Bear Electric Appliance Co.Ltd(002959) : Announcement on terminating the implementation of 2021 stock option and restricted stock incentive plan and cancellation of options and repurchase and cancellation of restricted shares

Securities code: Bear Electric Appliance Co.Ltd(002959) securities abbreviation: Bear Electric Appliance Co.Ltd(002959) Announcement No.: 2022036 Bear Electric Appliance Co.Ltd(002959)

On terminating the implementation of 2021 stock option and restricted stock incentive plan

Announcement on cancellation of stock options and repurchase and cancellation of restricted shares

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.

Bear Electric Appliance Co.Ltd(002959) (hereinafter referred to as “the company”) held the 14th meeting of the second board of directors and the 13th meeting of the second board of supervisors on April 7, 2022, deliberated and adopted the proposal on terminating the implementation of the 2021 stock option and restricted stock incentive plan and cancellation of options and repurchase and cancellation of restricted shares. The relevant matters are hereby announced as follows:

1、 Relevant approval procedures for 2021 stock option and restricted stock incentive plan

1. On March 25, 2021, the company held the fourth meeting of the second board of directors and the fourth meeting of the second board of supervisors, deliberated and adopted the proposal on the company’s stock option and restricted stock incentive plan in 2021 (Draft) and its summary, and the proposal on the company’s measures for the implementation and assessment of stock option and restricted stock incentive plan in 2021, See http://www.cn.info.com.cn for details 2021 stock option and restricted stock incentive plan (Draft).

2. On April 13, 2021, the board of supervisors of the company issued the verification opinions and publicity statement on the list of incentive objects first granted by the company’s stock option and restricted stock incentive plan in 2021. See http://www.cn.info.com.cn for details Explanation on the verification opinions and publicity of the board of supervisors on the list of incentive objects first granted by the company’s stock option and restricted stock incentive plan in 2021 (Announcement No.: 2021010).

3. On April 16, 2021, the company held the first extraordinary general meeting of shareholders in 2021, deliberated and approved the proposal on the company’s stock option and restricted stock incentive plan in 2021 (Draft) and its summary. On the same day, the company issued the self inspection report on the trading of the company’s shares by insiders and incentive objects of the stock option and restricted stock incentive plan in 2021. See http://www.cn.info.com.cn for details Announcement on the resolution of the first extraordinary general meeting of shareholders in 2021 (Announcement No.: 2021012) and self inspection report on the trading of company shares by insiders and incentive objects of stock option and restricted stock incentive plan in 2021 (Announcement No.: 2021013).

4. On May 21, 2021, the company held the sixth meeting of the second board of directors and the sixth meeting of the second board of supervisors, deliberated and adopted the proposal on adjusting the company’s 2021 stock option and restricted stock incentive plan and the proposal on granting stock option and restricted stock to incentive objects for the first time. See http://www.cn.info.com.cn for details Announcement on adjusting the company’s 2021 stock option and restricted stock incentive plan (Announcement No.: 2021031) and announcement on granting stock option and restricted stock to incentive objects for the first time (Announcement No.: 2021032).

5. On June 8, 2021, the company disclosed the announcement on the completion of the registration of the first grant of stock option and restricted stock incentive plan in 2021 (Announcement No.: 2021033) on cninfo.com, and the company completed the registration of the first grant of stock option and restricted stock incentive plan in 2021. 716000 registered stock options, 123 registered persons, stock option code 037131, option abbreviation: bear jlc1; A total of 35 incentive objects were granted restricted shares. The number of restricted shares granted was 444000, and the listing date was June 9, 2021.

6. On April 7, 2022, the company held the 14th meeting of the second board of directors and the 13th meeting of the second board of supervisors, deliberated and adopted the proposal on terminating the implementation of 2021 stock option and restricted stock incentive plan and cancellation of options and repurchase and cancellation of restricted shares. See http://www.cn.info.com.cn for details Announcement on terminating the implementation of 2021 stock option and restricted stock incentive plan and cancellation of options and repurchase and cancellation of restricted shares (Announcement No.: 2022036)

2、 Reasons for termination of the incentive plan

Due to the great changes in the current macroeconomic situation, industry market environment and the company’s launch of the incentive plan, the company did not meet the performance objectives set by equity incentive in 2021. In this case, it is difficult for the company to meet the performance assessment requirements set in the 2021 stock option and restricted stock incentive plan, and it is difficult to continue to promote and implement the incentive plan to achieve the incentive effect on the incentive objects. After careful argumentation, the board of directors of the company decided to terminate the implementation of the 2021 stock option and restricted stock incentive plan, cancel the stock options granted to the incentive object but not yet exercised, repurchase and cancel the restricted shares granted to the incentive object but not yet lifted, and terminate it together with the supporting management measures for the implementation and assessment of the 2021 stock option and restricted stock incentive plan and other documents.

After the termination of the incentive plan, the company will, in accordance with the provisions of relevant laws and regulations, fully consider the industry and market and combined with the actual situation of the company, mobilize the enthusiasm of the management and core backbone by optimizing the salary system and improving the performance appraisal system, continue to study and launch other effective incentive methods, improve the long-term incentive mechanism of the company and promote the sustainable, healthy and stable development of the company.

3、 Matters related to the cancellation of stock options and the repurchase and cancellation of restricted shares

1. Reasons and quantity for cancellation of stock options and repurchase of restricted shares

(1) Some incentive objects have resigned

According to the provisions of Chapter VIII of the incentive plan (Draft) on the handling of changes in the company / incentive object: “If the incentive object resigns due to resignation, layoffs of the company or expiration of the labor contract, the stock options exercised by the incentive object / restricted stocks whose restrictions on sales have been lifted will continue to be valid; the stock options granted to the incentive object but not yet exercised will not be exercised and will be cancelled by the company; the restricted stocks granted to the incentive object but not yet lifted will not be lifted and will be repurchased and cancelled by the company at the grant price.

The incentive object shall pay the individual income tax on the exercised / released restricted shares of stock options / restricted shares before leaving the company. “

In view of the fact that 16 incentive objects granted stock options for the first time and 5 incentive objects granted restricted shares for the first time have resigned and are no longer eligible for incentive objects. A total of 90000 stock options that have been granted but not yet exercised will be cancelled by the company, and 76000 restricted shares that have been granted but not yet lifted will be repurchased and cancelled by the company at the grant price.

(2) The company fails to meet the first vesting / lifting restriction period granted by the incentive plan for the first time, and the company level industry assessment

According to the relevant provisions of the company’s incentive plan (Draft), The performance assessment objective of the first exercise period of stock options granted for the first time in this incentive plan / the first release period of restricted shares is to meet one of two conditions: “the sales volume in 2021 shall not be less than 4 billion yuan or the net profit in 2021 shall not be less than 500 million yuan (the net profit index shall be calculated based on the audited net profit attributable to the shareholders of the listed company excluding the impact of the incentive cost of this and other incentive plans).”

According to the company’s annual report for 2021, the company’s annual sales in 2021 was 3.606 billion yuan, and the net profit attributable to shareholders of listed companies excluding the impact of equity incentive in 2021 was 283 million yuan. The company fails to meet the performance assessment target of the first exercise period / lifting of sales restriction period of the incentive plan. In addition to the resignation incentive objects, a total of 187800 stock options that failed to exercise in the first exercise period corresponding to 107 incentive objects shall be cancelled by the company; A total of 110400 restricted shares that failed to lift the restrictions on sales corresponding to the first period of lifting the restrictions on sales granted to the 30 incentive objects for the first time shall be repurchased and cancelled by the company according to the grant price.

(3) The company intends to terminate the implementation of this incentive plan

In view of the company’s intention to terminate the implementation of 2021 stock option and restricted stock incentive plan, the company needs to cancel 438200 stock options granted but not exercised by the remaining 107 incentive objects; Repurchase cancellation the remaining 30 incentive objects have been granted but have not yet lifted the restriction on the sale of 257600 restricted shares, and the repurchase price is the grant price. To sum up, a total of 716000 stock options of 123 incentive objects were cancelled this time; A total of 444000 restricted shares of 35 incentive objects were repurchased and cancelled. The restricted shares repurchased and cancelled this time account for 0.29% of the current total share capital of the company.

2. Repurchase price of restricted shares

According to the provisions of the incentive plan (Draft): “after the restricted shares granted to the incentive object are registered, if the company has matters affecting the total share capital or the stock price of the company, such as the conversion of capital reserve into share capital, the distribution of stock dividends, the splitting of shares, the allotment or reduction of shares, and the distribution of dividends, the company shall make corresponding adjustments to the repurchase price of the restricted shares that have not been lifted.”

The adjustment method for the repurchase price of dividend is as follows: P = p0-v (P0 is the repurchase price of restricted shares per share before adjustment; V is the dividend per share; P is the restricted shares per share after adjustment. After dividend adjustment, P must still be positive)

After the registration of the first grant of restricted shares in the incentive plan is completed, the company has made an annual equity distribution in 2020: a cash dividend of 12 yuan (including tax) for every 10 shares. The repurchase price of restricted shares was adjusted from 38.92 yuan / share to 37.72 yuan / share.

3. Source of funds and total amount of funds for restricted stock repurchase

The funds that the company intends to use to pay for the repurchase of restricted shares this time are its own funds, and the total repurchase price is 167477 million yuan.

4. There may be price adjustment factors and the total amount of funds to be used for repurchase in the future

In view of the fact that the cancellation of this restricted repurchase still needs to comply with relevant legal procedures and takes a long time, and the board of directors of the company has considered and approved the profit distribution plan for 2021 at the 14th meeting of the second board of directors. The distribution plan is to distribute cash dividends of 6 yuan (including tax) for every 10 shares, so there may be price adjustment in the future. If the company has implemented the above 2021 annual equity distribution plan before the completion of the repurchase and cancellation of restricted shares, the company will adjust the repurchase price accordingly during the repurchase of restricted shares in accordance with the provisions of the incentive plan (Draft), that is, after the completion of the above 2021 equity distribution plan, the price of restricted shares in the incentive plan will be adjusted to 37.12 yuan / share, The price the company intends to use for repurchase is adjusted to 164813 million yuan.

4、 Changes in the company’s equity structure after the proposed repurchase and cancellation of some restricted shares

Share type before this change and after this change

Quantity (share) ratio minus (+), -) quantity (share) ratio

1、 22280518925% limited sale conditions

Executive lock up shares 8325 0.01%

Restricted shares after IPO: 7977060050.99% 7977060051.14%

Equity incentive restricted shares 4440000.28% – 4440000.00%

2、 Shares with unlimited sales conditions 7622107548.72% 7622107548.86%

3、 Total shares 156444 Tcl Technology Group Corporation(000100) % 156 Shenzhen Ecobeauty Co.Ltd(000010) 0%

Note: if there is any tail difference, it is caused by rounding

After the completion of the repurchase and cancellation of restricted shares, the total number of shares of the company will be changed to 1560000 shares. After the completion of the repurchase, the company will perform the corresponding capital reduction procedures, the amendment of relevant provisions of the articles of association and the change of industrial and commercial information according to law. After the cancellation of this repurchase, the controlling shareholder and actual controller of the company will not change, and the equity distribution of the company still meets the listing conditions.

5、 Impact of termination of the incentive plan and subsequent arrangements

According to the relevant provisions of the accounting standards for business enterprises, the share based payment expenses of 2.9234 million yuan related to the resignation of incentive objects will not be recognized; For those who fail to meet the standard in the first vesting period / lifting the restriction period of performance assessment, the share based payment fee shall not be recognized. The termination of the incentive plan corresponds to phase 2 and phase 3 without accelerating the provision of share based payment related fees. The impact of the termination of the 2021 stock option and restricted stock incentive plan on the net profit of the company shall be subject to the audit report issued by the accounting firm.

According to the measures for the administration of equity incentive of listed companies and other provisions, the company promises not to review the equity incentive plan within three months after terminating the incentive plan. After the termination of the incentive plan, the company will continue to optimize the salary system

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