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FirstRand - Issue And Listing Of Additional Ordinary Shares FirstRand Limited Reg. No: 1966/010753/06 Share Code: FSR ISIN Code: ZAE000014973 ("FirstRand" or the "Company") ISSUE AND LISTING OF ADDITIONAL ORDINARY SHARES AND DISCLOSURE OF DIRECTORS" INTEREST Rand Merchant Bank is authorised to announce that FirstRand has issued a further 16 053 803 ordinary shares to participants under the FirstRand Out-performance Share Incentive Scheme (the "Out-performance scheme" or the "Scheme"). Application has been made to The JSE Securities Exchange, South Africa (the "JSE") to authorise the listing of the additional 16 053 803 ordinary shares in the capital of FirstRand with effect from 30 June 2004, or as soon as is practical thereafter. These new FirstRand ordinary shares arise from the conversion of variable rate convertible redeemable preference shares previously issued by the Company to selected staff members under the Out-performance scheme. The rules of the Out- performance scheme were approved by FirstRand"s shareholders and are incorporated in its Articles of Association. Under the Scheme, incentive shares are awarded to participants in terms of a formula based on the level of out-performance achieved by the FirstRand ordinary share price over the Fini 15 Index. This index forms part of the "FTSE-JSE Africa Index Series" administered by the JSE and is composed of the fifteen largest listed financial services organisations in South Africa. As such, the index reflects the share price performance of FirstRand"s peer group. For this particular tranche of preference shares falling due for conversion under the provisions of the Scheme, the performance measurement period was from the end of June 1999 to the end of December 2003. - In this volatile period, the weighted average FirstRand share price increased by 34,3% while the Fini 15 index declined by 2,5%. - FirstRand"s market capitalisation at the end of December 2003 amounted to R47,6bn. - In the context of FirstRand"s market capitalisation, the out- performance value that was created and / or preserved (relative to FirstRand"s Fini 15 peers) amounted to some R15,4bn. - Of this value, approximately 1,0% accrued to the participants and resulted in 16,1m incentive shares being awarded to them. It is these incentive shares that are now being listed on the JSE Securities Exchange. Financial Impact Taken in isolation, this issue of the new FirstRand ordinary shares to staff members has a dilution effect on existing FirstRand shareholders. Assuming that the additional ordinary shares had been in issue for the full six months ended 31 December 2003 (FirstRand"s last financial reporting period) the impact of the transaction may be extrapolated as follows: Before After Change Headline Earnings Per Share 51,04c 50,89c -0,29% Net Asset Value Per Share 447,15c 445,84c -0,29% Both in absolute terms and in the context of the shareholder value that was created and / or preserved by the FirstRand group such dilution is not material. As it represents part of the superior value realised, existing shareholders continue to be better off than they would have been had they invested in FirstRand"s peer group. The FirstRand Board believes that the outcome of this tranche of the Out- performance scheme is gratifying and goes some way in rewarding the superior value delivered to shareholders by the group"s management team. The remaining tranches of the scheme should continue to provide FirstRand with a powerful tool with which to retain and motivate its key staff members. Disclosure of Directors" Interest In compliance with rule 3.63 of the JSE Listing requirements the following information is disclosed for Directors who are participants under this tranche of the Out-performance Scheme: Director: L L P K Harris V W JP Burger Dippenaar Bartlett Company: FirstRand FirstRand FirstRand FirstRand Bank Holdings Ltd, a major subsidiary of
FirstRand Nature of Indirect Indirect Indirect Indirect Beneficial interest: Beneficial Beneficial Beneficial Date of 30 June 2004 30 June 30 June 30 June 2004 conversion: 2004 2004 Number of 285 833 285 833 214 375 214 375 ordinary shares awarded on conversion: Value of R2 915 497 R2 915 497 R2 186 625 R2 186 625 transaction: Clearance Yes Yes Yes Yes obtained: Sandton 30June 2004 Sponsor RAND MERCHANT BANK (A division of FirstRand Bank Limited) CORPORATE FINANCE Date: 30/06/2004 05:10:03 PM Supplied by www.sharenet.co.za Produced by the JSE SENS Department
