HKEX to Extend Regulatory Effect of Share Schemes under the Listing Rules | 联交所扩大《上市规则》下股份计划的监管效力

• Hong Kong

• Equity Capital Markets

29-08-2022

On 29 July 2022, The Stock Exchange of Hong Kong Limited (the “HKEX”) published the Consultation Conclusions on Proposed Amendments to Listing Rules relating to Share Schemes of Listed Issuers (the “Consultation Conclusions”), highlighting the key amendments to the share scheme regime under Chapter 17 of the Listing Rules (“Chapter 17”), following its consultation paper issued in October 2021.

With effect from 1 January 2023, the following key changes to Chapter 17, will apply to listed issuers as well as Principal Subsidiaries (as defined under the Listing Rules) of listed issuers:

• Extending the ambit of Chapter 17 to include all share schemes (“Share Schemes”), including grants of share awards and share options, while defining the scope of eligible participants (“Eligible Participants”) under the Share Scheme to capture employee participants, related entity participants and service providers;

• Enhancing the regulation of Share Schemes to manage the dilution of listed shares and accordingly, the interest of shareholders; and

• Streamlining the disclosure requirements to maintain high levels of shareholder protection.

Scope of Application of Chapter 17

Extending the ambit of Chapter 17 to capture all Share Schemes

Under the current drafting, Chapter 17 only applies to share option schemes. Nevertheless, share awards involving new issues of shares may present a similar potentially dilutive impact of shareholders’ interests. Although the same would not apply to share awards that are to be satisfied with existing shares, it is equally important to maintain consistency across the applicable rules.

Accordingly, the revised Chapter 17 is intended to encompass all Share Schemes, including both grants of share awards in respect of new and existing shares and share options.

Defining scope of eligible participants

At the moment, “participants” under Chapter 17 is only labelled as a broad generalisation without further classification of the parties that may be captured under Chapter 17.

Following the amendments, the following three categories shall be classified as “participants” for the purposes of Chapter 17.

(1) Employee Participants – directors and employees of the listed issuers or any of its subsidiaries.

(2) Related Entity Participants – directors and employees of the holding companies, subsidiaries and associated companies of the listed issuer.

(3) Service Providers – persons (individual or corporate entity) who provide services to the issuer group on a continuing or recurring basis in its ordinary and usual course of business which are in the interests of the long-term growth of the issuer group.

Service providers may include persons who work for the issuer as independent contractor where the continuity and frequency of their services are akin to those of employees. However, placing agents or financial advisers providing advisory services for fundraising, M&A, or other professional service providers such as auditors or valuers who provide assurance, or are required to perform their services with impartiality and objectivity should be excluded.

Enhancing Regulation of Share Schemes

To afford additional protection for minority shareholders against excessive shareholding dilution and to allow sufficient flexibility for listed issuers, the following key amendments are to be adopted:

Scheme Mandate Limit & Service Providers Sublimit

The current 10% scheme mandate limit shall apply to ALL share schemes, namely, aggregate number of shares which may be issued under all Share Schemes of a listed issuer must not exceed 10% of the relevant class of shares (the “Scheme Mandate Limit”). The Scheme Mandate Limit may be refreshed by shareholders once every three years. If additional refreshments within the three-year period are to be proposed, with certain exemptions, independent shareholders’ approval would be required. As a result, the current 30% limit on outstanding options is unnecessary and is therefore abolished.

In respect of Service Providers, it is required to set a sublimit within the Scheme Mandate Limit and such sublimit must be separately approved by shareholders. The basis for determining the sublimit and an explanation as to why such sublimit is appropriate and reasonable have to be disclosed in the circular of the listed issuer for the approval of the Share Scheme.

Minimum Vesting Period

The minimum vesting period for all grants of share awards and/or options over new shares of the issuer (“Share Grants”) shall not be less than 12 months. The minimum vesting period can be shortened if the following conditions have been fulfilled – (i) the Share Grants are made to Employee Participants; (ii) the relevant scheme document sets out the specific circumstances where the Share Grants are made with a shorter vesting period; and (iii) the explanation of the board of directors (or the remuneration committee if the Share Grants are made to the directors and/or senior management) on why the arrangements are appropriate and how the Share Grants align with the purpose of the scheme has been clearly disclosed in the circular.

Exercise Price or Share Grant Price

The current restrictions on the exercise price of share options are retained. For grants of new shares under share award schemes, no restrictions on the share grant price are imposed.

Restrictions on Large Share Grants to Individual Participants and Share Grants to Connected Persons

The following restrictions on Share Grants are imposed:

(1) Share Grants to an individual participant – shareholders’ separate approval (such participant and his/her close associates (or associates if he/she is a connected person) shall abstain from voting) is required if grants of share awards/ options in the 12-month period (up to and including the date of such granting) in aggregate to an individual participant exceed 1% of the issued shares.

(2) Share Grants to a director, chief executive or substantial shareholder (or any of their respective associates) are subject to the approval of independent non-executive directors (excluding the grantee), and additional independent shareholders’ approval would also be required if the following grant shall result in the shares issued and to be issued to such person in aggregate exceed 0.1% of the total class of shares in issue in the 12-month period:

• grants of share awards (excluding share options) to a director (other than independent non-executive directors) or chief executive, or any of their associates ; or

• grant of share awards or options to an independent non-executive directors or substantial shareholder, or any of their associates.

In addition, the HK$5 million de minimis threshold for grants of share options to an independent non-executive director or substantial shareholder of the listed issuer is removed.

Voting of unvested shares

It is now clear that the trustee holding unvested shares of a share scheme, whether directly or indirectly, shall abstain from voting on matters that require shareholders’ approval under the Listing Rules, unless otherwise required by law to vote in accordance with the beneficial owner’s direction and such a direction is given.

Streamlining Disclosure Requirements

Share Grants

Going forward, for Share Grants, disclosure of details for grants made to the following participants are to be made on an individual basis – (i) connected persons (as defined under the Listing Rules); (ii) participants with options and awards granted or to be granted exceeding the 1% individual limit; or (iii) related entity participants or Service Providers with options and awards granted or to be granted in any 12-month period exceeding 0.1% of the relevant class of shares issued.

Specifically, for Share Grants involving performance targets and clawback mechanism, all grant documents and grant announcements must include – (i) a description of the performance targets (which may be qualitative) attached to the awards or options to be granted (or if none, a negative statement to that effect in the grant documents); (ii) a description of the clawback mechanism to recover or withhold the remuneration to any participants (or if none, a negative statement to that effect in the grant documents); and (iii) only for grant announcements, the view of remuneration committee on the Share Grants to directors and senior management without performance targets and/or clawback mechanism.

Disclosure in periodic reports

Further, the listed issuers must disclose (not an exhaustive list):

• in their annual reports and interim reports certain information regarding the granting of awards/ options to (i) each director, chief executive or substantial shareholder of the listed issuers or their respective associates, (ii) each participant exceeding 1% individual limit, (iii) each related entity participant or service provider exceeding 0.1% limit, and (iv) other participants by category;

• in their remuneration report or corporate governance report a summary of material matters relating to share schemes that were reviewed and/or approved by the remuneration committee during the financial year;

• in their annual reports a summary of each share scheme setting out certain details; and

• for share scheme involving its existing shares, in their annual reports certain information relating to grants to (i) each director, (ii) the five highest paid individuals during the financial year in aggregate; and (iii) other grantees in aggregate.

Application to Share Schemes of Principal Subsidiaries

Certain rules, with appropriate modifications, shall apply to share schemes of a principal subsidiary of a listed issuer (whether these involve new shares issued by the subsidiary or existing shares so held by or for the issuer) as if there were the share schemes of the listed issuer.

A “principal subsidiary” refers to a subsidiary whose revenue, profits or total assets accounted for 75% (or more) of that of the listed issuer under the percentage ratios in any of the latest three financial years.

Transitional Arrangements – What Listed Issuers with an Existing Share Scheme Have to Do?

The revised Chapter 17 would take effect from 1 January 2023 and listed issuers should take note of the impact of the revised rules on the existing Share Schemes of the listed issuers:

	Share Option Scheme	Share Award Scheme
		With Advanced Mandate	Utilising General Mandate
Disclosure requirements in announcement, interim report and annual report	From 1 January 2023
Share grants to eligible participants (as defined under the revised Chapter 17)	For financial years commencing on or after 1 January 2023
Scheme Mandate	Share grants can be made under the existing scheme mandate	Share grants can be made under the existing scheme mandate  Note: no further refreshment is allowed	Issuers may grant shares under the general mandate until the second AGM after 1 January 2023
Amendment of terms of scheme to comply with the revised Chapter 17	On or before the refreshment of the scheme mandate limit/ expiry of scheme mandate/ adoption of new share scheme

Takeaways

Listed issuers often adopt Share Scheme to incentivise, motivate and retain talents. The rules pertaining to Share Schemes, or rather share options, were last updated approximately a decade ago and are long overdue for an update to capture the commonly adopted arrangements under current market practices. Listed issuers which intend to adopt new Share Schemes should take note of the new requirements under the revised Chapter 17. In respect of existing Share Schemes which are already in place, listed issuers should review and consider whether they need to revise their terms so as to comply with the new requirements when the existing mandates for such schemes expire.

The amendments echo a common theme that the HKEX has been striving to achieve in the recent years – placing the protection of shareholders (particularly minority shareholders) as a key priority. It would be interesting to observe HKEX’s ongoing updates to other aspects of the Listing Rules as the HKEX continues to unfold its ideas to enhance shareholders’ protection going forward.

Note: the above information is for reference purposes only and should not be regarded as a substitute for taking legal advice. It is only a general outline on the rules pertaining to share schemes of listed issuers under the Listing Rules and the amendments thereto, and is not intended to be exhaustive. If assistance in relation to any particular situation is required, please contact our solicitors.

 

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继2021年10月发布咨询文件后，香港联合交易所有限公司（“联交所”）于2022年7月29日刊发了《建议修订有关上市发行人股份计划的〈上市规则〉条文的谘询总结》（“咨询结论”），强调了对《上市规则》第17章（“第17章”）中股份计划制度的主要修订。

从2023年1月1日起，第17章的以下主要变化将适用于上市发行人以及上市发行人的主要附属公司（根据《上市规则》的定义）。

• 扩大第17章的范围，以涵盖所有涉及授出股份奬励及股份期权的股份计划（“股份计划”），同时界定股份计划的合资格参与者（“合资格参与者”），包括雇员参与者、关连实体参与者和服务提供者。

• 提升对股份计划的监管，以管理上市股份的摊薄情况和相应的股东利益；以及

• 简化披露要求，以维持高水平的投资者保障。

第17章的适用范围

扩大第17章的范围以涵盖所有股份计划

根据目前的文本，第17章只适用于股份期权计划。然而，涉及新发行股份的股份奖励可能对股东的利益产生类似的潜在摊薄影响。虽然这一点不适用于以现有股份支付的股份奖励，但保持各适用规则的一致性同样重要。

因此，修订后的第17章旨在涵盖所有的股份计划，包括授予新的和现有的股份的股份奖励及股份期权。

界定合资格参与者的范围

目前，第17章下的“参与者”只是被标示为一个广泛的概括，而没有对第17章可能包含的各方进行进一步分类。

修订后，为第17章的目的，以下三类人应被列为“参与者”。

（1） 雇员参与者——上市发行人或其任何附属公司的董事和雇员。

（2） 关连实体参与者——上市发行人的控股公司、同系附属公司和联营公司的董事和雇员。

（3） 服务提供者——一直并持续向上市发行人集团在其日常业务过程中提供有利其长远发展的服务的人士（个人或公司实体）。

服务提供者可包括以独立承包人的身份为发行人工作的人士（如其服务的持续性及频密程度与雇员相若）。但是，服务提供者不应包括配售代理或就集资、合并或收购事宜提供顾问服务的财务顾问，以及提供鉴证服务又或须公正客观地执行服务的其他专业服务提供者，例如核数师或估值师。

提升对股份计划的监管

为了向少数股东提供额外保障，令其免受股份大幅摊薄影响，并为上市发行人提供足够的灵活性，将采用以下主要的修订：

计划授权限额和服务提供者分项限额

目前10%的计划授权限额将适用于所有 股份计划，即上市发行人根据所有股份计划可发行的股份总数不得超过相关类别股份的的10%（“计划授权限额”）。计划授权限额可每三年由股东更新一次。如果要在三年内提出额外的更新，除了某些获得豁免的情况外，还需要经独立股东的批准。因此，目前规定中对未行使股份期权的30%限制变为不必要而被删除。

就服务提供者而言，发行人须在计划授权限额内另行设定分项限额，而该分项限额必须由股东另行批准。上市发行人须在有关批准股份计划的相关通函中，披露确定服务提供者分项限额的基准，并解释为何服务提供者分项限额为适当而合理。

最短归属期

所有授予的股份奖励及/或发行的新股期权（“股份授予”）的最短归属期不得少于12个月。在满足以下条件的情况下，最短归属期可以缩短：(i)股份授予是向雇员参与者作出的；(ii)相关计划文件载列了授予股份的归属期可予缩短的特定情况；以及(iii)在通函中清楚地披露了董事会（或如属向董事和/或高级管理层作出股份授予，则薪酬委员会）的解释，即为何有关安排是适当的，以及有关的授予股份如何符合计划的目的。

行使价或股份授出价

现时对股份期权行使价的限制被保留。就根据股份奖励计划授予的新股份而言，没有对股份授出价施加限制。

向个别参与者授予大量股份和向关连人士授予股份的限制

对股份授予有以下限制：

（1） 向个别参与者授予股份——如果在12个月内（截至并包括授予日期）向个别参与者授予的股份奖励/股份期权总额超过已发行股份的1%，则需要另行寻求股东的批准（会上参与者及其紧密联系人或（若参与者为关连人士）其联系人必须放弃投票权）。

（2）向董事、最高行政人员或主要股东（或其各自的任何联系人）授予股份须经独立非执行董事（不包括获授人）批准，如果以下授予将导致有关人士在12个月期间内根据该等授予已发行和将发行的股份总数超过相关类别已发行股份总数的0.1%，则还须经独立股东批准：

• 向董事（独立非执行董事除外）、主要行政人员或其各自的任何联系人授予股份奖励（不包括授予股份期权）；或

• 向独立非执行董事或主要股东，或其各自的任何联系人授予股份奖励或股份期权。

此外，移除了向上市发行人的独立非执行董事或主要股东授出股份期权的500万港元最低豁免限额。

未归属股份的表决权 

现已清楚表明，就《上市规则》规定须经股东批准的事宜投票表决时，直接或间接持有未归属股份的股份计划受托人须放弃投票权，除非法律另有规定其须按实益拥有人的指示投票表决（且有关指示已作出）。

简化披露要求

股份授予

今后，就股份授予而言，向以下参与者授予股份的详情将须个别逐一披露——(i)关连人士（根据上市规则的定义）；(ii)已获授予或将获授予的股份期权和奖励超过1%个人限额的参与者；或(iii)在任何12个月期间内已获授予或将获授予的股份期权和奖励超过相关类别股份0.1%的关连实体参与者或服务提供者。

具体而言，对于涉及表现目标和退扣机制的股份授予，所有计划文件和授出公告必须包括——(i)对即将授予的奖励或股份期权所附带的表现目标的描述（可为定性描述），如果没有有关表现目标，则须于授出文件中包括就此作出的否定声明；(ii)关于收回或扣起任何参与者的薪酬的退回机制的说明，如果没有退扣机制，则须于授出文件中包括就此作出的否定声明；以及(iii)仅就授出公告而言，薪酬委员会对向董事和高级管理层授予股份而不设表现目标和/或退回机制所发表的意见。

定期报告中的披露

此外，上市发行人必须披露（所列並非全部）：

• 在其年报及中期报告中，披露有关授予(i)每名上市发行人董事、最高行政人员或主要股东或其各自的联系人、(ii)每名超过1%个人限额的参与者、(iii)每名超过0.1%限额的关连实体参与者或服务提供者，以及(iv)其他参与者类别的股份奖励/股份期权的若干资料；

• 在其薪酬报告或企业管治报告中，提供在该财政年度内经薪酬委员会审阅和/或批准的与股份计划有关的重大事宜摘要；

• 在其年报中提供每项股份计划的摘要，列明某些细节；以及

• 对于涉及其现有股份的股份计划，在其年度报告中提供有关授予(i)每位董事，(ii)该财政年度内总薪酬最高的五位人士（合计）；以及(iii)其他获授人（合计）的某些信息。

适用于主要附属公司的股份计划

某些规则经适当修订后，将适用于上市发行人的主要附属公司的股份计划（无论该等计划是否涉及附属公司发行的新股或其代表持有的附属公司现有股份），如同该等股份计划是上市发行人的股份计划。

“主要附属公司”指在最近三个财政年度中任何一年收入、利润或总资产的有关百分比率占上市发行人75%（或以上）的附属公司。

过渡性安排——上市发行人该怎么做？

修订后的第17章将于2023年1月1日起生效，上市发行人应注意修订后的规则对现有股份计划的影响：

	股份期权计划	股份奖励计划
		预先授权下	使用一般授权
公告、中期报告和年报中的披露要求	自2023年1月1日起
向合资格参与者（根据修订后的第17章定义）授予股份	适用于2023年1月1日或之后开始的财政年度
计划授权	可以根据现有的计划授权授予股份	可以根据现有的计划授权授予股份  注：不允许进一步更新	发行人可根据一般授权授予股份，直至2023年1月所列並非全部日之后的第二次股东周年大会
修改计划条款以符合修订后的第17章的规定	在更新计划授权限额/计划授权到期/采用新股份计划时或之前

经验之谈

上市发行人经常采用股份计划来吸引、激励和保留人才。有关股份计划或股份期权的规则上一次更新是在大约十年前，本应较早进行更新，以反映当前市场惯例下普遍采用的安排。拟采用新股份计划的上市发行人应注意修订后的第17章的新规定。对于现有的股份计划，上市发行人应予以审视并考虑其是否需要修改其条款，以期在此类计划的现有授权到期时符合新的规定。

此等修订呼应了联交所近年来一直努力实现的一个共同主题——将保护股东（尤其是少数股东）放在首位。随着联交所继续展示其加强股东保护的想法，观察联交所对《上市规则》其他方面的持续更新将是一件有趣的事情。

注：本资料仅作参考之用，不应视为可替代法律意见。本资料仅是对《上市规则》中有关上市发行人股份计划的规则及其修订的一般概述，并不包括所有有关的信息。如果需要与任何特定情况有关的协助，请联系本所律师。