Form 4: New Horizon CFO Awarded Performance Share Units

New Horizon Aircraft Ltd.'s CFO, Brian Frederick Merker, was granted 312,500 performance share units with vesting tied to market capitalization and stock performance.

Summary

• Brian Frederick Merker, Chief Financial Officer of New Horizon Aircraft Ltd. (HOVR), was granted 312,500 Performance Share Units (PSUs).
• The transaction date for this grant was February 10, 2026.
• Each PSU represents a contingent right to receive one Class A ordinary share of New Horizon Aircraft Ltd.
• Fifty percent (50%) of the PSUs will vest based on the Company's market capitalization, with 80% of this portion vesting upon achieving 80% of a US$250,000,000 target market capitalization, and the remainder vesting proportionately up to 100% of the target.
• The remaining fifty percent (50%) of the PSUs will vest if the Company's Common Shares outperform the Russell Microcap Index in total return over any two-year period between the grant date and the PSU expiry date.
• The expiration date for these PSUs is December 15, 2029.
• Following this transaction, Brian Frederick Merker beneficially owns 312,500 derivative securities (PSUs) directly.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a moderately positive development, as it signifies a strong alignment of the CFO's incentives with the company's long-term growth and shareholder value creation, which is generally favorable for corporate governance and performance.

Positives

• The grant of Performance Share Units (PSUs) aligns the Chief Financial Officer's long-term incentives directly with shareholder value creation through market capitalization growth and stock performance relative to an industry benchmark.
• The market capitalization target of US$250,000,000 provides a clear, quantifiable goal for a significant portion of the award.
• Tying a portion of vesting to outperforming the Russell Microcap Index encourages superior relative stock performance.

Negatives

• The PSUs represent a contingent right and do not have immediate cash value or voting rights until they vest and convert into ordinary shares.
• Achievement of the vesting conditions, particularly the market capitalization target and outperformance against the Russell Microcap Index, is not guaranteed and depends on future company performance and market conditions.

Risks

• Market Capitalization Risk: The vesting of 50% of the PSUs is contingent on New Horizon Aircraft Ltd. achieving specific market capitalization targets, including an 80% threshold of US$250,000,000 and full vesting at US$250,000,000. Failure to meet these targets would result in non-vesting of this portion.
• Relative Performance Risk: The vesting of the remaining 50% of the PSUs depends on the Company's Common Shares achieving a higher total return than the Russell Microcap Index over any two-year period. Underperformance relative to this index would result in non-vesting of this portion.
• Equity Dilution Risk: Upon vesting and conversion, the issuance of Class A ordinary shares from these PSUs could lead to a slight dilution for existing shareholders, although this is a standard aspect of equity compensation plans.

Future Outlook

The future outlook for the granted PSUs is directly tied to New Horizon Aircraft Ltd.'s ability to significantly increase its market capitalization and achieve superior stock performance relative to the Russell Microcap Index over the coming years, with an expiration date of December 15, 2029.

Industry Context

StockSavvy.ai notes that performance-based equity awards, such as these Performance Share Units, are a common and effective mechanism in the aerospace and technology sectors to incentivize executive leadership. This structure aligns the Chief Financial Officer's financial interests with the long-term growth and shareholder value creation objectives of New Horizon Aircraft Ltd., a practice widely adopted by companies aiming for significant market expansion and competitive outperformance.

Comparison to Industry Standards

• Performance Share Units (PSUs) with market capitalization and relative total shareholder return (TSR) hurdles are a standard form of long-term incentive compensation for executives in growth-oriented companies, particularly in the aerospace and emerging technology sectors.
• The use of a specific market capitalization target (US$250,000,000) is a common practice, similar to targets set by companies like Joby Aviation or Archer Aviation in their early growth phases, to drive valuation milestones.
• Benchmarking against an index like the Russell Microcap Index is a robust method to ensure that performance is not just absolute but also relative to a relevant peer group, a practice seen in compensation plans across various industries to reward outperformance.

Stakeholder Impact

• Shareholders: Potential for increased shareholder value if vesting conditions (market cap growth, stock outperformance) are met, as the CFO's incentives are aligned with their interests. Potential for minor dilution upon conversion of PSUs.
• Employees: May signal management's confidence in future growth, potentially boosting morale.
• Management (CFO): Provides a significant long-term incentive tied directly to the company's strategic and financial success.

Next Steps

• New Horizon Aircraft Ltd. will need to track its market capitalization performance against the US$250,000,000 target.
• The company's stock performance will be monitored against the Russell Microcap Index over two-year periods until December 15, 2029, to determine the vesting of the remaining PSUs.
• Upon vesting, the PSUs will convert into Class A ordinary shares, which will then be beneficially owned by Brian Frederick Merker.

Key Dates

Keywords

New Horizon Aircraft, HOVR, Brian Merker, CFO, Performance Share Units, PSUs, executive compensation, insider transaction, market capitalization, Russell Microcap Index, equity incentive, stock performance