ESR Group Limited Interim Report 2023 Notes to Condensed Consolidated Financial Information 30 June 2023 87 27. SHARE-BASED COMPENSATION PLAN (continued) A. Share Option Plan (continued) If there is (i) a sale of all or substantially all of the shares in; or (ii) a disposal of all or substantially all of the business of the member of the Group of which a participant is a director or by which the participant is employed, as appropriate, by way of trade sale or by way of sale to a third party (an “Early Vesting Event”), any options granted to the participant will vest in full on the occurrence of the Early Vesting Event. # Total share options of 384,000, at an exercise price of HK$22.78, were granted to the directors of Company, Jinchu Shen and Stuart Gibson on 8 June 2022, in equal amount. The share options will vest in three equal tranches on 8 June 2022, 8 June 2023 and 8 June 2024. The 4,312,619 share options exercised during the six months ended 30 June 2023 resulted in the issue of 1,880,599 ordinary shares of the Company and new share capital of US$1,881 (before issue expenses), as further detailed in note 26. At 30 June 2023, the Company had 39,824,000 share options outstanding under the Plans. The exercise in full of the outstanding share options by conventional exercise method would, under the present capital structure of the Company, result in the issue of 39,824,000 additional ordinary shares of the Company and additional share capital and share premium of US$78,211,000 (before issue expenses). At the date of approval of these financial statements, the Company had 39,824,000 share options outstanding under the Plans, which represented approximately 0.91% of the Company’s shares in issue as at that date. B. Share Option Plan by a subsidiary of the Company On 20 January 2022, the Group completed the acquisition of 100% equity interests in ARA Group. ARA Group has the following share-based payment arrangement held under its subsidiary. In 2021, the subsidiary established an employee share option plan (“ESOP Plan”), subject to the subsidiary’s board of directors’ discretion, which entitles employees to purchase shares in the company. The ESOP Plan is intended to motivate, reward and retain certain members of the management team and the purpose is to promote the long-term growth of the subsidiary and drive strategic and economic alignment with shareholders. Under the ESOP Plan, subject to the subsidiary’s board of directors’ discretion, holders of vested options are entitled to purchase shares at an exercise price determined by the board of directors of the subsidiary having regard to the market value of an ordinary share at the date on which the options were granted. The ESOP Plan shall expire in September 2031. Provided that the holders remain in continuous employment at the subsidiary between the date of entry into the ESOP and the relevant vesting date of the options, the holders are only entitled to exercise the vested options on the occurrence of an exit event stipulated in the ESOP. In September 2021, a total of 790.13 options were granted under the ESOP Plan to certain eligible employees. These options vest equally in 4 tranches in September 2021 and in December of each year from 2021 to 2023. In September 2022, a total of 102.20 options were granted under the ESOP Plan to certain eligible employees. These options vest equally in 5 tranches in September 2022 and in December of each year from 2022 to 2025.
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