trade and Industry.Q: WHAT IS A SHARE IN A COMPANY?
A: When we look at who owns a company, the
company’s value is divided into units we call ‘shares’.Q: WHAT ARE “A” SHARES?
A: “A” shares are the respective units which will
be allocated to qualifying beneficiaries in terms of the
Employee Share Ownership Programme. These “A” Shares
represent 10% (approximately 30 million shares) of the
Group’s total issued shares, which will be placed into a Trust for
the benefit of the qualifying employee.Q: WHAT IS A DIVIDEND?
A: A dividend is a shareholder’s part of the profit that a company has made
in a particular year. The value of the dividend payment you receive is based
on the number of shares you own in the company.Q: WHAT IS VESTING?
A: A vesting period is a period of time that an investor or other
person holding a right to something must wait until they are capable
of fully exercising their rights. During this time, those rights may
not be taken away, unless certain rules have been breached.
In this instance, beneficiaries of the ESOP must wait for
the 7 year Scheme to run its course before
they have access to the growth of
their shares.Q: WHAT IS AN EMPLOYEE SHARE OWNERSHIP TRUST?
A: An employee share ownership trust is a legal entity set up by the
company for the benefit of qualifying employees (and registered as such with
the Master of the Supreme Court). An employee share ownership trust
facilitates the acquisition of company shares and the distribution of the
benefits that attach to such company shares to qualifying employees in
accordance with the Trust deed.Q: WHAT ARE ‘EMPLOYEE LEVELS’ OR ‘HAY-BAND LEVELS’?
A: In 2009, the Group implemented the Hay Job Grading
methodology to evaluate and size different jobs throughout
the organisation in an objective and fair manner. The Group
has 10 Hay (or employment) levels according to which jobs are sized. - Q: WHO ARE THE BENEFICIARIES OF THE SCHEME?
A: Beneficiaries of the Scheme include:
All permanent full-time employees of the Clicks Group, its business
units and Kalahari Medical Distributors as at the commencement
date of the Scheme, permanent full time employees who
work 173 hours per month or 40 hours per week
and all permanent full-time South African and non-
South African employees (irrespective of race).Q: WHAT IS THE COMMENCEMENT DATE?
A: This is the agreed-to starting date of the Scheme. From this date,
the Scheme will run its 7 year course. The provisional starting date is
2 February 2011, but this will be confirmed on 18 January 2011.Q: DO I HAVE TO PARTICIPATE IN THE SCHEME IF I DON’T WANT TO?
A: No one is obliged to participate in the Scheme
and there is no financial obligation required from employees
in order to participate. You may elect not to participate by
informing the Trustees of your decision in the prescribed manner
within 30 days of the initial allocation.Q: WILL PEOPLE WHO JOIN THE GROUP AFTER THE COMMENCEMENT OF THE SCHEME BE ABLE TO PARTICIPATE IN THE SCHEME?
A: Yes. Employees who join the Clicks Group after the commencement of the
Scheme and within the first 4 years of the Scheme will qualify for participation.
Their benefit will be pro-rated based on the number of completed remaining
years of the Scheme.Q: HOW WILL I BENEFIT FROM THE SCHEME?
A: The Scheme provides you with an opportunity to participate in the
growth and value of the shares of the company over the 7 year period
and to potentially own shares in the Company after the 7 years. - Q: WHAT HAPPENS TO MY “A” SHARES AT THE END OF THE 7 YEAR PERIOD?
A: After the 7 year period, you are entitled to the full
growth in the value of your “A” shares. Once your benefit has
converted to ordinary shares you can elect to sell all your shares,
some of your shares or none of your shares. You will however
be liable for the transaction costs and tax at the end of the period.Q: WHAT HAPPENS IF I AM PROMOTED?
A: If you are promoted from one of the 5 employment bands to
another during the term of the Scheme you will receive an additional
pro-rata allocation based on the promoted band for the remaining completed
years in the Scheme.Q: WHAT HAPPENS IF I RESIGN FROM THE CLICKS GROUP?
A: If you resign from the Clicks Group within the first 3 years of the
Scheme you will forfeit your entire allocation. However, if you
resign after year 3 of the Scheme (but before year 7) you will retain
a pro-rata benefit based on the number of completed years
that you remained on the Scheme (less a penalty based on a
formula as defined in the Trust deed).Q: WHAT HAPPENS TO MY “A” SHARES IF I RETIRE OR DIE?
A: Employees who leave the Clicks Group as a
result of death, disability, retrenchment or retirement will
not forfeit any of the “A” shares allocated to them for the period
that they remained on the Scheme.Q: WHAT HAPPENS TO MY “A” SHARES IF I AM DISMISSED?
A: Employees who are dismissed at any time during the 7 year period
will forfeit all allocation and rights under the Scheme.Q: WHAT IF MY BUSINESS UNIT IS SOLD?
A: If a business unit is sold the employees of such a business will be treated
the same as employees who retire and will therefore not forfeit any rights for
the period that they were part of the Scheme. - Q: HOW DO THE ALLOCATIONS WORK?
A: Allocations will be made to employees based on 5 employment
bands. Employees will be allocated “A” shares according to their
employment bands based on a factor set out in the Trust deed. All employees
within a particular employment band will be allocated the same number of
“A” shares. Employees may receive an enhanced allocation based on
whether they meet the criteria for enhanced allocation, namely that:
1. The employee is a registered pharmacist in a role that requires the
incumbent to be a registered pharmacist (irrespective of race);
2. An employee is a senior Black manager at Hay Band D, E or F; or
3. An employee has been employed by the Clicks Group for
more than 5 years as at the date of commencement
of the Scheme.Q: HOW MANY ‘A’ SHARES WILL I BE ALLOCATED?
A: The number of “A” shares that will be allocated to
you will depend on the band in which you are employed and
whether you are entitled to an enhanced initial allocation. We will
be able to provide you with more information regarding your specific
allocation of “A” shares by the end of January 2011.Q: ONCE I AM ALLOCATED ‘A’ SHARES, WILL I RECEIVE ANY FURTHER ALLOCATIONS IN THE FUTURE?
A: Whilst the Scheme is a “once off” scheme, employees who are
promoted across the respective bands may be entitled to an additional
allocation subject to the availability of “A” shares.Q: OVER AND ABOVE MY ALLOCATION, AM I ALSO ABLE TO BUY ‘A’ SHARES?
A: This is an employee share ownership programme and not a share
option scheme. Under this programme you are not able to buy shares over
and above your allocation.Q: WHAT MUST I DO TO GET ‘A’ SHARES?
A: In order to qualify for “A” shares, you must be a permanent
full time employee of the Clicks Group on the commencement
date of the Scheme. This means that your employment
contract stipulates that you work 173 hrs
per month or 40 hours per week.Q: CAN I TRADE MY ‘A’ SHARES?
A: No. These are allocated shares from the Clicks Group to
the Trust and you will only have access to the benefit at
the end of the 7 year period.Q: WILL MY FAMILY QUALIFY FOR ‘A’ SHARES?
A: The beneficiaries of the Scheme are permanent
full time employees of the Clicks Group, which means that
family members who are not employees of the Clicks Group
will not qualify as beneficiaries.Q: I RESIGNED BUT DO NOT HAVE ANY SHARES ALLOCATED. WHY?
A: You have to complete a minimum of three ESOP
years from 2 February to 1 February three years
later (not your service with the Group) in order to
qualify to retain a portion of your ESOP shares.Q: I RESIGNED FROM THE GROUP BUT REJOINED. WILL MY SHARES BE REINSTATED?
A: No, your ESOP shares will not be reinstated. The
termination of your employment will be dealt with
in accordance with the Trust Deed as a resignation.
The fact that you have re-joined will mean that you
could qualify for a new allocation, provided you
re-joined as a permanent full time employee before
1 February 2015.Q: WILL NEW SHARES BE ALLOCATED ONCE THE CURRENT SCHEME ENDS?
A: At this stage there are no plans to start a new
share scheme after the current one matures. - Q: WILL I GET DIVIDENDS?
A: Each beneficiary has a vested right to the distribution of
dividends as declared by the company in respect of its ordinary
shares. 90% of the value of the dividend payment will be used to
cover costs and the remaining 10% of the dividend payment
will be distributed to employees in the form of a cash
“trickle” dividend.Q: WILL I HAVE TO PAY INCOME TAX ON MY PAY-OUT AT THE END OF THE 7 YEAR PERIOD?
A: Yes. Tax and brokerage fees will be deducted from the
benefit received in terms of the ESOP (irrespective of the benefit
being taken up in shares or paid up in cash). Based on the current
tax legislation, tax payable will be determined at your “marginal rate”
which means that the benefit is taxed at the same rate as the tax you pay
on your salary. Brokerage is the fee paid to stock brokers to sell your shares
on the JSE (Johannesburg Stock Exchange) and varies.Q: HOW WILL I BE KEPT INFORMED OF THE VALUE OF MY SHARES THROUGHOUT THE 7 YEARS?
A: Alexander Forbes Share Scheme Services have been appointed to provide
the Trust administration service to the Employee Share Ownership Trust.
As part of this service to the Trust, Alexander Forbes will also proactively
communicate with beneficiaries of the Trust on a range of issues such as
annual statements, day to day correspondence and queries regarding
exiting employees as well as dividend payments.Q: I HAVE RESIGNED FROM THE GROUP, CAN I CASH IN MY ESOP SHARES?
A: No, the ESOP share payments will only be made
in 2018 (50%) and the balance (50%) in 2019. Q: I AM A NURSING PRACTITIONER, DO I QUALIFY FOR SHARES?
A: If you started with the Group as a permanent
employee on a Nursing Practitioner contract before
1 February 2015 and in 2016 you confirmed that
you agree to work full time on a 40 hour week
contract, and you are indeed completing your
contractual hours, then, subject to the requirements
of the Trust Deed, you will qualify for an ESOP share
allocation.Q: I WAS DISMISSED THEN REISNTATED; ARE MY SHARES ALSO REINSTATED?
A: Yes, your full share allocation will be reinstated.
Q: I WAS PROMOTED; DO I QUALIFY FOR ADDITIONAL SHARES?
A: If you were promoted prior to 1 February 2017,
you may qualify for an adjustment to your initial
share allocation, provided that your new job grade
qualifies for a higher ESOP share allocation. Your
allocation will be adjusted to the allocation level
for your new job grade, pro-rated for the number
of completed ESOP years’ in the scheme that you
worked at this higher grade.
The final adjustment to allocations for employees
who are promoted will be effective on 2/2/2017.
Employees promoted after this date will not be able
to complete an ESOP year at the higher job grade.Q: I WAS PREVIOUSLY A FULL-TIME EMPLOYEE, BUT THEN ELECTED TO GO ON A FIXED-TERM CONTRACT, ARE MY SHARES REDUCED?
A: In terms of the Trust Deed, only permanent full
time employees may qualify for an allocation of
ESOP shares. Permanent full time employees are
those employees who are appointed on permanent
employment contracts (i.e. not temporary, fixed
term or independent Locum contracts) and
are contracted to work for 40 hours a week or
more. As you are no longer a full time permanent
employee in terms of the ESOP trust deed, this
is deemed to be a resignation from permanent
employment, and you will not qualify for ESOP
shares for the years that you are not a permanent
full time employee.Q: I HAVE MOVED DEPARTMENTS / TO A DIFFERENT COMPANY WITHIN THE GROUP, WILL THIS AFFECT MY SHARES?
A: No, as long as you are permanently employed
and contracted to work 40 or more hours per
week, your ESOP shares will not be affected when
you move within the Group.
If your employment contract changes in a way that
affects the eligibility conditions of the ESOP trust
deed (such as if you move to part time or a fixed term contract) then this will have an impact on your
ESOP share allocation.We encourage beneficiaries to invest their ESOP
nest egg wisely. We will be providing information
regarding the options available regarding investments
closer to the time. Financial advisors will also be
available (at no cost to you) via our employee
wellness provider (ICAS).You can view all your up to date ESOP share
information on the ESOP website –
www.clicksesop.co.za.
You need to register in order to gain access to
your information. The online registration guideline is
available on the intranet – Rewards & Recognition\
ESOP\ESOP Communications\Online registration
guidelines. If you need assistance with your
registration on the ESOP website, please email
or call the Investec help line: NewClicksAdmin@
investec.co.za or
0861 255 525/555. Your total reward statement also
reflects the amount of ESOP shares that have been
allocated to you.
If you have access to ESS, your reward statement is
available on ESS, the same tab as where you view
your payslip. All other employees – a PDF version
of the reward statement was emailed to your line
manager at the end of January 2017.
If you do not have access to the internet or have
not received a reward statement, you can send an
email request to ESOP@clicksgroup.co.za with your
employee number.