Year ended 31 December 2012
52
40 Share-based Compensation Plans
40.1 DBSH Share Ownership Scheme The DBSH Share Ownership Scheme is a fund set up
to hold units of DBSH ’s ordinary shares. All employees
based in Singapore with at least one year of service and
who hold the rank of Assistant Vice President and below are eligible.
Under the Scheme, participants and the Group contribute up to 10 and 5 of monthly base salary
respectively to buy units of DBSH ’s ordinary shares.
Amounts contributed by the Group under the Scheme are recognised as employee benefits when paid.
The Group Ordinary shares
Number Market value
millions 2012
2011 2012 2011
Balance at 1 January 5,933,584
5,473,697 68
78 Balance at 31 December
6,509,414 5,933,584
97 68
40.2 DBSH Share Option Plan Under the DBSH Share Option Plan the Option Plan,
options to subscribe for DBSH ’s ordinary shares may
be granted to Group executives who hold the rank of Vice President or equivalent and above and selected
employees below the rank of Vice President or equivalent.
The exercise price of the granted options is equal to the average of the last dealt prices for DBSH
’s shares, as determined by reference to the daily official list
published by the Singapore Exchange Securities Trading Ltd, for the three consecutive trading days
immediately preceding the date of the grant. These share options vest over a period in accordance
with a vesting schedule determined by the Compensation and Management Development
Committee Committee, and are exercisable after the first anniversary of the date of the grant up to the date
of expiration of the options. The fair value of options granted is determined using the Binomial model.
The DBSH Share Option Plan expired on 19 June 2009 and the Plan was neither extended nor replaced. The
termination of this Plan will, however, not affect the rights of holders of any outstanding existing options.
The following table sets out the fair value of the outstanding time-based awards and the movement during the year.
The Group 2012
2011 Unissued number
of ordinary shares under outstanding
options Weighted
average exercise
price Unissued number
of ordinary shares under outstanding
options Weighted
average exercise
price
Balance at 1 January
5,769,925 11.56
11,417,819 12.58
Movements during the year: - Exercised
2,104,176 11.69
1,667,402 11.38
- ForfeitedExpired 420,337
12.55 3,980,492
14.53 Balance at 31 December
3,245,412 11.32
5,769,925 11.56
Outstanding options exercisable at 31 December 3,245,412
11.32 5,769,925
11.56 Weighted average remaining contractual life of
options outstanding at 31 December
1.04 years 1.51 years
Range of exercise price of options outstanding at 31 December
8.84 to 12.81 8.84 to 12.81
In 2012, 2,104,176 options 2011: 1,667,402 were exercised at their contractual exercise prices for the Group. During the year, the corresponding weighted average market price of DBSH
’s shares was 14.08 2011: 14.10.
Year ended 31 December 2012
53
Bank 2012
2011 Unissued number
of ordinary shares under outstanding
options Weighted
average exercise
price Unissued number
of ordinary shares under outstanding
options Weighted
average exercise
price
Balance at 1 January 4,810,649
11.57 9,419,150
12.66 Movements during the year:
- Exercised 1,518,839
11.92 1,305,541
11.55 - Forfeited Expired
866,789 11.87
3,302,960 14.54
Balance at 31 December 2,425,021
11.23 4,810,649
11.57 Additional information:
Outstanding options exercisable at 31 December 2,425,021
11.23 4,810,649
11.57 Weighted average remaining contractual life of
options outstanding at 31 December
1.04 years 1.44 years
Range of exercise price of options outstanding at 31 December
8.84 to 12.81 8.84 to 12.81
In 2012, 1,518,839 options 2011: 1,305,541 were exercised at their contractual exercise prices for the Bank. During the year, the corresponding weighted average market price of DBSH
’s shares was 14.06 2011: 13.94.
40.3 DBSH Share Plan
Under the DBSH Share Plan the Share Plan, DBSH ’s
ordinary shares may be granted to Group executives who hold such rank as may be determined by the
Committee appointed to administer the Share Plan from time to time. The awards could be performance-
based andor time-based. Where time-based awards are granted, they will only
vest after the satisfactory completion of time-based service conditions. Participants are awarded shares
of DBSH, their equivalent cash value or a combination of both as part of their deferred bonus
at the discretion of the Committee. A time-based award comprises two elements, namely,
the main award and
the “retention” award previously known as “kicker” award. The shares comprised in the
“retention” award constitute twenty percent of the shares comprised in the main award. Effective 2010,
the deferral period for unvested shares was extended from a 3-year period to a 4-year period showing a
more prudent risk management arrangement. Under the new vesting schedule, thirty-three percent of the
shares comprised in the main award will vest two years after the date of grant. A further thirty-three percent of
the shares comprised in the main award will vest three years after the date of grant. The remainder thirty-four
percent of the shares comprised in the main award,
together with the shares comprised in the “retention” award, will vest four years after the date of grant. For
time-based awards, the fair value of the shares awarded are computed based on the market price of
the ordinary shares at the time of the award and is amortised through the income statement over the
vesting period. At each balance sheet date, the Group revises its estimates of the number of shares expected
to vest based on non-market vesting conditions and the corresponding adjustments are made to the
income statement. The following table sets out the outstanding awards at the
end of each reporting period and the movement during the year:
The Group Number of shares
2012 2011
Balance at 1 January 11,595,571
9,444,365 Granted
6,002,356 5,319,354
Vested 3,500,581
2,932,204 Forfeited
455,221 235,944
Balance at 31 December 13,642,125
11,595,571
The weighted average fair value of the shares granted during the year is 14.09 2011: 14.40.
Bank Number of shares
2012 2011
Balance at 1 January 9,974,850
8,093,410 Granted
4,663,460 4,529,238
Vested 2,866,767
2,485,174 Forfeited Others
780,186 162,624
Balance at 31 December 10,991,357
9,974,850
The weighted average fair value of the shares granted during the year is 14.09 2011: 14.38.
Share based expenses are recognised as employee benefits, with the corresponding amount recharged by
the ultimate holding company. Therefore, the share based compensation reserve has a nil balance.
40.4 DBSH Employee Share Plan The DBSH Employee Share Plan the ESP caters to
