DEF 14A of Zai Lab Ltd, Apr 29, 2024

DEF 14A of Zai Lab Ltd

Filed Apr 29, 2024 · FY20230001628280-24-018995

Open on EDGAR

  1. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS

  2. Description of the Proposals

    Description of the Proposals The Board of Directors currently has ten members, all of whom are up for re-election at the Annual Meeting in accordance with the Sixth Amended and Restated Memorandum and Articles of Association (the “Current Articles”). The Board of Directors recommends shareholder approval of the re-election for each of these nominees. In reaching this recommendation, the Board of Directors considered a variety of factors, including the recommendation of the Nominating and Corporate Governance Committee, the criteria set forth in the Corporate Governance Guidelines and Board Diversity Policy, and the written confirmation of independence of each independent director. The Board of Directors believes that with their diverse business and professional backgrounds, each nominee will continue to bring to the Board of Directors valuable perspectives, skills, and experience that will complement the Board’s diversity and optimal composition. Among the returning Directors, Nisa Bernice Wing-Yu Leung was appointed as a director of the Company from August 2014 and an independent director of the Company from July 2020, so she has served on the Board for more than nine years. The Board of Directors is of the view that Ms. Leung is still independent. If elected at the Annual Meeting, each of these nominees would serve until the 2025 annual general meeting and until his or her successor has been duly elected and qualified or, if sooner, until the director’s death, resignation, or removal. For additional information on the Company’s corporate governance practices, including information on director elections and nominations, see Corporate Governance. For additional information on compensation for our non-employee directors, see Director Compensation. We will not enter into service contracts with our independent directors. For information on our employment agreement with our Chief Executive Officer, who also serves Chairperson of the Board of Directors, see CD&A - Employment Agreements. For more information on the view of the Board of Directors regarding director independence, see Corporate Governance - Director Independence.

  3. Director Biographical Information

    Director Biographical Information Set forth below is biographical information for our directors, which has been confirmed by each of them for inclusion in this Proxy Statement. We have provided their current Board and Committee roles as well as a summary of the experiences, qualifications, attributes, and skills that led the Board of Directors to conclude that each director should serve as a director in light of our business and structure. As discussed in Corporate Governance – Director Independence, the Board of Directors has determined that all of our director nominees, other than our Chief Executive Officer Dr. Du, are independent under the Nasdaq listing rules and HK Listing Rules. So far as the Board of Directors is aware, there is no other information which is disclosable pursuant to HK Listing Rules 13.51(2)(h) to (v) or other matters that need to be brought to the attention of the shareholders of the Company. For information on each director’s interest in our shares, see Security Ownership of Certain Beneficial Owners and Management. Samantha (Ying) Du, Ph.D. Founder, Chairperson of the Board of Directors, and Chief Executive Officer

  4. Director Biographical Information

    | Age | Director Since | Board Committees | Other Public Company Boards | | 59 | 2014 | Research and Development Commercial | None |

  5. Director Biographical Information

    Dr. Du is an experienced executive and entrepreneur with significant global leadership experience who brings to the Board of Directors a deep knowledge of the capital markets and the biotechnology, healthcare, and pharmaceutical industries as well as a considerable scientific background. In addition, as the Company’s Founder and Chief Executive Officer, Dr. Du provides valuable knowledge of the Company and its business. •Founder, Chief Executive Officer, and Chairperson of the Board of Directors of Zai Lab (2014-Present) •Healthcare Partner (2012-2014) and Venture Partner (2014-2017) at Sequoia Capital China, leading and serving on the boards of several major healthcare investments •Co-Founder and Chief Executive Officer of Hutchison MediPharma and Co-Founder and Chief Scientific Officer of Hutchison China MediTech (2001-2011) •Began her research career at Pfizer Inc. in the United States, where she led the global metabolic licensing program and was involved in the development of multiple early and late-stage products (1994-2001) •Ph.D. in Biochemistry from the University of Cincinnati and a B.S. in Molecular Biology from Jilin University, China John David Diekman, Ph.D. Lead Independent Director

  6. Director Biographical Information

    | Age | Director Since | Board Committees | Other Public Company Boards | | 81 | 2017 | Audit Compensation Nominating and Corporate Governance | None |

  7. Director Biographical Information

    Dr. Diekman is an experienced executive who brings to the Board of Directors extensive business, management, policy, and capital markets experience as well as deep expertise in the life sciences and venture capital industries, including in the area of oncology.

  8. Key Experience and Qualifications

    Key Experience and Qualifications •Founder and Managing Partner of 5AM Ventures (2002-Present) •Chairman of the Board of Directors of IDEAYA Biosciences, Inc. (NASDAQ) (2015-June 2020) •Chairman of The Scripps Research Institute (2014-Present), member of the Advisory Board of the Schaeffer Center for Health Policy and Economics at the University of Southern California (2014-March 2021), Charter Trustee of Princeton University (2008-June 2019), and Trustee of The California Institute of Technology (2004-2008) •Ph.D. in Chemistry from Stanford University and an A.B. in Organic Chemistry from Princeton University Kai-Xian Chen, Ph.D. Independent Director

  9. Key Experience and Qualifications

    | Age | Director Since | Board Committees | Other Public Company Boards | | 78 | 2018 | Research and Development | Innovent Biologics, Inc. (HKSE) | | | | | InnoCare Pharma Limited (HKSE) | | | | | Jiangsu Kanion Pharmaceutical Co., Ltd. (SSE) |

  10. Key Experience and Qualifications

    Professor Chen brings to the Board of Directors an extensive and distinguished scientific and academic background and considerable service as a member of several prestigious Chinese institutional and research organizations and as a member of the board of directors for various biopharmaceutical companies. •Member of the Chief Specialists Board and Deputy Chief Technical Officer, serving as a scientific advisor for various major drug research and development projects and programs in China (2001-Present) •Member of the Board of Directors of InnoCare Pharma Limited (March 2020-Present) •Member of the Board of Directors of Jiangsu Kanion Pharmaceutical Co., Ltd. (December 2019-Present) •Member of the Board of Directors of Innovent Biologics, Inc. (October 2018-Present) •Professor at the Shanghai Institute of Materia Medica (“SIMM”) Chinese Academy of Sciences (1990-Present) and Shanghai University of Traditional Chinese Medicine (2004-Present) •Postdoctoral research at Institut de Biologie Physico-Chimique in Paris, Ph.D. and Master of Science from the SIMM, Chinese Academy of Sciences, and B.S. in Radiochemistry from Fudan University Richard Brian Gaynor, M.D. Independent Director

  11. Key Experience and Qualifications

    | Age | Director Since | Board Committees | Other Public Company Boards | | 74 | 2021 | Research and Development, Chair | Alkermes plc (NASDAQ) |

  12. Key Experience and Qualifications

    Dr. Gaynor is an experienced oncologist who brings to the Board of Directors deep expertise in research and development and significant experience as a senior business executive in the biopharmaceutical industry.

  13. Key Experience and Qualifications

    Key Experience and Qualifications •President and Chief of Research and Development at BioNTech US Inc. (formerly Neon Therapeutics, Inc.) (May 2020-Present), after serving in this role at Neon Therapeutics from November 2016 to May 2020 •Member of the Board of Directors of Alkermes plc (September 2019-Present) •Member of the Board of Directors of Infinity Pharmaceuticals, Inc. (March 2020-March 2024) •Various senior clinical development and medical affairs roles at Eli Lilly and Company (2002-2016), including Senior Vice President of Clinical Development and Medical Affairs •Professor at the UCLA School of Medicine (1982-1991) and service on the faculty at the University of Texas Southwestern Medical School (1991-2002), including as the Chief of Hematology-Oncology and Director of the Simmons Cancer Center •Author of nearly 150 publications and participant on numerous advisory boards and committees, including currently serving as a Director for the Damon Runyon Cancer Research Foundation and on committees for the American Association of Cancer Research and other cancer organizations •M.D. from the University of Texas Southwestern Medical School, where he served a residency in internal medicine; fellowship training in hematology-oncology at the UCLA School of Medicine

  14. Nisa Bernice Wing-Yu Leung

    Nisa Bernice Wing-Yu Leung Independent Director

  15. Nisa Bernice Wing-Yu Leung

    | Age | Director Since | Board Committees | Other Public Company Boards | | 53 | 2014 | None | Hong Kong Exchanges and Clearing Limited (HKSE) |

  16. Nisa Bernice Wing-Yu Leung

    Ms. Leung brings to the Board of Directors significant venture capital experience in the global healthcare industry as well as extensive corporate governance experience through her service on the boards of global companies listed in the United States, Hong Kong, and Shanghai. •Managing Partner at Qiming Venture Partners, where she leads healthcare investments (2006-Present) •Member of the Board of Directors of Hong Kong Exchanges and Clearing Limited (June 2021-Present) •Member of Stanford Graduate School of Business Advisory Council (August 2019-Present) •MBA from Stanford Graduate School of Business

  17. William David Lis

    William David Lis Independent Director

  18. William David Lis

    | Age | Director Since | Board Committees | Other Public Company Boards | | 59 | 2018 | Nominating and Corporate Governance | Jasper Therapeutics, Inc. (NASDAQ) |

  19. William David Lis

    Mr. Lis brings to the Board of Directors over 30 years of experience in the biopharmaceutical industry, at both the executive and board level, including considerable leadership and business, financial, and product development expertise.

  20. Key Experience and Qualifications

    Key Experience and Qualifications •Chief Executive Officer and member of the Board of Directors of Tr1x Biotherapeutics, Inc. (May 2023-Present) •Various board and executive positions at Jasper Therapeutics, Inc., including Executive Chairman of the Board of Directors (March 2022-May 2023) and Chief Executive Officer and Executive Chairman of the Board of Directors (November 2019-March 2022) •Member of the Board of Directors of Eidos Therapeutics, Inc. (NASDAQ) (December 2018-its acquisition by Bridge Bio Pharma, Inc. in January 2021) •Various executive and board positions at Portola Pharmaceuticals, Inc. (later acquired by Alexion Pharmaceuticals, Inc. in 2020), including Chief Executive Officer and Member of the Board of Directors (December 2009-August 2018), Chief Operating Officer (2009), and Chief Business Officer (2008-2009) •Various executive positions at Scios, Inc. (a Johnson & Johnson company) (2003-2008), including Senior Vice President of New Product Development and Business Development •Various roles of increasing responsibility at Millennium Pharmaceuticals, Inc. (previously COR Therapeutics, Inc.) in sales, marketing, medical affairs, and business development (1998-2003) •B.S. from the University of Maryland

  21. Scott William Morrison

    Scott William Morrison Independent Director

  22. Scott William Morrison

    | Age | Director Since | Board Committees | Other Public Company Boards | | 66 | 2021 | Audit, Chair and Audit | Corvus Pharmaceuticals, Inc. (NASDAQ) | | | | Committee Financial Expert | IDEAYA Biosciences Inc. (NASDAQ) | | | | | Tarsus Pharmaceuticals, Inc. (NASDAQ) | | | | | Vera Therapeutics, Inc. (NASDAQ) |

  23. Scott William Morrison

    Mr. Morrison brings to the Board of Directors financial expertise obtained from his extensive business, accounting, and financial background obtained from his over 35 years of experience serving public and private companies in the life sciences industry until his retirement in 2015 as well as his significant board and audit committee experience. •Partner with Ernst & Young LLP (1996-2015), serving as U.S. Life Sciences Leader from 2002 to 2015 •Member of the Board of Directors, Chairperson of the Audit Committee, and Member of the Compensation Committee of Corvus Pharmaceuticals, Inc. (2015-Present) •Member of the Board of Directors, Chair of the Audit Committee, and Member of the Nominating and Corporate Governance Committee of IDEAYA Biosciences Inc. (July 2018-Present) •Member of the Board of Directors and Chair of the Audit Committee of Vera Therapeutics, Inc. (April 2020-Present) •Member of the Board of Directors, Chair of the Audit Committee, and Member of the Commercial Committee of Tarsus Pharmaceuticals, Inc. (October 2022-Present) •Member of the Board of Directors, Chair of the Audit Committee, Chair of the Transaction and Financing Committee, and Member of the Compensation Committee and Commercial Committee of Global Blood Therapeutics, Inc. (2016-its acquisition by Pfizer Inc. in October 2022) •Member of the Board of Directors and Chairman of the Audit Committee of Audentes Therapeutics, Inc. (NASDAQ) (2016-its sale to Astellas in January 2020) •Director on several life sciences industry boards, including BIO ECS (2002-2006), the Bay Area Biosciences Board (now California Life Sciences) (1989-2012), the Biotechnology Institute (1998- 2012), and the Life Sciences Foundation (2014-its merger with the Chemical Heritage Foundation in 2015) •Awarded the CLS Pantheon 2016 Life Sciences Leadership Award •B.S. in Business Administration from the Haas School at University of California, Berkeley and Certified Public Accountant (inactive) Leon Oliver Moulder, Jr. Independent Director

  24. Scott William Morrison

    | Age | Director Since | Board Committees | Other Public Company Boards | | 66 | 2020 | Nominating and Corporate Governance, Chair Compensation Commercial | Dianthus Therapeutics, Inc. (NASDAQ) |

  25. Scott William Morrison

    Mr. Moulder brings to the Board of Directors significant operational and senior management experience in the biopharmaceutical industry as well as extensive experience as a director on public and private boards in the industry.

  26. Key Experience and Qualifications

    Key Experience and Qualifications •Founder and Managing Member of Tellus BioVentures, LLC, a life sciences investment fund (March 2019-Present) •Founder and Chairman of the Board of Directors of Zenas BioPharma, a clinical-stage global biopharmaceutical company focused on developing and commercializing immunology-based therapies (December 2019-Present), also serving as Chief Executive Officer since August 2023 •Chairman of the Board of Directors of Dianthus Therapeutics, Inc., a clinical-stage biotechnology company (NASDAQ) (September 2023-Present) •Co-Founder, Chief Executive Officer, and Member of the Board Directors of Tesaro, Inc. (NASDAQ) (May 2010-its acquisition by GSK plc in January 2019) •President, Chief Executive Officer, and Vice Chairman of the Board of Directors of Abraxis BioScience, Inc. (NASDAQ) (2009- 2010) •Vice Chairman of Eisai Corporation of North America, a research-based pharmaceutical company and wholly owned subsidiary of Eisai Co., Ltd. (2008-2009) •President, Chief Executive Officer, and Member of the Board of Directors of MGI PHARMA, Inc. (2003-its acquisition by Eisai Corporation of North America in 2008), after serving as President and Chief Operating Officer (2002-2003) and Executive Vice President (1999-2002) •Temple University Trustee (January 2013-Present), Council Member for the University of Chicago Booth School of Business and the Polsky Center for Entrepreneurship and Innovation (June 2016-Present), and Board Member of the Fox Chase Cancer Center (March 2013-Present) •MBA from The University of Chicago Booth School of Business and B.S. in Pharmacy from Temple University

  27. Michel Pericles Vounatsos

    Michel Pericles Vounatsos Independent Director

  28. Michel Pericles Vounatsos

    | Age | Director Since | Board Committees | Other Public Company Boards | | 62 | 2023 | Commercial, Chair Research and Development | Revvity, Inc. (NYSE) |

  29. Michel Pericles Vounatsos

    Mr. Vounatsos brings to the Board of Directors extensive global leadership and management experience in the biopharmaceutical industry, including more than 25 years of service at leading companies. His expertise includes significant commercial experience in China and worldwide in the areas of primary care and neuroscience.

  30. Key Experience and Qualifications

    Key Experience and Qualifications •Chief Executive Officer and Member of the Board of Directors of Biogen Inc. (NASDAQ) (January 2017-November 2022), after serving as Executive Vice President and Chief Commercial Officer (2016) •Member of the Board of Directors and Audit Committee of Revvity, Inc. (March 2020-Present) and Chair of the Nominating and Corporate Governance Committee (October 2022-Present) •Various roles of increasing responsibility at Merck & Co. (1996-2016), including President, Primary Care & Merck Customer Centricity (2014-2016), President, Merck Customer Centricity (2012-2014), President of MSD China (2008-2012), and other leadership positions across Europe (1996-2008) •Member of the Advisory Board of Tsinghua University School of Pharmaceutical Sciences in Beijing, China (December 2020-Present) and Chairman of the Supervisory Board of Liryc, the Electrophysiology and Heart Modeling Institute at the University of Bordeaux (May 2019-Present) •MBA from HEC School of Management in Paris, France and Certificate of Clinical and Therapeutic Synthesis in Medicine from Université Victor Segalen, Bourdeaux II, France Peter Karl Wirth, J.D. Independent Director

  31. Key Experience and Qualifications

    | Age | Director Since | Board Committees | Other Public Company Boards | | 73 | 2017 | Compensation, Chair Audit | Syros Pharmaceuticals, Inc. (NASDAQ) |

  32. Key Experience and Qualifications

    Mr. Wirth brings to the Board of Directors expertise in corporate governance and significant experience in corporate strategy, product development, business development, and the legal issues relating to the operation of a global biopharmaceutical company.

  33. Key Experience and Qualifications

    Key Experience and Qualifications •Chairman of the Board of Directors at Syros Pharmaceuticals, Inc. (2017-Present) •Venture Partner at Quan Capital Management, LLC (August 2018-August 2023) •Chairman of the Board of Directors of FORMA Therapeutics Holdings, Inc. (NASDAQ) (2012-its acquisition by Novo Nordisk A/S in October 2022) •Co-Founder, President, and Member of the Board of Directors of Lysosomal Therapeutics, Inc. (2011-2014) •Various senior executive roles at Genzyme Corporation (1996-its acquisition by Sanofi-Aventis SA in 2011), most recently as Executive Vice President, Legal and Corporate Development, Chief Risk Officer, and Corporate Secretary •Partner at Palmer & Dodge LLP, where he was head of the firm’s biotechnology practice group and served as outside general counsel for Genzyme and a number of other biotechnology companies (1975-1996) •J.D. from Harvard Law School and B.A. in Political Science from the University of Wisconsin at Madison

  34. APPROVAL OF THE ZAI LAB LIMITED 2024 EQUITY INCENTIVE PLAN

    APPROVAL OF THE ZAI LAB LIMITED 2024 EQUITY INCENTIVE PLAN

  35. Information Regarding Our Equity Incentive Program

    Information Regarding Our Equity Incentive Program The following table provides certain additional information regarding our equity incentive program.

  36. Information Regarding Our Equity Incentive Program

    | | As of December 31, 2023 | | Total number of outstanding awards under the 2015 Plan, 2017 Plan, and 2022 Plan | 135,863,650 | | Total number of outstanding awards under the 2015 Plan, 2017 Plan, and 2022 Plan, as a percentage of the shares outstanding | 13.7% | | Weighted-average exercise price of outstanding share options | 3.14 | | Weighted-average remaining term of outstanding share options | 5.81 |

  37. Key Features of the 2024 Plan

    Key Features of the 2024 Plan The Company may issue new shares or use treasury shares, to the extent permitted under the HK Listing Rules, to satisfy grants made under the 2024 Plan. While the Board of Directors is aware of and has considered the potential dilutive effect of additional awards and option grants, it also recognizes the performance and motivational benefits of equity compensation and believes that the 2024 Plan is consistent with our executive compensation philosophy and the compensatory practices of other biotechnology companies in our peer group. The 2024 Plan contains a number of features that are designed to serve our shareholders’ interests and to reflect corporate governance best practices, including: •Pool Size / Scheme Mandate Limit. Subject to the capitalization adjustments provisions set forth in the 2024 Plan, the maximum number of shares that may be delivered in satisfaction of awards under the 2024 Plan is 99,208,743 ordinary shares (the “Scheme Mandate Limit”); provided that the maximum number of shares that may be issued upon exercise or vesting of all awards to be granted under the 2024 Plan and any other schemes or plans of the Company shall not in aggregate exceed 10% of the issued share capital of the Company (excluding treasury shares) as of the date of the 2024 Plan is approved by our shareholders (the “Effective Date”), and the Scheme Mandate Limit will automatically be reduced to an amount, together with any other schemes or plans of the Company, equal to ten percent (10%) of the issued share capital of the Company (excluding treasury shares) as of the Effective Date. As of April 12, 2024, there are a total of 992,087,430 ordinary shares of the Company in issue and the Company did not have treasury shares. The awards lapsed in accordance with the terms of the 2024 Plan will not be regarded as utilized for the purpose of calculating the Scheme Mandate Limit. The Company may seek approval of its shareholders in a general meeting to refresh the Scheme Mandate Limit after three (3) years from the date of such approval for the last refreshment (or the Effective Date). Additional refreshment within any three (3)-year period must be approved by independent shareholders of the Company in a manner compliant with Chapter 17 of the HK Listing Rules, as applicable. The total number of shares which may be issued upon exercise or vesting of all awards to be granted under the 2024 Plan and any other schemes or plans of the Company under the limit as refreshed shall not exceed ten percent (10%) of the total number of shares in issue (excluding treasury shares) as of the date of shareholder approval to refresh such limit. •Term of the Plan. The term of the 2024 Plan will expire ten years from the Effective Date. •Determination of Exercise Price. The exercise price of any share option or share appreciation right granted under the 2024 Plan will be established by the Administrator (as defined below) or will be determined by a method established by the Administrator at the time of grant; provided, however, that the exercise price will not be less than the higher of (i) the per-share closing price of the Company’s ADSs on Nasdaq on the date of grant, which must be a Nasdaq trading day, and (ii) the average per-share closing price of the Company’s ADS (or, if applicable, a share) on Nasdaq for the five Nasdaq trading days immediately preceding the date of grant. However, in the case of an incentive share option granted to a ten-percent shareholder within the meaning of Section 422 of the Internal Revenue Code, the exercise price will be no less than 110% of the per-share closing price of an ADS (or, if applicable, a share) on Nasdaq on the date of grant (which must be a Nasdaq trading day) in addition to (i) and (ii) above, whichever is higher. Furthermore, in the case of share options and share appreciation rights granted under the 2024 Plan as substitute awards under plans and arrangements of the Company or an affiliate that are assumed in business combinations or similar corporate transactions, such awards may provide for exercise prices that are less than the fair market value of a share at the time of the replacement grants, if the Administrator determines that such exercise price is appropriate to preserve the economic benefit of the award. Rule 17.03E of the HK Listing Rules provides that the exercise price of share options must be at least the higher of: (i) the closing price of the shares as stated in the Hong Kong Stock Exchange’s daily quotations sheet on the date of grant, which must be a business day; and (ii) the average closing price of the shares as stated in the Hong Kong Stock Exchange’s daily quotations sheets for the five (5) business days immediately preceding the date of grant. For the reasons below, the Company applied for, and the Hong Kong Stock Exchange granted, a waiver from strict compliance with Rule 17.03E of the HK Listing Rules: (a) Since the listing of the Company’s ADSs on Nasdaq in September 2017, it has been the Company’s practice to issue options exercisable into ADSs denominated in U.S. dollars under the 2015 Plan, the 2017 Plan, and the 2022 Plan with reference to Nasdaq prices. (b) The Company prepares and will continue to prepare its accounts based on U.S. Generally Accepted Accounting Principles in line with its established practice of granting options with exercise prices and share awards with grant values denominated in U.S. dollars and tied to the market price of its ADSs. (c) The vast majority of the Company’s trading volume for its securities is on Nasdaq. If any option or SAR granted must only be exercisable into ordinary shares with an exercise price based on Hong Kong Stock Exchange prices, this will significantly impede the ability of grantees to exercise those options and SARs. (d) Almost all eligible participants under the 2024 Plan reside outside of Hong Kong, primarily in the United States and mainland China. It will diminish the incentives to them if the exercise price of the options and SARs were calculated with reference to the Hong Kong Stock Exchange prices denominated in Hong Kong dollars. It will likely lead to significant inconvenience for those eligible participants with regard to the management of their holdings in the Company and their corresponding financial planning. It will also cause significant administrative burdens to the Company, both from a timing and cost perspective to change the determination and calculation of the exercise prices of options and SARs and to provide the necessary training to all affected eligible participants. (e) The method for determining the exercise price of the options and SARs based on Nasdaq prices substantially replicates the requirement in Rule 17.03E of the HK Listing Rules. The waiver from strict compliance with Rule 17.03E of the HK Listing Rules is subject to the condition that the Company shall not issue any share options with an exercise price denominated in Hong Kong dollars unless such exercise price complies with Rule 17.03E of the HK Listing Rules. The Board of Directors is of the view that the basis of determining the exercise price aligns with the purposes of the 2024 Plan to incentivize participants to generate shareholder value, to enable them to participate in the growth of the Company, and to align their interests with the interests of the shareholders.

  38. Key Features of the 2024 Plan

    •Maximum Individual Limit. Unless approved by the shareholders, in accordance with the HK Listing Rules and the terms of the 2024 Plan, the total number of shares issued and to be issued upon the vesting or exercise of awards granted under the 2024 Plan and any other plan of the Company to an individual grantee within any 12-month period (excluding any awards that have lapsed in accordance with the terms of the 2024 Plan or such other plan) shall not exceed 1% of the shares in issue (excluding treasury shares) at the date of any such grant, provided that awards may be issued in excess of such limit if separately approved by the shareholders in a manner compliant with Chapter 17 of the HK Listing Rules. Any grant of awards to a director, chief executive, or substantial shareholder of the Company, or any of their respective associates, under the 2024 Plan must be approved by the independent non-executive directors of the Company (excluding any independent non-executive director who is the grantee of the awards). In the event any grant of share awards (excluding grant of options) to a director (other than an independent non-executive director) or chief executive of the Company, or any of their respective associates, would result in the shares issued and to be issued in respect of all share awards granted (excluding any share awards lapsed in accordance with the terms of the 2024 Plan) to such person in the 12-month period up to and including the date of such grant, representing in aggregate over 0.1% of the relevant class of shares in issue (excluding treasury shares), such further grant of share awards must be approved by shareholders of the Company in a general meeting in the manner set out in Rule 17.04(4) of the HK Listing Rules. In the event any grant of awards to an independent non-executive director or substantial shareholder of the Company, or any of their respective associates, would result in the shares issued and to be issued in respect of all awards granted (excluding any awards lapsed in accordance with the terms of the 2024 Plan) to such person in the 12-month period up to and including the date of such grant, representing in aggregate over 0.1% of the relevant class of shares in issue (excluding treasury shares), such further grant of awards must be approved by shareholders of the Company in a general meeting in the manner set out in Rule 17.04(4) of the HK Listing Rules. •Maximum Award Limit to Directors. The maximum grant date fair value of all equity-based awards granted under the 2024 Plan and cash compensation awarded to any non-employee director in any calendar year shall not exceed (a) in the case of a newly appointed director, $1,000,000 in the first year of such director’s appointment, or (b) for all other directors, $750,000, subject to individual limits set forth in the 2024 Plan and applicable laws, regulations, and listing requirements. However, such limit shall not apply to any award granted pursuant to a director’s election to receive an award or shares in lieu of cash retainer or other fees (to the extent such award or shares have a fair market value equal to the value of such cash retainers or other fees); provided further that this limit shall not apply to distributions of previously deferred compensation under a deferred compensation plan maintained by the Company or an affiliate or compensation received by the director in his or her capacity as an executive officer or employee of the Company. Any grant made to directors is also subject to the limitations as set out in “Maximum Individual Limit” above. •Timing of Awards. No awards shall be granted in the periods prohibited under applicable laws, regulations, and listing requirements. •Terms of Awards. The Administrator shall determine the terms of all awards (including, but not limited to, the amount, if any, payable on acceptance of a share option), subject to the limitations provided in the 2024 Plan. Except as required by applicable laws, regulations, and listing requirements, a participant is not required to pay any amount to apply for or accept an award. By accepting (or, under such rules as the Administrator may prescribe, being deemed to have accepted) an award, the participant will be deemed to have agreed to the terms of the award and the 2024 Plan. Grants of awards shall be made on the basis of the participant’s contributions to the development and growth of the Company, as determined by the Administrator. •Share Option Term. The term of each share option shall be fixed by the Administrator, and no share option shall be exercisable more than ten (10) years after the date the share option is granted (or five (5) years from the date of grant in the case of an incentive share option granted to a ten-percent shareholder (as described above)). The Administrator shall also determine the time or times at which an award vests or becomes exercisable and the terms (including performance criteria to be satisfied) on which a share option remains exercisable. Unless otherwise determined by the Administrator, a grantee is not required to achieve any performance target before the share options can be exercised. Any share option granted but not exercised by the end of its option term will automatically lapse. The Board of Directors are of the view that the flexibility given to the Administrator to set the terms and conditions in the grant of options (such as the time-vesting conditions, the performance targets to be achieved, and the exercise price of options) for each grant will help motivate the participants to make continued contributions to the Company and its subsidiaries, which serves the purpose of the 2024 Plan. •Flexibility in Designing Equity Compensation Schemes. The 2024 Plan allows us to provide a broad array of equity incentives, including awards of share options, share appreciation rights, restricted shares, restricted share units, performance-based awards, unrestricted shares, and other types of awards that are convertible into or otherwise based on shares. •Repricing is Not Allowed. Except in connection with a corporate transaction or capitalization adjustment involving the Company or certain “Covered Transactions,” the Company may not, without obtaining shareholder approval: (i) amend the terms of outstanding share options or share appreciation rights to reduce the exercise price or base value of such share options or share appreciation rights; (ii) cancel outstanding share options or share appreciation rights in exchange for share options or share appreciation rights with an exercise price or base value that is less than the exercise price or base value of the original share options or share appreciation rights; or (iii) cancel outstanding share options or share appreciation rights that have an exercise price or base value greater than the fair market value of a share on the date of such cancellation in exchange for cash or other consideration. A “Covered Transaction” includes (i) a consolidation, merger, or similar transaction or series of related transactions, including a sale or other disposition of shares, in which the Company is not the surviving corporation or which results in the acquisition of all or substantially all of the Company’s then-outstanding shares by a single person or entity or by a group of persons and/or entities acting in concert; (ii) a sale or transfer of all or substantially all of the Company’s assets; and (iii) a dissolution or liquidation of the Company. Notwithstanding the above, adjustment of the exercise or purchase price and/or the number of shares subject to options or awards granted under the 2024 Plan may only be adjusted (in accordance with the manner set out in “Capitalization Adjustments” below) in the event of a capitalization issue, rights issue, sub-division or consolidation of shares, or reduction in capital.

  39. Key Features of the 2024 Plan

    Any adjustments required under Rule 17.03(13) of the HK Listing Rules must give a participant the same proportion of the equity capital, rounded to the nearest whole share, as that to which that person was previously entitled, but no such adjustments may be made to the extent that a share would be issued at less than its nominal value (if any). The issuance of securities as consideration in a transaction may not be regarded as a circumstance requiring adjustment, except as otherwise permitted by HK Listing Rules. In respect of any such adjustments, other than any made on a capitalization issue, an independent financial adviser or the Company’s auditors must confirm to the directors in writing that the adjustments satisfy the requirements set forth in Chapter 17 of the HK Listing Rules. •No Current Dividends Paid for Unearned Awards. Pursuant to the 2024 Plan, any distributions, dividends, or dividend equivalents with respect to awards (other than share options) that are subject to vesting conditions shall be subject to the same vesting conditions as the underlying awards. In this regard, we note that we currently do not pay dividends and do not anticipate doing so in the foreseeable future. Holders of share options and share appreciation rights shall not have any rights to participate in any dividends or distributions (including those arising on a liquidation of the Company) declared, recommended, or resolved to be paid to the shareholders before they become a shareholder with respect to such underlying shares. •Minimum Vesting Provision. The Administrator shall determine the time(s) at which an award vests or becomes exercisable and the terms (including any performance measures to be satisfied) on which an award remains exercisable. When determining the vesting period of each award, the Administrator shall consider the purposes of the 2024 Plan, including, but not limited to, attracting, motivating, and retaining employees, providing market competitive compensation, and better aligning the interests of award recipients with the shareholders. Awards granted under the 2024 Plan (other than cash-based awards) shall vest no earlier than the first anniversary of the date on which the award is granted, other than awards granted to employee participants which are: (i) substitute awards, (ii) awards to employee directors which vest on the earlier of the one-year anniversary of the grant date and the next annual meeting of shareholders which is at least fifty (50) weeks after the immediately preceding year’s annual meeting, and (iii) any additional awards the Administrator may grant, up to a maximum of 5% of the available shares under the 2024 Plan, in respect of certain limited award types, for example awards with performance-based vesting conditions, awards that are made in batches for administrative or compliance reasons, awards that vest evenly over a period of twelve (12) months or more, or awards with a total vesting and holding period of more than twelve (12) months. This restriction does not apply to the Administrator’s discretion to provide for accelerated exercisability or vesting of awards at any time. The Board of Directors and the Compensation Committee are of the view that (1) there are certain instances (for example those set out above) where a strict twelve (12)-month vesting requirement would not be appropriate or fair to the holder(s) of the awards; (2) there is a need for the Company to retain the flexibility to reward exceptional performers with accelerated vesting period or in exceptional circumstances where justified, which are consistent with the purpose of the 2024 Plan, the Company’s compensation policies, and market practices, taking into account, among other items, individual performance or contributions to the Company, retention concerns, and/or internal pay equity; (3) the Company should be allowed to formulate its own talent recruitment and retention strategies in response to changing market conditions and industry competition. It should have the flexibility to impose vesting conditions such as performance-based vesting conditions instead of time-based vesting criteria depending on individual circumstances (such as giving the Administrator discretion to grant awards of up to 5% of the available shares under the 2024 Plan with a vesting period shorter than 12 months, as set out in (iii) in the previous paragraph, which is in line with the market practice in the United States and is reasonable in the opinion of the Board of Directors and the Compensation Committee) so as to align with the purpose of the 2024 Plan to improve the Company’s long-term incentive mechanism to attract and retain outstanding talent. As such, the Board of Directors and the Compensation Committee are of the view that the circumstances when the vesting period is shorter than twelve (12) months prescribed above are appropriate and align with the purpose of the 2024 Plan. •Performance Targets and Clawback Mechanism. The Administrator may grant performance awards, which are awards subject to corporate performance measures. Corporate performance measures may be company-wide or related to a specific subsidiary, division, function, operating unit, line of business, project, or geographic area. Such performance measures may include cash flow, revenue, earnings, earnings per share, return on assets, return on equity, return on investment, share price, total shareholder return, market value added or economic value added, customer satisfaction metrics, and any other performance-related goals as the Administrator determines. The Administrator may amend or adjust the performance measure(s), in its sole discretion. Performance measures shall be subject to such other rules and conditions as the Administrator may establish. The Administrator may provide in any case that any outstanding award (whether or not vested or exercisable) and the proceeds from the exercise or disposition of any award or shares acquired under any award will be subject to forfeiture and disgorgement to the Company, with interest and other related earnings, if the participant to whom the award was granted violates (A) a non-competition, non-solicitation, confidentiality, or other restrictive covenant by which he or she is bound or (B) any Company or Affiliate policy applicable to the participant that provides for forfeiture or disgorgement with respect to incentive compensation that includes awards under the 2024 Plan. In addition, the Administrator shall require forfeiture and disgorgement to the Company of any outstanding award and the proceeds from the exercise or disposition of any award or shares acquired under any award, with interest and other related earnings, to the extent required by applicable laws, regulations, and listing requirements, including, without limitation, Section 10D of the Exchange Act, and any applicable corporate policy.

  40. Key Features of the 2024 Plan

    The Board of Directors believes that this will provide the Administrator with more flexibility in setting out the terms and conditions of the awards under particular circumstances of each grant and facilitate the ability to offer suitable incentives to attract and retain quality personnel that are valuable to the development of the Company. The Board of Directors recognizes that it may not always be appropriate to impose performance targets or prescribe a clawback mechanism. One of the purposes of granting the awards is to provide motivation and incentive to employees and directors of the Company and its subsidiaries whose contributions are important to the long-term growth of the Company. The grant of the awards is for the purpose of attracting and retaining talent. As such, the Administrator should be given sufficient flexibility to decide the best way to achieve such purpose taking into account changing market conditions, industry competition, and the individual circumstances of each participant. It may sometimes be impractical to expressly set out a generic set of performance targets in the 2024 Plan, as each participant will play different roles and contribute in diverse ways to the Company. •Broad-Based Eligibility for Equity Awards. We grant equity awards to eligible employees to align their interests with those of shareholder and to motivate our employees to act as owners of the business. •Rights of Holders of Awards. Except with respect to a restricted share award, any holder of an award shall have the rights of a shareholder only as to shares acquired upon vesting or exercise of an award. Accordingly, such holder shall not have any voting rights, or rights to participate in any dividends or distributions (including those arising on a liquidation of the Company) declared, recommended, or resolved to be paid to the shareholders on the register of members of the Company on a date prior to the name of such holder being registered on such register. However, the Administrator may also grant dividend equivalent rights to a holder of a non-option award that would entitle the recipient to receive credits for dividends that would be paid if the recipient held a specified number of ordinary shares; provided that, with respect to unvested awards that are subject to vesting conditions, any dividends or dividend equivalent rights will be subject to the same vesting conditions as the underlying awards. •Transferability. Awards granted to a participant under the 2024 Plan are non-transferable except as designated by the participant by will or by the laws of descent and distribution, or, if provided by the Administrator, pursuant to a qualified domestic relations order; provided, however, that awards may be transferred to or for the benefit of the participant’s family if provided by the Administrator and subject to approval from the Hong Kong Stock Exchange. The Company will seek a waiver from the Hong Kong Stock Exchange before granting any award which is transferable. •Cancellation of Awards. The Administrator may at any time cancel share options previously granted to, but not yet exercised by a participant to whom the share option was granted. Where the Company cancels share options and offers share options to the same participant, the offer of such new share options may only be made with available share options to the extent not yet granted (excluding the cancelled share options) within the Scheme Mandate Limit. Cancellation of non-share options will be governed by the provisions set out under “Amendment and Termination” below. •Amendment and Termination. The Board of Directors or the Administrator may at any time amend the 2024 Plan or any outstanding award for any reason permitted by applicable laws, regulations, and listing requirements, and may at any time terminate the 2024 Plan as to any future grants of awards; provided, however, that except as otherwise expressly provided in the 2024 Plan, the Board of Directors or the Administrator may not, without the participant’s consent, alter the terms of an award so as to affect materially and adversely the participant’s rights under the award, unless the Board of Directors or the Administrator expressly reserved the right to do so at the time the award was granted. Any amendments to the 2024 Plan or any outstanding award will be conditioned upon shareholder approval or approval by the Board of Directors or members thereof only to the extent, if any, such approval is required by applicable laws, regulations, and listing requirements, as determined by the Board of Directors or the Administrator. To the extent required under applicable laws, regulations, and listing requirements, amendments to the terms of the 2024 Plan and the terms of the awards granted under the 2024 Plan will be subject to approval by the shareholders entitled to vote at a meeting of the shareholders. The powers and authority of the Board of Directors or the Administrator in relation to the alteration of any terms of the 2024 Plan will not be changed except with prior sanction of a resolution of the Company in a general meeting. In the event the 2024 Plan is terminated while any award remains outstanding, the provisions of the 2024 Plan will remain in full force to the extent necessary to give effect to the exercise or vesting of any such award. Any amended terms of the 2024 Plan must comply with the relevant requirements under Chapter 17 of the HK Listing Rules. This summary is subject to the specific provisions contained in the full text of the 2024 Plan set forth in Appendix A to this Proxy Statement. A copy of the 2024 Plan will be published on the websites of the Hong Kong Stock Exchange and the Company for a period of not less than fourteen (14) days before the date of the Annual Meeting and will also be made available for inspection at the Annual Meeting.

  41. Other Features of the 2024 Plan

    Other Features of the 2024 Plan The 2024 Plan provides us with flexibility to issue various equity-based incentive awards, as described below, to attract, retain, and motivate our workforce. The shares we issue pursuant to awards granted under the 2024 Plan may be authorized by unissued ordinary shares, previously issued ordinary shares, or ADSs, as determined in the discretion of the Administrator. The 2024 Plan is administered by the Compensation Committee; provided that the Board of Directors may, in its sole discretion, elect to administer all or certain parts of the 2024 Plan. The Compensation Committee may delegate to subcommittees, other members of the Board of Directors, or officers of the Company such duties, powers, and responsibilities as may be permitted under applicable laws, regulations, and listing requirements, provided that it may not delegate its power and authority regarding eligibility for awards or executive officer compensation. The term “Administrator” thus includes the Board of Directors, the Compensation Committee, and person(s) delegated authority under the 2024 Plan, as applicable. The following persons, as selected from time to time by the Administrator, are eligible to participate in the 2024 Plan: (i) directors and employees of the Company (including persons who are granted awards under the 2024 Plan as an inducement to enter into employment contracts with the Company); and (ii) directors and employees of the holding companies, fellow subsidiaries or associated companies of the Company. As of January 31, 2024, nine non-employee directors and approximately 2,175 employees would be eligible to participate in the 2024 Plan, if selected by the Administrator. The Board of Directors (including the independent non-executive Directors) considers that the basis of determination of the eligibility of participants aligns with the purposes of the 2024 Plan on the following grounds: •The Board of Directors believes that share options and other share-based incentive awards play an important role in the Company’s success by encouraging and enabling the employees, officers, non-employee directors of the Company and its related entities whose judgement, initiative, and efforts contribute to the Company’s success; •The Board of Directors anticipates that providing such persons with a direct equity stake in the Company will result in a closer alignment of the interests of such individuals with those of the Company and the shareholders, thereby stimulating their efforts and strengthening their desire to remain with the Company; •In assessing the eligibility of these persons, the Administrator will take into account a wide range of factors, including but not limited to, their potential and/or actual contribution to the Company’s business, their past performance, the scale of their business involvements or dealings with the Company, the length of the respective relationships between them and the Company and the benefits and positive impacts they have brought about to the Company’s business development. In this way, the Administrator will be able to assess the eligibility and contribution of each participant and determine the terms of grant to enable the purpose of the 2024 Plan to be achieved. Under the 2024 Plan, the Administrator may award share options, share appreciation rights (“SARs”), restricted shares, share units (including restricted share units), performance awards, unrestricted shares, and other types of awards that are convertible into or otherwise based on shares (each an “award”). The Administrator may also grant dividend equivalent rights to a holder of a non-option award that entitle the recipient to receive credits for dividends that would be paid if the recipient held a specified number of ordinary shares; provided that, with respect to unvested awards that are subject to vesting conditions, any dividends or dividend equivalents will be subject to the same vesting conditions as the underlying awards. •Share Options and SARs. The Administrator may grant share options, including incentive share options (“ISOs”), as well as SARs. A share option is a right entitling the holder to acquire shares upon payment of the applicable exercise price. A SAR is a right entitling the holder upon exercise to receive an amount (payable in shares or, if specified in the award agreement, cash) equal to the excess of the fair market value of the shares subject to the right over the base value from which appreciation is to be measured. Other than in the case of substitute awards, the exercise price (or the base value from which the appreciation is measured) of each award requiring exercise will not be less than the higher of (i) the per-share closing price of an ADS (or, if applicable, an ordinary share) on Nasdaq on the grant date; and (ii) the average per-share closing price of an ADS (or, if applicable, an ordinary share) on Nasdaq for the five (5) trading days immediately preceding the grant date (or, if greater, the par value of an ordinary share on such date). However, in the case of an ISO granted to a 10% shareholder within the meaning of Section 422 of the Internal Revenue Code, the exercise price shall be no less than 110% of the per-share closing price of an ADS (or, if applicable, a share) on Nasdaq on the grant date. Where the exercise of an award is to be accompanied by payment, payment of the exercise price must be by cash or check acceptable to the Administrator or, if so permitted by the Administrator and applicable laws, regulations, and listing requirements, (A) through the delivery of previously acquired unrestricted shares, or the withholding of unrestricted shares otherwise deliverable upon exercise, in either case, that have a fair market value equal to the exercise price; (B) through a broker-assisted exercise program acceptable to the Administrator; (C) by other means acceptable to the Administrator; or (D) by any combination of the foregoing permissible forms of payment. The delivery of previously acquired shares in payment of the exercise price under clause (A) above may be accomplished either by actual delivery or by constructive delivery through attestation of ownership, subject to such rules as the Administrator may prescribe. Unless the Administrator expressly provides otherwise, the following rules will apply if a participant’s employment ceases: (A) Except as provided in (B) and (C) below, immediately upon the cessation of the participant’s employment each unvested share option and SAR that is then held by the participant will cease to be exercisable and will terminate and all other Awards that are then held by the participant, to the extent not already vested will lapse; (B) Subject to (C) and (D) below, all vested and unexercised share options and SARs held by the participant immediately prior to the cessation of the participant’s employment, to the extent then exercisable, will remain exercisable for the lesser of (1) a period of three (3) months from the effective date of the termination of employment or (2) the period ending on the latest date on which such share option or SAR could have been exercised, and will thereupon immediately terminate; (C) Subject to (D) below, all vested and unexercised share options and SARs held by a participant immediately prior to the cessation of the participant’s employment due to his or her death, to the extent then exercisable, will remain exercisable for the lesser of (1) a period of one (1) year from the date of the participant’s death or (2) the period ending on the latest date on which such share option or SAR could have been exercised, and will thereupon immediately terminate; and

  42. Other Features of the 2024 Plan

    (D) All share options and SARs (whether or not vested or exercisable) held by a participant immediately prior to the cessation of the participant’s employment will immediately terminate upon such cessation of employment if the termination is for specified cause or occurs in circumstances that in the determination of the Administrator would have constituted grounds for the participant’s employment to be terminated for specified cause. •Restricted and Unrestricted Shares and Share Units. The Administrator may grant awards of unrestricted shares, share units, restricted shares, and restricted share units. A share unit is an unfunded and unsecured promise, denominated in shares, to deliver shares or, if specified in the award agreement, cash measured by the value of shares in the future, and a restricted share unit is a share unit that is subject to the satisfaction of specified service or performance-based vesting conditions. Restricted shares are shares that are subject to restrictions requiring that they be redelivered or offered for sale to the Company if specified service or performance-based vesting conditions are not satisfied. •Performance Awards. The Administrator may grant performance awards, which are awards subject to corporate performance measures as described in “Key Features of the 2024 Plan - Performance Targets and Clawback Mechanism” above. •Other Share-Based Awards. The Administrator may grant other awards that are convertible into or otherwise based on shares, subject to such terms and conditions as it determines. •Substitute Awards. The Administrator may grant substitute awards, which are awards issued under the 2024 Plan in substitution for equity awards of an acquired company that are converted, replaced, or adjusted in connection with the acquisition. The Administrator will determine the extent to which the terms and conditions of the 2024 Plan apply to substitute awards, if at all. Substitute awards may have terms and conditions that are inconsistent with the general terms and conditions of the 2024 Plan. In no event shall the term “substitute award” be construed to refer to an award made in connection with the cancellation and repricing of a share option or SAR. •Lapse of Awards. Unless otherwise set forth in the award agreement or determined by the Administrator, awards shall cease to vest upon a termination of the participant’s employment with the Company and its affiliates or the participant ceasing to be an eligible participant under the 2024 Plan. In the event a share option or SAR expires without being exercised during the term thereof or an award does not vest, such award shall lapse automatically, and the Company shall owe no liability to any participant for the lapse of any award. Except as the Administrator may otherwise determine, each award will automatically lapse (and in the case of outstanding restricted shares, will automatically be forfeited) immediately upon consummation of a Covered Transaction, other than (A) any award that is assumed or substituted pursuant to the 2024 Plan and (B) any award that by its terms, or as a result of action taken by the Administrator, continues following the Covered Transaction. For the purpose of the 2024 Plan, a “Covered Transaction” means any of the following: (i) a consolidation, merger, or similar transaction or series of related transactions, including a sale or other disposition of shares, in which the Company is not the surviving corporation or which results in the acquisition of all or substantially all of the Company’s then-outstanding shares by a single person or entity or by a group of persons and/or entities acting in concert; (ii) a sale or transfer of all or substantially all of the Company’s assets; (iii) a dissolution or liquidation of the Company; or (iv) a change in the composition of the Board of Directors where, during any twenty-four (24) month period, individuals who, as of the beginning of such period, constitute the Board of Directors (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board of Directors, provided that any person becoming a Director subsequent to the beginning of such period whose election or nomination for election was approved by a vote of at least a majority of the Incumbent Directors then on the Board of Directors (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for Director, without written objection to such nomination) shall be an Incumbent Director; provided that no individual initially elected or nominated as a Director of the Company as a result of an actual or threatened election contest with respect to Directors or as a result of any other actual or threatened solicitation of proxies by or on behalf of any person other than the Board of Directors shall be deemed to be an Incumbent Director. •Capitalization Adjustments. In the event of a capitalization issues, rights issue, subdivision or consolidation of shares, or reduction in capital, the number and class of securities available under the 2024 Plan and the terms of each outstanding award shall be appropriately adjusted by the Administrator. To the extent permitted by the Hong Kong Stock Exchange, in the event of an equity restructuring which causes the per share value of the shares to change, or any other change in corporate capitalization, such equitable adjustments described in the prior sentence may be made as determined to be appropriate and equitable by the Administrator to prevent dilution or enlargement of rights of participants. Subject to the requirements of the HK Listing Rules, the default method of adjustment is set out below: (1) In the case of a capitalization issue or rights issue, the Company would calculate the adjusted number of awards and adjusted exercise price by applying the formula prescribed (and as updated from time to time) by the Hong Kong Stock Exchange in section A(a) and A(b), respectively, of the “Appendix to Supplementary Guidance on Main Board Listing Rule 17.03(13)” (the “Supplemental Guidance”) to FAQ No. 072-2020 published by the Hong Kong Stock Exchange, set out below: New number of Awards = Existing Awards * F New Exercise Price = Existing Exercise Price * (1/F) Where F = CUM / TEEP CUM = Closing price as shown in the daily quotation sheet of the Hong Kong Stock Exchange on the last day of trading before going ex-entitlement TEEP (Theoretical ex entitlement price) = (CUM + [M * R]) / (1+M) M = Entitlement per existing Share R = Subscription price (2) In the case of a consolidation, subdivision or reduction of share capital, the Company would calculate the adjusted number of awards and exercise price by applying the formula prescribed (and as updated from time to time) by the Hong Kong Stock Exchange in section B of the Supplemental Guidance, set out below: New number of Awards = Existing Awards * F New Exercise Price = Existing Exercise Price * (1/F) Where F = Subdivision or consolidation or reduction factor Any dispute arising in connection with the adjustment of any awards and other terms shall be referred to the decision of the auditors or the independent financial advisers of the Company and whose decision, in the absence of manifest error, shall be final, conclusive and binding on all persons who may be affected thereby. None of the Directors is or will be trustee of the 2024 Plan nor has a direct or indirect interest in the trustee.

  43. Election of Directors

    Election of Directors The Board of Directors currently consists of ten members. The Current Articles provide that unless otherwise determined by the Company in a general meeting, the number of directors shall be not less than one or more than ten. We are not subject to any contractual obligations regarding the election of our directors. Our Nominating and Corporate Governance Committee and Board of Directors may consider a broad range of factors relating to the qualifications and background of nominees, as further set forth below under Director Nominations. The laws of the Cayman Islands do not require an annual election of directors, and the Current Articles provide that each Director shall be elected annually for terms expiring at the next annual general meeting of the Company, at which he or she may be eligible for re-election or until the earlier of their resignation or removal. The Current Articles provide that (1) the shareholders requisitioning a general meeting of shareholders may put forward resolutions to appoint or remove directors (with or without cause), and (2) at that meeting so convened, the shareholders of the issued shares as of the applicable record date may by ordinary resolution approve the removal of directors. Shareholders holding in aggregate not less than one-tenth of the voting rights of issued shares and entitled to vote at general meetings to requisition an extraordinary general meeting of our shareholders in accordance with the Current Articles. Additionally, the Current Articles provide that any vacancy on the Board of Directors, including a vacancy resulting from an enlargement of the Board of Directors, may be filled by ordinary resolution or by vote of a simple majority of our directors then in office.

  44. Director Nominations

    Director Nominations The Board of Directors is responsible for nominating and recommending director candidates to the Company’s shareholders for election at the annual general meeting or for appointing directors to the Board to fill a vacancy or as an addition to the existing Board between annual general meetings. The Board of Directors has delegated to the Nominating and Corporate Governance Committee the responsibility to identify, evaluate, and recommend director candidates to the Board of Directors for their consideration, as deemed appropriate. From time to time, the Nominating and Corporate Governance Committee utilizes third-party search firms to identify director candidates. The Board of Directors has adopted Corporate Governance Guidelines that include, among other things, the criteria that the Board of Directors may consider in evaluating the suitability of director candidates. The Board of Directors has delegated to the Nominating and Corporate Governance Committee the responsibility for reviewing, on an annual basis, the qualification criteria for the Board of Directors as a whole and its individual members and recommending any changes to the Board of Directors for approval. In identifying director candidates, the Board of Directors and the Nominating and Corporate Governance Committee may consider any factors that they deem appropriate in the context of the needs of the Board of Directors and the overall diversity and composition of the Board of Directors. Such factors may include, but are not limited to, the candidate’s qualifications, skills, expertise, experience, integrity, independence (including any actual or perceived conflicts of interest), and time availability in light of other commitments, including service on other boards. Diversity may be considered across multiple dimensions, including diversity in experiences, perspective, and skills as well as diversity with respect to other background characteristics such as gender, age, culture, ethnicity, and nationality. Overall, the Board of Directors and Nominating and Corporate Governance Committee will be guided to select and recommend director candidates that they determine are best suited to meet the needs of the Board of Directors and further the interests of our shareholders through their established record of professional accomplishment, ability to contribute positively to the collaborative culture among board members, knowledge of our business, understanding of the competitive landscape, and professional and personal experiences and relevant expertise.

  45. Director Nominations by Shareholders

    Director Nominations by Shareholders Any shareholder wishing to recommend a director candidate for consideration by the Nominating and Corporate Governance Committee should provide the following information within the time frame set forth for shareholder proposals and in accordance with our Articles of Association to Zai Lab Limited, 314 Main Street, Fourth Floor, Suite 100, Cambridge, MA 02142, Attention: Chief Legal Officer & Corporate Secretary: (a) the name and address of record of the shareholder; (b) a representation that the shareholder is a record holder of our securities or, if the shareholder is not a record holder, evidence of ownership in accordance with Rule 14a-8(b)(2) of the Exchange Act; (c) the candidate’s name, age, business and residential address, educational background, current principal occupation or employment, and principal occupation or employment for the past five years; (d) a description of the qualifications and background of the candidate that addresses the criteria for board membership approved by the Board of Directors; (e) a description of all arrangements or understandings between the shareholder and the candidate; (f) the consent of the candidate (1) to be named in the proxy statement for our next general meeting and (2) to serve as a director, if elected at that meeting; and (g) and any other information regarding the candidate that is required to be included in a proxy statement filed pursuant to SEC rules and HK Listing Rules. The Nominating and Corporate Governance Committee may seek further information from or about the shareholder making the recommendation, the candidate, or any such other beneficial owner, including information about all business and other relationships between the candidate and the shareholder and between the candidate and any such other beneficial owner. The Nominating and Corporate Governance Committee will consider director candidates recommended by shareholders or other sources in the same manner as nominees identified by the Nominating and Corporate Governance Committee.

  46. Board Diversity

    Board Diversity In accordance with Nasdaq Rule 5606, the below chart provides information on each of our director’s voluntary, self-identified characteristics.

  47. Board Diversity

    | Board Diversity Matrix | | | Board Size: | | | Total Number of Directors | 10 |

  48. Board Diversity

    | Gender Identity | Female | Male | | Directors | 2 | 8 | | Demographic Background | Female | Male | | Asian | 2 | 1 | | White | 0 | 6 | | Did not disclose demographic background | 0 | 1 |

  49. Our Corporate Governance Practices

    Our Corporate Governance Practices We seek to implement and follow corporate governance practices in line with best practices in our industry. The Board of Directors has adopted Corporate Governance Guidelines, which are available on our website at https://ir.zailaboratory.com/corporate-governance/highlights. The Board of Directors periodically reviews and updates these Guidelines, as deemed appropriate, such as in consideration of evolving legal and regulatory requirements and corporate governance best practices. Our corporate governance practices include the following: •Each of our directors is independent, except for the Chairperson who also serves as our CEO; •The Board of Directors has a lead independent director to, among other things, lead meetings of the Board when the Chairperson is not present, serve as liaison between the Chairperson and independent directors, and preside over executive sessions of our independent directors; •Our directors are elected annually; •The Audit, Nominating and Corporate Governance, and Compensation Committees are comprised solely of independent directors; •Each of the Board Committees operates pursuant to a written charter that has been approved by the Board of Directors and is available on our website; •Independent directors meet regularly without management; •The Company provides new directors with a director orientation program to help familiarize them with our business, policies, and procedures and makes available to directors continuing education programs; •The Board and Committees are provided access to senior management as well as independent advisors as necessary to perform their duties and, for Committees, in accordance with their respective charters; •The Board of Directors and Board Committees conduct an annual self-evaluation; and •The Board periodically reviews the Company’s succession planning.

  50. Director Independence

    Director Independence The Board of Directors has determined that all members of the Board of Directors, except Samantha (Ying) Du, our Chairperson and CEO, are independent, as determined in accordance with Nasdaq requirements and the HK Listing Rules. In making this independence determination, the Board of Directors considered the relationships that each such director has with us and all other facts and circumstances that the Board of Directors deemed relevant in determining their independence, including the beneficial ownership of our share capital by each director. In considering the independence of the directors listed above, the Board of Directors considered the association of our directors with the holders of more than 5% of our share capital. None of the directors has any relationship with any other director, senior management, or substantial shareholder of the Company. We expect that the composition and functioning of the Board of Directors and each of our committees will continue to comply with applicable SEC rules and regulations, HK Listing Rules, and Nasdaq and Hong Kong Stock Exchange requirements. There are no family relationships among any of our directors or executive officers or senior management. The Board of Directors also considered each director’s tenure on the Board of Directors when considering independence. In this regard, we note that Ms. Leung has been a member of the Board of Directors since August 2014 and an independent director since July 2020. The Board of Directors believe that Ms. Leung continues to provide valuable guidance and perspective to the Company in her capacity as an independent director. The Board of Directors has also received from Ms. Leung a confirmation of independence according to Rule 3.13 of the HK Listing Rules. Taking into account that Ms. Leung (i) does not have any relationship with any directors, senior management, or substantial shareholders of the Company; (ii) is not and has not involved in any relationships or circumstances which would interfere with the exercise of her independent judgement as an independent director; and (iii) has been providing objective and independent views and guidance to the Company as mentioned above during her tenure of office as an independent director, the Board of Directors considers that Ms. Leung is still independent and the long service of Ms. Leung does not diminish her independence or affect her exercise of independent judgment, and her continuous tenure will continue to provide valuable contributions to the Board and its diversity.

  51. 2023 Say-on-Pay Vote and Shareholder Engagement

    | What We Heard | How We Responded | | Shareholders wanted to better understand the retention awards provided to the named executive officers in 2022 | •Shareholders expressed a desire that the Compensation Committee limits its use of such one-time awards, which the Company had provided in 2022 to help address the low retentive value of prior executive stock option awards. | | | •The Compensation Committee understands the concerns raised by shareholders and believes such one-time awards should be limited. | | | •In connection with any potential one-time awards in the future, the Compensation Committee is committed to basing its decisions on the principles of our compensation philosophy, specifically designing a compensation program to attract, retain, and motivate strong leaders who perform at high levels and succeed in a demanding business environment. | | | •There are circumstances under which the Compensation Committee may deem it necessary to grant one-time or off-cycle grants, such as to reflect a promotion or in light of key retention concerns that could impair our successful operations and, when such awards are deemed appropriate, the Compensation Committee will disclose key factors considered in reaching its decisions. | | | •The Compensation Committee did not provide any such retention awards in 2023 to any named executive officers. | | Shareholders appreciate the use of both quantitative and qualitative metrics in determining annual incentives, but would like more emphasis on and accountability for corporate results for our CEO | •Beginning with 2024, to further emphasize and promote CEO accountability for corporate results, the Board of Directors changed the weighting of corporate and individual performance for the CEO’s annual incentive award by increasing the weighting for corporate performance from 75% to 90% and reducing the weighting for individual performance from 25% to 10%. | | Shareholders understood that performance-based restricted stock units (“PSUs”) may not be an appropriate equity vehicle at this time, but wanted to better understand how the Compensation Committee determined the mix of equity awards | •Each year, the Compensation Committee considers a variety of vehicles to help the Company best achieve its goals of attracting, retaining, and motivating strong leaders who perform at high levels and succeed in a demanding business environment. Working with its independent compensation consultant, Pearl Meyer, the Compensation Committee considered whether PSUs should be included as an element in the Company’s executive compensation program. After considering market practices in our peer group as well as the stage of development of the Company, the Compensation Committee determined that PSUs are not the preferable form of award at this time for several reasons, including that (1) our stock price is highly impacted by geopolitical factors beyond management’s control; and (2) we are in the early launch phases of multiple products so there is limited ability to set realistic and meaningful longer-term performance targets. The Compensation Committee is committed to evolving the Company’s equity mix over time and, as our business evolves, to align with market best practices for our industry and support our business priorities at the time and leadership talent retention objectives. |

  52. Principal Objectives of Our 2023 Compensation Program

    Principal Objectives of Our 2023 Compensation Program Our executive compensation program is designed to drive the creation of long-term shareholder value by awarding compensation that is designed to attract, retain, and motivate strong leaders who perform at high levels, help us deliver on our corporate mission and objectives, and succeed in a demanding international business environment. In structuring our executive compensation program, our Compensation Committee considers the unique characteristics of the Company and the significant competition for top talent in our industry; the challenges of recruiting, retaining, and motivating executives in an industry that generally has significant risks and longer business cycles than other commercial industries; and evolving compensation governance and best practices. In addition, as a company incorporated in the Cayman Islands, with a substantial presence in Greater China and the United States and dual-primary listing on Nasdaq and the Hong Kong Stock Exchange, our leadership team must also possess, in addition to deep knowledge of the U.S. and Hong Kong securities laws and governance requirements, the global perspectives and expertise required to navigate geopolitical challenges and to address novel and complex issues amid the evolving global regulatory landscape. Because the Company is designing an executive compensation program to attract, retain, and motivate global talent, with specific knowledge of the evolving Chinese regulatory and operating environment, the Company’s executive compensation program may differ from our U.S. peers to reflect the competitive market in China and the Company’s desire to incentivize an entrepreneurial mindset to encourage actions that support our long-term growth and strategy. For these reasons, the Compensation Committee looks at the totality of factors the Company faces when it considers and determines executive compensation. Our executive compensation program in 2023 was: •Mission Focused and Business Driven. Our executive compensation program focused on whether we met our corporate performance goals and whether each named executive officer achieved his or her individual performance goals. These goals are designed to support the annual and long-term objectives of our business, including the discovery, development, and commercialization of innovative products to address significant unmet medical needs in our key therapeutic areas. We seek to provide an executive compensation program that contributes to building and sustaining a foundation for long-term success. •Market Competitive. While we do not benchmark our compensation, or its components, to a specific market percentile of compensation within our peer group, we consider the executive compensation programs of our peer group in making executive compensation determinations. Broader market data, as further described below, is also considered in order to provide additional context for our executive compensation decisions, considering the unique characteristics of the Company and the need to attract, retain, and motivate executives with a global skillset with deep knowledge of both the U.S. and China regulatory regimes. Peer group and market practices are among the many factors we consider in developing an executive compensation program that is designed to enable us to recruit, retain, and motivate our leadership team to achieve our business objectives and enhance shareholder value. •Performance Focused. We believe strongly in pay-for-performance and endeavor to provide our named executive officers with higher levels of compensation when our business goals and their personal performance objectives are met or exceeded and with lower levels of compensation when such corporate or individual performance does not meet our expectations and goals. Each performance factor is weighted separately in determining whether annual bonuses have been earned. •Aligned with Shareholders. We believe every employee contributes to our success and, as such, we have endeavored to design a compensation program that provides every employee with a vested interest in our success. For members of our executive team, including our named executive officers, a significant portion of their total compensation is equity-based to promote further alignment between the interests of our executive officers and our shareholders.

  53. The Decision-Making Process

    The Decision-Making Process The Compensation Committee works closely with its independent compensation consultant, as well as with management, to evaluate the effectiveness of the Company’s executive compensation program. The duties and responsibilities of the Compensation Committee are documented in the Compensation Committee’s written charter, which was adopted by the Board of Directors and can be found on our website, www.zailaboratory.com, under the “Corporate Governance” subsection of the “Investors” section. Role of Compensation Committee. The Compensation Committee reviews, on an annual basis, our executive compensation program in light of our business goals and objectives and the business results and corporate performance goals we achieved for the year in order to establish the compensation for our named executive officers. The Compensation Committee may, in its discretion, adopt or recommend to the Board of Directors the adoption of, new or amended elements of our executive compensation program, to the extent our business goals and objectives have changed. In making executive compensation decisions, the Compensation Committee reviews a variety of factors and compensation-related data, including information obtained from our peer group companies and other market data such as compensation surveys comprising companies with a similar size, complexity, and industry focus as us. The Compensation Committee also considers our Company’s performance with respect to our annual corporate performance goals as well as the individual performance of each named executive officer. Based on this assessment of corporate and individual performance, the Compensation Committee will determine (or recommend to the Board of Directors in the case of the CEO) the amount of total compensation that it deems appropriate for each executive officer as well as how such compensation should be allocated between cash and non-cash compensation and among the different forms of non-cash compensation. In addition, the Compensation Committee reviews our annual bonus plan and our equity incentive plan, assesses the business achievements relevant to granting awards under these plans, and makes recommendations to the Board of Directors with respect to the Company’s overall compensation policies and practices. Role of our CEO. Each year, our CEO provides the Compensation Committee with an assessment of the Company's performance relative to its corporate goals for the most recently completed fiscal year as well as the individual performance of each named executive officer, other than herself, and recommends to the Compensation Committee the compensation to be paid or awarded to each named executive officer, other than herself. Our CEO’s recommendations are based on numerous factors, including: •Company, team, and individual performance; •internal pay comparisons; •potential for future contributions; •leadership competencies; and •external market competitiveness. In consideration of the CEO’s recommendations and other factors, the Compensation Committee will make the final determinations regarding the compensation of our named executive officers, other than our CEO, and will make a recommendation to the Board of Directors for the compensation to be paid or awarded to our CEO. The Board of Directors is responsible for making the final determination regarding our CEO’s compensation. Our CEO does not participate in any deliberations regarding her own compensation. Role of the Independent Compensation Consultant. The Compensation Committee believes that independent advice is important in developing and overseeing our executive compensation program. The Compensation Committee has engaged Pearl Meyer to provide consulting services in relation to executive and director compensation decisions. Pearl Meyer reports directly to the Compensation Committee and only provides services to us on such matters as needed and as directed solely by the Compensation Committee. These services include providing guidance on trends in CEO, executive, and non-employee director compensation; the development of the specific components of our executive compensation program; and a competitive market assessment of our executive compensation program, including the composition of our compensation peer group. The Compensation Committee has assessed the independence of Pearl Meyer in accordance with applicable SEC and Nasdaq rules and confirmed that Pearl Meyer’s work does not raise any conflicts of interest and that Pearl Meyer remains independent under applicable rules.

  54. External Market Competitiveness and Compensation Peer Group

    External Market Competitiveness and Compensation Peer Group We consider market practices and trends when designing our executive compensation programs and determining executive compensation levels. We consider competitive ranges for each position when we make executive compensation decisions and review external market practices as a reference point to assist us in designing an executive compensation program that is tailored to the unique characteristics of our Company and is intended to attract, retain, and motivate talented leaders. To understand the external market competitiveness of the compensation for our named executive officers, the Compensation Committee reviews reports analyzing publicly available information and surveys prepared by Pearl Meyer. These reports compare the compensation of each named executive officer to data available for comparable positions at companies in our peer group and, in certain circumstances, the broader market, by compensation element. To determine our 2023 peer group, we identified comparable companies that approximate (i) our scope of business, including revenues and market capitalization, (ii) our global geographical reach, (iii) our research-based business with multiple marketed products, and (iv) a comparable pool of talent for which we compete. In 2022, the Compensation Committee, with support from our independent compensation consultant, conducted an in-depth analysis to determine the appropriate peer group to evaluate 2023 compensation decisions in the context of the Company’s business strategy and operating parameters. The purpose of the peer group analysis was to enable the Company to use the appropriate comparator group and third-party data sources for our annual assessment of executive compensation. Following this analysis, the Compensation Committee determined that our peer group should be updated to reflect the Company’s current size and scope of our business. For example, we expanded our peer group and added certain companies that were deemed comparable in size and business scope or were China-based competitors (these new companies denoted with an asterisk in the table below), and we removed certain companies that were no longer deemed comparable in size or that had been acquired. The peer group used to establish 2023 target compensation consisted of the following 20 comparator companies*:

  55. External Market Competitiveness and Compensation Peer Group

    | ACADIA Pharmaceuticals, Inc.** | Exelixis, Inc. | | Agios Pharmaceuticals, Inc.** | Innovent Biologics, Inc. | | Alnylam Pharmaceuticals, Inc. | Insmed Incorporated** | | Amicus Therapeutics, Inc.** | Mirati Therapeutics, Inc. | | Apellis Pharmaceuticals, Inc.** | Neurocrine Biosciences, Inc. | | argenx SE | PTC Therapeutics, Inc.** | | BeiGene, Ltd. | Sarepta Therapeutics, Inc. | | BioCryst Pharmaceuticals, Inc.** | Shanghai Junshi Biosciences Co., Ltd. | | Blueprint Medicines Corporation** | Ultragenyx Pharmaceutical Inc. | | CanSino Biologics Inc.** | Vir Biotechnology, Inc.** |

  56. External Market Competitiveness and Compensation Peer Group

    *Removals from the peer group in 2023 include Acceleron Pharma Inc., BioMarin Pharmaceuticals, Inc., Horizon Therapeutics plc, Incyte Corporation, Jazz Pharmaceuticals plc, and Seagen Inc. ** Represents new peer group members in 2023. For each of the companies in our peer group, we analyze available data to identify comparable executive officers. We then compiled and analyzed the data for each comparable position. Our competitive analysis included the structure and design of the executive compensation programs as well as the targeted value of the compensation under these programs. For our executive officers, we may supplement the data from our peer group with size appropriate published compensation surveys from the life sciences sector. While the Compensation Committee considers relevant market pay practices when setting executive compensation, it does not believe it is appropriate to establish compensation levels based only on market practices. The Compensation Committee believes that compensation decisions are complex and require a deliberate review of Company and individual performance and peer compensation levels. The factors that influence the amount of compensation awarded include, but are not limited to: •Market competition for a particular position; •Experience and past performance inside or outside the Company; •Roles and responsibilities within the Company; •Tenure with the Company and associated institutional knowledge; •Long-term potential with the Company; •Innovative thinking and leadership; •Industry expertise; •Personal performance and contributions; •Succession planning; •Past and future performance objectives; and •Value of the position within the Company.

  57. Annual Base Salary

    Annual Base Salary The Compensation Committee seeks to maintain the annual base salaries that we pay to our new and existing named executive officers at competitive levels. For 2023, the Board of Directors, in consideration of the recommendation by the Compensation Committee, reviewed the base salaries of chief executive officers in our peer group relative to Dr. Du’s compensation and considered Dr. Du’s capabilities, performance, and future expected contributions. Based on this analysis, the Board of Directors approved an increase to Dr. Du’s base salary to reflect her continued positive contributions and to better align this element of her compensation with the market. The Compensation Committee undertook a similar, individualized review of each other named executive officer’s capabilities, performance, roles and responsibilities, and future expected contributions, as well as considering their base salaries compared to peer group compensation data, when approving the base salaries for our other named executive officers. Based on this analysis, the Compensation Committee approved increases to base salary for Mr. Smiley and Dr. Reinhart, in light of their continued positive contributions and to better align this element of their compensation with the market, with a larger increase for Mr. Smiley in light of his promotion to President and Chief Operating Officer in April 2023. Dr. Amado did not receive a base salary increase since his 2023 base salary was established when he commenced employment with the Company in December 2022. The Compensation Committee established Dr. Chen’s base salary with respect to her role as Chief Financial Officer upon her promotion to this role in July 2023. Below is a table of the annual base salaries for our named executive officers in 2023 and 2022 and the percentage changes in annual base salary, where applicable.

  58. Annual Base Salary

    | Name | Base Salary as of December 31, 2023 | Base Salary as of December 31, 2022 | Percentage Increase | | Samantha (Ying) Du | $878,000 | $840,000 | 4.5% | | Yajing Chen* | $450,000 | N/A | N/A | | Rafael Amado | $620,000 | $620,000 | —% | | Harald Reinhart | $592,515 | $567,000 | 4.5% | | Joshua Smiley | $650,000 | $600,000 | 8.3% | | Billy Cho** | $499,200 | $499,200 | —% |

  59. Annual Base Salary

    *Dr. Chen was not a named executive officer in 2022; accordingly, no base salary is shown for 2022. ** Base salary is as of July 7, 2023, the date of Mr. Cho’s departure from the Company.

  60. Annual Incentive Awards (Bonuses)

    Annual Incentive Awards (Bonuses) Our annual bonus program is designed to motivate and reward our named executive officers for achievement of performance that supports short- and long-term value creation for the Company. Target annual bonus opportunities are based on a percentage of the named executive officer’s base salary and their respective roles and responsibilities. Actual awards are determined based on the Compensation Committee’s assessment of corporate and individual performance and can range from 0% to 150% of target depending on performance. CEO Annual Incentive Award. For 2023, the annual incentive award for our CEO was weighted 75% for corporate performance and 25% for individual performance, and the target bonus percentage of annual base salary was 90%. Beginning with 2024, in consideration of a variety of factors, including shareholder feedback, the Compensation Committee changed the weighting of corporate and individual performance for the CEO’s annual incentive award to 90% based on corporate performance and 10% based on individual performance. Annual Incentive Award for Other NEOs. The annual incentive awards for our other named executive officers are weighted 60% for corporate performance and 40% for individual performance. The target bonus percentages range from 45% to 60% of annual base salary, which were unchanged from 2022, other than the target for Mr. Smiley which increased from 50% to 60% in connection with his promotion to President and Chief Operating Officer in April 2023. The Compensation Committee established Dr. Chen’s target bonus percentage with respect to her role as Chief Financial Officer at 40% upon her promotion to this role in July 2023. The table below shows the 2023 target annual bonus for each named executive officer.

  61. Annual Incentive Awards (Bonuses)

    | Name | Target Percentage | Target Amount | | Samantha (Ying) Du | 90% | $790,200 | | Yajing Chen* | 40% | $180,000 | | Rafael Amado | 50% | $310,000 | | Harald Reinhart | 50% | $296,258 | | Joshua Smiley* | 60% | $390,000 | | Billy Cho** | 45% | $224,640 |

  62. Annual Incentive Awards (Bonuses)

    *As noted above, Mr. Smiley’s target opportunity and base salary were increased upon his promotion in April 2023, and Dr. Chen’s target opportunity and base salary were established in her role as Chief Financial Officer upon her promotion to this role in July 2023. In accordance with the terms of our annual incentive program, Dr. Chen’s 2023 actual target opportunity was pro-rated to reflect her target opportunity and base salary in effect prior to and following her mid-year promotion. **Mr. Cho stepped down from the Company, effective July 7, 2023. In accordance with the terms of his severance agreement and general release, a portion of the severance payment he received related to a pro-rated 2023 annual bonus. For more information regarding Mr. Cho’s severance agreement and general release, see CD&A –Employment Agreements. Corporate Performance Goals and Results. Each year, we establish key corporate strategic goals that are aligned with Company-wide incentives relating to significant business objectives. These goals may fall into several categories, including goals related to our commercial performance and financial condition, the advancement of our pipeline, including clinical and regulatory developments, and the expansion of our pipeline through business development and internal discovery activities. The Compensation Committee determines the specific goals and related weightings for annual incentive awards based on management input at the beginning of the year and a desire to reflect core performance measures and priorities for the business for the fiscal year, including our commitment to compliance, and to set goals that we believe will best support short-, medium-, and long-term value growth. The goal-setting process for 2023 was rigorous, involving lengthy discussions and a review of multiple data points, including analyst consensus, product expectations, and overall market potential. The Compensation Committee may also consider other key achievements during the year in assessing overall corporate performance. The goals were designed to be challenging but achievable with strong management performance and the successful execution of our 2023 corporate strategic goals. The Compensation Committee reviewed our performance with respect to our 2023 corporate goals and concluded that the Company had achieved most of these goals as well as significant successes beyond these goals. Based on this level of achievement, the Compensation Committee then determined that the corporate multiplier for the corporate performance element of our named executive officers’ annual incentive awards was 96%. The discussion below outlines the Company’s 2023 corporate goals and target percentage weighting as well as our progress and achievement with respect to these goals and the related score achieved.

  63. Additional Achievements (Score: 5.0%)

    Additional Achievements (Score: 5.0%) The Compensation Committee also considered the following achievements that were above and beyond the corporate performance goals approved by the Compensation Committee for 2023: the outstanding commercial launch and NRDL listing for VYVGART for the treatment of gMG and the breakthrough therapy designation for the SC efgartigimod for CIDP. Total Corporate Performance Score: 96%. Individual Performance. Upon review of the individual performance of each named executive officer, the Compensation Committee agreed that individual performance goals had exceeded expectations for all NEOs for the 2023 performance year. Individual performance ratings were determined by the Board of Directors for our CEO, in consideration of the recommendation from the Compensation Committee, and by the Compensation Committee for the other named executive officers, in consideration of the recommendation from our CEO. 2023 Annual Incentive Award Payouts. Bonuses were then determined based on the corporate and individual performance ratings described above. Actual award payouts ranged between approximately 103% and 118% of target bonuses as shown in the table below. The table below shows the 2023 target annual bonus and actual bonuses earned for our named executive officers.

  64. Additional Achievements (Score: 5.0%)

    | Name* | Target Percentage | Corporate Performance Multiplier (%) | Individual Performance Multiplier (%) | Actual (as a % of Target) | Actual Award Payout ($) | | Samantha (Ying) Du | 90% | 96% | 125% | 103% | 815,882 | | Yajing Chen** | ** | 96% | 125% | ** | 183,617 | | Rafael Amado | 50% | 96% | 150% | 118% | 364,560 | | Harald Reinhart | 50% | 96% | 150% | 118% | 348,399 | | Joshua Smiley | 60% | 96% | 125% | 108% | 419,640 |

  65. Equity Incentive Compensation

    Equity Incentive Compensation Equity incentive compensation comprises a significant portion of total target direct compensation for our named executive officers. Such equity compensation directly aligns the interests of the named executive officers with those of our shareholders. Each year, the Compensation Committee considers a variety of factors, including the Company’s stage of development and business needs and objectives, market practices in our peer group, and experience and past performance, to determine the type and mix of equity awards that it believes will best support the Company in achieving its goals of attracting, retaining, and motivating strong leaders who perform at high levels and succeed in executing on our corporate strategic goals in a demanding business environment. For 2023, we granted equity incentive awards using a mix of 75% service-based stock options (“stock options”) and 25% restricted share units (“RSUs”).

  66. Equity Incentive Compensation

    | Equity Vehicle | What It Does | Design Details | | Stock Options | Rewards for stock appreciation and continued service over the vesting period | Exercise price per Share: See table below Vesting: 25% per year on the anniversary of the date of the grant, subject to continued employment with the Company on the vesting date Exercise term: 10 years | | RSUs | Supports leadership retention objectives and further aligns interests of executives with shareholders as the RSUs fluctuate based on our share price performance | Vesting: 25% per year on the anniversary of the date of the grant, unless otherwise noted below, subject to continued employment with the Company on the applicable vesting date |

  67. Equity Incentive Compensation

    Working with its independent compensation consultant, Pearl Meyer, the Compensation Committee also considered other types of equity awards, including performance-based restricted stock units (“PSUs”), and whether such other types of equity awards should be included as an element in the Company’s executive compensation program. The Compensation Committee determined that stock options and RSUs are most appropriate at this time. The Compensation Committee considered various relevant factors in its decision, including our stock price volatility, which is affected by geopolitical factors outside of management’s control, and the fact that many of our commercial products are still in the early stages of commercialization thereby limiting our ability to reliably establish long-range performance targets. In addition, in analyzing the market practices in our peer group, the Compensation Committee found that many companies in our industry focus on service-based full value awards earlier in their development and introduce performance-based equity as they develop and mature. The Compensation Committee will continue to consider the appropriate equity mix over time and as our business evolves to align with market best practices for our industry and support our business and leadership retention objectives. 2023 Equity Incentive Awards. In determining the total amount and mix of annual equity grants to our named executive officers, in April 2023, the Compensation Committee (or the Board of Directors with respect to the CEO) considered corporate and individual performance, the equity incentive awards granted to comparable executive officers of our peer group companies and, in certain circumstances, broader market data, as well as the retentive value of outstanding equity. In general, equity incentive awards constitute the largest component of our executive compensation program in order to better align the interests of our executives with those of our shareholders. The target equity incentive awards granted during 2023 to our named executive officers are set forth in the table below:

  68. Equity Incentive Compensation

    | Name | Stock Options* | RSUs* | Total Target Value | | Samantha (Ying) Du | $7,500,000 | $2,500,000 | $10,000,000 | | Rafael Amado | $2,250,000 | $750,000 | $3,000,000 | | Harald Reinhart | $2,178,750 | $726,250 | $2,905,000 | | Joshua Smiley | $2,982,000 | $994,000 | $3,976,000 |

  69. Equity Incentive Compensation

    *The stock options are exercisable for ADSs, and each RSU represents a contingent right to receive one ADS. The actual number of ADSs granted were determined by dividing the corresponding allocation of the target value by the 30-trading-day average of the closing price of our common stock as of the grant date (“30-Day Average”). The target award value differs from the amounts reported in the 2023 Summary Compensation Table as SEC rules require that the amounts reported in the 2023 Summary Compensation Table be reported based on the grant date fair value calculated in accordance with accounting rules, which is based on the stock price on the date of grant. Additional details on amounts of the 2023 equity grants to our named executive officers are shown in Executive Compensation Tables – 2023 Grants of Plan-Based Awards. Dr. Chen is excluded from the table above as she became an executive officer after the Compensation Committee (and Board of Directors for our Chief Executive Officer) determined the total amount and mix of equity awards for our named executive officers. Dr. Chen’s stock option and RSU awards and total target value were determined in accordance with guidelines for senior management. For more information on how the equity awards for Dr. Chen were allocated between the annual equity incentive awards per this process in April 2023 and the promotion equity award she received in August 2023 in connection with her promotion to Chief Financial Officer, see Executive Compensation Tables – 2023 Grants of Plan-Based Awards. Mr. Cho did not receive an equity award in 2023. He stepped down from the Company effective July 7, 2023. For more information regarding his severance agreement and general release, see CD&A – Employment Agreements.

  70. Employment Agreements

    Employment Agreements We have entered into employment agreements with each of our named executive officers that govern the terms and conditions of their service relationship with us, including the terms and conditions related to their compensation and benefits. The term of Dr. Du’s employment is without a fixed period and subject to a specified notice period only. The compensation received by our named executive officers in accordance with these employment agreements is disclosed elsewhere in this CD&A. Each of our named executive officers is afforded severance protection through his or her employment agreement. These severance protections are described in more detail below in Potential Payments Upon Termination or Change in Control. Mr. Cho stepped down from the Company, effective July 7, 2023, to pursue another professional opportunity, and the Company entered into a Severance Agreement and General Release in connection with his resignation. In light of Mr. Cho’s significant contributions to the Company and in exchange for his release of claims and continued compliance with covenants relating to confidentiality, trade secrets, intellectual property, and competitive activities, this agreement provided Mr. Cho with a payment equal to a pro-rated bonus of $115,705 and an additional severance payment of $250,000. In addition, the Company agreed to allow RSUs granted to Mr. Cho under the 2017 Equity Incentive Plan to continue vesting through July 7, 2024, subject to continued compliance with his restrictive covenant obligations and the obligations in the Severance Agreement and General Release, and Mr. Cho agreed to not sell any ADSs or ordinary shares of the Company, including shares received upon vesting of these RSUs, for a three-month period after his separation date.

  71. 2023 Summary Compensation Table

    2023 Summary Compensation Table The following table sets forth the compensation paid to, received by or earned during each of the fiscal years set forth below by our named executive officers:

  72. 2023 Summary Compensation Table

    | Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($) (1) | Non-Equity Incentive Plan Compensation ($) (2) | All Other Compensation ($) (3) | Total ($) | | Samantha (Ying) Du, | 2023 | $868,500 | — | $1,901,226 | $8,442,237 | $815,882 | $14,440 | $12,042,285 | | Chief Executive Officer and Chairperson of the Board of Directors | 2022 | $830,000 | — | $10,529,796 | $8,015,244 | $831,600 | $5,501 | $20,212,141 | | | 2021 | $774,305 | — | $6,726,276 | $6,946,588 | $864,000 | $4,410 | $15,315,579 | | Yajing Chen | 2023 | $424,445(4) | — | $467,350 | $922,620 | $183,617 | $16,500 | $2,014,532 | | Chief Financial Officer | | | | | | | | | | Rafael Amado | 2023 | $620,000 | $600,000(5) | $732,098 | $2,532,664 | $364,560 | $16,500 | $4,865,822 | | President, Head of Oncology Research and Development | 2022 | $2,385 | — | $3,868,200 | $3,631,121 | $— | $— | $7,501,706 | | Harald Reinhart | 2023 | $586,136 | | $715,700 | $2,452,468 | $348,399 | $16,500 | $4,119,203 | | President, Head of Global Development, Neuroscience, Autoimmune, and Infectious Diseases. | 2022 | $567,000 | | $3,265,075 | $2,492,656 | $348,705 | $7,625 | $6,681,061 | | | 2021 | $466,090 | $107,640 | $5,238,208 | $2,127,892 | $264,960 | $7,250 | $8,212,040 | | Joshua Smiley | 2023 | $637,500 | $150,000(6) | $970,291 | $3,356,619 | $419,640 | $16,500 | $5,550,550 | | President and Chief Operating Officer | 2022 | $250,000 | $250,000(6) | $3,639,510 | $4,009,898 | $142,101 | $5,008 | $8,296,517 | | Billy Cho, | 2023 | $258,040 | — | $399,247 | $1,850,700 | $— | $378,014 | $2,886,001 | | Former Chief Financial Officer | 2022 | $494,400 | $— | $2,208,554 | $1,424,383 | $253,843 | $— | $4,381,180 | | | 2021 | $466,090 | $— | $1,602,414 | $1,920,292 | $254,880 | $— | $4,243,676 |

  73. 2023 Summary Compensation Table

    (1)Reflects the aggregate grant date fair value of restricted share awards, restricted share unit awards, performance share unit awards, and stock options granted during the applicable fiscal year, computed in accordance with ASC Topic 718. In addition, the amount reported for Mr. Cho for 2023 represents the incremental fair value under ASC Topic 718 associated with the modification of certain of his outstanding restricted share unit awards to provide for continued vesting through July 7, 2024 and the extension of his post-termination exercise period for his options through August 31, 2024. The underlying valuation assumptions for equity awards granted during 2023 are further discussed in Note 15 in our 2023 Annual Report on Form 10-K. (2)Reflects amounts earned by each of the named executive officers under our annual bonus plan for the applicable fiscal year. (3)For Drs. Du, Chen, Amado, and Reinhart and Mr. Smiley, the amounts for 2023 reflect Company contributions made under the Company’s 401(k) plan on behalf of the participating named executive officer. For Mr. Cho, the amount for 2023 reflects the payment made in accordance with Mr. Cho’s Severance Agreement and General Release, which includes (i) a pro-rated bonus of $115,705, (ii) an additional severance payment of $250,000 and (iii) a payment for accrued vacation of $12,309. (4)Dr. Chen was promoted from Deputy Chief Financial Officer to Chief Financial Officer, effective July 7, 2023. Her salary was pro-rated for her periods of service in these roles in 2023. (5)Reflects a cash sign-on award paid in January and March 2023 in connection with the commencement of Dr. Amado’s employment. (6)Reflects a cash sign-on award paid in August 2022 and August 2023 in connection with the commencement of Mr. Smiley’s employment.

  74. 2023 Grants of Plan-Based Awards

    2023 Grants of Plan-Based Awards The following table reports potential payouts for annual incentive awards made under our annual bonus program for our named executive officers in 2023 and stock options and RSUs that were granted during 2023 to our named executive officers:

  75. 2023 Grants of Plan-Based Awards

    | Name and Award (Type) | Grant Date (1) | Estimated Future Payouts Under Non- Equity Incentive Plan Awards ($)(2) | | | All Other Stock Awards: No of Shares of Stock or Units (3) | All Other Option Awards: No. of Securities Underlying Options (3) | Exercise or Base: Price of Option Awards ($) (3) | Grant Date Fair Value of Stock and Option Awards ($)(4) | | | | Threshold | Target | Maximum | | | | | | Samantha (Ying) Du | | | | | | | | | | Annual Bonus | — | — | $790,200 | — | — | — | $— | $— | | Stock Options | 4/3/2023 | — | $— | — | — | 377,391 | $33.95 | $8,442,237 | | RSUs | 6/29/2023 | — | $— | — | 71,880 | — | | $1,901,226 | | Yajing Chen | | | | | | | | | | Annual Bonus | — | — | $168,473 | — | — | — | $— | $— | | Stock Options | 4/3/2023 | — | $— | — | — | 26,000 | $33.95 | $581,620 | | | 8/14/2023 | — | $— | — | — | 20,000 | $25.71 | $341,000 | | RSUs | 4/3/2023 | — | $— | — | 10,000 | | | $339,500 | | | 8/14/2023 | — | | — | 5,000 | | | $127,850 | | Rafael Amado | | | | | | | | | | Annual Bonus | — | — | $310,000 | — | — | — | $— | $— | | Stock Options | 4/3/2023 | — | $— | — | — | 113,217 | $33.95 | $2,532,664 | | RSUs | 4/3/2023 | — | $— | — | 21,564 | — | $— | $732,098 | | Harald Reinhart | | | | | | | | | | Annual Bonus | — | — | $296,258 | — | — | — | $— | $— | | Stock Options | 4/3/2023 | — | $— | — | — | 109,632 | $33.95 | $2,452,468 | | RSUs | 4/3/2023 | — | $— | — | 21,081 | — | $— | $715,700 | | Joshua Smiley | | | | | | | | | | Annual Bonus | — | — | $390,000 | — | — | — | $— | $— | | Stock Options | 4/3/2023 | — | — | — | | 150,050 | $33.95 | $3,356,619 | | RSUs | 4/3/2023 | — | — | — | 28,580 | — | $— | $970,291 | | Billy Cho | | | | | | | | | | Annual Bonus | | | $224,640 | | | | | | | Modification of Stock Options (5) | 7/7/2023 | | | | | 370,000 | $21.84 | $1,689,456 | | | 7/7/2023 | | | | | 18,000 | $44.94 | $98,307 | | | 7/7/2023 | | | | | 9,620 | $130.96 | $8,705 | | | 7/7/2023 | | | | | 10,022 | $45.47 | $54,232 | | Modification of RSUs (5) | 7/7/2023 | | | | 15,752 | | | $399,247 |

  76. 2023 Grants of Plan-Based Awards

    (1)The Board of Director action date for the April 3 option grant and June 29 RSU grant to Dr. Du was March 22, 2023. The Compensation Committee action date for the April 3 option and RSU grants to Drs. Amado and Reinhart and Mr. Smiley was February 15, 2023. The Compensation Committee action date for the August 14 option and RSU grant to Dr. Chen was July 3, 2023. The April 3 option and RSU awards to Dr. Chen were granted in accordance with the Company’s policies and procedures for grants to senior management. (2)Non-Equity Incentive Plan amounts above reflect short-term cash incentive opportunities granted under our annual bonus plan, which is discussed in more detail in CD&A – Annual Incentive Awards. Actual amounts earned by each of the named executive officers under our annual bonus program for 2023 are disclosed above in the 2023 Summary Compensation Table. Dr. Chen was promoted from Deputy Chief Financial Officer to Chief Financial Officer, and her target bonus percentage was increased to 40%, effective July 7, 2023. The target amount for Dr. Chen reported in the table reflects her pro-rated target for the year, based on the target in effect for her periods of service in these roles in 2023. (3)Each RSU represents a contingent right to receive one ADS, and the stock options are exercisable for ADSs. As a result, the number of shares and exercise price in these columns are represented in terms of ADSs. Each ADS represents ten ordinary shares. RSU and option awards vest in equal annual installments over four years, beginning on the first anniversary of the grant date, subject to the executive remaining in continuous service with us on the vesting date. Option awards have a maximum term of ten years from the grant date. (4)Except as noted in footnote 4, amounts reflect the aggregate grant date fair value of restricted share unit awards and stock options granted during 2023, computed in accordance with ASC Topic 718. The underlying valuation assumptions for equity awards granted during 2023 are further discussed in Note 15 in our 2023 Annual Report on Form 10-K. (5)The amount reported for Mr. Cho in this row represents the number of RSU and stock options, as applicable, impacted by the modification of their terms and the incremental fair value under ASC Topic 718 associated with the modification of certain of his outstanding RSU awards to provide for continued vesting through July 7, 2024 and the extension of his post-termination exercise period for his options through August 31, 2024. Each of our named executive officers has entered into an employment agreement that governs the terms and conditions of their employment relationship with us, including the terms and conditions with respect to their compensation and benefits. Among other items, the employment agreements set out the annual bonus targets, as a percentage of base salary, for each of our named executive officers. Please see CD&A – Annual Incentive Awards above for the 2023 bonus targets applicable to our named executive officers.

  77. Outstanding Equity Awards at December 31, 2023

    Outstanding Equity Awards at December 31, 2023 The following table provides information on the outstanding stock options, restricted share units, and performance share units, in each case held as of December 31, 2023 by our named executive officers:

  78. Outstanding Equity Awards at December 31, 2023

    | | | Option Awards | | | | Stock Awards | | | | | Name | Grant Date | Number of securities underlying unexercised options (#) exercisable (1) | Number of securities underlying unexercised options (#) unexercisable (1)(2) | Option exercise price ($) | Option expiration date | Number of shares or units of stock that have not vested (#)(1)(3) | Market value of shares or units of stock that have not vested ($)(4) | Equity Incentive Plan Awards: Number of unearned shares, units or other rights that have not vested (#)(1)(5) | Equity Incentive Plan Awards: Market or payout value of unearned shares, units or other rights that have not vested ($)(4) | | Samantha (Ying) Du | 10/22/2015 | 589,165 | — | $0.60 | 10/21/2025 | | | | | | | 3/9/2016 | 604,376 | — | $1.20 | 3/8/2026 | | | | | | | 8/25/2016 | 922,184 | — | $1.74 | 8/24/2026 | | | | | | | 3/28/2018 | 350,000 | — | $20.90 | 3/27/2028 | | | | | | | 3/8/2019 | 240,000 | 60,000 | $38.93 | 3/7/2029 | | | | | | | 3/12/2020 | 150,000 | 100,000 | $44.94 | 3/11/2030 | | | | | | | 4/1/2021 | 34,800 | 52,200 | $130.96 | 3/31/2031 | | | | | | | 4/1/2021 | | | | | 10,200 | $278,766 | | | | | 12/1/2021 | | | | | | | 63,175 | $1,726,573 | | | 4/1/2022 | 56,400 | 225,600 | $45.47 | 3/31/2032 | | | | | | | 4/1/2022 | | | | | 43,200 | $1,180,656 | | | | | 6/25/2022 | | | | | 176,400 | $4,821,012 | | | | | 4/3/2023 | — | 377,391 | $33.95 | 4/2/2033 | | | | | | | 6/29/2023 | | | | | 71,880 | $1,964,480 | | | | Yajing Chen | 10/1/2021 | 3,200 | 4,800 | $102.75 | 9/30/2031 | | | | | | | 10/1/2021 | | | | | 2,760 | $75,431 | | | | | 11/1/2021 | 2,500 | 2,500 | $104.42 | 10/31/2031 | | | | | | | 11/1/2021 | | | | | 1,000 | $27,330 | | | | | 4/1/2022 | 4,000 | 16,000 | $45.47 | 3/31/2032 | | | | | | | 4/1/2022 | | | | | 6,000 | $163,980 | | | | | 6/25/2022 | | | | | 18,750 | $512,438 | | | | | 4/3/2023 | — | 26,000 | $33.95 | 4/2/2033 | | | | | | | 4/3/2023 | | | | | 10,000 | $273,300 | | | | | 8/14/2023 | — | 20,000 | $25.71 | 8/13/2033 | | | | | | | 8/14/2023 | | | | | 5,000 | $136,650 | | | | Rafael Amado | 12/30/2022 | 36,740 | 146,960 | $30.70 | 12/29/2032 | | | | | | | 12/30/2022 | | | | | 84,000 | $2,295,720 | | | | | 4/3/2023 | — | 113,217 | $33.95 | 4/2/2033 | | | | | | | 4/3/2023 | | | | | 21,564 | $589,344 | | |

  79. Outstanding Equity Awards at December 31, 2023

    | Harald Reinhart | 9/20/2017 | 40,000 | — | $18.00 | 9/19/2027 | | | | | | | 3/28/2018 | 60,000 | — | $20.90 | 3/27/2028 | | | | | | | 11/16/2018 | 30,000 | — | $17.99 | 11/15/2028 | | | | | | | 4/1/2021 | 10,660 | 15,990 | $130.96 | 3/31/2031 | | | | | | | 4/1/2021 | | | | | 3,030 | $82,810 | | | | | 12/1/2021 | | | | | | | 35,097 | $959,201 | | | 4/1/2022 | 17,539 | 70,160 | $45.47 | 3/31/2032 | | | | | | | 4/1/2022 | | | | | 13,354 | $364,965 | | | | | 6/25/2022 | | | | | 54,750 | $1,496,318 | | | | | 4/3/2023 | — | 109,632 | $33.95 | 4/2/2033 | | | | | | | 4/3/2023 | | | | | 21,081 | $576,144 | | | | Joshua Smiley | 8/15/2022 | 27,800 | 111,200 | $45.78 | 8/14/2032 | | | | | | | 8/15/2022 | | | | | 63,600 | $1,738,188 | | | | | 4/3/2023 | — | 150,050 | $33.95 | 4/2/2033 | | | | | | | 4/3/2023 | | | | | 28,580 | $781,091 | | | | Billy Cho (6) | 3/2/2018 | 370,000 | — | $21.84 | 8/31/2024 | | | | | | | 3/12/2020 | 18,000 | — | $44.94 | 8/31/2024 | | | | | | | 4/1/2021 | 9,620 | — | $130.96 | 8/31/2024 | | | | | | | 4/1/2021 | | | | | 920 | $25,144 | | | | | 4/1/2022 | 10,022 | — | $45.47 | 8/31/2024 | | | | | | | 4/1/2022 | | | | | 1,907 | $52,118 | | | | | 6/25/2022 | | | | | 12,925 | $353,240 | | |

  80. Outstanding Equity Awards at December 31, 2023

    (1)The stock options are exercisable for ADSs, and each of the stock awards represents a contingent right to receive one ADS. As a result, the number of shares and exercise price in these columns are represented in terms of ADSs. Each ADS represents ten ordinary shares. (2)Option awards have a maximum term of ten years from the grant date and vest in equal annual installments over five years, beginning on the first anniversary of the grant date, subject to the executive remaining in continuous service with us on each such vesting date, other than (i) option awards granted to Dr. Chen on November 1, 2021, and (ii) the option awards granted from April 3, 2023, which vest in equal amounts over four years, beginning on the first anniversary of the grant date, subject to the executive remaining in continuous service with us on the vesting date. (3)Restricted share awards and restricted share unit awards vest in equal annual installments over five years, beginning on the first anniversary of the grant date, subject to the executive remaining in continuous service with us on the vesting date, other than (i) the restricted share unit awards granted on June 25, 2022, (ii) restricted share awards granted to Dr. Chen on November 1, 2021, and (iii) the restricted share awards granted from April 3, 2023, which vest in equal amounts over four years, beginning on the first anniversary of the grant date, subject to the executive remaining in continuous service with us on the vesting date. (4)Market values reflect the closing price of our ADSs on Nasdaq on December 29, 2023, which was $27.33. (5)PSUs vest based on the satisfaction of specified product advancement milestones over the performance period beginning December 1, 2021 and ending on December 31, 2025. (6)Under his Severance Agreement and General Release, Mr. Cho’s outstanding RSU awards granted under the 2017 Plan will continue to vest through July 7, 2024, and his outstanding unvested stock options and PSUs were forfeited as of his termination date.

  81. Potential Payments Upon Termination or Change of Control

    Potential Payments Upon Termination or Change of Control For the named executive officers serving as executive officers as of December 31, 2023 that are eligible to receive severance in accordance with their employment agreement, we have quantified the potential payments upon termination under various termination circumstances in the table below. These tables assume that the covered termination took place on December 31, 2023.

  82. Potential Payments Upon Termination or Change of Control

    | Name | Benefit Type | Termination due to death or disability ($) | Termination without Cause or for Good Reason ($) | Termination without Cause or for Good Reason in connection with a Change of Control ($) | | Samantha (Ying) Du | Severance | $73,167 | $2,107,200 | $3,345,612 | | | Benefits Continuation | $1,535 | $27,635 | $27,635 | | | Value of Equity Acceleration | $9,971,487 | $9,971,487 | $9,971,487 | | Rafael Amado | Severance | $51,667 | $930,000 | $930,000 | | | Benefits Continuation | $978 | $11,733 | $11,733 | | | Value of Equity Acceleration | N/A | N/A | $2,885,064 | | Harald Reinhart | Severance | $49,376 | $888,773 | $888,773 | | | Benefits Continuation | $2,400 | $28,801 | $28,801 | | | Value of Equity Acceleration | N/A | N/A | $3,479,437 | | Joshua Smiley | Severance | $54,167 | N/A | $1,040,000 | | | Benefits Continuation | $978 | N/A | $11,733 | | | Value of Equity Acceleration | N/A | N/A | $2,519,279 |

  83. Potential Payments Upon Termination or Change of Control

    Our continuing named executive officers are entitled to receive certain benefits upon a qualifying termination of employment, including following a change in control of the Company, or in the event of a termination of employment due to the executive’s death or disability, as described below. Under the terms of their respective employment agreements, in the event of a termination of employment, each of our named executive officers will be entitled to receive any accrued but unpaid base salary, reimbursement for unpaid business expenses incurred prior to termination, and any additional compensation as may be expressly required under applicable law, including accrued but unused vacation time. In addition, our continuing named executive officers, other than Dr. Chen and Mr. Smiley, will be entitled to receive additional compensation as described below upon termination of employment by us without “cause” or by the executive for “good reason” (each, a “qualifying termination”), subject to the executive’s timely execution of a separation agreement and a general release of claims in a form reasonably satisfactory to the Company, and our continuing named executive officers, other than Dr. Chen, will be entitled to receive additional compensation in the event of a qualifying termination within 12 months following a change in control (a “change in control termination”) and as a result of death or disability, the first subject to the executive’s timely execution of a separation agreement and a general release of claims in a form reasonably satisfactory to the Company. •Qualifying Termination (without a Change in Control): (i) an amount equal to 12 months (18 months, in the case of Dr. Du) of base salary and 12 months (18 months, in the case of Dr. Du) of the Company’s portion of monthly premiums with respect to health, dental, and vision coverage or COBRA continuation coverage, as applicable, and (ii) a pro-rated bonus based on the number of days that the executive worked in the year of termination. Dr. Du will also receive full accelerated vesting of any then-outstanding unvested stock options, restricted shares, or other equity awards held by the executive (“Equity Acceleration”). •Change in Control Termination: For Dr. Du, (i) an amount equal to 18 months of base salary and 18 months of the Company’s portion of monthly premiums with respect to health, dental, and vision coverage or COBRA continuation coverage, as applicable, and (ii) an amount equal to the sum of six month of base salary, two times her target bonus, and six months of the Company’s portion of monthly premiums payable immediately prior to the effective date of such termination with respect to health, dental, and vision insurance coverage. For Drs. Amado and Reinhart and Mr. Smiley, (i) an amount equal to 12 months of base salary and 12 months of the Company’s portion of monthly premiums with respect to health, dental, and vision coverage or COBRA continuation coverage, as applicable, and (ii) a pro-rated bonus based on the number of days that the executive worked in the year of termination. Drs. Du, Amado, and Reinhart and Mr. Smiley will also receive Equity Acceleration. •Death or Disability: An amount equal to one month of base salary and one month of the Company’s portion of monthly premiums with respect to health, dental, and vision coverage or COBRA continuation coverage, as applicable. Dr. Du will also receive Equity Acceleration. Mr. Cho resigned from the Company, effective July 7, 2023. Upon his resignation, and in consideration of his significant contributions to the Company, as well as the Severance Agreement and General Release he entered into with the Company, we paid Mr. Cho $365,705. Mr. Cho also received a payout of $12,309 representing his unused vacation pay. Under Mr. Cho’s Severance Agreement and General Release, he will continue to vest in outstanding RSUs granted under the 2017 Plan through July 7, 2024 (estimated incremental fair value of $399,247 based on the closing stock price on July 7, 2023). All unvested stock option grants and PSU awards held by Mr. Cho were forfeited as of his termination date. The vested options previously granted to Mr. Cho remained exercisable from the date of Mr. Cho’s resignation from the Company in July 2023 to August 31, 2024 (estimated incremental fair value of $1,850,700 based on the closing stock price on July 7, 2023). For more information regarding the Severance Agreement and General Release, see CD&A – Employment Agreements.

  84. Potential Payments Upon Termination or Change of Control

    | ADDITIONAL EXECUTIVE COMPENSATION INFORMATION |

  85. CEO to Median Employee Pay Ratio

    CEO to Median Employee Pay Ratio We determined that the annual total compensation of our median compensated employee was $86,709 for 2023. The annual total compensation of our CEO, Samantha (Ying) Du, was $12,042,285 for 2023, as reported in the “Total” column of the 2023 Summary Compensation Table. We calculated the median compensated employee’s annual total compensation using the same methodology required for calculating total annual compensation for our CEO (and other named executive officers) for purposes of the 2023 Summary Compensation Table. The ratio of these two amounts was 1 to 139. To identify the median compensated employee, we used cash compensation consisting of base salary and allowance paid with respect to 2023 (annualized for those individuals who were not employed for the full year) and annual cash bonus or incentives paid with respect to 2023 for all employees employed by the Company on December 31, 2023. We then identified the employee closest to the median that had been employed for the full year to serve as our median compensated individual for purposes of this analysis. We believe this pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above. Because the SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above.

  86. Pay Versus Performance

    Pay Versus Performance In accordance with the pay versus performance (“PvP”) disclosure requirements in Item 402(v) of Regulation S-K, this section presents information that describes the relationship between Compensation Actually Paid (“CAP”), as that term is defined under the rules prescribed by Item 402(v), to the Company’s CEO, other named executive officers as a group, and certain financial performance measures of the Company. While the Compensation Committee (or Board of Directors for our CEO) makes executive compensation decisions after considering a variety of factors, including corporate and individual performance, the decisions of the Compensation Committee and Board of Directors in 2023 were made independently of these PvP disclosure requirements. For more information regarding our executive compensation program and related decisions, please refer to Executive Compensation – Compensation Disclosure & Analysis.

  87. Pay Versus Performance Table

    Pay Versus Performance Table The following table sets forth information for each applicable year regarding the CAP of our CEO, Samantha (Ying) Du, and of our other named executive officers as a group, as well as certain Company financial performance measures, including our total shareholder return (“TSR”), the TSR of the NASDAQ Biotechnology Index (our Company-Selected Peer Group), our net income, and our revenue growth. We selected revenue growth to be our Company-Selected Measure as it represents the most important financial performance measure used to link CAP for 2023 to Company financial performance for purposes of this disclosure.

  88. Pay Versus Performance Table

    | | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | | Summary Compensation Table Total for CEO (1) | Compensation Actually Paid to CEO (1)(2) | Average Summary Compensation Table Total for Non-CEO NEOs (2)(3) | Average Compensation Actually Paid to Non-CEO NEOs (2)(3) | TSR (4) | Peer Group TSR (4) | Net Income (Loss) (in millions) | Revenue Growth (5) | | Year | $ | $ | $ | $ | $ | $ | $ | % | | 2023 | 12,042,285 | 6,461,230 | 3,887,222 | 2,335,843 | 65.71 | 118.87 | (334.6) | 24% | | 2022 | 20,212,141 | 739,598 | 6,838,043 | 3,457,925 | 73.82 | 113.65 | (443.3) | 49% | | 2021 | 15,315,579 | (30,500,547) | 6,176,702 | (4,953,682) | 151.12 | 126.45 | (704.5) | 195% | | 2020 | 8,536,036 | 112,741,937 | 3,401,688 | 22,645,622 | 325.41 | 126.42 | (268.9) | 277% |

  89. Pay Versus Performance Table

    (1) Samantha (Ying) Du has been the CEO of the Company since 2014. (2) Deductions from, and additions to, total compensation in the Summary Compensation Table by year to calculate Compensation Actually Paid include:

  90. Pay Versus Performance Table

    | | 2023 | | | | Samantha (Ying) Du | Average Non-CEO NEOs | | | $ | $ | | Total Compensation from Summary Compensation Table | 12,042,285 | 3,887,222 | | Adjustments for Equity Awards* | | | | Adjustment for grant date values in the Summary Compensation Table | (10,343,463) | (2,879,951) | | Year-end fair value of unvested awards granted in the current year | 7,756,321 | 1,764,936 | | Year-over-year difference of year-end fair values for unvested awards granted in prior years | (3,048,258) | (558,020) | | Fair values at vest date for awards granted and vested in current year | — | — | | Difference in fair values between prior year-end fair values and vest date fair values for awards granted in prior years | 54,345 | (56,045) | | Forfeitures during current year equal to prior year-end fair value | — | (272,288) | | Dividends or dividend equivalents not otherwise included in total compensation | — | — | | Incremental fair value resulting from modifications of stock options and RSUs not reflected in the other columns | — | 449,989 | | Total Adjustments for Equity Awards | (5,581,055) | (1,551,379) | | Compensation Actually Paid (as calculated) | 6,461,230 | 2,335,843 |

  91. Pay Versus Performance Table

    *Adjustments are calculated using the same methodology as used in the Company’s financial statements under generally accepted accounting principles and, for awards subject to performance-based vesting conditions, based on the probable outcome of such performance-based vesting conditions as of the last day of the applicable fiscal year. (3) The Non-CEO NEOs included the following executives by year: 2023: Yajing Chen, Rafael Amado, Harald Reinhart, Josh Smiley, and Billy Cho; 2022: Billy Cho, Rafael Amado, Harald Reinhart, Alan Bart Sandler, and Josh Smiley; 2021: Billy Cho, F. Ty Edmondson, Harald Reinhart, and Alan Bart Sandler; and 2020: Billy Cho, F. Ty Edmondson, Alan Bart Sandler, and Tao Fu. (4) TSR is determined based on the value of an initial fixed investment of $100, and the reinvestment of all dividends are assumed. The TSR peer group consists of the NASDAQ Biotechnology Index. (5) Revenue growth is calculated as follows: (total revenues from our audited annual consolidated statements of operations for the current year - total revenues from our audited annual consolidated statements of operations for the prior year) / total revenues from our audited annual consolidated statements of operations for the prior year.

  92. Pay Versus Performance: Graphical Description

    Pay Versus Performance: Graphical Description The illustrations below provide a graphical description of CAP (as calculated in accordance with the SEC rules) compared to: (1) our cumulative TSR and the cumulative TSR of the Peer Group, (2) our net income, and (3) revenue growth. Since a significant portion of compensation for our CEO and other named executive officers consists of equity awards, the change in value of Compensation Actually Paid is directionally aligned with changes in our TSR, net income, and revenue growth.

  93. CAP Versus Revenue Growth

    | DIRECTOR COMPENSATION |

  94. CAP Versus Revenue Growth

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) (1) (2) | All Other Compensation ($) | Total ($) | | Kai-Xian Chen | $57,500 | $499,984 | $— | $557,484 | | John Diekman (3) | $108,452 | $499,984 | $— | $608,436 | | Richard Gaynor, M.D. (3) | $65,000 | $499,984 | $— | $564,984 | | Nisa Leung | $— | $— | $— | $— | | William Lis (3) (4) | $67,041 | $499,984 | $— | $567,025 | | Scott Morrison (3) | $70,781 | $499,984 | $— | $570,765 | | Leon Moulder, Jr. (3) | $74,364 | $499,984 | $— | $574,348 | | Peter Wirth (3) | $76,161 | $499,984 | $— | $576,145 | | Michel Vounatsos | $71,292 | $749,962 | $— | $821,254 |