Shenzhen Esun Display Co.Ltd(002751) : Announcement on the progress of controlling shareholders in planning major events and signing the supplementary agreement to the equity transfer agreement

Securities code: 002751 securities abbreviation: Shenzhen Esun Display Co.Ltd(002751) Announcement No.: 2021-084 Shenzhen Esun Display Co.Ltd(002751)

Announcement on the progress of controlling shareholders in planning major events and signing the supplementary agreement to the equity transfer agreement

The company and all members of the board of directors guarantee that the information disclosed is true, accurate and complete without false records, misleading statements or major omissions.

1、 Basic information of planned share transfer

Shenzhen Esun Display Co.Ltd(002751) (hereinafter referred to as “the company” or “the company”) disclosed the suggestive announcement on the planning of major events by the controlling shareholder (Announcement No.: 2021-062) on October 25, 2021. The controlling shareholder of the company, Mr. Liu Menglong, is planning to transfer some equity with Mr. Lin Qingde, who holds more than 5% of the shares. On December 6, the announcement on the progress of the controlling shareholder’s planning of major events and the proposed change of the company’s control right (Announcement No.: 2021-073) was disclosed. Liu Menglong has signed the equity transfer agreement with Lin Qingde, and Liu Menglong will transfer 16797369 shares and corresponding voting rights (accounting for 10.87% of the total share capital of the company) to Lin Qingde, After the completion of the share transfer, it will involve the change of the controlling shareholder and actual controller of the company. On December 24, 2021, the supplementary announcement on the progress of controlling shareholders in planning major events and the proposed change of the company’s control was disclosed.

2、 Progress

In view of the fact that all the shares of Shenzhen Esun Display Co.Ltd(002751) held by Liu Menglong have been pledged, and there are certain restrictions on the transfer of the above shares due to the nature of senior management locked shares, it is difficult to complete the first equity transfer in 2021. Through friendly negotiation, both parties agree to make relevant adjustments on the methods and steps of equity transfer, and Liu Menglong agrees to increase the shares originally planned to be transferred to Lin Qingde by 2392731 shares, that is, Liu Menglong plans to transfer 19190100 shares of Shenzhen Esun Display Co.Ltd(002751) (accounting for 12.42% of the total share capital of Shenzhen Esun Display Co.Ltd(002751) to Lin Qingde. On December 30, 2021, both parties signed a supplementary agreement to the equity transfer agreement to adjust the proportion and steps of equity transfer. The specific contents of the supplementary agreement are as follows:

Party A (transferee): Lin Qingde

Party B (transferor): Liu Menglong

Article 1 this equity transfer

1.1 Party B agrees to transfer its 19190100 shares of Shenzhen Esun Display Co.Ltd(002751) (accounting for 12.42% of the total share capital of Shenzhen Esun Display Co.Ltd(002751) , hereinafter referred to as the “subject shares”) to Party A in stages in accordance with the agreement (hereinafter referred to as the “equity transfer”).

1.2 after the equity transfer, Party A will hold Shenzhen Esun Display Co.Ltd(002751) 26928100 shares (accounting for 17.43% of the total share capital of Shenzhen Esun Display Co.Ltd(002751) ), and Party B will hold Shenzhen Esun Display Co.Ltd(002751) 13060168 shares (accounting for 8.45% of the total share capital of Shenzhen Esun Display Co.Ltd(002751) ).

Article 2 specific arrangements for this equity transfer

Since all Shenzhen Esun Display Co.Ltd(002751) shares held by Party B have been pledged at present, Party A agrees to provide loan support for Party B to go through the formalities for lifting the pledge registration of 11618149 shares (hereinafter referred to as “one of the subject shares”), And handle the agreement transfer of the remaining 7571951 shares in the subject shares (hereinafter referred to as “subject shares II”) in accordance with the default disposal of stock pledge repo transaction. The specific arrangements are as follows: 2.1 one of the subject shares

2.1.1 Party A and Party B shall sign a loan contract on the date of signing this agreement, agreeing that Party A shall provide loans to Party B to ensure that Party B can successfully handle the formalities for the cancellation of pledge registration of one of the subject shares.

2.1.2 Party B shall complete the formalities for cancellation of pledge registration of one of the subject shares within 2 working days from the date of receiving the loan.

2.1.3 Party B shall pledge one of the subject shares to Party A and complete the pledge registration procedures within 1 working day from the date of completing the pledge registration cancellation procedures of one of the subject shares.

2.1.4 whereas Party B’s term of office as a director of the listed company expires on March 21, 2022, Party B agrees to transfer the ownership of one of the subject shares to Party A and sign the relevant agreement on equity transfer of this part of shares after changing its tradable shares with limited sales conditions to tradable shares with unlimited sales conditions half a year after the expiration of the term of office of the director. The transfer method and price of one of the subject shares will comply with the relevant management regulations of the regulatory authorities. If the transfer method and price agreed in the agreement are inconsistent with the relevant legal provisions and regulatory requirements, the relevant agreements will be adjusted according to the regulatory norms of the relevant regulatory authorities.

2.2 subject shares II

The second part of the subject shares (which are non tradable shares) is disposed of in breach of the repurchase transaction. The equity transfer price of the second part of the subject shares is 15.6 yuan / share, and the total transfer price is 118122435.6 yuan. The equity transfer price of the target shares II complies with the provisions of Article 2 of the guidelines for the handling of share agreement transfer business of Listed Companies in Shenzhen Stock Exchange on the disposal of breach of stock pledge repo transaction through agreement transfer and the notice on matters related to the disposal of breach of stock pledge repo transaction through agreement transfer Article 4 Provisions on the transfer price of the transfer of the stock pledge repurchase default disposal agreement.

2.2.2 Party B shall complete the transfer of the stock pledge repurchase default disposal agreement of two of the subject shares to Party A before January 30, 2022.

2.2.3 from the date of signing this agreement, Party A and Party B shall jointly communicate with the existing share Pledgee of two of the subject shares about handling the transfer of stock pledge repurchase default disposal agreement, and Party A shall provide necessary cooperation for this purpose.

Article 3 taxes

All taxes, fees and handling charges arising from this transaction shall be borne by Party A and Party B respectively in accordance with the provisions of laws and regulations.

Article 4 Rights and obligations of both parties

4.1 Party B shall ensure that it has complete ownership of the subject shares and can transfer the subject shares to Party A in accordance with the agreement.

4.2 Party B shall be responsible for completing the internal resolutions of the listed company, the approval of regulatory authorities, information disclosure and other matters that may be involved in the share transfer, and perform its obligations according to law.

4.3 after Party B transfers the subject shares to Party A respectively, Party A becomes the sole owner of the corresponding shares and has complete disposal right, voting right and income right of the shares held.

Article 5 operation and management

5.1 Party B agrees to entrust the voting right corresponding to one of the subject shares to Party A exclusively and free of charge within the entrustment period. If Party A is unable to attend the on-site meeting of the general meeting of shareholders, Party A may authorize its representative to attend the general meeting of shareholders; In addition, unless Party A’s written consent is obtained, Party A shall not designate other subjects to exercise the entrusted rights. The term of entrustment of voting rights of one of the subject shares shall be from the date when one of the subject shares is pledged and registered with Party A to the earlier of the date when Party A obtains the ownership of one of the subject shares and the expiration of 36 months from the date of signing this agreement. During the term of entrustment, Party A has the right to exercise the following rights in the name of Party A according to its own will, in accordance with the company law of the people’s Republic of China and other laws and regulations and the provisions of the articles of association of the listed company in force at that time: (1) the right to request, convene, attend and preside over the general meeting of shareholders;

(2) Voting right: vote on all matters that need to be considered and voted at the general meeting of shareholders in accordance with relevant laws, regulations, rules, normative documents and the articles of association of the listed company, and sign relevant meeting documents;

(3) Proposal right and nomination right, and put forward proposals or proposals including but not limited to nominating, recommending, electing or removing directors and non employee representative supervisor candidates;

(4) Access to the articles of association, register of shareholders, stubs of corporate bonds, minutes of the general meeting of shareholders, resolutions of the board of directors, resolutions of the board of supervisors and financial and accounting reports of listed companies;

(5) Other shareholders’ rights specified in the then effective laws, regulations or the articles of association of the listed company, except for the transfer, pledge and income of one of the subject shares, which are directly related to the disposal of the ownership income of one of the subject shares held by Party A.

5.2 Party B agrees that Party A may reorganize the board of directors and senior management team of the listed company, and agrees that the chairman of the Board shall be nominated by Party A.

5.3 after signing this agreement, Party A and Party B shall jointly maintain the stability of the production, operation and management team of the listed company, and shall not engage in transactions and behaviors that may lead to significant adverse changes in the financial and operating conditions of the listed company.

Article 6 confidentiality

Either party of this agreement is only used for the purpose of this agreement. All information provided by Party A and Party B in accordance with the provisions of this Agreement and the contents of this agreement, except for public disclosure in accordance with laws, regulations, departmental rules and normative documents and the requirements of regulatory authorities, and providing necessary information to competent government departments, regulatory agencies or intermediaries, without the consent of the other party, Neither party shall disclose any undisclosed information related to this agreement to any third party through any channel in any way.

Article 7 notice and service

7.1 the communication between Party A and Party B shall be in the form of written information or written materials delivered in person and signed; If it cannot be delivered directly or one party rejects it, the sender can deliver it by mail or notarization according to the contact information specified by Party A and Party B in this agreement, and it shall be deemed to have been delivered on the third day from the date of mailing. If one party changes its contact information without informing the other party in writing in advance, the adverse consequences arising therefrom shall be borne by the changing party.

Article 8 dispute resolution and liability for breach of contract

8.1 any dispute or pending matter arising from the performance of this Agreement shall be settled by Party A and Party B through friendly negotiation. If the negotiation fails, either party shall submit the dispute to the people’s court where Party A is located for litigation.

8.2 if two of the subject shares cannot be transferred to Party A before January 30, 2022 due to Party A’s reasons, and Party A and Party B fail to reach a written agreement on the extension, Party B shall return the equity transfer price of two of the subject shares paid by Party A within three days after the occurrence of the above circumstances. If Party B returns it within the time limit, Party B shall pay liquidated damages to Party A at the rate of 0.05% of the overdue amount per day.

Article 9 others

9.1 this agreement is a supplementary agreement to the equity transfer agreement between Party A and Party B on December 4, 2021. If the equity transfer agreement is not agreed or inconsistent with this agreement, this Agreement shall prevail. 3、 Shareholding commitment and performance of the transferor

Mr. Liu Menglong’s relevant commitments in the company’s prospectus for initial public offering and the notice on not reducing Shenzhen Esun Display Co.Ltd(002751) shares:

1. Liu Menglong promises that the shares held by Shenzhen Esun Display Co.Ltd(002751) before the date of publication of the prospectus will not be transferred or managed by others or repurchased by Shenzhen Esun Display Co.Ltd(002751) within 36 months from the date of listing of Shenzhen Esun Display Co.Ltd(002751) shares.

2. Liu Menglong’s commitment to shareholding intention and reduction intention is as follows: “(1) I intend to hold the company’s shares for a long time; (2) if I intend to reduce my shares after the expiration of the lock-in period, I will seriously abide by the relevant provisions of the CSRC and the exchange on shareholder reduction, combined with the needs of the company to stabilize the stock price, carry out business and capital operation; (3) My reduction of shares of the company shall comply with the provisions of relevant laws, regulations and rules, including but not limited to the centralized bidding trading mode of the exchange, block trading mode, agreement transfer mode, etc; (4) Before I reduce the shares of the company, I will make an announcement three trading days in advance, and perform the obligation of information disclosure in a timely and accurate manner in accordance with the rules of the stock exchange; Unless I hold less than 5% of the company’s shares; (5) Within two years after the expiration of the lock up period, the total number of shares of the company I hold each year shall not exceed 10% of the total number of shares registered in my name on the last trading day of the previous year. If the company’s equity distribution, capital reduction and share reduction lead to changes in the company’s shares held by me, the amount of transferable shares in the corresponding year shall be changed accordingly; (6) If I violate my commitment, the cash dividends I should enjoy in the company’s profit distribution plan for the current year and subsequent years will not be distributed until I fulfill this commitment; The shares of the company held by me during the period of breach of commitment shall not be transferred. The above commitments shall not become invalid due to job change, resignation and other reasons. ”

3. Based on the confidence in the company’s future development prospects and the recognition of the company’s internal value, promote the company’s long-term, sustainable, healthy and stable development, safeguard the interests of small and medium-sized investors, and support the company to realize its future development strategy, I promise that my initial restricted shares will not be reduced within 12 months from the date of lifting the restriction (i.e. from April 24, 2018 to April 23, 2019).

4. Liu Menglong’s commitment to subscribe for the non-public offering of shares in 2016: I agree that the subscribed shares will not be transferred within 36 months from the end of the non-public offering.

As of the date of this announcement, Mr. Liu Menglong has strictly fulfilled and is in the process of fulfilling the above commitments. There is no violation of the share locking commitment in the transfer of shares.

4、 Impact of this equity change on the company

If the control of the company will change after the completion of the share transfer, the controlling shareholder and actual controller of the company will be changed to Mr. Lin Qingde. This transaction is based on the consensus and common values of both parties on the company’s future development goals to promote the company’s business development. This transaction will not affect the normal production and operation of the company. The company will continue to focus on the main business, maintain the stability of the core team and ensure the smooth transition of this change of control.

5、 Other notes and risk tips

1. This transaction does not involve tender offer, nor does it constitute a related party transaction.

2. The current controlling shareholders and actual controllers of the company do not occupy the company’s funds, the company’s guarantee for them or abuse the rights of the controlling shareholders to damage the interests of the company.

3. As of December 31, 2021, Liu Menglong held 32250268 shares of the company (accounting for 20.87% of the total share capital of the company). According to the detailed rules for the implementation of share reduction by shareholders, directors, supervisors and senior managers of Listed Companies in Shenzhen Stock Exchange, that is, the shares transferred by directors and senior managers each year shall not exceed the shares held by the company

 

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