Suning puts an incentive plan with 22 million stock options - Jongo News - Daily News of China

(A Suning electrical appliances store)
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Today Suning Appliance Company issued the outline of its stock option incentive plan, releasing 22 million options to encourage employees. The exercise price of 18.51 million of the initially granted options is RMB 66.60 (USD 8.567).

The total 18.51 million of the stock options will be vested in three periods. Upon gaining permission from the CSRC (China's Securities Regulatory Commission), this plan will be submitted for the deliberation to Suning’s AGM (Annual General Meeting).

An industry analyst indicates that this stock option plan will lay a solid foundation for the company’s continued development, and therefore the market quotation will rise; these conditions will engender a favourable return for short term investors.

The 22 billion options account for 3.05% of the total equity. The exercise price of 3.49 million of the options provided to ‘the key personnel and the personnel with special contributions who are nominated by Chairman’ will be decided at the board meeting.

Moreover, also in this plan are the vesting requirements of options. The requirements in the first, the second and the third vesting periods are that the company’s net profits increase respectively by 80% in 2006, 50% in 2007 and 30% in 2008 over their previous years and the profit for every share should not less than RMB 0.9 (USD 0.116). If the requirements are fail to be fulfilled in a due period or any option is expired for vesting, the related options will be cancelled by the company.

“Self-financing is the only way for the employees to make the vesting of their stock options, Suning is not responsible for providing financial help in any form”, says a spokesman of Suning. .