HUTCHMED (China) Limited has adopted a new Share Option Scheme designed to retain and incentivise eligible employees and non-executive directors while aligning their interests with shareholders.
Key Features • Duration: The scheme is effective for 10 years from its adoption date, after which no new options can be granted, though existing options may continue until expiry.
• Aggregate Issuance Limit: The total number of new shares that may be issued upon exercise of all options under the scheme and any other share incentive plans is capped at 5% of the company’s issued share capital (excluding treasury shares) as at the adoption date. This limit can be “refreshed” with shareholder approval, up to 10% of issued shares at the date of the new approval.
• Individual Limit: No eligible participant may receive options that, together with all other equity awards granted to that individual in the preceding 12-month period, exceed 1% of issued share capital, unless separate shareholder approval is obtained.
• Vesting & Exercise: – Minimum vesting period of 12 months, unless specific exceptions (e.g., new hires replacing forfeited awards, death, disability, or performance-based grants) are approved by the Remuneration Committee. – Options are exercisable for up to 10 years from the grant date, subject to satisfaction of any performance conditions set by the Board. – Cashless exercise mechanisms are permitted, allowing sale or withholding of shares to settle exercise price and tax obligations.
• Governance & Restrictions: – Grants to directors, substantial shareholders, or their associates require prior approval from independent non-executive directors; certain large grants also need shareholder approval. – Options are non-transferable except on death. – A clawback policy applies, enabling the company to recoup benefits in specified circumstances. – The scheme includes detailed lapse provisions for expiry, cessation of employment, misconduct, takeovers, winding-up, and other events.
• Adjustment Mechanism: In the event of capital changes such as rights issues, consolidations, or subdivisions, the number of shares under option and/or the exercise price may be adjusted subject to auditor or independent adviser certification.
• Termination: The Board may terminate the scheme at any time; it also ends automatically ten years after adoption. Existing unexercised options will either remain valid under the scheme rules or be cancelled with compensation arrangements.
The new scheme complements HUTCHMED’s broader incentive framework and may be used alongside cash-based remuneration plans, subject to compliance with Hong Kong Listing Rules and any other relevant regulations.
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