SinoMab BioScience Limited — Capital/Financing Update 2021

Feb 4, 2021

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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SinoMab BioScience Limited 中國抗體製藥有限公司

(Incorporated in Hong Kong with limited liability)

(Stock code: 3681)

ADOPTION OF SHARE AWARD SCHEME

ADOPTION OF THE SCHEME

The Board is pleased to announce that on 4 February 2021, the Company has adopted the Scheme to incentivize the Directors, senior management, employees and consultants for their contribution to the Group and to attract, motivate and retain skilled and experienced personnel to strive for the future development and expansion of the Group by providing them with the opportunity to own equity interests in the Company and to promote the success of the Company’s business.

The Company shall not make any further grant of Award which will result in the aggregate number of Shares underlying all grants made pursuant to the Scheme to exceed 5% of the number of issued Shares as at the Adoption Date save with the approval of the Board.

The total number of Award Shares granted to a Selected Participant under the Scheme shall not exceed 2% of the total number of issued Shares as at the Adoption Date.

APPOINTMENT OF TRUSTEE

Computershare Hong Kong Trustees Limited has been appointed by the Company as the trustee for the Scheme. To satisfy an Award, the Company shall transfer to the Trust the necessary funds and instruct the Trustee to acquire Shares through on-market transactions at the prevailing market price.

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ADOPTION OF THE SCHEME

The Board is pleased to announce that on 4 February 2021, the Company has adopted the Scheme. Key terms of the Scheme Rules are set out below:

1. Purpose of the Scheme

The purpose of the Scheme is to incentivize the Directors, senior management, employees and consultants for their contribution to the Group and to attract, motivate and retain skilled and experienced personnel to strive for the future development and expansion of the Group by providing them with the opportunity to own equity interests in the Company and to promote the success of the Company’s business.

2. Administration of the Scheme

The Scheme shall be subject to the administration of the Board or an Authorized Person (as the case may be) in accordance with the Scheme Rules and, where applicable, the Trust Deed. A decision of the Board or an Authorized Person (as the case may be) shall be final and binding on all persons affected thereby.

The Board has the power to administer the Scheme. The Board or an Authorized Person may from time to time appoint one or more administrators to assist in the administration of the Scheme.

3. Grant of Award

The Board or an Authorized Person (as the case may be) may, from time to time, select any Eligible Person to be a Selected Participant and, subject to the Scheme Rules, grant an Award to such Selected Participant during the Award Period. In determining the Selected Participants, the Board or an Authorized Person (as the case may be) may take into consideration matters including the present and expected contribution of the relevant Selected Participant to the Group.

Where any grant of Award Shares is proposed to be made to any person who is a connected person of the Company within the meaning of the Listing Rules, the Company shall comply with the relevant provisions of the Listing Rules.

No grant of any Award Shares to any Selected Participant may be made:

• (a) in any circumstances where the requisite approval from any applicable regulatory authorities has not been granted;

• (b) in any circumstances that any member of the Group will be required under applicable securities laws, rules or regulations to issue a prospectus or other offer documents in respect of such Award or the Scheme, unless the Board or an Authorized Person (as the case may be) determines otherwise;

• (c) where such Award would result in a breach by any member of the Group or its directors of any applicable securities laws, rules or regulations in any jurisdiction;

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• (d) where such grant of Award would result in a breach of the Scheme Limit;

• (e) where such grant of Award would result in a breach of the Listing Rules (unless relevant waiver is granted by the Stock Exchange).

Any such grant so made shall be null and void to the extent that it falls within the circumstances above.

4. Timing of Awards

No Award shall be made to Selected Participants and no directions or recommendation shall be given to the Trustee with respect to a grant of an Award under the Scheme:

• (a) where any Director is in possession of unpublished inside information (as defined in the SFO) in relation to the Company or where dealings by Directors are prohibited under any code or requirement of the Listing Rules or any applicable laws, rules or regulations;

• (b) during the period of 60 days immediately preceding the publication date of the annual results or, if shorter, the period from the end of the relevant financial year up to the publication date of the results of the Company; and

• (c) during the period of 30 days immediately preceding the publication date of the half-year results or, if shorter, the period from the end of the relevant half-year period up to the publication date of the results of the Company.

In respect of the administration of the Scheme, the Company shall comply with all applicable disclosure regulations including those imposed by the Listing Rules.

5. Satisfaction of Awards

To satisfy an Award, the Company shall transfer to the Trust the necessary funds and instruct the Trustee to acquire Shares through on-market transactions at the prevailing market price. The Company shall not instruct the Trustee to acquire Shares where such action is prohibited under the Listing Rules, the SFO or other applicable laws from time to time.

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6. Vesting of Award Shares

For the purposes of vesting of the Award, the Board or an Authorized Person (as the case may be) may either:

• (a) direct and procure the Trustee to release from the Trust the Award Shares to the Selected Participants by transferring the number of Award Shares to the Selected Participants in such manner as determined by them from time to time; or

• (b) to the extent that, at the determination of the Board or an Authorized Person (as the case may be), it is not practicable for the Selected Participant to receive the Award in Shares solely due to legal or regulatory restrictions with respect to the Selected Participant’s ability to receive the Award in Shares or the Trustee’s ability to give effect to any such transfer to the Selected Participant, the Board or an Authorized Person (as the case may be) will direct and procure the Trustee to sell, by on-market transactions at the prevailing market price, the number of Award Shares so vested in respect of the Selected Participant and pay the Selected Participant the Actual Selling Price of such Award Shares in cash arising from such sale based on the number of Award Shares.

7. Scheme Limit

The Company shall not make any further grant of Award which will result in the aggregate number of Shares underlying all grants made pursuant to the Scheme to exceed 5% of the number of issued Shares as at the Adoption Date (the “ Scheme Limit ”) save with the approval of the Board.

The total number of Award Shares granted to a Selected Participant under the Scheme shall not exceed 2% of the total number of issued Shares as at the Adoption Date.

8. Lapse and Forfeiture of Award

In the event that a Selected Participant does not satisfy the conditions/criteria set out in the award letter issued to such Selected Participant, and the Award does not vest, the Award shall lapse and the Award Shares shall be deemed to be Returned Shares.

The Trustee shall hold Returned Shares to be applied towards future Awards in accordance with the Scheme. When Shares have been deemed to be Returned Shares under the Scheme Rules, the Company shall notify the Trustee accordingly.

If a Selected Participant ceases to be an Eligible Person by reason of (i) death of the Selected Participant, (ii) termination of the Selected Participant’s employment or contractual engagement with the relevant member of the Group by reason of his/her permanent physical or mental disablement, (iii) termination of the Selected Participant’s employment or contractual engagement with the relevant member of the Group by reason of redundancy, any outstanding Award Shares not yet vested shall be immediately forfeited, unless the Board or an Authorized Person (as the case may be) determines otherwise at its absolute discretion.

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If a Selected Participant, being an Employee whose employment is terminated by the relevant member of the Group by reason of the employer terminating the contract of employment without notice or payment in lieu of notice, or the Selected Participant having been convicted of any criminal offence involving his or her integrity or honesty, any outstanding Award Shares not yet vested shall be immediately forfeited, unless the Board or an Authorized Person (as the case may be) determines otherwise at its absolute discretion.

If a Selected Participant is declared bankrupt or becomes insolvent or makes any arrangements or composition with his or her creditors generally, any outstanding Award Shares not yet vested shall be immediately forfeited, unless the Board or an Authorized Person (as the case may be) determines otherwise at its absolute discretion.

For the avoidance of doubt, if a Selected Participant ceases to be an Eligible Person by reason of retirement of the Selected Participant at his or her volition, any outstanding Award Shares not yet vested shall continue to vest, unless the Board or an Authorized Person (as the case may be) determines otherwise at its absolute discretion.

9. Assignment of Award

Any Award granted under the Scheme but not yet vested shall be personal to the Selected Participant and cannot be assigned or transferred and no Selected Participant shall in any way sell, transfer, charge, mortgage, encumber or create any interest in favour of any other person over or in relation to any such Award, or enter into any agreement to do so.

10. Voting Rights

Neither the Selected Participant nor the Trustee may exercise any of the voting rights in respect of any Award Shares that have not yet vested.

11. Dividend

A Selected Participant shall have no right to any dividend of the Shares subject to the Award that is granted to him or her and that has not vested or any of the Returned Shares or any dividend of the Returned Shares, all of which shall be retained by the Trustee for the benefit of the Scheme.

12. Alteration of the Scheme

Subject to compliance with the Articles of the Company, all applicable laws, rules and regulations, the Scheme may be altered in any respect by a resolution of the Board provided that no such alteration shall operate to affect adversely any subsisting rights of any Selected Participant unless otherwise provided for in the Scheme Rules.

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13. Termination

Unless terminated earlier as determined by the Board, the Scheme shall be valid and effective for the Award Period (after which no further Awards will be granted), and thereafter for so long as there are any non-vested Award Shares granted hereunder prior to the expiration of the Scheme, in order to give effect to the vesting of such Award Shares or otherwise as may be required in accordance with the provisions of the Scheme Rules.

Following the settlement, lapse, forfeiture or cancellation (as the case may be) of the last outstanding Award made or can be made under the Scheme, the Trustee shall sell all the Shares remaining in the Trust within a reasonable time period as agreed between the Trustee and the Company upon receiving notice of the settlement, lapse, forfeiture or cancellation (as the case may be) of such last outstanding Award (or such longer period as the Company may otherwise determine), and remit all cash and net proceeds of such sale and other funds remaining in the Trust (after making appropriate deductions in respect of all disposal costs, expenses and other existing and future liabilities in accordance with the Trust Deed) to the Company.

LISTING RULES IMPLICATION

The Scheme does not constitute a share option scheme pursuant to Chapter 17 of the Listing Rules and is a discretionary scheme of the Company. No shareholders’ approval is required for the adoption of the Scheme.

The Company will comply with the relevant requirements under Chapter 14A of the Listing Rules for any grant of Shares to connected persons of the Company. For the avoidance of doubt, where any grant of Award to any Director forms part of his/her remuneration under his/her service contract, such grant shall be fully exempt from the reporting, announcement and independent shareholders’ approval requirements under Rules 14A.73(6) and 14A.95 of the Listing Rules. In such case, such Director shall abstain from voting on the Board resolution approving the grant of Award to himself/herself.

APPOINTMENT OF TRUSTEE

Computershare Hong Kong Trustees Limited has been appointed by the Company as the Trustee. To the best knowledge, information and belief of the Directors after making all reasonable enquiries, the Trustee and its ultimate beneficial owners were third parties independent of the Company and its connected persons prior to its appointment.

The Trustee will become a connected person of the Company if the number of the Award Shares held by the Trustee for the benefit of the connected persons of the Company equals to or exceeds 30% of the aggregate number of the Award Shares held by the Trustee. Save for the restriction that the total number of Award Shares granted to any one Selected Participant under the Scheme shall not exceed 2% of the total number of issued Shares as at the Adoption Date, there is no other restriction in the Scheme on the aggregate interests of the Company’s connected persons held by the Trustee. The Company will comply with the relevant provisions under Chapter 14A of the Listing Rules where appropriate.

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DEFINITIONS

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

Term	Definition
“Actual Selling Price”	the actual price at which the Award Shares are sold (net of brokerage,
	trading fee of the Stock Exchange, transaction levy of the Securities
	and Futures Commission of Hong Kong and any other applicable costs)
	on vesting of an Award pursuant to the Scheme or in the case of a
	vesting when there is an event of change in control or privatisation
	of the Company pursuant to the Scheme Rules, the consideration
	receivable under the related scheme or offer
“Adoption Date”	4 February 2021, being the date on which the Board approved the
	adoption of the Scheme
“Articles”	the articles of association of the Company (as amended from time to
	time)
“Authorized Person”	any person authorized by the Board for the administration of the
	Scheme
“Award”	an award granted by the Board to a Selected Participant, which may
	vest in the form of Award Shares or the Actual Selling Price of the
	Award Shares in cash, as the Board may determine in accordance with
	the terms of the Scheme Rules
“Award Period”	the period commencing on the Adoption Date, and ending on the
	business day immediately prior to the 10th anniversary of the Adoption
	Date
“Award Share(s)”	the Shares granted to a Selected Participant in an Award
“Board”	the board of the Company
“Company”	SinoMab BioScience Limited (中國抗體製藥有限公司), a company
	incorporated in Hong Kong with limited liability and the Shares of
	which are listed on Stock Exchange (stock code: 03681)
“connected person(s)”	has the meanings ascribed to it under the Listing Rules
“Director(s)”	director(s) of the Company

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“Employee”

any employee (whether full-time or part-time employee) of any member of the Group provided that the individual shall not cease to be an Employee in the case of (a) any leave of absence approved by the relevant member of the Group; or (b) transfer amongst any member of the Group or any successor, and provided further that an Employee shall, for the avoidance of doubt, cease to be an Employee with effect from (and including) the date of termination of his employment

“Eligible Person” any individual, being an Employee or director of any member of the Group who the Board or an Authorized Person (as the case may be) considers, in its sole discretion, to have contributed or will contribute to the Group; however, no individual who is resident in a place where the grant, acceptance or vesting of an Award pursuant to the Scheme is not permitted under the laws and regulations of such place or where, in the view of the Board or an Authorized Person, compliance with applicable laws and regulations in such place makes it necessary or expedient to exclude such individual, shall be entitled to participate in the Scheme and such individual shall therefore be excluded from the term Eligible Person

• “Group” the Company and its subsidiaries “Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange “on-market transactions” the acquisition or disposal of Shares through one or more transactions through the facilities of the Stock Exchange in accordance with the Listing Rules and any other applicable laws and regulations

• “Returned Share(s)” such Award Shares that are forfeited in accordance with the terms of the Scheme, or deemed to be Returned Shares under the Scheme Rules

• “Scheme” the share award scheme adopted by the Company on the Adoption Date “Scheme Limit” having the meaning as defined in the paragraph headed “Scheme Limit” of this announcement

“Scheme Rules” the rules of the Scheme as amended from time to time “Selected Participant(s)” any Eligible Person who has been granted any Award pursuant to the terms of the Scheme “SFO” the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong)

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“Shares” ordinary shares of the Company

“Stock Exchange” The Stock Exchange of Hong Kong Limited

“Trust”

the trust constituted by the Trust Deed to service the Scheme

“Trust Deed” the trust deed to be entered into between the Company and the Trustee (as may be restated, supplemented and amended from time to time) in relation to the Scheme

“Trustee” Computershare Hong Kong Trustees Limited, the trustee appointed by the Company for the administration of the Scheme

“Vesting Date” with respect to a Selected Participant, the date or dates on which the Award (or part thereof) is to vest in the relevant Selected Participant

“%”

per cent.

By Order of the Board SinoMab BioScience Limited Dr. Shui On LEUNG Executive Director, Chairman and Chief Executive Director

Hong Kong, 4 February 2021

As at the date of this announcement, the executive Director is Dr. Shui On LEUNG, the non-executive Directors are Dr. Haigang CHEN, Mr. Xun DONG, Mr. Senlin LIU, Ms. Wenyi LIU, Mr. Huiyuan MA and Mr. Jing QIANG, and the independent non-executive Directors are Mr. George William Hunter CAUTHERLEY, Mr. Michael James Connolly HOGAN, Mr. Ping Cho Terence HON and Mr. Dylan Carlo TINKER.

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