Directors’ Report ESR Group Limited Annual Report 2023 91 KM ESOP, TIER 1 ESOP, POST-IPO SHARE OPTION SCHEME AND THE LONG TERM INCENTIVE SCHEME 1. KM ESOP Below is a summary of the principal terms of the KM ESOP of the Company. The terms of the KM ESOP are not subject to the provisions of Chapter 17 of the Listing Rules. (i) Purpose The purpose of the KM ESOP is to incentivise or reward eligible participants for their contribution towards the Company’s operations, so as to: (a) motivate and encourage recipients to continue to perform well; (b) to retain the services of recipients whose work is vital to the growth and continued success of the Company; and (c) to link the personal interests of members of the Board and the employees with those of the Shareholders. (ii) Who may join The Board may, at its discretion, grant an option to any director or employee of the Group, or any director or employee of any company which is under the control of the Company (an “Eligible Person”). No amount is payable on the grant of option(s). (iii) Classes of shares that may be issued Under the KM ESOP, ordinary shares may be issued. For the year ended 31 December 2023, the Company has issued 1,967,705 ordinary shares under the KM ESOP. (iv) Maximum number of shares As at the latest practicable date prior to the issue of this annual report, the number of shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under the KM ESOP at any time shall not exceed 13,408,424 Shares (approximately 0.32% of number of the issued share of the Company as at the date of this report). (v) Maximum entitlement of each participant The scheme does not set a limit of maximum entitlement of each participant under the scheme. (vi) Period within which the securities must be taken up under an option An option shall lapse automatically (to the extent not already exercised and subject always to the terms and conditions upon which the option was granted) on the earliest of: (a) the tenth anniversary of the date of grant; (b) the expiry of three months from the date on which the participant ceases to be an Eligible Person; (c) If the participant ceases to be an employee by reason of his death, the options may be exercised by his personal representatives within twelve months from the date of death. If the participant ceases to be an employee by reason of his injury, ill-health or disability, the options may be exercised, to the extent it is vested, within six months from the date of cessation of employment. (“Rights on Death, Retirement, Injury and Disability”) CORPORATE GOVERNANCE FINANCIAL STATEMENTS STRATEGIC REPORTS
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