Huaxin Cement Co., Ltd. Announcement on the Second period of Stock Option Incentive Plan of the Company Meeting the Exercise Conditions

Transcription

1 Stock Code: , Stock Abbreviation: Huaxin Cement, Huaxin B Share Ref.: Huaxin Cement Co., Ltd. Announcement on the Second period of Stock Option Incentive Plan of the Company Meeting the Exercise Conditions To the best of our knowledge, the Board of Directors of the Company and its members confirm that there is no material false or misleading statement or material omission in this announcement and shall be severally and jointly liable for the truthfulness, accuracy and completeness of its content. Important Notice: Planned Volume of the exercisable stock options: 898,320 Source of the stock: Participants targeted private placement of 898,320 stocks By Reviewing and checking, the Remuneration and Assessment Committee confirms that the exercise conditions for the Second period of The Stock Option Incentive Plan of Huaxin Cement Co., Ltd. (Revised Version) (hereinafter referred to as The Stock Option Incentive Plan) are mature and 898,320 stock options can be exercised from July 17, 2015 to July 16, Details are as follows: I. Explanation on the exercise conditions of The Stock Option Incentive Plan Exercise conditions Explanation on the qualification in exercise conditions 1. The following situations should have not occurred to the Company ⑴ The certified public accountants issued a negative opinion on the latest annual financial report or an audit report could not be commented; ⑵ Punished by the Chinese Securities Regulatory Commission in the previous year due to a major illegal activity; ⑶ Other circumstances recognized by China Securities Regulatory Commission. 2. The Company should also meet the following Performance conditions : ⑴During the vesting period before exercising, both the net profit attributable to the shareholders of the listed Company and the net profit after extraordinary items No situation in which relevant persons be deprived the exercise right occurred within the Company, and the exercise conditions for The Stock Option Incentive Plan has been satisfied. Audited by PricewaterhouseCoopers Zhong Tian CPAs Limited Company: net profit attributable to shareholders of the Company and 2014 net profit attributable to shareholders of the Company after extraordinary items are 1,221.6 million Yuan and 1,121.9 million Yuan respectively; the average net profit attributable to shareholders of the Company

2 attributable to the shareholders of the listed Company should be not lower than the average of those in the three financial years prior to the grant date and it can t be a negative figure. ⑵ Return on net assets(%) for 2014 should be not less than 10%; from the granting of the stock options to the start of the second exercise period, average growth rate of net profits each year should be not less than 25% and the average net profit attributable to shareholders of the Company after extraordinary items from 2010 to 2012 are million Yuan and million Yuan respectively. Both figures of 2014 net profit attributable to shareholders of the Company and 2014 net profit attributable to shareholders of the Company after extraordinary items are higher than the annual average figures from 2010 to 2012, and not negative Return on net assets (%) was 14.35%, the net profits of the Company increased by % on year-on-year basis Return on net assets (%) was 13.19%, the net profits of the Company increased by 3.47% on year-on-year basis. The average net profits growth rate of year 2013 and 2014 was 57.97% In conclusion, the Company has reached the above performance requirements. 2. All the participants are qualified in the exercise conditions Exercise conditions Any one of the following situations should not occurred to the participants: 1. Publicly condemned by Stock Exchanges or declared as an inappropriate choice by Stock Exchanges in the last three years; 2. Received Administrative punishment from the China Securities Regulatory Commission due to the major illegal behavior in the last three years; 3. personnel shall not take positions as Directors or Senior Management members according to the Company Law. 4. Other serious behaviors violating the relevant provisions which recognized by the Company's Board of Directors; According to the Company's Remuneration and Performance Management Policy, the participants would obtain the qualification for grant and exercise Explanation on the qualification in exercise conditions According to the resolution on the assessment for participants of the Remuneration and Assessment Committee: all 13 participants are qualified in the exercise conditions for the stock option plan 1. All the participants have not involved in the afore-listed 4 situations in which relevant persons should be deprived the exercise rights. 2. All granted participants should have met the Pass or Above in his/her 2014 performance assessment.

3 rights only when meeting the Company performance target and achieving a Pass or Above with his/her past year performance assessment. 3. By reviewing and checking, it was confirmed that the participants did not purchase or sell the Company s stocks in the previous 6 months before the exercise period. 4. The exercising by the participants is in accordance with exercise conditions of the second period of the Stock Option Incentive Plan of the Company, and the participants have legal and valid identities. II. Specifics of the exercise 1. Granting date: July 16, Volume of the exercisable stock options: 898, Number of the participants: number of exercisable participants for this time is Exercise price: 8.89 Yuan/share (it is an adjusted price after the Company conducted 1.7 Yuan (incl. tax) dividend for 10 shares in 2014). 5. Source of the stock: private placement targeted on participants. 6. Exercise arrangement: This is the second exercise period. The Shareholders General Meeting of the Company authorized the Board of Directors to conduct uniformly the relevant registration procedures for registering the stock option exercise of participants and exercisable shares during the window period defined by the relevant policies, and define the day on which China Securities Depository & Cleaning Corp. Ltd. Shanghai Branch completing the registration of shares changes as the exercise day, as well as dispose with the commercial registration for the changes and all other procedures after finishing the exercise. 7. The second Exercise period: from July 17, 2015 to July 16, 2016 After the exercise period, granted but not exercised stock options will no longer be allowed to be exercised, and will be cancelled by the Company. 8. Participants and their exercise rights

4 Name Position Number of Proportion to stock options the current to be granted total share under the capital Plan Li Yeqing CEO 171, % Wang Ximing VP 89, % Kong Lingling VP 96, % Ke Youliang VP 89, % Hu Zhenwu VP 78, % Liu Fengshan VP 80, % Feng Dongguang AVP 41, % Yang Hongbing AVP 41, % Du Ping AVP 41, % Mei Xiangfu AVP 41, % Yuan Dezu AVP 41, % Chen Bing AVP 41, % Liu Yunxia AVP 41, % Total , % III. Independent Opinions from Independent Directors on the Implementation of the Stock Option Incentive Plan 1. The Company is in compliance with the Measures for the Administration of Equity Incentive Plans of Listed Companies (For Trial Implementation), Equity Incentive Related Matters Memorandum No. 1-3, The Implementation Measurement Plan for Stock Option Incentive Plan of Huaxin Cement Co., Ltd. and other relevant regulations on the implementation of the stock option incentive plan. The Company has the qualification to conduct the incentive plan, and there was no situation in which relevant persons should be deprived the exercise rights occurred within the Company. 2. Confirmed by reviewing and checking, the participants with exercise rights for this time are qualified in the exercise conditions, and their identities as participants with exercise rights are in compliance and valid. 3. The Company s arrangement for the stock option exercise violates no stipulations in relevant laws or regulations. 4. The Company undertakes that it will not provide loans, loan guarantees or plans/arrangements of financial assistance to the participants. This stock option exercise poses no harm to the Company or all shareholders. Based on the above reasons, the Remuneration and Assessment Committee agrees that the qualified participants to exercise the stock options during the second exercise

5 period defined in the Stock Option Incentive plan of the Company. IV. Conclusive Opinions of the Lawyers Hubei Sunshine Law Firm issued Legal Opinions on the Implementation of the Stock Option Incentive Plan (Phase II) of Huaxin Cement Co., Ltd. and regarded that the Company has carried out appropriately the approval and authorization procedures in respect of the qualification of the Company for the stock option exercise, the qualification of the participants for the stock option exercise and other relevant issues, the exercise conditions are in compliance with relevant stipulations in Measures for the Administration of Equity Incentive Plans of Listed Companies (For Trial Implementation) and The Stock Option Incentive Plan. V. Documents for Inspection 1. Resolution of the Third Meeting of the Eighth Board of Directors 2. Resolution of the Second Meeting of the Eighth Board of Supervisors 3. Independent opinions from Independent Directors on the Implementation of the Stock Option Incentive Plan 4. Legal Opinions on the Implementation (of the second period) of the Stock Option Incentive Plan of Huaxin Cement Co., Ltd. Issued by Hubei Sunshine Law Firm It is herewith announced. Huaxin Cement Co., Ltd. Board of Directors July 4, 2015