Giant Wheels Launches First Equity Incentive Plan

“Equity incentive mechanism” is a kind of economic rights given to the managers by obtaining the equity of the company so that they can participate in corporate decision-making, profit-sharing, and risk-taking as shareholders, thus diligently and diligently serving the long-term development of the company. An incentive method. In foreign countries, the equity incentive system is regarded as the “golden handcuffs” that companies give to managers. This metaphor graphically illustrates the dual role of the incentive and restraint of the equity incentive system. Domestic listed companies generally use "stock options" or "restricted stocks" as incentive tools. On August 29, 2011, the board of directors of Giant Wheels launched the first equity incentive plan with "restricted stocks."

"Restricted Stocks" means that listed companies grant a certain number of shares of the company's stock according to pre-determined conditions. Incentive objects can only sell restricted stocks and benefit from them if their working years or performance targets meet the requirements of the equity incentive plan. . This time, the company adopts a directional issuance mode. According to the performance target determined at the beginning of the period, a certain number of stocks of the company will be granted to the incentive target at a price not lower than 50% in the secondary market. The incentive target needs to raise funds from the company’s stock.

The board of directors of the company has determined that December 29, 2011 is the date of grant, and granted restricted stock of 1,470 million shares to 19 companies, including directors, senior management personnel, middle-level cadres, and core technology and business personnel, accounting for 39,791 shares of the company’s total. For 3.69% of the shares, the price of the restricted stock granted to the incentive object was 3.99 yuan per share, and the grant price was determined based on 50% of the company's average share price of 7.98 yuan on the 20 trading days prior to the announcement of the equity incentive plan.

For the restricted stock granted according to this equity incentive plan, the incentive target must be unlocked when the company’s performance conditions meet the following conditions: (1) 2010 net profit is a fixed base, 2011, 2012, 2013 The annual net profit growth rate of the company is not less than 20%, 40% and 60% respectively; (2) 2011, 2012 and 2013 net assets return rate is not less than 7.5%; 8%; 8.5%; (3) The net profit of the previous year in the unlocking period is not lower than the average of the most recent three fiscal years and must not be negative. The lock-up period for restricted stocks granted was 1 year, and the unlocking period was 3 years. The 3 unlocking ratios were 40%, 30% and 30%, respectively. From the perspective of the design of the net profit growth index, it is significantly higher than the company’s average growth rate in the previous three years, which reflects the company’s confidence in the future development and reflects the company’s determination to continue to grow bigger and stronger. At the same time, the implementation of the equity incentive plan is conducive to the rational use of human resources, further improve the operating efficiency, closely integrate the interests of managers with the interests of all shareholders, and have a far-reaching and positive impact on the company's ability to continue operating and the increase in shareholders' equity.

Corporate governance is an incentive mechanism. Professor Zhang Weiying, a well-known economist, said one sentence: “Corporate governance structure is to distribute power and responsibility so that you can take responsibility for bad things, do good things and get benefits, so that you have the enthusiasm.” The company's first equity incentive With the smooth start-up and implementation, the company's board of directors will take the opportunity to launch the second-stage equity incentive plan to the company's middle-level cadres and core technology and business personnel, and strive to achieve a win-win situation for shareholders and employees.