Thursday, 17 August 2017

ZTE to boost incentives by issuing stock options to more than 2,000 employees

ZTE
Monday 24 April 17

ZTE Corporation, a major international provider of telecommunications, enterprise and consumer technology solutions for the Mobile Internet, today announced a plan to issue stock options to more than 2,000 employees as incentives, in a programme tied to the company’s financial performance…

ZTE Corporation, a major international provider of telecommunications, enterprise and consumer technology solutions for the Mobile Internet, today announced a plan to issue stock options to more than 2,000 employees as incentives, in a programme tied to the company’s financial performance.

ZTE’s Board of Directors approved a 5-year stock option incentive programme for as many as 2,013 individuals, for a combined maximum total of 150 million shares, equal to 3.6 percent of the company’s share capital. The exercise price of the stock options, which will be issued in three tranches, will be RMB 17.06 each, which was the average trading price of ZTE’s shares on the Shenzhen stock exchange on 19 April.

The stock option incentive programme is subject to certain financial performance metrics being satisfied by the company. Stock options in the first tranche may be exercised if ZTE achieves return on equity of 10 percent in its 2017 financial results, with annual net profit at least 10 percent higher than RMB 3.825 billion.

Stock options in the second tranche may be exercised if ZTE achieves return on equity of 10 percent in its 2018 financial results, with annual net profit that year at least 20 percent higher than RMB 3.825 billion. Stock options in the third tranche may be exercised if ZTE achieves return on equity of 10 percent in its 2019 financial results, with annual net profit that year at least 30 percent higher than RMB 3.825 billion.

On March 23, ZTE reported that its annual net profit attributable to holders of ordinary shares of the listed company would have been RMB 3.825 billion in 2016, without a provision related to the company’s settlement of a case in the United States.

As ZTE aims to capture new opportunities in the global telecommunications and ICT market with the advent of 5G, the stock option incentive programme will help the company retain talent, and enhance the loyalty of the management and key personnel. The programme is subject to the approval of ZTE shareholders. Further information about the stock option programme is available in ZTE’s filing to the Hong Kong stock exchange today.


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