HG Semiconductor Limited — Share Issue/Capital Change 2024

Dec 4, 2024

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 disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

HG SEMICONDUCTOR LIMITED

宏光半導體有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 6908)

GRANT OF AWARDS PURSUANT TO SHARE AWARD SCHEME

This announcement is made pursuant to Rule 17.06A of the Rules (the "Listing Rules") Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Stock Exchange").

The board (the "Board") of directors (the "Director(s)") of HG Semiconductor Limited (the "Company", together with its subsidiaries, the "Group") announces that on 4 December 2024 (the "Date of Grant"), awards (the "Awards") in respect of a total of 67,565,478 ordinary shares (the "Awarded Shares") of HK$0.01 each in the share capital of the Company (the "Shares") were granted to the eligible participants set forth below (collectively, the "Grantees") pursuant to the share award scheme of the Company adopted by the shareholders of the Company on 29 December 2023 (the "Share Award Scheme"), subject to acceptance by the Grantees.

Details of the Awards granted are as follows:

Date of Grant: 4 December 2024

Number of Awarded Shares involved under the Awards granted: 67,565,478

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Category of grantees:	Category of Grantees	Position in the Group	Number of Award Shares
Directors	Dr. Xu Zhihong	Executive Director	750,000
	Mr. Zhao Yi Wen	Executive Director	750,000
	Mr. Lu Kailin	Executive Director	750,000
	Mr. Li Yang	Executive Director	750,000
	Mr. Zou Haiyan	Independent non-executive Director	200,000
	Mr. Siu Miu Man	Independent non-executive Director	200,000
	Ms. Liu Wanwen	Independent non-executive Director	200,000
Employees	25 employees	Employees	63,965,478
Total			67,565,478

Purchase price of the Awards: Nil

Closing price of the Shares on the Date of Grant: HK$0.57 per Share

Vesting period: Subject to acceptance of the Awards by the Grantees, all the Awarded Shares involved under the Awards granted to the Grantees will be vested in the Grantees on the expiry of 12 months from the date of grant (except for one employee Grantee where 50% of the Awarded Shares involved in the Award granted to him will be vested on the expiry of 12 months from the date of grant and the remaining 50% will be vested on the expiry of 24 months from the date of grant).

Performance targets: There are no performance targets attached to the Awards. Having considered that (i) the grant of the Awards has already taken into account the ability of the Grantees' future potential contributions to the growth of the Group; and (ii) the Awards are subject to a vesting period of 12 months or more from the Date of Grant, the remuneration committee (the “Remuneration Committee”) of the Board is of the view that performance targets are not necessary for the Awards granted to the Grantees.

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Clawback mechanism:
No clawback mechanism is stipulated. The Remuneration Committee is of the view that clawback mechanism is not necessary considering the lapse and cancellation of the Awards under various scenarios have already been provided for under the Share Award Scheme, which sufficiently safeguard the Company's interests.

The Awards will be satisfied by the allotment and issue of new Shares within the scheme mandate limit (the “Scheme Mandate Limit”) of the Share Award Scheme.

The 67,565,478 Awarded Shares involved under the Awards granted to the Grantees represent approximately 9% of the issued share capital of the Company as at the date of this announcement. The 67,565,478 Awarded Shares involved under the Awards represent the value of approximately HK$38.51 million, taking into account the closing price of HK$0.57 per Share as stated in the daily quotation sheets issued by the Stock Exchange on the date of grant.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, save as disclosed above, each of the Grantees is a third party independent of the Company and its connected persons (as defined under the Listing Rules).

REASONS FOR AND BENEFITS OF THE AWARDS

The purposes of granting the Awards are to reward the Grantees for their past contributions and to retain them to contribute and share the future growth of the Group. The Board considers that the grant of the Awards serves to align the interests of the Grantees with those of the Group through ownership of Shares, dividends and other distributions paid on Shares and/or the increase in value of the Shares, encouraging the Grantees to make contributions to the long-term growth and profits of the Group which is consistent with the purposes of the Share Award Scheme.

LISTING RULES IMPLICATIONS

Pursuant to Rule 17.04(1) of the Listing Rules, each grant of the Award to a Director has been approved by the independent non-executive Directors (for the grant of an Award to an independent non-executive Director, excluding such independent non-executive Director).

To the best knowledge of the Directors, as at the date of this announcement, (i) none of the Awards granted to any executive Director as disclosed above has resulted in the Shares issued and to be issued in respect of all awards granted (excluding any awards lapsed in accordance with the terms of the Share Award Scheme) to such executive Director in the 12-month period up to and including the Date of Grant representing in aggregate over 0.1% of the Shares in issue; (ii) none of the Awards granted to any independent non-executive Director as disclosed above has resulted in the Shares issued and to be issued in respect of all options and awards granted (excluding any options and awards lapsed in accordance with the terms of the relevant share option scheme and/or share award scheme) to such independent non-executive Director in the 12-month period up to and including the Date of Grant representing in aggregate over 0.1% of the Shares in issue; (iii) none of the Grantees is a related entity

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participant (as defined under Rule 17.03A(1) of the Listing Rules) or a service provider (as defined under Rule 17.03A(1) of the Listing Rules); and (iv) none of the Grantees has been granted awards under the Share Award Scheme and (if any) awards and options under other share award schemes and share option schemes of the Company which exceed the 1% individual limit under Rule 17.03D(1) of the Listing Rules. None of the Awards is subject to approval by the Shareholders.

The Company does not have any arrangement to provide financial assistance to the Grantees to facilitate the paying up of the nominal value of the Awarded Shares.

NUMBER OF SHARES AVAILABLE FOR FUTURE GRANT

After the grant of the Awards, no more Shares are available for future grant of awards under the Scheme Mandate Limit and the service provider sublimit (as defined in the Share Award Scheme).

By order of the Board
HG Semiconductor Limited
Dr. Xu Zhihong
Chairman and Executive Director

Hong Kong, 4 December 2024

As at the date of this announcement, the executive Directors are Dr. Xu Zhihong, Mr. Zhao Yi Wen, Mr. Lu Kailin, Mr. Li Yang and Mr. Leung Kin Pang; and the independent non-executive Directors are Mr. Zou Haiyan, Mr. Siu Miu Man, Simon, MH and Ms. Liu Wanwen.

If there is any inconsistency in this announcement between the Chinese and English versions, the English version shall prevail.

• For illustration purposes only