Eligible participants

Generally no restriction as to who can be eligible participants

Eligible participants are restricted to:

·         employees of the issuer’s group;

·         employees of the holding companies, fellow subsidiaries or associated companies of the issuer (“Related Entity”); and

·         service providers to the issuer’s group (“Service Provider”).

Scheme mandate

·         Grants of share options from all share option schemes cannot exceed 10% of an issuer’s issued shares (the “10% Scheme Mandate Limit”).

·         Shareholders may refresh the scheme mandate at any time.

·         The total number of outstanding options cannot exceed 30% of the issued shares.

·         In addition to the share option schemes, the 10% Scheme Mandate will extend to cover share award schemes that involve the issuance of new shares.

·         The 10% scheme mandate limit may only be refreshed every three years; Additional refreshments within the three-year period must be approved by independent shareholders.

·         The issuer must set a sub-limit for the grants to Service Providers and disclose the basis for determining the sub-limit in its circular to shareholders, who will separately vote on the sub-limit.

·         Remove the 30% limit on outstanding share options.

Minimum vesting period

No restriction

12 months, unless the remuneration committee approves a shorter vesting period for the Share Grants made to employee participants specifically identified by the issuer.

Large grants which require shareholders’ approval

Grants of options in excess of 1% of issued shares over a 12-month period require shareholders’ approval (the “1% Individual Limit”).

Extend the 1% Individual Limit to grants of share awards under the share award schemes.

Grants to directors, chief executives or substantial shareholders of the issuer

·         Grants of options to directors, chief executives or substantial shareholders of the issuer require approval by independent non-executive directors (“INED(s)”).

·         De minimis exemption: grants of options to INEDs and substantial shareholders no more than 0.1% of issued shares and in the value of $5 million over a 12-month period does not require independent shareholders’ approval.

·         All Share Grants to connected persons require approval by the remuneration committee, instead of INEDs.

·         Restrict the application of de minimis exemption by remove the HK$5 million value qualification for application of de minimis exemption. Grants to directors, chief executives or substantial shareholders of the issuer in excess of 0.1% of issued shares over a 12-month period require independent shareholders’ approval.

Performance targets and clawback mechanism

Disclosure of performance targets (or a negative statement) and no restrictions for clawback mechanism in grant announcement.

Require disclosure of the performance targets and clawback mechanism for the grants in announcement. If there is no performance targets and clawback mechanism for the grants, the remuneration committee’s views must be disclosed.

Disclosure to individuals (also applicable to Share Schemes funded by existing shares)

·         Disclose details of option grants by announcement.

·         Disclose grants to connected persons on an individual basis.

·         Require disclosure on an individual basis of Share Grants (including grants under share award schemes) to the following persons:

o  a connected person;

o  a Related Entity participant or service provider with Share Grants in excess of 0.1% of the issuer’s issued shares over any 12-month period; or

o  a participant with Share Grants in excess of the 1% Individual Limit.

·         Disclose the number of shares available for future grant under the scheme mandate and the Service Provider sub-limit (if applicable).

Disclosure of remuneration committee’s work in annual report

Disclose a summary of the work performed by the remuneration committee during the year in the corporate governance report of the annual report.

Disclose all matters relating to Share Schemes reviewed by the remuneration committee during the year in the corporate governance report of the annual report.

Changes to terms of share award or option granted

Require shareholders’ approval for changes to the terms of the share option schemes or terms of option granted under the share option schemes.

Relax the requirement by allowing approval from the remuneration committee and/or shareholders of the issuer if there are changes.

Transfer of share awards or options

A grantee cannot transfer share options.

Allow a transfer of share awards or options to a vehicle (including a trust or a private company) for the benefit of the grantee and his/her family members (e.g. for estate planning or tax planning purposes), provided that such transfer would continue to meet the purpose of the scheme and other requirements of Chapter 17.

Voting rights of unvested scheme shares

No restriction

·         The trustee holding unvested shares of a Share Scheme shall abstain from voting on matters that require shareholders’ approval under the Listing Rules.

·         An issuer must disclose the number of unvested shares held by the trustee of its Share Scheme in its monthly returns.

Share Schemes of subsidiaries of issuer

The requirements under Chapter 17 of the Listing Rules are applicable to share option schemes adopted by subsidiaries of listed issuers which involve issue of new securities

The application of Chapter 17 of the Listing Rules will extend to share option schemes adopted by subsidiaries of listed issuers, whether such schemes involve issue of new shares or granting of existing share, subject to the subsidiary qualifying as an insignificant subsidiary.