Share Issuance Scheme （员工發股计划）

Share Issuance Scheme （员工發股计划）

1.    Employee Share Option, ESOS (雇员认股计划)

Employees allow to buy company share with discounted of 10% max. of market price. But discounted price cannot be over than 10% of 5 days weighted average market price.

2.    Share Grant Scheme (雇员免费送股)

Free share given to employee

             Any share issuance scheme proposal must be approved by shareholder in general meeting. Validity period of each proposal share issuance scheme normally between 5 to 10 years. After the validity period new proposal is required for the resolution. New issuance share quantity cannot over the existing share quantity of 30%. ESOS committee established once approval is granted by shareholder and ESOS committee will draft the share quantity allocation, price and vesting period (allow to sell period).

Shareholder benefits may affect;

1.    According to financial statement requirement regardless ESOS or SGS must record as an expenses and its will impact the bookkeeping profit. Even it has not affect cash flow and dividend distribution capability but market confidence level drop may happen as affect profit.

2.    If company allocate huge quantity to a single employee and the ESOS committee does not set vesting period properly. Cash out may happen anytime and will cause share price drop pressure.

3.    Independent Director may include in SIS program to indeed their contribution to the company. Independent director play as supervise role in company once involving in ESOS program and have company share become not independent. Independent director mean a director does not have a single share of company.

4.    New share issue, company share quantity will increase consequently EPS will be dilute and affect the company share price performance.