Zai Lab Limited (ZLAB) DEF 14ADefinitive proxy

The record date for the Annual Meeting is April 25, 2024 (ordinary share record date). Only shareholders of record as of 4:30 p.m. (Shanghai and Hong Kong Time) on April 25, 2024 are entitled to receive notice of, and to attend and to vote at the Annual Meeting or any adjournment thereof. The latest date and time for lodging a share transfer in order to be registered as a shareholder on the record date is 4:30 p.m. (Shanghai and Hong Kong Time) on April 25, 2024.

Your vote is important to us. Whether or not you expect to attend the Annual Meeting, we urge you to vote your shares as soon as possible. The manner in which you hold your shares will dictate how you can vote:

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.

Each director nominated for election will be elected if a simple majority of the votes cast by the shareholders entitled to vote who are present in person, virtually, or by proxy vote in favor of such director. Broker non-votes and abstentions with respect to one or more directors will not be treated as votes cast for this purpose and, therefore, will not affect the outcome of the election.

The Audit Committee is responsible for the appointment, compensation, retention, and oversight of the independent registered public accounting firms and auditors retained to audit our consolidated financial statements, subject to shareholder approval in accordance with the HK Listing Rules. The Audit Committee has appointed KPMG LLP, an independent registered public accounting firm in the United States, and KPMG, a public interest entity auditor registered in accordance with the Accounting and Financial Reporting Council Ordinance in Hong Kong, as our independent registered public accounting firms and auditors for the fiscal year ending December 31, 2024. KPMG LLP has been the Company’s independent registered public accounting firm and auditor since 2022.

If this proposal is not approved at the Annual Meeting, the Board of Directors will reconsider its appointment of KPMG LLP and KPMG. If approved in accordance with Hong Kong Stock Exchange requirements and the HK Listing Rules, KPMG LLP and KPMG will serve as the Company’s independent auditors until the next annual general meeting, unless removed or subsequently changed by shareholders at a general meeting.

We expect a representative from each of KPMG LLP and KPMG to be available at the Annual Meeting to respond to appropriate questions. They will have the opportunity to make a statement if they desire to do so.

Approval of Proposal 11 requires the favorable vote of a simple majority of the votes cast by the shareholders entitled to vote who are present in person, virtually, or by proxy at the Annual Meeting. Broker non-votes and abstentions with respect to this proposal will not be treated as votes cast for this purpose and, therefore, will not affect the outcome of the vote. We expect that there will be no broker non-votes on this proposal due to the discretionary authority granted to brokerage firms, banks, and other financial institutions.

The Board of Directors recommends shareholder approval of Board authority to fix auditor compensation for 2024 in accordance with the HK Listing Rules. The Board of Directors notes, in this regard, that the annual amount of auditor compensation cannot fully be determined at the beginning of the year. This is because an auditor’s compensation for any given year may vary, such as due to the scope and extent of the audit work undertaken during that year. As a result, the Board of Directors requests shareholder approval to delegate the authority to the Board of Directors to fix auditor compensation for the year ending December 31, 2024.

If approved in accordance with the HK Listing Rules, the Board of Directors may delegate such responsibility to the Audit Committee. Auditor compensation will be approved in accordance with the policies and procedures described in Pre-Approval Policies below.

Approval of Proposal 12 requires the favorable vote of a simple majority of the votes cast by the shareholders entitled to vote who are present in person, virtually, or by proxy at the Annual Meeting. Broker non-votes and abstentions with respect to this proposal will not be treated as votes cast for this purpose and, therefore, will not affect the outcome of either vote. We expect that there will be no broker non-votes on this proposal due to the discretionary authority granted to brokerage firms, banks, and other financial institutions.

Consistent with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), we are providing our shareholders with an opportunity to indicate whether they support our named executive officer compensation as described in detail in the Compensation Discussion and Analysis (“CD&A”) and Executive Compensation Tables. This non-binding advisory vote, commonly referred to as “say-on-pay,” is not intended to address any specific item of compensation, but instead relates to the CD&A, the tabular disclosures regarding named executive officer compensation, and the narrative disclosures accompanying the tabular disclosures.

As discussed in the CD&A, our executive compensation guiding principles and structure are designed to attract, retain, and motivate strong leaders who perform at high levels and succeed in a demanding business environment.

Specifically, our executive compensation program in 2023 was:

The Compensation Committee of the Board of Directors (the “Compensation Committee”) actively reviews and assesses our executive compensation program in consideration of 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 (mainland China, Hong Kong, Macau, and Taiwan, collectively) 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, the need to attract a global skillset with deep knowledge of both U.S. and Chinese regulatory regimes, 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.

The Compensation Committee strives to act in the long-term best interests of the Company and our shareholders and believes that our executive compensation program is strongly aligned with the long-term interests of our shareholders. In determining whether to approve this proposal, the Compensation Committee believes that shareholders should consider the following with respect to 2023 compensation determinations and governance:

We actively monitor our executive compensation practices in light of the industry in which we operate and the marketplace for talent in which we compete. We are focused on providing competitive compensation to our executive officers that incentivizes high levels of performance while providing the Company with tools to attract, retain, and motivate the best talent.

Advisory approval of Proposal 13 requires the favorable vote of a simple majority of the votes cast by the shareholders entitled to vote who are present in person, virtually, or by proxy at the Annual Meeting. Broker non-votes and abstentions with respect to Proposal 13 will not be treated as votes cast for this purpose and, therefore, will not affect the outcome of the vote. The say-on-pay vote is advisory and therefore not binding on the Board of Directors, the Compensation Committee, or the Company. However, the Board of Directors and the Compensation Committee value the opinion of our shareholders, and to the extent there is a significant vote against the compensation of our named executive officers as disclosed in this Proxy Statement, we will consider our shareholders’ concerns, and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.

Prior to our primary listing on the Hong Kong Stock Exchange, our Board of Directors generally had the authority to issue the Company’s authorized shares. Such authority was similar to that of other companies listed on Nasdaq and in the United States. Under the HK Listing Rules, however, a primary-listed company must obtain such authority from its shareholders to issue authorized but unissued shares. Granting such authority to the Board of Directors is a routine annual matter for primary-listed companies on the Hong Kong Stock Exchange. As a result, we are seeking shareholder approval of a general mandate to the Board of Directors to allot and issue ordinary shares and/or ADSs (a “General Mandate”), in compliance with the HK Listing Rules and to the same extent already authorized under our Current Articles and the rules of Nasdaq. We are not asking shareholders to approve an increase in authorized share capital.

In light of the dynamics in our industry and the markets in which we operate, we believe in maintaining a strong balance sheet with maximum flexibility to fund our continued efforts to pursue our corporate strategic goals. Such General Mandate authority would allow our company to meet the emerging needs of our business, such as advancing and expanding our pipeline through our research and development activities and pursuing growth opportunities through strategic transactions or business development arrangements, in a timely manner. Consistent with our past practice, the Board of Directors will only authorize issuances of securities under a General Mandate if it determines that such issuances are in the best interests of the Company and its shareholders. The Board of Directors has no immediate plans, arrangements, or understandings to issue any shares pursuant to a General Mandate, and we are not asking shareholders to approve a specific issuance of shares.

Further, the Company does not intend to issue any shares under a General Mandate at a discount of more than 20% to the benchmarked price as described in Rule 13.36(5) of the HK Listing Rules, being the higher of the closing price on the date of issue and the average closing price in the 5 trading days immediately prior to the date of issue.

In accordance with the HK Listing Rules, it is a customary practice for primary-listed companies on the Hong Kong Stock Exchange to seek shareholder authority to issue up to 20% of their total issued shares as of the date of the resolution granting the mandate and for such authority to remain effective until the next annual meeting of shareholders, unless otherwise revised or revoked or modified by shareholders at a general meeting. The General Mandate of up to 20% that shareholders approved at our 2023 annual meeting will expire on the date of our 2024 Annual Meeting. Therefore, consistent with market practice, and as allowed under the HK Listing Rules, we are seeking shareholder approval for continuing authority for the Board of Directors to authorize the Company to issue new shares and/or resell treasury shares (as defined in the HK Listing Rules) (the “treasury shares”) of up to 20% of our issued shares (excluding treasury shares), as described in Proposal 14 below. In recognition of differing preferences and levels of comfort with respect to a General Mandate across our diverse global shareholder base, we are also providing our shareholders with an opportunity to vote on a General Mandate of up to 10% of our issued shares (excluding treasury shares), as described in Proposal 15 below.

In order to give the Company maximum flexibility to allot and issue ordinary shares and/or ADSs if and when appropriate and in accordance with the HK Listing Rules, the Board of Directors recommends shareholder approval of a General Mandate of up to 20% of the total number of issued ordinary shares of the Company (excluding treasury shares) as of the date of the Annual Meeting. If approved in accordance with the Hong Kong Stock Exchange requirements and HK Listing Rules, the General Mandate shall remain in force until the next annual general meeting, unless otherwise earlier revised or revoked by shareholders at a general meeting. Pursuant to this proposal, assuming for illustrative purposes that our total issued shares remain unchanged from April 12, 2024 to the date of the Annual Meeting (i.e., 992,087,430 ordinary shares) and the Company does not have treasury shares, the Company will be allowed to issue new shares and/or resell treasury shares of up to a maximum of 198,417,486 ordinary shares. For clarity, this authority will include the authority to issue securities convertible into shares of common stock, or options, warrants, or similar rights to subscribe for shares of common stock or such convertible

securities of the Company and to make or grant offers, agreements, and/or options (including bonds, warrants, and debentures convertible into shares of common stock), subject to the limitations described in the resolution above.

In the alternative, the Board of Director recommends shareholder approval of a General Mandate of up to 10% of the total number of issued ordinary shares of the Company (excluding treasury shares) as of the date of the Annual Meeting. Such an alternative General Mandate would similarly be approved in accordance with the Hong Kong Stock Exchange requirements and HK Listing Rules and would remain in force until the next annual general meeting, unless otherwise earlier revised or revoked by shareholders at a general meeting. Pursuant to this proposal, assuming for illustrative purposes that our total issued shares remain unchanged from April 12, 2024 to the date of the Annual Meeting (i.e., 992,087,430 ordinary shares) and the Company does not have treasury shares, the Company will be allowed to issue new shares and/or resell treasury shares of up to a maximum of 99,208,743 ordinary shares. For clarity, this authority will include the authority to issue securities convertible into shares of common stock, or options, warrants, or similar rights to subscribe for shares of common stock or such convertible securities of the Company and to make or grant offers, agreements, and/or options (including bonds, warrants, and debentures convertible into shares of common stock), subject to the limitations described in the resolution above.

Although the Board of Directors believes a General Mandate of up to 20% of the total number of issued ordinary shares (excluding treasury shares) is most appropriate to provide maximum flexibility for the Company, as noted above, the Board of Directors recommends that you vote for a General Mandate of up to 10% as an alternative to provide the Company with such level of flexibility to issue new shares and/or resell treasury shares as it deems appropriate.

Approval of Proposals 14 and 15 requires the favorable vote of a simple majority of the votes cast by the shareholders entitled to vote who are present in person, virtually, or by proxy at the Annual Meeting. Broker non-votes and abstentions with respect to these proposals will not be treated as votes cast for this purpose and, therefore, will not affect the outcome of the vote.

Prior to our primary listing on the Hong Kong Stock Exchange, our Board of Directors generally had the authority to repurchase the Company’s authorized shares. Such authority was similar to that of other companies listed on Nasdaq or in the United States. Under the HK Listing Rules, however, a company must obtain such authority from its shareholders to repurchase its shares on the Hong Kong Stock Exchange. Granting such authority to the Board of Directors is a routine annual matter for primary-listed companies on the Hong Kong Stock Exchange and is consistent with market practice. Without such authority, our ability to repurchase shares would be limited to the repurchase of shares that trade on Nasdaq and would not include repurchases of shares that trade on the Hong Kong Stock Exchange. Granting the Board of Directors this authority will provide parity between investors who hold our shares that trade on Nasdaq and investors that hold our shares that trade on the Hong Kong Stock Exchange.

As a result, in order to give the Company the flexibility to repurchase ordinary shares and/or ADSs if and when appropriate and in accordance with the HK Listing Rules, we are seeking shareholder approval of a general mandate to the Board of Directors to repurchase ordinary shares and/or ADSs (the “Repurchase Mandate”) of up to 10% of the total number of issued ordinary shares of the Company (excluding treasury shares as defined in the HK Listing Rules) (the “treasury shares”) as of the date of the Annual Meeting. If approved in accordance with the Hong Kong Stock Exchange requirements and HK Listing Rules, the Repurchase Mandate shall remain in force until the next annual general meeting, unless otherwise earlier revised or revoked by shareholders at a general meeting. We are seeking shareholder approval of a mandate to authorize the Board of Directors to repurchase shares and/or ADSs of up to 10% of our issued shares (excluding treasury shares). Pursuant to this proposal, assuming for illustrative purposes that our total issued shares remain unchanged from April 12, 2024 to the date of the Annual Meeting (i.e., 992,087,430 ordinary shares) and the Company does not have treasury shares, the Company will be allowed to repurchase a maximum of 99,208,743 ordinary shares, in compliance with the HK Listing Rules and to the same extent already authorized under our Current Articles and applicable Cayman law, SEC, and Nasdaq requirements.

The Board of Directors believes that, following our primary listing on the Hong Kong Stock Exchange, it is in the best interests of the Company and our shareholders to have a general authority from our shareholders to enable our Company to purchase its shares in the markets. Further, the Company believes it is important to promote equality between shareholders, regardless of the exchange on which the shares they hold trade. The Board of Directors would only repurchase shares if it believes it is in the best interests of the Company and its shareholders, taking into account the Company’s overall financial position. The Board of Directors has no immediate plans to repurchase any shares pursuant to this mandate, and we are not asking shareholders to approve a specific repurchase of shares.

The Board of Directors recommends shareholder approval of a Repurchase Mandate of up to 10% of the total number of issued ordinary shares of the Company (excluding treasury shares) as of the date of the Annual Meeting. If approved by shareholders, the Repurchase Mandate will remain in force until the next annual general meeting, unless otherwise earlier revised or revoked by shareholders at a general meeting.

Approval of Proposal 16 requires the favorable vote of a simple majority of the votes cast by the shareholders entitled to vote who are present in person, virtually, or by proxy at the Annual Meeting. Broker non-votes and abstentions with respect to Proposal 16 will not be treated as votes cast for this purpose and, therefore, will not affect the outcome of the vote.

On April 16, 2024, the Board of Directors approved the Zai Lab Limited 2024 Equity Incentive Plan (the “2024 Plan”), conditioned on and subject to the passing of the necessary ordinary resolution at a general meeting of the Company approving the adoption of the 2024 Plan. The 2024 Plan will replace the Zai Lab Limited 2022 Equity Incentive Plan (the “2022 Plan”) with respect to future grants, and accordingly, the Company will not make any further grant of options or awards under the 2022 Plan upon the adoption of the 2024 Plan. Awards already granted under the 2022 Plan as well as the Zai Lab Limited 2017 Equity Incentive Plan (the “2017 Plan”) and the Zai Lab Limited 2015 Omnibus Equity Incentive Plan (the “2015 Plan”) will remain in full force and effect pursuant to the terms and conditions of the respective plan. The 2024 Plan will be subject to the requirements under Chapter 17 of the HK Listing Rules, and all types of awards granted under the 2024 Plan which involve the issue of new shares or use of treasury shares (as defined in the HK Listing Rules) (the “treasury shares”) shall comply with Chapter 17 of the HK Listing Rules (including but not limited to the Scheme Mandate Limit (as defined below)).

Similar to the 2022 Plan, the 2024 Plan is designed to enhance the flexibility of the Compensation Committee of the Board of Directors (the “Compensation Committee”) in granting share options and other awards (each, an “award”) to (i) directors and employees of our Company or any of its subsidiaries; and (ii) directors and employees of the holding companies, fellow subsidiaries, or associated companies of the Company, and to allow us to continue to grant share options and other awards to such persons at levels determined to be appropriate by the Administrator (as defined below). The Board of Directors believes that share options and other share-based incentive awards play an important role in our success by allowing us to attract, retain, and reward the Company’s employees and non-employee directors whose judgement, initiative, and efforts contribute to the successful conduct of our business. The Board of Directors also anticipates that providing such persons with a direct equity stake in our Company will result in a closer alignment of the interests of such individuals with those of our Company and our shareholders.

If the 2024 Plan is approved by our shareholders, the Company will make an application to the Hong Kong Stock Exchange for the listing of, and permission to deal in, the shares that will be issued under the 2024 Plan. If the 2024 Plan is not approved by our shareholders, share options and other awards will continue to be granted under the 2022 Plan.

Because the 2024 Plan does not include an “evergreen” feature, the number of shares reserved under the 2024 Plan will not increase automatically. The aggregate number of shares reserved and available for issuance under our 2022 Plan as of April 12, 2024 was 97,908,743. The aggregate number of 99,208,743 shares contemplated by the 2024 Plan (based on the number of shares issued as of April 12, 2024 and assuming there is no change in the number of issued shares between April 12, 2024 and the Effective Date) reflects an increase of 1,300,000 shares reserved and

available for issuance, which is equal to approximately 0.13% of the Company’s total issued shares as of the date hereof. Given our increased headcount and our continued efforts to motivate and retain our employees and to develop and commercialize our product portfolio, we believe the share increase contemplated by the 2024 Plan is critical to our ongoing effort to build shareholder value.

Equity incentive awards are an important component of our executive and non-executive employee compensation. Through such awards, we link the interests of employees throughout the organization to the interests of our shareholders and motivate our employees to act as owners of the business. The Compensation Committee and the Board of Directors believe that we must continue to offer a competitive equity compensation program in order to attract, retain, and motivate the talented and qualified employees necessary for our continued growth and success.

We attempt to manage our long-term shareholder dilution by limiting the number of equity incentive awards we grant annually. The Compensation Committee carefully monitors our annual burn rate, total dilution, and equity expense in order to maximize shareholder value by granting only the appropriate number of equity incentive awards that it believes is necessary to attract, reward, and retain employees.

As of April 12, 2024, the closing price of our ADS on Nasdaq was $14.31.

We anticipate that, if the 2024 Plan is approved and becomes effective, the number of shares available for grant under the 2024 Plan upon adoption should be sufficient to provide equity incentives to attract, retain, and motivate our employees through at least the end of 2025, although it is possible that we will exhaust the share pool sooner, such as if we expand our workforce to support our growing business at a rate higher than we currently expect.

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:

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.

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:

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.

None of the Directors is or will be trustee of the 2024 Plan nor has a direct or indirect interest in the trustee.

The following is a brief summary of certain United States federal income tax consequences generally arising with respect to awards under the 2024 Plan. This discussion does not address all aspects of the United States federal income tax consequences of participating in the 2024 Plan that may be relevant to participants in light of their personal investment or tax circumstances and does not discuss any state, local, or non-United States tax consequences of participating in the 2024 Plan. Each participant is advised to consult his or her particular tax advisor concerning the application of the United States federal income tax laws to such participant’s particular situation, as well as the applicability and effect of any state, local, or non-United States tax laws before taking any actions with respect to any awards.

deduction. If, however, those shares are disposed of within the above-described period, then in the year of that disposition the participant will recognize compensation taxable as ordinary income equal to the excess of (1) the lesser of the amount realized upon that disposition and the fair market value of those shares on the date of exercise over (2) the exercise price, and the Company (or, if applicable, the affiliate employer) will be entitled to a corresponding deduction, subject to the deduction limits under Section 162(m) of the Internal Revenue Code.

A participant will not recognize taxable income at the time a restricted share unit is granted, and the Company will not be entitled to a tax deduction at that time. Upon settlement of restricted share units, the participant will recognize compensation taxable as ordinary income (and subject to income tax withholding in respect of an employee) in an amount equal to the fair market value of any shares delivered and the amount of any cash paid by the Company, and the Company (or, if applicable, the affiliate employer) will be entitled to a corresponding deduction, subject to the deduction limits under Section 162(m) of the Internal Revenue Code.

A participant who receives shares that are not subject to any restrictions under the 2024 Plan will recognize compensation taxable as ordinary income on the date of grant in an amount equal to the fair market value of such shares on that date, and the Company (or, if applicable, the affiliate employer) will be entitled to a corresponding deduction, subject to the deduction limits under Section 162(m) of the Internal Revenue Code.

The approval of Proposal 16 requires the favorable vote of a simple majority of the votes cast by the shareholders entitled to vote who are present in person, virtually, or by proxy at the Annual Meeting. Broker non-votes and

abstentions with respect to this proposal will not be treated as votes cast for this purpose and, therefore, will not affect the outcome of the vote. There is no shareholder who has any material interest in this proposal, and therefore, none of the shareholders are required to abstain from voting on this Proposal 16.

The Board of Directors knows of no other matters that will be presented for consideration at the Annual Meeting as of the date of this Proxy Statement. If any other matters are properly brought before the Annual Meeting, the person(s) named in the accompanying proxy intend to vote on such matters in accordance with their best judgment.

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.

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.

Our corporate governance practices include the following:

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.

The Board of Directors has five standing committees: the Audit Committee, the Compensation Committee, the Nominating and Corporate Governance Committee, the Research and Development Committee, and the Commercial Committee. The Audit, Compensation, and Nominating and Corporate Governance Committees are comprised solely of independent directors. The Company’s CEO and Chairperson participates as a member of the Research and Development and Commercial Committees. These committees perform important oversight and advisory functions on behalf of the Board of Directors and meet regularly. All of our committees operate in accordance with written charters, which were approved by the Board of Directors and are available on our website at https://ir.zailaboratory.com/corporate-governance/highlights.

The current membership of each committee, a brief description of their primary responsibilities, and the number of meetings held in 2023 are included below.

Scott Morrison (Chair), John Diekman, and Peter Wirth currently serve on the Audit Committee. The Board of Directors has determined that each member of the Audit Committee is “independent” for Audit Committee purposes as that term is defined in SEC and Nasdaq rules and the HK Listing Rules. The Board of Directors has evaluated the background of Scott Morrison and, upon so doing, designated him as an “audit committee financial expert,” as defined in SEC rules. The Board of Directors has also determined that Mr. Morrison has the relevant accounting qualification as required under the HK Listing Rules. The Audit Committee’s responsibilities include:

The Audit Committee held eleven meetings in 2023. The Audit Committee’s written charter satisfies the applicable standards of the SEC and Nasdaq as well as the HK Listing Rules.

Peter Wirth (Chair), John Diekman, and Leon O. Moulder, Jr. currently serve on the Compensation Committee. The Board of Directors has determined that each member of the Compensation Committee is “independent” as that term is defined in Nasdaq requirements and HK Listing Rules. The Compensation Committee’s responsibilities include:

The Compensation Committee held five meetings in 2023.

Leon O. Moulder, Jr. (Chair), John Diekman, and William Lis currently serve on the Nominating and Corporate Governance Committee. The Board of Directors has determined that each member of the Nominating and Corporate Governance Committee is “independent” as that term is defined in the Nasdaq and HK listing rules. The Nominating and Corporate Governance Committee’s responsibilities include:

The Nominating and Corporate Governance Committee held four meetings in 2023.

Richard Gaynor (Chair), Kai-Xian Chen, Samantha Du, and Michel Vounatsos currently serve on the Research and Development Committee. The Research and Development Committee’s responsibilities include:

The Research and Development Committee held four meetings in 2023.

Michel Vounatsos (Chair), Samantha Du, and Leon O. Moulder, Jr. currently serve on the Commercial Committee. The Commercial Committee’s responsibilities include:

The Commercial Committee held three meetings in 2023.

The Board of Directors provides every shareholder the ability to communicate with the Board of Directors, as a whole, and with individual directors on the Board of Directors through an established process for shareholder communication. For a shareholder communication directed to the Board of Directors as a whole, shareholders may send such communication to the attention of our Corporate Secretary via regular mail or expedited delivery service to: Zai Lab Limited, 314 Main Street, Fourth Floor, Suite 100, Cambridge, MA 02142, Attention: Board of Directors c/o Corporate Secretary.

For a shareholder communication directed to an individual director in his or her capacity as a member of the Board of Directors, shareholders may send such communication to the attention of the individual director via Regular Mail or Expedited Delivery Service to: Zai Lab Limited, 314 Main Street, Fourth Floor, Suite 100, Cambridge, MA 02142, Attention: [Name of Individual Director].

Communications will be distributed to the Board of Directors, or to any individual director or directors as deemed appropriate, depending on the facts and circumstances outlined in the communications. Items that are unrelated to the duties and responsibilities of the Board of Directors may be excluded, such as junk mail and mass mailings, resumes, and other forms of job inquiries, surveys, and solicitations or advertisements.

We remain committed to delivering our Trust for Life strategy, which includes key environmental, social, and governance topics identified by our stakeholders through our sustainability materiality assessment.

The Nominating and Corporate Governance Committee provides guidance and oversight to management with respect to our Trust for Life strategy. Our executive leadership team, led by our CEO and Founder, monitors the development and execution of our overall corporate business strategy, including our Trust for Life strategy and key activities, and our Chief Sustainability Officer maintains responsibility for the day-to-day management of the enterprise sustainability program.

Our Trust for Life strategy supports our core business of discovering, developing, and commercializing therapies that improve the lives of patients in China and worldwide. Through our Trust for Life strategy, we continue to focus on the quality of our products and manufacturing processes, minimizing our environmental footprint, supporting our employees and communities, and promoting honest and ethical business practices. In our effort to deliver value to our patients, workforce, healthcare professionals, communities, and shareholders, we have made three Trust for Life commitments – Improve Human Health, Create Better Outcomes, and Act Right Now – which we seek to build upon in the coming years, including our goal of reaching one million patients by 2030.

In developing our sustainability program and evaluating and reporting our progress with respect to our Trust for Life commitments and goals, we have aligned with industry appropriate sustainability reporting standards from the Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB). We have also considered other sources, including the United Nations Sustainable Development Goals (SDGs), the Task Force on Climate-Related Financial Disclosures (TCFD) framework, HK Listing Rules, and feedback from industry-leading raters and rankers, including CDP (formerly the Carbon Disclosure Project), the S&P Corporate Sustainability Assessment (CSA), and the Dow Jones Sustainability Index (DJSI).

Additional information on our Trust for Life program, strategy, activities, and progress in 2023, is included in our 2023 Trust for Life Report, which is available on our website at https://www.zailaboratory.com/sustainability.

Biographical information for our executive officers is set forth below:

For 2023, our named executive officers were:

EXECUTIVE SUMMARY

The Compensation Committee is committed to keeping an open dialogue with the investor community. We regularly meet with our shareholders to discuss business topics, seek feedback on our performance, and address other matters, such as executive compensation. Consistent with our commitment to listen and respond to our shareholders, we increased the focus of our outreach and engagement efforts as a result of our most recent say-on-pay vote, for which we received “FOR” votes equal to 61.4% of the votes cast. We take the feedback of our shareholders seriously, and we undertook robust shareholder engagement efforts to better understand why we received a lower say-on-pay vote result in 2023 and what adjustments to our executive compensation program shareholders might recommend.

The outcome of our 2023 shareholder outreach efforts was to develop and begin implementing a strategy to respond to our shareholders’ concerns and priorities. To this end, our Compensation Committee considered the following feedback received from shareholders and, where deemed appropriate, made the following changes to our executive compensation program that are intended to more closely align with market best practices and shareholder feedback:

We will continue our shareholder engagement efforts and facilitate open and ongoing dialogues so that we may continue to understand current investor perspectives on our executive compensation program and practices, among other things. We will also continue to consider the feedback we receive from our shareholders as well as the outcome of say-on-pay votes when making compensation decisions regarding our executives.

Our executive compensation program is designed to support our pay-for-performance culture, reflect the competitive market for skilled executives in both China and the United States, meet the unique characteristics of the Company, and have strong alignment with the interests of our shareholders. We believe the following policies and practices within our executive compensation program promote strong governance principles and are in the best interests of our shareholders:

WHAT GUIDES OUR 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:

Our executive compensation program uses a mix of fixed and variable cash and non-cash compensation, with an emphasis on variable compensation based on performance and long-term goals. The program is structured to create a meaningful balance between achieving strong short-term annual results while promoting long-term viability and success. Therefore, the Compensation Committee reviews and determines the mix of incentives at least annually

based on the short- and long-term objectives of the business. The charts below show the target annual total direct compensation of our CEO and our other named executive officers, or NEOs, for 2023. These charts illustrate that a majority of executive compensation is variable (92% for our CEO and an average of 84% for our other named executive officers).

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.

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.

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.

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.

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*:

*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:

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.

*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.

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.

The table below shows the 2023 target annual bonus for each named executive officer.

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.

The Company is still in the process of meeting its goals with respect to obtaining marketing authorization approval for TTFields in China for second-line NSCLC and initiating a global Phase II study for ZL-1102 (IL-17) for the treatment of chronic plaque psoriasis.

enforcement efforts in China. The Company achieved its commercial breakeven goal, meaning that net product revenue exceeded cost of sales and sales and marketing expenses for our commercial products, and commercial insurance coverage goal for Optune.

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.

*The 2023 annual incentive award for our CEO was weighted 75% for corporate performance and 25% for individual performance. The annual incentive awards for our other named executive officers were weighted 60% for corporate performance and 40% for individual performance.

** 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. Her bonus was pro-rated for her periods of service in these roles in 2023.

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”).

We maintain share ownership guidelines for our executive officers to strengthen and reinforce the link our compensation programs create between our executive officers and our shareholders. A summary of our share ownership guidelines is set forth below.

Executive officers have five years from their initial appointment to comply with this policy. Only shares beneficially owned and vested are included in the share ownership calculation. Shares underlying unvested options or RSUs are not included in the calculation. All of our named executive officers currently meet the applicable share ownership guideline or are still within the five-year period to meet such guideline. Once an executive officer’s level of share ownership satisfies the applicable guideline, the executive officer is expected to continue to comply with the guideline amount for as long as the individual is subject to this policy. Future declines in share price will not affect the covered person’s compliance with this policy as long as the covered person holds a number of shares equal to or greater than the number of shares he or she held at the time he or she achieved compliance.

In 2023, we adopted a policy that provides us with the right to recover amounts paid on the basis of financial results that are subsequently restated in accordance with the requirements of the Dodd-Frank Act, SEC rules, and applicable listing standards. In addition, under the provisions of the Sarbanes-Oxley Act, the chief executive officer and chief

financial officer of a public company may be required to forfeit certain equity- or incentive-based compensation in the event of an accounting restatement due to the material noncompliance of the issuer, as a result of misconduct, with respect to one or more reporting requirements under the securities laws. These Sarbanes-Oxley requirements would be enforced as a matter of law if the circumstances arose that warranted it.

In accordance with the Company’s insider trading policy, our executive officers and directors are prohibited from engaging in pledging or hedging transactions with respect to our shares.

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: