MING YANG SMART ENERGY GROUP LIMITED

(GDR under the symbol: "MYSE")

(a joint stock company established under the laws of the People's Republic of China with limited liability)

Announcement on Termination of 2022 Share Option Incentive Scheme

Ming Yang Smart Energy Group Limited (the "MYSE" or "Company") held the 12th meeting of the third session of Board of Directors and the 8th meeting of the third session of Board of Supervisors on 29 August 2024, and considered and approved the Resolution on Termination of the 2022 Share Option Incentive Scheme, agreeing to terminate the share option scheme and related supporting documents in view of the fact that it will be difficult to achieve the expected incentive purposes and effects if the 2022 Share Option Incentive Scheme is continued to be implemented. Details of which are set out as follows:

I. Summary of the Share Option Scheme

The Company held the 35th meeting of the second session of Board of Directors and the 31st meeting of the second session of Board of Supervisors on 10 November 2022, and considered and approved the Resolution on the Company's 2022 Share Option Incentive Scheme (Draft) and its Summary and Resolution on the Company's 2022 Share Option Incentive Scheme Implementation Assessment Administrative Measures and other resolutions. As of now, the resolution has not been submitted to the general meeting for consideration, and this share option scheme has not officially come into effect.

II. Reasons for Termination of the Share Option Scheme

The Company's 2022 Share Option Incentive Scheme is to further establish and improve the Company's long-term incentive mechanism, attract and retain outstanding talents, and fully mobilize the enthusiasm and creativity of the Company's core team. Since the Company's Board of Directors considered and approved the Share Option Scheme, the domestic and foreign market environment has changed significantly, and the original assessment targets have lost their timeliness. If the Company continues to adopt the share option scheme, it will be difficult to achieve the expected incentive purposes and effects.

In order to fully implement effective incentives for employees, safeguard the legitimate rights and interests of the Company and the majority of investors, and in combination with the Company's actual operating conditions and future strategic development, the Company's Board of Directors intended to terminate the 2022 Share Option Incentive Scheme, as well as the related supporting documents including 2022 Share Option Incentive Scheme (Draft) and 2022 Share Option Incentive Scheme Implementation Assessment Management Measures after careful consideration.

III. Impact of Termination of the Aforesaid Incentive Scheme on the Company

The 2022 Share Option Incentive Scheme has not been submitted to the general meeting for consideration, and the Company has not implemented the Share Option Scheme and has not granted the relevant rights and interests. Therefore, the termination of the Incentive Scheme does not involve repurchase and cancellation, and no related share-based payment expenses will be incurred. Such termination will not affect the Company's financial condition, and there is no situation that harms the interests of the Company and shareholders.

After the termination of the Share Option Scheme, the Company will, in accordance with the provisions of relevant laws and regulations, fully consider the conditions of industry and market and the actual situation of the Company, mobilize the enthusiasm of management and key business personnel by optimizing the compensation system and improving the performance appraisal system, and establish and improve the Company's long-term incentive mechanism, so as to promote the Company's continuous, healthy and stable development.

IV. Review Opinions of the Remuneration and Appraisal Committee of the Board of Directors

The Company's 2022 Share Option Incentive Scheme is to attract and motivate outstanding talents and establish an effective incentive mechanism. If the Company continues to implement the Share Option Scheme, it will be difficult to achieve the expected incentive purposes and effects. The proposed termination of the Incentive Scheme will not affect the diligence and responsibility of the Company's management and business backbones, is in line with the Company's overall development direction, and there will be no obvious damage to the interests of the Company and shareholders. The Company's Remuneration and Appraisal Committee agreed to terminate the share option incentive and submit the resolution to the Company's Board of Directors for consideration.

V. Opinions of the Board of Supervisors

The termination of the 2022 Share Option Incentive Scheme by the Company is in compliance with the relevant laws and regulations including Measures for the Administration of Equity Incentives for Listed Companies, normative documents and company regulations. As the Company's continued implementation of the Incentive Scheme is expected to be difficult to achieve the expected incentive purposes and effects, the termination will not have a significant impact on the Company's daily operations and future development, and there will be no obvious damage to the interests of the Company and shareholders. The Company's Board of Supervisors agreed to terminate the 2022 Share Option Incentive Scheme.

VI. Concluding Opinions of the Legal Opinion

The lawyers of Beijing Zhong Lun (Shenzhen) Law Firm are of the opinion that: as at the date of this legal opinion, the termination of the Incentive Scheme by the Company has obtained the necessary approvals and authorizations, which is in compliance with the relevant provisions of the Administrative Measures, the Articles of Association and the Incentive Scheme Draft; the reasons for termination of the Incentive Scheme are reasonable, and there are no circumstances that obviously jeopardize the interests of the Company and all of its shareholders; the termination of the Incentive Scheme is subject to the fulfillment of information disclosure obligations by the Company in accordance with relevant laws, regulations and normative documents.

 

Ming Yang Smart Energy Group Limited

30 August, 2024