HC Group Inc. — Remuneration Information 2019

Jul 8, 2019

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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HC GROUP INC. 慧聰集團有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock Code: 02280)

RENEWAL OF SCHEME LIMIT UNDER THE EMPLOYEES SHARE AWARD SCHEME AND

GRANT OF AWARDED SHARES PURSUANT TO THE EMPLOYEES SHARE AWARD SCHEME

RENEWAL OF SCHEME LIMIT UNDER THE SCHEME

As the existing maximum number of Awarded Shares to be granted under the Scheme has almost been utilized, on 8 July 2019, the Board resolved to amend and renew the Existing Scheme Limit to grant Awarded Shares up to 56,000,000 Shares, representing not more than 5% of the total issued share capital of the Company as at the date of this announcement.

GRANT OF AWARDED SHARES PURSUANT TO THE SCHEME

On 8 July 2019, after the approval of the Renewed Scheme Limit and pursuant to the Scheme, the Board resolved to grant an aggregate of 28,100,000 Awarded Shares, representing approximately 2.51% of the total issued share capital of the Company, to 26 Selected Employees, of which 4,000,000 Awarded Shares is granted to Mr. Zhang Yonghong, an executive Director and chief executive officer of the Company, and 2,000,000 Awarded Shares is granted to Mr. Liu Xiaodong, an executive Director and president of the Company, subject to the vesting periods and conditions of the grant of the Awarded Shares.

Reference is made to the announcements of the Company dated 17 November 2011 and 14 June 2012 in relation to, inter alia, the adoption of the Scheme by the Board and the renewal of scheme limit under the Scheme by the Board, respectively.

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RENEWAL OF SCHEME LIMIT UNDER THE SCHEME

As the existing maximum number of Awarded Shares which may be granted under the Scheme, being 27,834,037 Awarded Shares, representing not more than 5% of the total issued share capital of the Company as at the date of approval of the Existing Scheme Limit by the Board on 14 June 2012, has almost been utilized, on 8 July 2019, the Board resolved to amend and renew the Existing Scheme Limit to grant Awarded Shares up to 56,000,000 Shares, representing not more than 5% of the total issued share capital of the Company as at the date of this announcement.

GRANT OF AWARDED SHARES PURSUANT TO THE SCHEME

On 8 July 2019, after the approval of the Renewed Scheme Limit and pursuant to the Scheme, the Board resolved to grant an aggregate of 28,100,000 Awarded Shares, representing approximately 2.51% of the total issued share capital of the Company, to 26 Selected Employees, of which 4,000,000 Awarded Shares is granted to Mr. Zhang Yonghong (“ Mr. Zhang ”), an executive Director and chief executive officer of the Company, and 2,000,000 Awarded Shares is granted to Mr. Liu Xiaodong (“ Mr. Liu ”), an executive Director and president of the Company, subject to the following vesting periods and conditions:

		Percentage of Awarded
		Shares to be vested and
		released to the Selected
		Employee (subject to
		fulfillment of vesting
		conditions set out
Vesting period	Vesting date	in the next column)	Condition 1	Condition 2
			(Note 1)	(Note 2)
First period	On or after 8 January 2020	40%	The performance targets of the	The Selected Employee shall
			Company for the year 2019 is	remain as an Employee as at
			fully achieved.	31 December 2019.
Second period	On or after 8 January 2021	30%	The performance targets of the	The Selected Employee shall
			Company for the year 2020 is	remain as an Employee as at
			fully achieved.	31 December 2020.
Third period	On or after 8 January 2022	30%	The performance target of the	The Selected Employee shall
			Company for the year 2021 is	remain as an Employee as at
			fully achieved.	31 December 2021.

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Note:

1. 50% of the Awarded Shares in each vesting period shall vest in the Selected Employees only if Condition 1 and Condition 2 set out above are fully achieved. If the performance targets set out in Condition 1 above cannot be fully achieved, the number of Awarded Shares to be vested in the respective vesting period will be further adjusted in the following manner:

Percentage of performance targets achieved

Percentage of the Awarded Shares to be vested and released to the Selected Employee

100% 100% 70%-99% Proportionate to the percentage of performance targets actually achieved Less than 70% Nil

1. The remaining 50% of the Awarded Shares to be awarded in each vesting period shall vest in the Selected Employees only if Condition 2 is fulfilled. If the Selected Employee ceases to be an Employee before the vesting date of the relevant vesting period, all of the Awarded Shares granted to the Selected Employee for that vesting period and any vesting periods thereafter shall lapse in full.

The grant of Awarded Shares to Mr. Zhang and Mr. Liu forms part of the remunerations of Mr. Zhang and Mr. Liu under their respective service contracts, and is exempt from the reporting, announcement and independent shareholders’ approval requirements under Rule 14A.73(6) and Rule 14A.95 of the Listing Rules. Each of Mr. Zhang and Mr. Liu had abstained from voting on the board resolution approving the grant of Awarded Shares to himself, respectively.

The Company will provide to the trustee of the Scheme (the “ Trustee ”) a relevant sum, who will purchase the 28,100,000 Awarded Shares from the market.

Pursuant to the Scheme Rules, the Board shall not make any further award which will result in the number of Shares awarded by the Board under the Scheme to be in excess of 5% of the total issued share capital of the Company as at 8 July 2019.

REASONS FOR RENEWAL OF THE EXISTING SCHEME LIMIT AND THE GRANT OF THE AWARDED SHARES

The 26 Selected Employees are the core management of the Group who have continuously made outstanding contributions to the Company. In view of their great potential to becoming officers to implement the Company’s future strategies, the Board believes that the grant of the Awarded Shares will enhance the competitiveness of the Group’s remuneration package to attract and retain the Group’s senior management, and therefore the renewal of the Existing Scheme Limit and the grant of the Awarded Shares are in the interest of the Company and the Shareholders as a whole.

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DEFINITIONS

In this announcement, the following expressions shall, unless the context requires otherwise, have the following meanings:

“Awarded Shares” in respect of a Selected Employee, such number of Shares purchased by the Trustee out of cash paid by the Company and has the meaning ascribed to such term in the Scheme Rules “Board” the board of Directors “Company” HC Group Inc., a company incorporated with limited liability under the laws of the Cayman Islands, the Shares of which are listed on the main board of the Stock Exchange “Director(s)” directors of the Company “Employee” any employee (including director) of the Company or of any of its Subsidiary “Existing Scheme Limit” the maximum number of Awarded Shares (i.e. 27,834,037 Shares) which may be granted under the Scheme, being not more than 5% of the total issued share capital of the Company as at the date of approval of the renewal of the scheme limit under the Scheme by the Board on 14 June 2012 “Group” the Company and its subsidiaries “Hong Kong” Hong Kong Special Administrative Region “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange “PRC” the People’s Republic of China, excluding Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan “Renewed Scheme Limit” the maximum number of Awarded Shares (i.e. 56,000,000 Shares) which may be granted under the Scheme, being not more than 5% of the total issued share capital of the Company as at the date of approval of the further renewal of the scheme limit under the Share Awarded Scheme by the Board on 8 July 2019 “Scheme” the share award scheme of the Company adopted by the Board on 17 November 2011, as amended from time to time

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“Scheme Rules” the rules relating to the Scheme “Selected Employee(s)” any Employee(s) selected by the Board pursuant to the Scheme Rules for participation in the Scheme and has the meaning ascribed to such term in the Scheme Rules

“Share(s)” ordinary share(s) of HK$0.10 each in the share capital of the Company

• “Shareholder(s)”

holder(s) of the Shares

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

“Subsidiary(ies)” subsidiary(ies) of the Company from time to time within the meaning of the Companies Ordinance (Chapter 622 of the Laws of Hong Kong)

• “Trust”

the trust constituted by the Trust Deed

• “Trust Deed”

the trust deed or other document entered or to be entered into between the Company and the Trustee (as restated, supplemented and amended from time to time) in respect of, inter alia, the constitution of the Trust and the appointment of the Trustee for the administration and operation of the Scheme

• “%”

per cent.

By Order of the Board HC Group Inc. Liu Jun Chairman

Hong Kong, 8 July 2019

As at the date of this announcement, the Board comprises:

• Mr. Liu Jun (Executive Director and Chairman)

• Mr. Zhang Yonghong (Executive Director and Chief Executive Officer)

• Mr. Liu Xiaodong (Executive Director and President)

• Mr. Guo Fansheng (Non-executive Director)

• Mr. Li Jianguang (Non-executive Director)

• Mr. Sun Yang (Non-executive Director)

• Mr. Zhang Ke (Independent non-executive Director)

• Mr. Zhang Tim Tianwei (Independent non-executive Director)

• Ms. Qi Yan (Independent non-executive Director)

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