Annual Financial Statements 2020

76 76 ANNUAL FINANCIAL STATEMENTS NOTES TO THE ANNUAL FINANCIAL STATEMENTS CONTINUED STANDARD BANK NAMIBIA LIMITED Annual financial statements 2020 77 37. 37.2 Equity-linked transactions continued Equity compensation plans continued 37.2.2 Cash-settled share-based payments All employees granted an annual performance award over a threshold and who is in employment in a company entity domiciled outside of South Africa have part of their award deferred. In addition the company makes special awards to qualifying employees in employment of a company entity. The awards are classified as cash-settled awards. The award units are denominated in employee's host countries' local currency, the value of which moves parallel to the changes in the price of the SBG shares listed on the JSE and accrue notional dividends over the vesting period which are payable on vesting. Awards vest in three equal tranches at 18 months, 30 months and 42 months from the date of award. Final pay-out is determined with reference to SBG share price on vesting date. Weighted average fair 2020 units value at Currency grant date Expected life at Opening grant date (years) balance Transferred between group Granted Exercised Forfeited companies Outstanding NAD N$152.64 2.51 42 336 29 292 (22 085) (7 856) 41 687 37. 37.3 Equity-linked transactions continued Deferred bonus scheme (DBS) It is essential for the company to retain key skills over the longer term. This is done particularly through share-based incentive plans. The purpose of these plans is to align the interests of the company, its subsidiaries and employees, as well as to attract and retain skilled, competent people. The company has implemented a scheme to defer a portion of incentive bonuses over a minimum threshold for key management and executives. This improves the alignment of shareholder and management interests by creating a closer linkage between risk and reward, and also facilitates retention of key employees. The purpose of the DBS 2012 is to encourage a longer-term outlook in business decision making and closer alignment of performance with long-term value creation. All employees granted an annual performance award over a threshold have part of their award deferred. The award is indexed to the company's share price and accrues notional dividends during the vesting year, which are payable on vesting. The awards vest in three equal amounts at 18 months, 30 months and 42 months from the date of award. The final pay-out is determined with reference to the company's share price on vesting date. Units 2020 2019 Currency NAD ZAR 2019 units Reconciliation Units outstanding at beginning of the year Exercised Weighted average fair value at grant date Expected life at grant date (years) Opening balance Granted Exercised Forfeited Transferred between group companies Outstanding Lapsed Transfers Units outstanding at end of the year N$182.43 2.51 42 481 20 138 (15 370) (4 913) 42 336 37.4 2 415 (2 415) 7 826 (7 826) 33 858 (23 289) (2 061) (682) 7 826 Performance reward plan The performance reward plan (PRP) is performance-driven share plan which rewards value delivered against specific targets. The PRP incentivises a group of senior executives to meet the strategic long-term objectives that deliver value to shareholders, to align the interests of those executives with those of shareholders and to act as an attraction and retention mechanism in a highly competitive marketplace for skills. The PRP operates alongside the existing conditional, equity-settled long-term plans, namely the EGS, DBS, and other share incentive schemes. The awards are indexed to the SBN Holdings Limited's share price and accrues notional dividends during the vesting period, which are payable on vesting. Shares that vest (if any), and that are delivered to the employee, are conditional on the pre- specified performance metrics. These awards have been partially hedged through the use of equity forwards. Awards are issued to individuals in employment of a group entity domiciled outside of South Africa are classified as cash-settled. Movement summary Units outstanding at beginning of the year Granted Exercised Units outstanding at end of the year Weighted average fair value at grant date Expected life (years) Units 2020 2019 38 400 47 900 13 200 13 170 (16 000) (22 670) 38 400 35 600 N$152.64 3.07 N$182.43 3.07

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