Securities abbreviation: Gree Electric Appliances Inc.Of Zhuhai(000651) securities code: Gree Electric Appliances Inc.Of Zhuhai(000651) Gree Electric Appliances Inc.Of Zhuhai(000651)
Phase II employee stock ownership plan
(Draft)
May, 2002
statement
The company and all members of the board of directors guarantee that there are no false records, misleading statements or major omissions in the ESOP, and bear individual and joint legal liabilities for the authenticity, accuracy and integrity of its contents.
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Risk statement
1. Gree Electric Appliances Inc.Of Zhuhai(000651) phase II employee stock ownership plan can only be implemented after being approved by the general meeting of shareholders of the company. There is uncertainty whether the employee stock ownership plan can be approved by the general meeting of shareholders of the company. 2. There is uncertainty about the specific number of participants, capital scale, stock scale and other factors of the employee stock ownership plan.
3. If the subscription funds of employees are insufficient, there is a risk that the employee stock ownership plan is lower than the expected scale.
4. The performance appraisal of the employee stock ownership plan is realizable to some extent, but there may be a risk that the performance will not be achieved in the future due to changes in the macroeconomic environment, fluctuations in the prosperity of the industry, intensified market competition and other reasons.
5. The company will disclose relevant progress in the future according to the regulations. Please make careful decisions and pay attention to investment risks.
hot tip
1. The Gree Electric Appliances Inc.Of Zhuhai(000651) phase II employee stock ownership plan (Draft) (hereinafter referred to as the “Employee Stock Ownership Plan”) is the company’s basis for the company law of the people’s Republic of China, the securities law of the people’s Republic of China, the guidance on the pilot implementation of employee stock ownership plan by listed companies, the guidance on self discipline supervision of listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board and other relevant laws and regulations Normative documents and Gree Electric Appliances Inc.Of Zhuhai(000651) articles of association. 2. The employee stock ownership plan follows the principles of legal compliance, voluntary participation and risk bearing. There is no situation of compulsory employee participation in the employee stock ownership plan such as apportionment and forced distribution.
3. Since 2012, the company’s performance has grown steadily, and its net profit has increased from more than 7 billion yuan to more than 22 billion yuan for many consecutive years, up to 26.4 billion yuan. However, the company has not implemented any incentive measures linked to equity for 13 years. It did not launch the first phase of employee stock holding plan until 2021, covering only more than 4000 people, Compared with the incentive policies of other enterprises in the industry and the growing demand for talents under the background of industrial diversification of the company, it is still insufficient. The lack of long-term incentive is still a weakness in corporate governance, which is not conducive to further mobilize the initiative and creativity of employees and realize the sustainable development of the company.
While paying attention to its own development, the company attaches great importance to the return to shareholders. Since its listing, the company has accumulated cash dividends of more than 100 billion yuan (including the dividend plan of 20 yuan for 10 shares in 2021). The total cash dividends per share implemented in the past three years have reached 9.70 yuan (including tax; the dividend plan of 20 yuan for 10 shares in 2021 will be implemented after being considered and approved by the general meeting of shareholders), By formulating the shareholder return plan for the next three years (20222024), the company has established a scientific, sustainable and stable shareholder return mechanism. The company has also implemented the three-phase share repurchase plan, with a total amount of 27 billion yuan for repurchase.
Since the third quarter of 2020, the price of bulk raw materials has continued to rise sharply. The tense geopolitical situation at the beginning of 2022 continued to promote the high fluctuation of bulk commodity prices. Covid-19 epidemic broke out repeatedly. The real economy is facing the triple pressure of demand contraction, supply shock and weakening expectation. The risks, challenges and pressures faced by the company’s production and operation have doubled.
The long-term, stable and healthy development of the company is inseparable from the hard work of employees. In order to share the achievements of enterprise development with employees, improve employees’ enthusiasm and creativity, and ensure the realization of development strategy and business objectives, the company plans to implement the second phase of employee stock ownership plan to further improve the benefit sharing and risk sharing mechanism between shareholders and management, middle-level cadres and core employees.
4. The holders of the employee stock ownership plan include the company’s directors (excluding independent directors), supervisors and senior managers, as well as the middle-level cadres and core employees of the company and its holding subsidiaries who are recognized by the board of directors to play an important role in the overall performance and medium and long-term development of the company. The total number of employees to participate in the employee stock ownership plan shall not exceed 12000. The final number and list of participants will be determined according to the actual contributions of employees. 5. The capital scale of the employee stock ownership plan does not exceed 1.55 billion yuan, and the capital source is the legitimate salary of employees and self raised funds obtained through other ways permitted by laws and administrative regulations. The company does not provide financial assistance or guarantee for employees’ loans due to their participation in the employee stock ownership plan, and the employee stock ownership plan does not withdraw incentive funds from the company.
6. The stock source of the ESOP is the shares repurchased in the company’s special account for repurchase, and the stock size is no more than 94728008 shares, accounting for 1.60% of the current total share capital of the company. The employee stock ownership plan will obtain the company’s shares held in the company’s special securities repurchase account through non trading transfer and other ways permitted by laws and regulations within 6 months after the deliberation and approval of the general meeting of shareholders. During the period from the announcement date of the resolution of the board of directors to the completion date of non transaction transfer, if the company has ex right and ex dividend matters such as conversion of capital reserve into share capital and distribution of shares, the number of underlying shares shall be adjusted accordingly. There is still uncertainty about the transfer of the final subject stock, and the final number of shares held shall be subject to the actual implementation.
The total number of shares of the company held by all effective employee stock ownership plans of the company shall not exceed 10% of the total share capital of the company, and the total number of shares corresponding to the share interests obtained by a single employee shall not exceed 1% of the total share capital of the company. 7. The purchase price of the company’s repurchased shares under the employee stock ownership plan is 16.36 yuan / share, which is equal to 50% of the closing price of 32.72 yuan / share on the previous trading day of the board of directors. During the period from the announcement date of the resolution of the board of directors to the completion date of non transaction transfer, if the company has ex right and ex dividend matters such as conversion of capital reserve into share capital, distribution of shares or cash dividends, the purchase price shall be adjusted accordingly.
8. The duration of the employee stock ownership plan is 3 years, which is calculated from the date when the employee stock ownership plan is reviewed and approved by the general meeting of shareholders and the subject shares announced by the company are transferred to the name of the employee stock ownership plan. The duration of the employee stock ownership plan can be extended after more than 50% (excluding 50%) of the rights and interests held by the holders with voting rights attending the shareholders’ meeting are agreed and submitted to the board of directors for deliberation and approval.
If the duration of the employee stock ownership plan expires and has not been extended, the employee stock ownership plan can be terminated automatically or in advance in accordance with relevant laws, regulations and the provisions of the employee stock ownership plan.
9. The lock-in period of the ESOP is 12 months, calculated from the date when the subject shares announced by the company are transferred to the name of the ESOP. During the lock-in period, the shares derived from the company’s share distribution, capital reserve converted into share capital, share allotment, convertible bond conversion and other circumstances shall also comply with the above share lock-in arrangements, and the ESOP shall not be traded during the lock-in period.
10. According to the appraisal results within the appraisal period, the employee stock ownership plan will attribute the corresponding rights and interests to each holder of the employee stock ownership plan in two phases, and the maximum attributable proportion of each phase is 50%.
The appraisal indicators of the employee stock ownership plan are divided into company performance appraisal indicators and individual performance appraisal indicators. Among them, the performance evaluation indicators of the company are as follows:
Performance assessment indicators in attribution period
The net profit in 2022 will increase by no less than 2 billion yuan compared with that in 2020, and the return on net assets of the company in the first vesting period in 2022 will not be less than 22%, the cash dividend per share in the current year will not be less than 2 yuan, or the total cash dividend will not be less than 50% of the net profit in the current year.
The net profit in 2023 will increase by no less than 3 billion yuan compared with that in 2020, and the return on net assets of the company in the second vesting period in 2023 will not be less than 21%, the cash dividend per share in the current year will not be less than 2 yuan, or the total cash dividend will not be less than 50% of the net profit in the current year.
Note 1: the above “net profit” refers to the audited net profit attributable to the shareholders of the listed company, in which the net profit increased by assessment is calculated based on the net profit attributable to the shareholders of the listed company before amortization of the share payment expenses involved in the implementation of equity incentive or employee stock ownership plan;
Note 2: the above “return on net assets” refers to the weighted average return on net assets, which is calculated according to the calculation method of No. 9 rules for the preparation of information disclosure of companies offering securities to the public – Calculation and disclosure of return on net assets and earnings per share, The net profit attributable to the shareholders of the listed company is calculated based on the net profit attributable to the shareholders of the listed company before amortization of the share payment expenses involved in the implementation of equity incentive or employee stock ownership plan.
At the expiration of the first assessment vesting period, if the company’s performance assessment indicators do not meet the standards, all the attributable shares in the first period will be deferred to the second assessment vesting period for combined assessment. If the company’s performance assessment indicators meet the standards in the second assessment vesting period, and the sum of the net profit growth in 2022 and 2023 compared with the net profit in 2020 is not less than 5 billion yuan, the management committee will combine the individual performance assessment results of employees, The attributable equity of the shares can be distributed in two periods.
Personal performance appraisal will be implemented according to the internal personal performance appraisal methods of the company.
11. The equity disposal of the employee stock ownership plan includes but is not limited to cash distribution, transfer of stock rights and interests to the individual securities account of the holder, etc. the specific disposal method shall be decided by the management committee.
12. After the establishment of the employee stock ownership plan, the company will manage it by itself and set up a management committee to exercise shareholders’ rights on behalf of the employee stock ownership plan.
13. The holders of the employee stock ownership plan are proposed to include a total of 8 or 9 directors (excluding independent directors), supervisors and senior managers. The above holders are related to the employee stock ownership plan. When the board of directors and the board of supervisors consider the relevant proposals of the employee stock ownership plan, the relevant personnel shall avoid voting.
The above directors, supervisors and senior managers promise not to hold positions in the Management Committee of the employee stock ownership plan, and give up their proposal and voting rights at the meeting of the holders of the employee stock ownership plan. The employee stock ownership plan does not form a concerted action relationship with the above directors, supervisors and senior managers. In addition to the above, there is no relationship between the ESOP and other directors, supervisors and senior managers of the company who do not participate in the ESOP.
In order to fully stimulate the enthusiasm of the company’s employees and ensure the realization of development strategies and business objectives, the shares of the employee stock ownership plan will be preferentially subscribed by middle-level cadres and core employees recognized by the board of directors as important to the overall performance and medium and long-term development of the company. If there is any surplus share of the employee stock ownership plan, Ms. Dong Mingzhu, chairman and President of the company, will subscribe according to law in combination with her own situation. Since the company has no controlling shareholder and actual controller, Ms. Dong Mingzhu, the chairman and President of the company, has a concerted action relationship with Zhuhai Mingjun investment partnership (limited partnership), which holds more than 5% of the shares of the company, and Ms. Dong Mingzhu, the chairman and President of the company, has the possibility of subscription, therefore, Ms. Dong Mingzhu and Zhuhai Mingjun investment partnership (limited partnership) should avoid voting during the deliberation of matters related to the employee stock ownership plan; If Ms. Dong Mingzhu, the chairman and President of the company, participates in the employee stock ownership plan, she promises not to hold a position in the Management Committee of the employee stock ownership plan, and gives up her personal proposal right and voting right at the meeting of the holders of the employee stock ownership plan. The employee stock ownership plan does not constitute a concerted action relationship with Ms. Dong Mingzhu, the chairman and President of the company and Zhuhai Mingjun investment partnership (limited partnership).
14. The holder of the employee stock ownership plan promises and authorizes the trade union to exercise the voting right (excluding the voting right of shares held by directors, supervisors and senior managers) according to the meaning of the trade union, without the prior written confirmation of the trade union, for the shares directly held due to the transfer of the stock rights and interests of the employee stock ownership plan to the individual securities account one year before the expiration of the ownership and transfer of all shares to the individual securities account, It is not allowed to sell or pledge by itself, otherwise the trade union has the right to recover its corresponding share proceeds, and the relevant proceeds shall be managed by the trade union by setting up a special account and enjoyed by other holders. The specific distribution method shall be determined by the holders.
15. The ESOP can only be implemented after being approved by the general meeting of shareholders of the company. After the board of directors deliberates and approves the ESOP, the company will promote the procedure of the general meeting of shareholders to deliberate the ESOP. The shareholders’ meeting of the company to review the employee stock ownership plan will adopt the combination of on-site voting and online voting. When the general meeting of shareholders votes on the ESOP, shareholders and persons acting in concert under the following circumstances shall avoid: participating in the ESOP, sharing income and other situations that may lead to preference of interests. The ESOP plan shall be adopted by more than half of the voting rights held by the non affiliated shareholders attending the meeting. 16. After the implementation of the employee stock ownership plan, the equity distribution of the company will not meet the requirements of listing conditions.
catalogue
Chapter I General Provisions 11 I. purpose of the employee stock ownership plan 11 II. Basic principles of the employee stock ownership plan 11 (I) principle of legal compliance 12 (II) principle of voluntary participation 12 (III) risk bearing principle 12 Chapter II holders, determination basis and subscription of the employee stock ownership plan 13 I. basis for determining the holders of the employee stock ownership plan 13 II. Verification of the holders of the employee stock ownership plan 13. III. information of the holders of the employee stock ownership plan Chapter III the source, scale and purchase price of funds and shares of the employee stock ownership plan 15 I. capital source and scale of the employee stock ownership plan 15 II. Stock source and scale of the employee stock ownership plan
