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MSM - Massmart - Sale of treasury shares at a discount to black non-executive directors of massmart Massmart Holdings Limited (Incorporated in the Republic of South Africa) (Registration Number: 1940/014066/06) Share code: MSM ISIN: ZAE000029534 ("Massmart" or "the Company") SALE OF TREASURY SHARES AT A DISCOUNT TO BLACK NON-EXECUTIVE DIRECTORS OF MASSMART Massmart`s record and commitment to the rationale and implementation of Broad- based Black Economic Empowerment (BBBEE) is well documented and has been acknowledged externally. Massmart`s general staff BBBEE share trust schemes were implemented in October 2006. At that time the black non-executive directors of Massmart were not included as the Board was of the view that the design of those schemes was geared more specifically to Massmart`s staff. Thereafter, the Board initially considered facilitating a transaction through which the black non-executive directors could become shareholders of Massmart, at a level that would not compromise their independence as directors. It was intended to do this by offering Massmart shares to the directors at a discount and for the directors to acquire the shares with third party finance. The Board has now resolved, subject to shareholder approval, to substantially reduce the Rand size of the transaction and to avoid the need for the directors to raise finance, by selling ordinary Massmart shares currently held as treasury shares by Massmart Management & Finance Company (Proprietary) Limited at nominal cost to Massmart`s five black non-executive directors. The effect of the proposed transaction is to give to the directors ownership of shares in Massmart, at nominal cost, with a market value approximating the originally intended Rand value of the discount of R1.46 million (at the current market price of R73-00 per share) for each of the five directors. The key terms of the proposed transaction are: - Each of the five black non-executive directors will acquire 20 000 Massmart ordinary shares at one cent per share; - The shares have full voting and dividend rights; - The shares vest in two tranches of 50% at the end of each of years 3 and 5 from the date of issue (being three days after the 26 November 2008 annual general meeting); - If a director is dismissed from the Board or not re-elected by shareholders then all unreleased shares will be forfeited; and - If a director resigns from the Board before the end of year 3 then all unreleased shares will be forfeited. If a director resigns after year 3 then all shares will be released but may not be disposed of for a period of six months. This R7.3 million transaction will have a negligible effect on the net asset value per share, net tangible asset value per share, HEPS and EPS of Massmart. The necessary circular and resolutions for this transaction are included in the Massmart June 2008 annual report to be issued shortly and will be put to shareholders for consideration and approval at the Massmart annual general meeting on 26 November 2008. 13 October 2008 Johannesburg Sponsor Deutsche Securities (SA)(Proprietary) Limited Date: 13/10/2008 14:34:01 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
