Brother Enterprises Holding Co.Ltd(002562)
Management measures for phase I employee stock ownership plan
Chapter I General Provisions
Article 1 in order to standardize the implementation of the first phase of the employee stock ownership plan (hereinafter referred to as the “Employee Stock Ownership Plan”) of Brother Enterprises Holding Co.Ltd(002562) (hereinafter referred to as the “company”), in accordance with the company law of the people’s Republic of China, the securities law of the people’s Republic of China and the guidance of the CSRC on the pilot implementation of the employee stock ownership plan by listed companies (hereinafter referred to as the “ESOP”)“ “Guidance”) The Brother Enterprises Holding Co.Ltd(002562) is hereby formulated in accordance with the guidelines for information disclosure of listed companies of Shenzhen Stock Exchange No. 4 – Employee Stock Ownership Plan (hereinafter referred to as “disclosure guidelines No. 4”) and other relevant laws, administrative regulations, rules, normative documents, the articles of association and the provisions of the Brother Enterprises Holding Co.Ltd(002562) phase I employee stock ownership plan (Draft) (hereinafter referred to as “Employee Stock Ownership Plan”) Measures for the administration of phase I employee stock ownership plan (hereinafter referred to as “the measures”).
Chapter II Formulation of employee stock ownership plan
Article 2 basic principles of employee stock ownership plan
(i) Principle of legal compliance
The company implements the employee stock ownership plan, performs the procedures in strict accordance with the provisions of laws and administrative regulations, and makes information disclosure truthfully, accurately, completely and timely. No one shall use the employee stock ownership plan to engage in securities fraud such as insider trading and manipulation of the securities market.
（2） Principle of voluntary participation
The implementation of the ESOP by the company follows the principle of independent decision of the company and voluntary participation of employees. The company does not force employees to participate in the ESOP by means of apportionment, forced distribution, etc.
（3） Risk bearing principle
The participants of the employee stock ownership plan shall be responsible for their own profits and losses, bear their own risks, and have equal rights and interests with other investors.
Article 3 holders of employee stock ownership plans
(i) Basis for determining participants
According to the company law, securities law, guiding opinions and other relevant laws, regulations, normative documents and the relevant provisions of the articles of association, and in combination with the actual situation of the company, the participants of the employee stock ownership plan are determined. All participants must work in the company or a wholly-owned subsidiary of the company, receive remuneration and sign labor contracts.
（2） Scope of participants
The company’s directors (excluding independent directors), supervisors, senior managers, middle and senior managers and business backbone personnel. The participation of the above employees in the ESOP follows the principle of independent decision of the company and voluntary participation of employees, and there is no forced participation of employees by means of apportionment, forced distribution, etc.
Article 4 source of underlying stock involved in ESOP
The stock source of the employee stock ownership plan is Brother Enterprises Holding Co.Ltd(002562) a common shares repurchased by the company’s special account for repurchase.
The 15th meeting of the 4th board of directors held on September 3, 2018 and the 3rd extraordinary general meeting of shareholders held on September 20, 2018 considered and approved the proposal on share repurchase plan of the company, which was approved on September 4, 2018 The announcement on share repurchase plan of the company (Announcement No.: 2018-074) and the supplementary announcement on share repurchase plan of the company (Announcement No.: 2018-076) were disclosed on September 7, 2018, and the repurchase report (Announcement No.: 2018-084) was disclosed on October 17, 2018; it was disclosed on November 2, 2018 Announcement on the first repurchase of shares of the company (Announcement No.: 2018-091). The company held the 19th meeting of the Fourth Board of directors on February 22, 2019, considered and adopted the proposal on adjusting the stock repurchase plan of the company, and disclosed the announcement on adjusting the stock repurchase plan of the company on February 23, 2019 (Announcement No.: 2019-011). As of the announcement date of the draft employee stock ownership plan, the company’s repurchase has been completed. The total capital of the repurchase is RMB 30000260.48 (excluding transaction costs), the lowest price of stock transaction is RMB 4.12/share, the highest price is RMB 5.13/share, and the number of shares repurchased is 67912400 shares, accounting for 0.639% of the total share capital of the company.
Within 6 months after the draft ESOP is approved by the general meeting of shareholders, the ESOP will obtain the company’s shares repurchased by the company through non trading transfer and other ways permitted by laws and regulations.
Article 5 capital source of employee stock ownership plan
The fund sources of the ESOP are the legal salary of employees, self raised funds and other ways permitted by laws and administrative regulations. The company will not provide advance, guarantee, loan and other financial assistance to the holder in any way.
Article 6 duration and lock-in period of ESOP
(i) Duration of the underlying shares involved in the ESOP
The duration of the employee stock ownership plan is 36 months, calculated from the date when the company announces the transfer of the last subject stock to the name of the employee stock ownership plan. If the employee stock ownership plan is not extended at the expiration of the duration, it will terminate automatically.
One month before the expiration of the duration of the employee stock ownership plan, if all the company’s shares held have not been sold, the duration of the employee stock ownership plan can be extended after more than 2 / 3 shares held by the holders attending the holders’ meeting are agreed and submitted to the board of directors for deliberation and approval.
If the company’s shares held by the employee stock ownership plan cannot be fully realized before the expiration of the duration due to the suspension of trading or short window period of the company’s shares, the duration of the employee stock ownership plan can be extended after more than 2 / 3 of the shares held by the holders attending the shareholders’ meeting are agreed and submitted to the board of directors for deliberation and approval.
The company shall disclose a suggestive announcement six months before the expiration of the duration of the employee stock ownership plan, stating the number of shares held by the expiring employee stock ownership plan and its proportion in the total share capital of the company.
The company shall disclose the number of shares held by the expired ESOP and its proportion in the total share capital of the company and the disposal arrangements after the expiration at the latest when the duration of the ESOP expires. If the period is to be extended, the difference from that before the extension shall be explained item by item according to the disclosure requirements in Article 9 of the disclosure guidelines No. 4, and the corresponding review procedures and disclosure obligations shall be performed according to the provisions of the employee stock ownership plan.
After the lock-in period of the employee stock ownership plan expires, when the assets held by the employee stock ownership plan are all monetary funds, the employee stock ownership plan can be terminated in advance after more than 2 / 3 shares held by the holders attending the holder meeting are agreed and submitted to the board of directors for deliberation and approval.
（2） Lock up period of the underlying shares involved in the employee stock ownership plan
The lock up period of the underlying shares of the company held by the employee stock ownership plan is 12 months (including the reserved part), the one-time unlocking upon expiration shall be calculated from the time when the company announces the transfer of the last subject stock to the name of the employee stock ownership plan. After the expiration of the locking period and before the expiration of the duration, the employee stock ownership plan will decide to adopt the disposal methods such as direct sale of shares by the employee stock ownership plan and transfer to employees according to the arrangement of the employee stock ownership plan and the market conditions at that time.
During the lock-in period, when the company converts capital reserve into share capital and distributes stock dividends, the newly acquired shares of the employee stock ownership plan due to holding the company’s shares are locked together, and the lock-in period of these shares is the same as that of the corresponding shares.
During the lock-in period and duration, the ESOP will strictly abide by the market trading rules and the provisions of China Securities Regulatory Commission and Shenzhen Stock Exchange on not buying and selling stocks in the information sensitive period.
Article 7 implementation procedures of employee stock ownership plan
(i) The board of directors of the company is responsible for preparing the draft shareholding plan and soliciting the opinions of employees through the employee congress.
（2） The board of directors deliberated and approved the draft of the employee stock ownership plan. The independent directors shall express independent opinions on whether the stock ownership plan is conducive to the sustainable development of the company, whether it damages the interests of the company and all shareholders, and whether there are ways to force employees to participate in the employee stock ownership plan by means of apportionment and forced distribution.
（3） The board of supervisors of the company shall express opinions on whether the ESOP is conducive to the sustainable development of the listed company, whether it damages the interests of the listed company and all shareholders, and whether the company forces employees to participate in the company’s ESOP by means of apportionment and forced distribution. (IV) employees who intend to participate in the ESOP shall sign the letter of intent to subscribe for the Brother Enterprises Holding Co.Ltd(002562) phase I ESOP.
（5） When the board of directors deliberates the ESOP, the directors associated with the ESOP shall avoid voting. The board of directors shall announce the resolution of the board of directors, the draft and summary of the ESOP, the opinions of independent directors, the opinions of the board of supervisors, etc. within 2 trading days after the draft ESOP is deliberated and adopted.
（6） The company employs a law firm to issue legal opinions on matters related to the employee stock ownership plan, issue a notice of convening the general meeting of shareholders, and announce the legal opinions before the general meeting of shareholders.
（7） The general meeting of shareholders will be convened to review the ESOP. The general meeting of shareholders will vote by combining on-site voting and online voting. A resolution on the ESOP shall be adopted by more than half of the voting rights held by the shareholders attending the meeting
（8） Hold a meeting of the holders of the employee stock ownership plan, elect members of the management committee, clarify the specific matters of the implementation of the employee stock ownership plan, and timely disclose the convening of the meeting and relevant resolutions.
（9） The Management Committee of the employee stock ownership plan shall, in accordance with the authorization of the holder’s meeting, open a securities account, purchase the underlying shares, etc. the company shall timely disclose the time and quantity of the underlying shares within 2 trading days after completing the purchase of the underlying shares or transferring the underlying shares to the name of the employee stock ownership plan.
（10） The board of directors shall handle the share locking and equity distribution of the employee stock ownership plan in accordance with the authorization of the general meeting of shareholders.
Chapter III Management of employee stock ownership plan
Article 8 management mode of employee stock ownership plan
The internal management authority of the ESOP is the shareholders’ meeting; A management committee shall be established for the ESOP to supervise the daily management of the ESOP and exercise shareholders’ rights on behalf of the holders; The board of directors of the company is responsible for drafting and revising the draft of the employee stock ownership plan, and handling other relevant matters of the employee stock ownership plan within the scope authorized by the general meeting of shareholders; The ESOP is managed by the company itself.
The management committee shall manage the assets of the employee stock ownership plan in accordance with relevant laws, administrative regulations, departmental rules, employee stock ownership plans and management rules, safeguard the legitimate rights and interests of the holders of the employee stock ownership plan and ensure the asset safety of the employee stock ownership plan.
The management committee manages the assets of the employee stock ownership plan according to the written power of attorney of the meeting of the holders of the employee stock ownership plan. The management period is from the date when the general meeting of shareholders approves the employee stock ownership plan to the date when all the shares held by the employee stock ownership plan are sold, the assets are distributed and the cancellation of the employee stock ownership plan is completed.
Article 9 shareholders’ meeting of employee stock ownership plan
(i) After subscribing for the shares of the ESOP, the participants will become the holders of the ESOP. The holder meeting is the internal top management authority of the ESOP, which is composed of all the holders. All holders have the right to attend the meeting of ESOP holders and exercise their voting rights according to their shares. The shareholders’ meeting shall exercise the following functions and powers:
1. To elect and remove members of the Management Committee of the shareholding plan;
2. Review and approve the change, termination, extension of duration and early termination plan of the employee stock ownership plan, and submit it to the board of directors of the company for deliberation and approval;
3. Review whether the ESOP will participate in the company’s share allotment, additional issuance, convertible bonds and other financing projects during the duration;
4. Authorize the stock ownership plan management committee as the management organization of the employee stock ownership plan to exercise the responsibilities of asset management of the employee stock ownership plan;
5. Authorize the management committee to supervise the daily management of the employee stock ownership plan;
6. Authorize the management committee to exercise shareholders’ rights;
7. Authorize the management committee to make decisions and implement the share abandonment of the employee stock ownership plan, the ownership of the forcibly recovered share, the grant and distribution of the recovered share, the determination of the relevant price and the cashing arrangement of the corresponding income;
8. Authorize the management committee to make decisions and be responsible for selling the underlying shares held by the employee stock ownership plan or transferring the underlying shares to the name of the holder;
9. Authorize the management committee to make decisions on the benefit distribution of the employee stock ownership plan and implement the benefit distribution plan;
10. Authorize the management committee to hire relevant professional institutions to provide management, consulting and other services for the shareholding plan, and be responsible for the corresponding docking work;
11. Revise the management measures;
12. Other matters that the Management Committee deems necessary to convene a shareholders’ meeting for deliberation;
13. Other functions and powers of the shareholders’ meeting stipulated by laws, regulations, rules, normative documents or employee stock ownership plan.
（2） Convening of shareholders’ meeting
1. The first shareholders’ meeting shall be convened by the chairman of the company or his designated person, and the subsequent shareholders’ meeting shall be convened by the stock ownership plan management committee and presided over by the director of the management committee. If the chairman of the management committee is unable to perform his duties, he shall appoint a member of the management committee to preside over the meeting.
When convening the shareholders’ meeting, the management committee shall submit a written notice of the meeting to all shareholders 3 days in advance by direct delivery, mail, fax, e-mail, website announcement, notice posted in the workplace, the company’s OA system, wechat or other means. The written meeting notice shall at least include the following contents:
1. Time and place of the meeting;
2. Convening method of the meeting;
3. Matters to be considered (meeting proposals);
4. The convener and moderator of the meeting, the proposer of the interim meeting and his written proposal;
5. Meeting materials necessary for voting at the meeting;
6. The holder shall attend the meeting in person or entrust other holders to attend the meeting on his behalf;
7. Contact person and contact information;
8. Date of notification.
In case of emergency, the holder’s meeting may be convened by oral notice. The oral meeting notice shall at least include the contents of items 1 and 3 above and the description of convening the holder’s meeting as soon as possible due to emergency.
Employee stock ownership plans held individually or jointly
