Hua Hong Grace Semiconductor Limited has released a circular convening an Extraordinary General Meeting (EGM) for 22 October 2026 to seek shareholder approval for two key items:
1) Adoption of a new 10-year share option scheme; and 2) Authorisation to issue up to 52.14 million share options (the “2026 Options”) under that scheme.
Key terms of the proposed Share Option Scheme • Scheme mandate limit: Capped at 10% of the issued share capital, or 192.85 million shares based on the 1.93 billion shares outstanding on the latest practicable date (18 September 2026). • Eligibility: Executive and non-executive directors, senior management, key technical personnel and other core employees; independent non-executive directors are excluded. • Option price: Not lower than the higher of (i) the closing price on the grant date, (ii) the average closing price over the preceding five trading days, and (iii) the par value of a share. • Vesting: Minimum two-year vesting for any option; 2026 Options carry a three-year cliff, followed by vesting tranches of 30%, 30% and 40% on the third, fourth and fifth anniversaries of the grant date, respectively. • Exercise window: Up to seven years from the grant date for each option. • Performance hurdles: Corporate metrics (revenue and profit) benchmarked against both historical performance and peer averages, and individual appraisal scores; unfulfilled portions are forfeited. • Clawback: The board may cancel or recover unvested or unexercised options in cases such as misconduct, breach of obligations, or reputational damage to the group.
Details of the initial 2026 Option Grant • Size: Up to 52.14 million options, equating to 2.71% of the current issued share capital. • Post-grant headroom: 140.71 million shares (7.29% of issued capital) remain available under the 10% scheme mandate. • Grant timing: Within 12 months after EGM approval; grantees expected to number fewer than 2,700 employees.
Regulatory and shareholder approvals • The scheme and the initial grant both require ordinary resolutions at the EGM. • Additional approvals are required from the State-owned Assets Supervision and Administration Commission of Shanghai Municipal Government and the Hong Kong Stock Exchange for listing of option-related shares.
Outstanding legacy options • The company’s 2015 option scheme expired in August 2022; 67,000 options from December 2019 grants remain exercisable until December 2026.
The board recommends shareholders vote in favour of the new incentive framework, which is positioned to align employee remuneration with long-term corporate performance.