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.

CHINA ISOTOPE & RADIATION CORPORATION

中 國 同 輻 股 份 有 限 公 司

(A joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 1763)

ANNOUNCEMENT

PROPOSED ADOPTION OF SHARE

APPRECIATION RIGHTS INCENTIVE PLAN AND INITIAL GRANT

This announcement is made by China Isotope & Radiation Corporation (the "Company") pursuant to Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and the Inside Information Provisions under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

The plan for the first tranche of Share Appreciation Rights (the "Plan") and the scheme for initial grant under the plan for the first tranche of Share Appreciation Rights (the "Initial Grant Scheme") were approved by the board of Directors of the Company (the "Board") on 13 December 2019. The Plan and the Initial Grant Scheme will be submitted to the State-owned Assets Supervision and Administration Commission of the State Council ("SASAC") for approval and the general meeting of the Company for consideration and approval.

Since the Plan and the Initial Grant Scheme do not involve the grant of options in relation to new shares or other new securities of the Company or any of its Subsidiaries, they are not subject to Chapter 17 of the Listing Rules.

The Board hereby emphasises that the Plan and the Initial Grant Scheme are subject to the approval of SASAC and the general meeting, and the fulfillment of the conditions of the initial grant. Shareholders and potential investors are advised to exercise caution when dealing in the shares of the Company.

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PROPOSED ADOPTION OF THE PLAN AND INITIAL GRANT

A summary of the principal terms of the Plan is set out below:

Incentive instrument:

Under the Plan, the Share Appreciation Rights are used as an

incentive instrument. Subject to the satisfaction of the conditions

for the entry into force and the vesting arrangement, each Share

Appreciation Right granted to a Participant under the Plan will

entitle the Participant to obtain, on the vesting date during the

term of the Plan, the excess of the closing price over the exercise

price of a share of the Company at the exercise date, which will

be paid by the Company in cash. No participants will own the

shares or have the voting right, allotment. The Share Appreciation

Rights shall not be transferred or used for securing or repaying

debts.

Conditions for the entry

The entry into force of the Plan is subject to the fulfillment of

into force of the Plan:

the following conditions: (1) approval of relevant regulatory

authorities; and (2) approval and adoption of the Plan by the

general meeting of the Company by resolution.

The effective date and term:

The effective date of the Plan is the date of fulfillment of the above conditions. Unless terminated early in accordance with Chapter 16, the Plan is valid for a term of ten (10) years from the effective date.

Participants:

Participants include core personnel who have a direct impact

on the results of operations and sustainable development of the

Company and exclude independent non-executive Directors and

supervisors.

Number of Share

The total number of underlying shares in relation to the total

Appreciation Rights

number of Share Appreciation Rights granted during the term of

granted:

the Plan shall not exceed ten percent (10%) of the total issued

share capital of the Company as at any plan approval date. If the

total number of underlying shares of the Company in relation

to Share Appreciation Rights (including those exercised and

unexercised) granted to a Participant through all incentive plans in

effect exceeds one percent (1%) of the total issued share capital,

the Company will not further grant Share Appreciation Rights

under the Plan to the Participant pursuant to the Plan.

Vesting arrangement:

No Share Appreciation Rights obtained by all grantees pursuant

to the Plan shall vest within two years following the grant date or

shall be exercised prior to vesting. In principle:

(1) one third (1/3) of the total number of Share Appreciation

Rights granted to each grantee will vest two years (24

months) from the grant date;

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(2)

the other one third (1/3) of the total number of Share

Appreciation Rights granted to each grantee will vest three

years (36 months) from the grant date; and

(3)

the remaining one third (1/3) of the total number of Share

Appreciation Rights granted to each grantee will vest four

years (48 months) from the grant date.

Only vested Share Appreciation Rights can be exercised, while

unvested portions shall not be exercised.

In addition to the aforesaid vesting arrangement, the Board

has the power to set specific business indicators and objectives

according to the specific business conditions of the Company,

and define the same as additional conditions for the vesting of

appreciation rights, upon the approval of the general meeting, and

adjust the number of vested appreciation rights according to the

fulfillment of constraint conditions as to performance.

Conditions for the vesting of

Vesting of the Share Appreciation Rights granted to a Participant

Share Appreciation Rights:

shall be conditional upon the satisfaction of all of the following

conditions:

None of the following events occur to the Company:

(1)

issue of an adverse opinion report or a disclaimer of opinion

report by a certified public accountant on financial and

accounting reports for the most recent accounting year;

(2)

administrative punishment by regulatory authorities due

to major violation of laws and regulations during the most

recent year; and

(3)

such other circumstances in which the Plan shall not be

implemented, as determinate by the Stock Exchange.

None of the following events occur to a Participant:

(1)

it being denounced, or declared as an unqualified candidate

by the Stock Exchange during the most recent three years;

(2)

administrative punishment by regulatory authorities due

to major violation of laws and regulations during the most

recent three years; and

(3)

such circumstances in which the equity incentive may not be

granted as required by relevant laws and regulations.

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In addition to the aforesaid conditions, if Share Appreciation

Rights under the Plan vest in tranches, performance conditions

(including performance assessment indicators of the Company

and performance assessment requirements for Participants) shall

be specified by the Board of the Company, for Share Appreciation

Rights vesting for each tranche, which shall not be exercised until

all performance assessment indicators reach the objectives set for

the period.

Exercise price:

The exercise price of Share Appreciation Rights granted under the

Plan is the highest of:

(1) the closing price of the shares of the Company as stated in

the daily quotation sheet of the Stock Exchange on the date

of grant of Share Appreciation Rights;

(2) the average closing price of the shares of the Company as

stated in the daily quotation sheet of the Stock Exchange for

five consecutive trading days immediately prior to the date

of grant of Share Appreciation Rights; and

(3) the nominal value of the shares of the Company.

INITIAL GRANT SCHEME

Participants for the initial grant by the Company under the Plan include:

  1. 86 core management talents of the Company, including members of the Board, senior management members, middle-level cadres and deputy cadres at the headquarters, cadres and deputy cadres in the leading group of a secondary organisation, cadres in the leading group of a tertiary organisation at the Company, and the Company's officers in charge of external assignment; and
  2. 79 core technicians of the Company, including technical leaders, personnel of research institutes and research centers, cadres and deputy cadres at marketing platforms, personnel
    with a senior professional title in engineering research, personnel being trained to be technical leaders, young talents of China National Nuclear CorporationEmployed by the Company, personnel who obtain special government allowance from the State Council, doctors and senior technicians at the Company.

From the above, the total number of Participants for the initial grant under the Plan for the first tranche of Share Appreciation Rights is approximately 165, approximately accounting for 6.6% of the total number of employees of the Company.

The total number of shares in relation to the grant of the Share Appreciation Rights is 9,093,300 shares, accounting for 2.84% of the total share capital of the Company, without reserved shares. The number of equity appreciation rights granted accounts for less than 3% of the total share capital of the Company.

The Company determines the number of Share Appreciation Rights to be granted to a Participant according to the requirement that the expected value of the equity incentive granted to an individual shall not exceed 40% of its total remuneration (including the expected value of the equity incentive) upon the grant, and intends to grant the incentive value for two years for the

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tranche, and at the same time, undertakes that it will not further grant Share Appreciation Rights within two years following the completion of the grant.

The numbers of Share Appreciation Rights granted to personnel of the Company at all levels are set out as follows:

As a

Number of

As a

Percentage of

Appreciation

Percentage of

the Total

Rights Granted

the Total

Number of

(10 thousand

Number

Shares of

S/N

Name

Title

shares)

Granted

the Company

1

Meng Yanbin

Chairman and secretary of

the party committee

12.39

1.36%

0.039%

2

Wu Jian

General manager and

deputy secretary of

the party committee

12.39

1.36%

0.039%

3

Du Jin

Chief engineer

11.19

1.23%

0.035%

4

Wang Suohui

Deputy general manager

11.19

1.23%

0.035%

5

Wu Laishui

Chief accountant,

chief legal officer

11.44

1.26%

0.035%

6

Fan Guomin

Deputy general manager

11.19

1.23%

0.035%

7

Fu Yongjie

Secretary of the discipline

committee

11.19

1.23%

0.035%

Sub-total

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80.98

8.91%

0.25%

Total for other personnel

158

828.35

91.09%

2.59%

Total

165

909.33

100%

2.84%

The number of underlying shares of the Company in relation to interests granted to any Participant does not exceed 1% of the total share capital of the Company.

GRANT CONDITIONS OF THE INITIAL GRANT SCHEME

The Company shall not grant Share Appreciation Rights to a Participant pursuant to the scheme until both the Company and the Participant satisfy the following conditions:

  1. None of the following events occur to the Company: (i) issue of an adverse opinion report or a disclaimer of opinion report by a certified public accountant on financial and accounting reports for the most recent accounting year; (ii) administrative punishment by regulatory authorities due to major violation of laws and regulations during the most recent year; and (iii) such other circumstances in which the equity incentive plan shall not be implemented, as determinate by the Stock Exchange.
  2. None of the following events occur to a Participant: (i) it being denounced, or declared as an unqualified candidate by the Stock Exchange during the most recent three years; (ii) administrative punishment by regulatory authorities due to major violation of laws and regulations during the most recent three years; and (iii) the performance assessment result of the Participant for the previous year being "unqualified".

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If the Company fails to satisfy the grant conditions, it shall not grant any Share Appreciation Right pursuant to the scheme; if the Participant fails to satisfy the grant conditions, the Company shall not grant any Share Appreciation Right to the Participant pursuant to the scheme.

Share Appreciation Rights shall not be granted unless the Company satisfies all of the following three performance conditions:

  1. its return on equity for 2018 is not less than 13%, or the 50th percentile of that of the benchmarking enterprise for the same period;
  2. its total profit for 2018 increases year-on-year by not less than 15%, or the 50th percentile of that of the benchmarking enterprise for the same period; and
  3. EVA for 2018 reaches the objective set by the Group and exceeds zero.

The Board has the power to set specific business indicators and objectives as additional conditions for granting Share Appreciation Rights, according to the specific business conditions of the Company, and determines whether actual granting of Share Appreciation Rights occurs, according to the fulfillment of constraint conditions as to performance.

PERFORMANCE CONDITIONS AND INDIVIDUAL PERFORMANCE ASSESSMENT CONDITIONS FOR THE ENTRY INTO FORCE OF THE INITIAL GRANT SCHEME

Based on careful analysis of the historical performance level and in consideration of the industry development trend and actual development conditions of the Company in recent years, the Company specifies that the vesting of Share Appreciation Rights initially granted is subject to the following performance conditions of the Company, in order to give full play to the strategic guiding role of Share Appreciation Rights:

Performance Indicator

First Exercise Period

Second Exercise Period

Third Exercise Period

Return on equity

The Company's return on

equity for the financial year

immediately prior to the vesting

is not less than 14%, or the

75th percentile of that of the

benchmarking enterprise for the

same period

The Company's return on equity for the financial year immediately prior to the vesting is not less than 14.5%, or the 75th percentile of that of the benchmarking enterprise for the same period

The Company's return on equity for the financial year immediately prior to the vesting is not less than 15%, or the 75th percentile of that of the benchmarking enterprise for the same period

Growth rate of total profit

The Company's growth rate of

total profit for the financial

year immediately prior to the

vesting is not less than 15%, or

the 75th percentile of that of the

benchmarking enterprise for the

same period

The Company's growth rate of total profit for the financial year immediately prior to the vesting is not less than 15%, or the 75th percentile of that of the benchmarking enterprise for the same period

The Company's growth rate of total profit for the financial year immediately prior to the vesting is not less than 15%, or the 75th percentile of that of the benchmarking enterprise for the same period

Economic value added

EVA of the Company for the

EVA of the Company for the

EVA of the Company for the

financial year immediately

financial year immediately

financial year immediately

prior to the vesting reaches the

prior to the vesting reaches the

prior to the vesting reaches the

objective set by the Group and

objective set by the Group and

objective set by the Group and

exceeds zero

exceeds zero

exceeds zero

Note 1: Like the performance conditions, ∆EVA is an internal operation indicator of the Company as well as an assessment indicator in the state-owned asset system, so the data of benchmarking enterprises are unavailable, and reference is made to normal methods for setting of ∆EVA targets specified in equity incentive plans of other state-owned listed companies, without benchmarking against benchmarking enterprises;

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Note 2: In determining whether the performance conditions for the vesting are fulfilled, impacts of principal business change, asset reorganisation and other matters of benchmarking enterprises on performance indicators shall be excluded; and sample extremes with excessive deviation shall be removed.

If the above performance conditions are satisfied and the performance assessment result of the Participant for the previous year is "basically qualified" or above, appreciation rights vest according to the performance of the Company and relevant provisions of the vesting schedule, with the vesting rate as follows:

Individual Performance Assessment Result

Ratio of Individual Vesting Portion to

for the Previous Year

Vesting Portion for the Year

Excellent/qualified

100%

Basically qualified

80%

Unqualified

0%

If the performance assessment result of the Participant for the previous year is excellent or qualified, the individual actual vesting rate for the year is 100% of the vesting portion for the year; if the performance assessment result of the Participant for the previous year is "basically qualified", the individual actual vesting rate for the year is 80% of the vesting portion for the year, and the remaining portion is cancelled; if the performance assessment result of the Participant for the previous year is "unqualified", all appreciation rights for the period are cancelled.

The Board has the power to set specific business indicators and objectives as additional conditions for the vesting of Share Appreciation Rights. Specific constraint conditions as to performance will be determined by the Board and notified to employees upon the grant of Share Appreciation Rights, and shall not be amended without approval, once confirmed. If an amendment is required due to business strategy adjustment of the Company, significant change in local macro economy or national policies, and other special circumstances, such amendment is subject to the approval of the Board and submission to SASAC for filing.

GRANT DATE OF THE INITIAL GRANT SCHEME

The grant date shall be determined by the Board pursuant to the scheme, subject to the review and approval of the scheme by relevant regulatory authorities, the approval of the scheme by the general meeting, and satisfaction of the grant conditions.

The Board shall not grant Share Appreciation Rights to employees after a share price-sensitive event may occur or a resolution may become price-sensitive, until share price-sensitive information is published, or is disclosed in accordance with the Listing Rules. No Share Appreciation Rights shall be exercised prior to the above publication or disclosure.

Share Appreciation Rights shall not be granted within one month prior to the earlier of:

  1. the date of the meeting held by the Board for approving annual, interim or quarterly results; and
  2. the deadline for the Company to publish any of its annual, interim or quarterly results announcements.

Relevant restrictions expire on the date of results announcement of the Company. The period of restrictions on the grant or exercise will include the period of delay in results announcement by the Company.

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REASONS FOR THE ADOPTION OF THE PLAN

The Plan is formulated by the Company in accordance with the Company Law of the People's Republic of China, the Provisional Measures on Implementation of Equity Incentive Schemes by State-Controlled (Overseas) Listed Companies, the Notice on Issues concerning Regulating the Implementation of Equity Incentive Scheme by State-Controlled Listed Companies, the relevant provisions of the Listing Rules, and other relevant laws, regulations, rules, normative documents and the Articles of Association, in order to further improve the corporate governance structure and long-term incentive value of the Company, better mobilise the enthusiasm of the management team and core technical personnel, effectively promote the realisation of the Company's medium and long-term strategic objectives, establish a long-term incentive mechanism closely linked to the Company's performance and long-term strategies, and improve the overall compensation structure system. The Company expects to:

  1. closely link the interests of Shareholders, Directors, senior management, professionals and core personnel of the Company through equity incentive, thus promoting the maximisation of Shareholder value and the maintenance and appreciation of values of state-owned assets;
  2. deepen the reform of the salary system, and form a mechanism for benefit and risk sharing among Shareholders, the Company and employees and fully mobilise the enthusiasm of Directors, senior management, professionals and core personnel of the Company, through the establishment of a long-term incentive mechanism, thus building a stable core management and a professional team of core personnel; and
  3. ensure that it is able to provide total compensations which are competitive in the talent market, so as to attract, retain and stimulate managerial personnel and professionals who are essential for achieving the strategic objectives of the Company.

GENERAL INFORMATION

No Participants actually hold shares or have any rights that Shareholders have, such as voting right and allotment. Participants shall not, without approval, dispose of Share Appreciation Rights, including but not limited to transfer, sale, exchange, mortgage, guarantee, repayment of debts. Participants shall refrain from any act that may damage the interests of the Group, including gross misconduct, major decision-making errors leading to heavy losses of the Group, and violations of the aforesaid restrictions on the disposal of appreciation rights; otherwise, the Participants will not be entitled to Share Appreciation Rights and gains thereon in whole or in part, and the gains on Share Appreciation Rights obtained on the exercise during the period shall be recovered by the Company.

Pursuant to the Plan, each Share Appreciation Right is related to a share, and Share Appreciation Rights will be settled in cash, and thus there will be no influence on the total number of issued shares or dilution effect on shares. Since the Plan does not involve the grant of options in relation to new shares or other new securities of the Company or any of its Subsidiaries, it is not subject to Chapter 17 of the Listing Rules.

The Board hereby emphasises that the Plan and the Initial Grant Scheme are subject to the approval of SASAC and the general meeting, and the fulfillment of the conditions of the initial grant. Shareholders and potential investors are advised to exercise caution when dealing in the shares of the Company.

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DEFINITIONS

In this announcement, unless the context otherwise requires, the following terms and expressions have the meanings set forth below:

"Board"

"Company"

"Director(s)"

"Group"

"Listing Rules"

"Participant(s)"

"PRC" or "China"

the board of Directors

China Isotope & Radiation Corporation

director(s) of the Company

the Company and its subsidiaries

the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

person(s) who is (are) entitled to Share Appreciation Rights pursuant to the scheme

the People's Republic of China, excluding, for the purpose of this announcement only, Hong Kong, Macau Special Administrative Region of the PRC and Taiwan

"RMB"

"Share Appreciation Rights"

Renminbi, the lawful currency of the PRC

the share appreciation rights under the Plan, entitling a Participant to obtain, on the vesting date during the term of the Plan, the excess of the market price over the exercise price of a share at the exercise date, subject to the satisfaction of the conditions for the entry into force and the vesting arrangement

"Shareholder(s)"

shareholder(s) of the Company

"Stock Exchange"The Stock Exchange of Hong Kong Limited

"Subsidiary(ies)"has the meaning ascribed to it under the Listing Rules

By order of the Board

China Isotope & Radiation Corporation

Meng Yanbin

Chairman

Beijing, the PRC, 13 December 2019

As at the date of this announcement, the Board comprises Mr. Meng Yanbin, Mr. Wu Jian and Mr. Du Jin as executive Directors; Mr. Zhou Liulai, Mr. Chen Shoulei and Mr. Chen Zongyu as non-executive Directors; and Mr. Guo Qingliang, Mr. Meng Yan and Mr. Hui Wan Fai as independent non-executive Directors.

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China Isotope & Radiation Corporation published this content on 13 December 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 December 2019 09:10:08 UTC