Link Real Estate Investment Trust : Adoption of Unit Award Scheme

The Securities and Futures Commission of Hong Kong, Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

The Board announces the adoption of the 2017 Scheme on 10 July 2017. The 2017 Scheme is a unit award scheme pursuant to which Awards may be granted to selected eligible Participants.

The 2017 Scheme shall be valid and effective for 10 years commencing from the Adoption Date (i.e. expiring on 9 July 2027), save and except in the case of extension or early termination in accordance with the Rules.

A summary of the principal terms of the 2017 Scheme is set out in this announcement.

The 2017 Scheme does not constitute a unit option scheme or an arrangement analogous to a share option scheme requiring shareholders' approval for the purpose of Chapter 17 of the Listing Rules (as if Chapter 17 of the Listing Rules were applicable to Link). Restricted Unit Awards shall be satisfied by Units purchased on the open stock market save and except in certain limited circumstances prescribed by the Rules (such as in the case of death of a Grantee, in which case a cash payment will be made in lieu of Units), and no new Units will be issued in satisfaction of any Restricted Unit Award that may vest under the 2017 Scheme. The terms of the 2017 Scheme and the adoption thereof comply with the Trust Deed. For the avoidance of doubt, the 2017 Scheme is not a plan succeeding Link's existing long-term incentive plan that will be expiring on 22 July 2017 (unless earlier terminated).

Having regard to legal advice received from its legal advisors as to Hong Kong law, the Manager is satisfied that no Unitholders' approval is required for the adoption of the 2017 Scheme under the Trust Deed. Having regard to legal advice received from its legal advisors as to Hong Kong law and based on the confirmation and information provided by the Manager (and having taken into account its duties under the Trust Deed and the REIT Code), the Trustee is also satisfied that no Unitholders' approval is required for the adoption of the 2017 Scheme under the Trust Deed.

This announcement is made by the Manager to provide information on the 2017 Scheme, to uphold good corporate governance and for transparency.

1. THE 2017 SCHEME

   The Board of the Manager announces that the Board adopted the 2017 Scheme on the Adoption Date (i.e. 10 July 2017). For the avoidance of doubt, the 2017 Scheme is not a plan succeeding Link's existing long-term incentive plan that will be expiring on 22 July 2017 (unless earlier terminated). A summary of the principal terms of the 2017 Scheme is set out below:
2. Objectives

   The objectives of the 2017 Scheme are to:

3. align the interests of the Participants with the Unitholders as a whole with a view to creating value for Link and the Unitholders;

4. enable the Manager to attract and retain talented management and key employees whose contributions are essential to the achievement of the strategic goals and the long-term growth of Link; and

5. incentivise management and key employees of the Link Entities through rewarding them in calibration of their contributions to the business performance and success of Link.

6. Duration

   The 2017 Scheme shall be valid and effective for 10 years commencing from the Adoption Date (i.e. expiring on 9 July 2027), save and except in the case of extension or early termination in accordance with the Rules.

7. Administration

   The Board has full and overriding discretion over all matters relating to the 2017 Scheme. Without affecting the power and authority of the Board under the 2017 Scheme, the Committee shall administer the 2017 Scheme according to the Rules and shall, among other things, establish vesting target(s), vesting scale and other conditions upon which an Award is granted, and review from time to time such vesting target(s) and conditions, in its absolute discretion and power but consistent with the objectives of the 2017 Scheme. The Committee is presently comprised of five INEDs.

   Subject to the general power of the Board and the Committee, the Administrator (being the Director of Human Resources of the Manager) shall implement and operate the 2017 Scheme.

8. Eligible Participants

   The following persons shall be eligible to participate in the 2017 Scheme: (a) Directors; and (b) key employees of any Link Entity whom, in the opinion of the Committee, have contributed, or have the potential to contribute, to the success of Link (collectively, the "Participants" and individually, a "Participant").

9. Grant of Award

   The Committee has the absolute discretion to select any eligible Participant to participate in the 2017 Scheme, grant to that Participant any Award, and impose any vesting target(s), vesting scale and/or other conditions (if any) on the Award so granted, save and except where an Award is to be granted to a Restricted Person, the grant of that Award and the vesting target(s), vesting scale and/or other conditions (if any) imposed thereon shall be approved by the Board.

   An Award may be in the form of a Restricted Unit Award or a Conditional Cash Award. A Restricted Unit Award may be granted with or without a Conditional Cash Award. A Conditional Cash Award, however, shall not be granted alone and must be granted in conjunction with a Restricted Unit Award. Grant of Award is only valid once accepted by the Participant.

   No Award shall be granted to an Excluded Person, a Relevant Director or a significant holder of Link, or their respective associates.

10. Applicable Limits

    No further Award shall be granted if such grant will result in the maximum number of Units awarded or to be awarded under all Awards granted (excluding Awards lapsed or cancelled) under the 2017 Scheme (and any other incentive scheme(s) of any Link Entity) exceeding 10% of the number of Units in issue as at the Adoption Date (being 221,456,347 Units).

    No Award shall be granted to any Participant if such grant will result in the maximum number of Units awarded or to be awarded under all Awards granted to such Participant (excluding Awards finally lapsed) under the 2017 Scheme (and any other incentive scheme(s) of any Link Entity) within 12 months immediately preceding the date of the proposed grant exceeding 1% of the number of Units in issue from to time.

    No Award shall be granted to an INED or NED (or his/her associate) if such grant will result in the maximum number of Units awarded or to be awarded under all Awards granted to such INED or NED or his/her associate (excluding Awards finally lapsed) under the 2017 Scheme (and any other incentive scheme(s) of any Link Entity) within 12 months immediately preceding the date of the proposed grant exceeding 0.1% of the number of Units in issue from to time. Further, no Award shall be granted to any INED if such grant will result in such INED being entitled to a total number of Units exceeding such limit provided in the corporate governance policy of the Manager for the purpose of assessing his/her independence as an INED.

11. Operation and Vesting

    Restricted Unit Awards shall be satisfied by Units purchased on the open stock market save and except in certain limited circumstances prescribed by the Rules (such as in the case of death of a Grantee) where a cash amount may be paid in lieu of Units that would have vested under the relevant Restricted Unit Awards.

    On expiry of the applicable vesting period, the Committee shall review and determine (if applicable) whether and to what extent the vesting target(s) and/or such other conditions in respect of such Award have been finally satisfied (or, if applicable, waived).

    Upon the Committee's determination of the vesting results in accordance with the Rules, but subject to the dealing restrictions disclosed under paragraph 10 below, the Manager (through the Administrator) shall, among other things:

12. fund the Third Party Intermediary to enable it to purchase (or procure the purchase of) Units in favour of, and in the name of, the relevant Grantees in satisfaction of the Restricted Unit Awards that have vested, and such purchases shall be made by the Third Party Intermediary within 20 Business Days upon receipt of the funds, having regard to prevailing market conditions, Applicable Laws and Regulations, and practicability and other matters; and

13. pay to the relevant Grantees cash amounts in satisfaction of the Conditional Cash Awards that have vested, as soon as practicable after completion of the purchase of Units in paragraph 7(a) above, and such cash amounts shall be calculated with reference to the respective distributions per Unit during the applicable vesting period, taking into account the number of Units in respect of which such Restricted Unit Award has vested, and assuming such Units had been in issue during that vesting period.

Subject to the applicable limits disclosed under paragraph 6 above, the Board (upon the recommendation of the Committee) has the absolute discretion to vary (or, as the case may be, waive) any vesting target(s), vesting scale or vesting date imposed on an Award during the vesting period and in accordance with the Rules, if the Board (based on market data and/or advice from an independent external consultant and upon the recommendation of the Committee) considers that such variation (or, as the case may be, waiver) is a more accurate measurement of the performance and success, or will otherwise bring about benefit to or is in the long-term interest of Link and the Unitholders as a whole, provided that: (a) any variation and/or waiver of any vesting target(s), vesting scale or vesting date imposed on Awards granted to a Restricted Person shall further be approved by the INEDs (other than any INED who has an interest in the foregoing); (b) no Director shall approve or vote on any variation of terms of an Award in his (or his associate's) favour; (c) the variation of any conditions imposed on an Award (other than the vesting target(s), vesting scale or vesting date, which shall only be approved by the Board) may be made by the Committee (based on the recommendation of the Administrator) at its sole discretion; and (d) no variation of any kind shall be made after the expiry of the vesting period.