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NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 31 December 2017
13. SHARE CAPITAL AND OTHER EQUITY (continued)
13.3 EMPLOYEE SHARE PURCHASE PLAN
In June 2017, the Bank launched its twelfth offering of ESP Plan for Group employees, which commenced on 1 July 2017 and expire on
30 June 2019. Under the offering, the Bank granted 7,580,663 (2016: 10,644,475) rights to acquire ordinary shares in the Bank. There
were 3,342 (2016: 4,260) rights granted to a director of the Bank. The fair value of rights, determined using the binomial valuation
model was $5.5 million (2016: $9.2 million). Significant inputs to the valuation model are set out below:
Acquisition price ($)
Share price ($)
Expected volatility based on last 250 days historical volatility as of acceptance date (%)
Risk-free rate based on 2-year swap rate (%)
Expected dividend yield (%)
2017 2016
10.77
10.72
13.06
1.26
3.36 8.45
8.45
20.66
0.99
4.26
Movements in the number of acquisition rights of the ESP Plan are as follows:
2017
Number of
acquisition
rights
At 1 January
Exercised and conversion upon expiry
Forfeited
Subscription
At 31 December
15,662,202
(6,302,173)
(2,356,609)
7,580,663
14,584,083
Average share price underlying acquisition rights exercised/converted
2016
Average
price
$9.106
$9.855
$9.545
$10.770
$9.576
$10.992
Number of
acquisition
rights
14,221,456
(26,443)
(9,177,286)
10,644,475
15,662,202
Average
price
$9.814
$9.337
$9.443
$8.450
$9.106
$8.876
At 31 December 2017, the weighted average remaining contractual life of outstanding acquisition rights was 1.0 years (2016: 1.1 years).
There were 7,602 (2016: 7,775) rights held by a director of the Bank.
13.4 DEFERRED SHARE PLAN
Total awards of 5,761,209 (2016: 7,473,690) ordinary shares, which included 220,000 (2016: 318,541) ordinary shares to a director of the
Bank, were granted to eligible executives under the DSP for the financial year ended 31 December 2017. The fair value of the shares at
grant date was $54.9 million (2016: $66.9 million).
During the year, 5,007,868 (2016: 4,350,930) deferred shares were released to employees, of which 271,875 (2016: 273,612) deferred
shares were released to a director of the Bank who held office as at the end of the financial year. At 31 December 2017, a director of the
Bank had deemed interest in 709,143 (2016: 738,024) deferred shares.
The nature, general terms and conditions of Share Option Scheme, Employee Share Purchase Plan and Deferred Share Plan are provided
in the Directors’ Statement and the Corporate Governance section of the Annual Report.
The accounting treatment of share-based compensation plan is set out in Note 2.19.7.
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OCBC ANNUAL REPORT 2017