31
Report on
Corporate Governance
PERFORMANCE SHARE PLAN
On 10 March 2015
,
the shareholders adopted the
“
LHN Performance Share Plan
”
(the
“
PSP
”
)
.
The PSP has
been assigned by the Board of Directors to be administered by a committee comprising Mr Lee Gee Aik
,
Ms Ch
’
ng Li-Ling and Mr Eddie Yong (the
“
Committee
”
)
.
The primary objective of establishing the PSP is to recognise and reward the Directors and employees for
their valuable contributions to the growth and success of the Group as well as to retain employees whose
services are vital to our success in order to achieve greater growth in the Group
.
Eligible participants (the
“
Participants
”
) under the PSP will have the opportunity to participate in the equity of the Company
,
thereby
aligning their interests with the interests of the Company and shareholders
,
motivating them towards
long-term growth and profitability of the Group and better performance through increased dedication and
incentives
.
The PSP aims to promote higher performance goals
,
and recognise and reward the contributions made by
employees
.
The PSP contemplates the contingent award of fully-paid shares after certain pre-determined
benchmarks have been met (the
“
Awards
”
)
.
The Company believes that the PSP will be more effective than
pure cash bonuses in motivating employees to work towards pre-determined goals
.
Under the PSP
,
the size of the Award granted to a Participant will be determined based on
,
amongst
others
,
his rank
,
job performance
,
potential for future development and his contribution to the success
and development of the Group as determined by the Committee prior to the date of grant
.
The performance
period here is a forward-looking period for which performance conditions and targets are set and measured
over the performance period
.
The final Award is determined by the performance achievement over the
performance period
.
The performance period
,
vesting period and other conditions will be determined by the
Committee administering the PSP
.
The PSP allows for participation by full-time employees of the Group and Directors (including Independent
Directors) who have attained the age of 21 years on or before the relevant date of grant of the Award
.
The
aggregate number of shares which may be delivered to the controlling shareholder and their respective
associates under the PSP shall not exceed 25% of the total number of shares available under the PSP
,
with
the number of shares which may be delivered to each controlling shareholder and his respective associate
not exceeding 10% of the total number of shares available under the PSP
.
The total number of shares over which may be delivered pursuant to the vesting of Awards
,
when added to
the number of shares issued and issuable in respect of all Awards granted under the PSP (including shares
issued and/or issuable under any other share-based incentive schemes or share plans of the Company)
shall not exceed 15% of the total number of issued shares (excluding treasury shares) of the Company from
time to time
.
Further details on the Company
’
s PSP are set out on pages 295 to 305 of the Offer Document
.
No Award or shares has been awarded to any Participant (which includes directors and controlling
shareholders) under the PSP since its adoption in FY2015
.
(C) ACCOUNTABILITY AND AUDIT
Principle 10 – Accountability
The Board is responsible for providing a balanced and understandable assessment of the Group
’
s
performance
,
position and prospects
,
including interim and other price sensitive public information and
reports to regulators (if required)
.
Management provides the Board and Board Committees on a timely basis
,
with sufficient relevant information on the Group
’
s financial performance and commentary of the competitive
conditions of the industry in which the Group operates
,
in order that it may effectively discharge its duties
.
The Company adopts a policy which welcomes directors to request for further explanations
,
briefings or
informal discussions on any aspect of the Group
’
s operations or business from Management
.
