SANY Heavy Industry Proposes 2026 Employee Stock Ownership Plan

[HK] SANY Heavy Industry: Overseas Regulatory Announcement - 2026 A-Share Employee Stock Ownership Plan (Draft)

Time: 2026-06-24 22:25:26 China Finance Network

Original Title: SANY Heavy Industry: Overseas Regulatory Announcement - 2026 A-Share Employee Stock Ownership Plan (Draft)

The Exchange takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness, and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

SANY HEAVY INDUSTRY CO., LTD. SANY Heavy Industry Co., Ltd. (a joint stock company incorporated in the People's Republic of China with limited liability) (Stock Code: 6031)

OVERSEAS REGULATORY ANNOUNCEMENT

This announcement is made pursuant to Rule 13.10B of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

Set out below is an announcement published by SANY Heavy Industry Co., Ltd. on the website of the Shanghai Stock Exchange (www.sse.com.cn) for reference only.

By Order of the Board SANY Heavy Industry Co., Ltd. Xiang Wenbo Executive Director and Chairman Hong Kong, 24 June 2026

As at the date of this announcement, the Board comprises (i) executive directors Mr. Xiang Wenbo and Mr. Yu Hongfu; (ii) non-executive directors Mr. Liang Wengen, Mr. Liang Zaizhong and Mr. Liu Daojun; and (iii) independent non-executive directors Mr. Wu Zhongxin, Ms. Xi Yan and Mr. Lan Yuquan.

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Stock Code: 600031 Stock Short Name: SANY Heavy Industry

SANY Heavy Industry Co., Ltd. 2026 A-Share Employee Stock Ownership Plan (Draft)

June 2026

Declaration

The Company and all directors guarantee that this employee stock ownership plan contains no false records, misleading statements or material omissions, and assume individual and joint liability for its authenticity, accuracy and completeness.

Special Reminders

1. This "SANY Heavy Industry Co., Ltd. 2026 A-Share Employee Stock Ownership Plan" (hereinafter referred to as "this ESOP") is formulated by SANY Heavy Industry Co., Ltd. (hereinafter referred to as the "Company" or "SANY Heavy Industry") in accordance with the "Company Law of the People's Republic of China" (hereinafter referred to as the "Company Law"), the "Securities Law of the People's Republic of China" (hereinafter referred to as the "Securities Law"), the "Guiding Opinions on the Pilot Implementation of Employee Stock Ownership Plans by Listed Companies" (hereinafter referred to as the "Guiding Opinions"), the "Shanghai Stock Exchange Listed Company Self-Regulatory Guidelines No. 1 - Standardized Operations" and other relevant laws, administrative regulations, rules, normative documents and the Company's Articles of Association.

2. The participants of this ESOP are directors, senior management, middle management, key position personnel, and core business (technical) personnel of the Company, totaling no more than 5,420 persons. All participants must be employed by the Company or its wholly-owned or controlling subsidiaries. Eligible employees participate in this ESOP on the principles of compliance with laws, voluntary participation, and self-risk bearing.

3. The total scale of this ESOP shall not exceed RMB 496,887,444. The funding source of this ESOP is the bonus reserve accrued in accordance with the Company's "Key Position Compensation Management Measures" and the "Notice on Implementing New Compensation Measures for Some Newly Hired Employees (Trial)" and other provisions.

4. The source of shares for this ESOP is the shares already repurchased by the Company in its special repurchase account, totaling no more than 23,328,049 shares, representing no more than 1% of the Company's current total share capital. The purchase price of the shares held in the Company's special securities account for repurchase under this ESOP is RMB 21.30 per share.

5. The total number of shares held by all effective employee stock ownership plans of the Company shall not exceed 10% of the Company's total share capital, and the total number of shares corresponding to the equity interests obtained by a single employee shall not exceed 1% of the Company's total share capital. If relevant laws, regulations and normative documents change the requirements for the maximum scale of this ESOP, the scale of this ESOP shall be adjusted accordingly.

6. The term of this ESOP is 72 months, commencing from the date when this plan is approved by the shareholders' meeting and the Company announces the last batch of underlying shares transferred to the name of this ESOP. This ESOP obtains the underlying shares through non-trade transfer and other methods permitted by laws and regulations. The underlying shares obtained under this ESOP shall not be traded during the lock-up period.

7. To optimize the talent structure and increase the attraction of "two new" and "three modernizations" talents, the equity interests of the underlying shares under the Company's 2026 ESOP are vested in two parts: (1) For employees under the salary system, the equity interests of the shares are vested to holders over 5 natural years, namely 2027, 2028, 2029, 2030 and 2031, with 20% vested to the holder's name each year; (2) For employees under the stock-based salary system, the equity interests of the shares are vested to holders over 2 natural years, namely 2027 and 2028, with 50% vested to the holder's name each year. After the lock-up period expires and each vesting year ends, the management committee will implement the distribution at its discretion based on market conditions.

8. This ESOP does not set performance assessment indicators for holders.

9. If a holder engages in dishonest or disloyal conduct against the Company, such as corruption, bribery, or infringing upon the Company's interests, the holder's participation qualification shall be cancelled, and the management committee has the right to compulsorily and gratuitously recover the ESOP shares held by the holder in the year of such conduct and thereafter, and the corresponding gains shall belong to the Company.

10. Regardless of the reason why a holder ceases to work for the Company, the holder's participation qualification shall be cancelled, and the management committee has the right to compulsorily and gratuitously recover the unallocated ESOP shares held by the holder, and the corresponding gains shall belong to the Company.

11. The management committee of this ESOP handles the cancellation of holders' qualifications and the disposal of shares held by disqualified holders.

12. The highest authority for internal management of this ESOP is the holders' meeting. Holders elect a management committee, which performs daily management duties, exercises shareholders' rights on behalf of holders, or authorizes a professional management institution to exercise shareholders' rights. This ESOP may appoint a professional management institution for management.

13. After the board of directors approves this ESOP, the Company will issue a notice to convene a shareholders' meeting to consider this ESOP. This ESOP can only be implemented after approval by the shareholders' meeting. The shareholders' meeting to consider this ESOP will adopt a combination of on-site and online voting.

14. Participation in this ESOP by employees follows the principles of the Company's independent decision and employees' voluntary participation. There is no forced participation by apportionment or mandatory distribution.

15. After this ESOP is implemented, the Company's total shares capital will not change, and the shareholding structure will not be affected. However, the lock-up of shares under this ESOP may cause the Company's equity distribution not to meet the conditions for listing.

16. This ESOP has no concerted action arrangement with the Company's directors, senior management, controlling shareholders, or actual controllers, nor does it have any plan for concerted action. This ESOP waives its voting rights at shareholders' meetings for the shares it holds during its term.

17. The financial and accounting treatment and taxation issues related to the implementation of this ESOP shall be handled in accordance with relevant financial systems, accounting standards, and tax systems. The relevant taxes and fees to be paid by employees due to the implementation of this ESOP shall be borne by the employees themselves.

Table of Contents

1. Purpose of ESOP 2. Basic Principles of ESOP 3. Participants and Determination Criteria 4. Funding and Share Sources 5. Holder Information 6. Term and Lock-up Period 7. Share Adjustment During Term 8. Participation in Financing During Term 9. Holders' Meeting 10. Management Committee 11. Management Model 12. Selection of Management Institution and Fees 13. Changes, Termination, and Disposal of Holders' Rights 14. Rights and Obligations of Company and Holders 15. Implementation Procedures 16. Other Important Matters

Definitions

Unless otherwise specified, the following definitions apply in this document:

Abbreviation	Definition
SANY Heavy Industry/Company/Our Company	SANY Heavy Industry Co., Ltd.
ESOP/This ESOP/This Plan/ESOP (Draft)	SANY Heavy Industry Co., Ltd. 2026 A-Share Employee Stock Ownership Plan (Draft)
Holder	Person who chooses to participate in this ESOP and obtains a certain number of shares
Controlling Shareholder/Sany Group	Sany Group Co., Ltd.
CSRC	China Securities Regulatory Commission
Exchange	Shanghai Stock Exchange
Yuan, 10,000 Yuan, 100 Million Yuan	RMB Yuan, RMB 10,000, RMB 100 million
Company Law	Company Law of the People's Republic of China
Securities Law	Securities Law of the People's Republic of China
Guiding Opinions	Guiding Opinions on the Pilot Implementation of Employee Stock Ownership Plans by Listed Companies
Self-Regulatory Guidelines	Shanghai Stock Exchange Listed Company Self-Regulatory Guidelines No. 1 - Standardized Operations
Articles of Association	Articles of Association of SANY Heavy Industry Co., Ltd.

1. Purpose of the ESOP

To further improve the corporate governance structure of SANY Heavy Industry Co., Ltd., promote the establishment and improvement of incentive and restraint mechanisms, fully mobilize the enthusiasm and creativity of the Company's directors, senior management and employees, effectively combine the interests of shareholders, the Company, and operators, and enable all parties to focus on the long-term development of the Company, the Company has formulated this draft plan in accordance with the Company Law, Securities Law, Guiding Opinions, Self-Regulatory Guidelines, and other laws, regulations, normative documents and the Articles of Association.

2. Basic Principles of the ESOP

(1) Principle of Compliance with Laws

The Company implements this ESOP strictly in accordance with laws and administrative regulations, fulfilling procedures and carrying out information disclosure in a true, accurate, complete and timely manner. No one may use this ESOP for insider trading, market manipulation or other securities fraud.

(2) Principle of Voluntary Participation

The Company implements this ESOP on the basis of the Company's independent decision and employees' voluntary participation. The Company does not force employees to participate through apportionment or mandatory distribution.

(3) Principle of Self-Risk Bearing

Participants in this ESOP are fully responsible for their own profits and losses and bear risks themselves, with equal rights to other investors.

3. Participants and Determination Criteria

(1) Legal Basis for Determining Participants

The Company determines the list of participants of this ESOP based on relevant provisions of the Company Law, Securities Law, Guiding Opinions, Self-Regulatory Guidelines and other laws, regulations, normative documents and the Articles of Association, combined with actual circumstances. All participants must be employed by the Company or its wholly-owned or controlling subsidiaries.

(2) Criteria for Determining Participants

Participants in this ESOP should meet one of the following criteria:

1. Directors (excluding independent directors) and senior management of the Company;
2. Middle management personnel of the Company;
3. Key position personnel and core business (technical) personnel.

(3) Verification of Participants

The lawyer engaged by the Company shall issue clear opinions on whether the participants are legal and compliant.

4. Funding and Share Sources

(1) Funding Source

The total scale of this ESOP shall not exceed RMB 496,887,444. The funding source is the bonus reserve accrued in accordance with the Company's "Key Position Compensation Management Measures" and the "Notice on Implementing New Compensation Measures for Some Newly Hired Employees (Trial)" and other provisions.

(2) Share Source

The shares for this ESOP come from the Company's repurchase account, totaling no more than 23,328,049 shares, representing no more than 1% of the Company's current total share capital. The purchase price is RMB 21.30 per share.

The total number of shares held by all effective employee stock ownership plans of the Company shall not exceed 10% of the Company's total share capital, and the total number of shares corresponding to the equity interests obtained by a single employee shall not exceed 1% of the Company's total share capital. Shares held by the employee stock ownership plan do not include shares obtained by employees before the Company's initial public offering, shares purchased through the secondary market, and shares obtained through equity incentives.

After this draft plan is approved by the shareholders' meeting, this ESOP will obtain the shares held in the Company's special securities account for repurchase through non-trade transfer and other methods permitted by laws and regulations.

5. Holder Information

The participants and the upper limit of granted shares and allocation under this ESOP are determined by the Company's board of directors, which may adjust the list of participants and their granted shares based on actual payment conditions.

The participants of this ESOP are directors, senior management, middle management, key position personnel, and core business (technical) personnel of the Company, totaling no more than 5,420 persons. The estimated grant proportion is shown in the table below:

No.	Name	Position	Granted Amount (RMB)	Proportion
I. Directors and Senior Management
1	Sun Xinliang	Vice President	765,724	0.15%
2	Zhang Ke	Vice President	2,900,004	0.58%
3	Qin Zhiyu	Board Secretary	440,000	0.09%
Subtotal for Directors and Senior Management		4,105,728	0.83%
II. Middle Management, Key Position Personnel, Core Business (Technical) Personnel
Subtotal for Middle Management, Key Position Personnel, Core Business (Technical) Personnel		492,781,716	99.17%
Total		496,887,444	100%

6. Term and Lock-up Period

(1) Term of the ESOP

1. The term of this ESOP is 72 months, commencing from the date when this plan is approved by the shareholders' meeting and the Company announces the last batch of underlying shares transferred to the name of this ESOP. The ESOP may be terminated early, and the term may be extended upon expiration according to relevant regulatory provisions. In case of force majeure (including but not limited to war, natural disasters) causing the suspension of trading on the Shanghai Stock Exchange, the term of the ESOP will be automatically extended by the same period as the suspension. During the suspension period, holders may not withdraw, transfer, pledge, guarantee or repay debts with their ESOP shares.
2. One month before the expiration of the term, with the consent of more than two-thirds (not including) of the shares held by holders attending the holders' meeting and approval by the board of directors, the term may be terminated early or extended.
3. If the Company's shares are suspended or due to window periods, causing the shares held by this ESOP to be unable to be fully realized before the expiration of the term, with the consent of more than two-thirds (not including) of the shares held by holders attending the holders' meeting and approval by the board of directors, the term may be extended.

(2) Lock-up Period

1. The lock-up period of this ESOP is 12 months, commencing from the date when the last batch of underlying shares is transferred to the name of this ESOP.
2. This ESOP will strictly comply with market trading rules and the relevant provisions of the CSRC and Shanghai Stock Exchange on stock trading. It shall not buy or sell shares during the following periods: (1) Within 15 days before the announcement of annual and semi-annual reports; (2) Within 5 days before the announcement of quarterly reports, performance forecasts, and performance express; (3) From the occurrence or decision-making process of major events that may have a significant impact on the trading price of the Company's securities and derivatives until the disclosure date; (4) Other periods stipulated by the CSRC and Shanghai Stock Exchange. The trading restrictions of this ESOP shall be implemented in accordance with the newly revised relevant provisions of the CSRC and Shanghai Stock Exchange.

7. Share Adjustment During Term

When the Company implements financing, capitalization of reserves, distribution of dividends, bonus shares, share consolidation, etc., the shares held by the ESOP will be treated on a pro rata basis according to the principle of same share same rights.

8. Participation in Financing During Term

During the term of this ESOP, if the Company conducts financing through rights issues, additional offerings, convertible bonds, etc., the management committee will submit to the holders' meeting for consideration whether to participate and the funding solution.

9. Holders' Meeting

(1) Powers of the Holders' Meeting

The participants become holders after being granted ESOP shares. The holders' meeting is the highest authority of this ESOP, composed of all holders. All holders have the right to attend the holders' meeting and vote according to their shareholding. The holders' meeting exercises the following powers:

1. Elect and remove members of the management committee;
2. Review changes, termination, extension and early termination of this ESOP, and submit to the board of directors for approval;
3. Review whether the ESOP participates in the Company's rights issues, additional offerings, convertible bonds and other financing during its term;
4. Authorize the management committee to exercise shareholders' rights;
5. Other powers stipulated by laws, regulations, rules, normative documents or this ESOP (Draft).

(2) Convening Procedure

1. The first holders' meeting is convened and presided over by the chairman of the Company or his authorized representative. Subsequent meetings are convened by the management committee and presided over by the director of the committee. If the director is unable to perform duties, he/she appoints a committee member to preside.
2. Holders individually or collectively holding more than 30% of the ESOP shares may propose to convene a holders' meeting.
3. Holders individually or collectively holding more than 30% of the ESOP shares may submit provisional proposals to the holders' meeting, which must be submitted to the management committee at least 3 working days before the meeting.
4. The convenor shall send a notice at least 5 days before the meeting by direct delivery, mail, fax, email or other means to all holders. The notice shall include at least the time, place, manner, main items to be considered, necessary meeting materials, contact person and phone number, and date of the notice. Oral notice shall at least include the time, place, manner, and explanation of urgency.
5. Voting Procedure: (1) Each holder exercises voting rights according to the shares he/she holds, with one vote per share. Voting is by secret ballot. (2) After full discussion, the chairperson shall promptly ask attendees to vote. The chairperson may also decide to vote after all proposals have been discussed. Voting is by written ballot. (3) The voting intention is "for", "against" or "abstain". Attendees must choose one; no choice or multiple choices are deemed abstention. Voting after the chairperson announces results or after the stipulated time is not counted. (4) Each motion is passed if it receives more than 50% (not including) of the votes held by attending holders. (5) Resolutions that need to be submitted to the board of directors or shareholders' meeting shall be submitted in accordance with the Articles of Association. (6) The chairperson arranges for recording of the meeting.

10. Management Committee

1. This ESOP establishes a management committee to oversee daily management, be responsible to the holders' meeting, and exercise shareholders' rights on behalf of holders.
2. The management committee consists of 5 members, including one director. Members are elected by the holders' meeting. The director is elected by a majority of all committee members and serves for the term of this ESOP.
3. The management committee shall manage the assets of this ESOP in accordance with relevant laws, administrative regulations, departmental rules, this plan and the "Management Measures for the ESOP", and protect the legitimate rights and interests of holders, ensuring the safety of assets. The committee has the following fiduciary duties: (1) Not to accept bribes or illegally obtain income, not to encroach on ESOP property; (2) Not to misappropriate ESOP funds; (3) Not to open accounts in personal names for ESOP assets without holders' meeting consent; (4) Not to lend ESOP funds or provide guarantees with ESOP property without holders' meeting consent; (5) Not to abuse power to harm ESOP interests. Committee members who violate fiduciary duties and cause losses shall bear compensation liability.
4. The management committee performs the following duties: (1) Convene holders' meetings; (2) Represent all holders to monitor daily management; (3) Exercise shareholders' rights on behalf of all holders or authorize professional institutions; (4) Manage distribution of ESOP benefits; (5) Handle registration of inheritance of ESOP shares; (6) Handle other matters related to this ESOP; (7) Other duties granted by the holders' meeting.
5. The director exercises the following powers: (1) Preside over holders' meetings and convene/preside over management committee meetings; (2) Supervise and inspect implementation of resolutions; (3) Other powers granted by the management committee.
6. The management committee meets irregularly, convened by the director with at least 1 day notice.
7. Holders or committee members representing more than one-third (not including) of the shares may propose an interim meeting. The director shall convene and preside within 5 days of receiving the proposal.
8. A meeting is valid only if more than half of the committee members attend. Resolutions must be passed by more than half of all committee members. Each member has one vote.
9. Voting is by secret ballot. Meetings may be held by fax or online with signatures.
10. Committee members should attend in person; if unable, they may appoint another member in writing with a proxy specifying the agent, scope of authority, and validity period. Absent members without proxy are deemed to have waived voting rights.
11. Minutes of meetings shall be made and signed by attending members.

11. Management Model

(1) The highest internal management authority is the holders' meeting; management structure exercises shareholders' rights; the board of directors formulates and amends this draft and handles other related matters within the scope of shareholders' meeting authorization.

(2) Matters authorized by the shareholders' meeting to the board of directors include: 1. All matters necessary for establishing and implementing this ESOP; 2. Deciding on amendments and changes; 3. Deciding on extension or shortening of term and lock-up period; 4. Considering resolutions submitted by the holders' meeting; 5. Adjusting this ESOP if policies change; 6. Interpreting this draft; 7. Changing participants and determination criteria; 8. Authorizing the management committee to handle unlocking and selling of shares; 9. Nominating candidates for the management committee; 10. Other matters within the scope permitted by law.

12. Selection of Management Institution and Fees

This plan is self-managed by the Company, involving no external management institution and thus no management fees.

13. Changes, Termination, and Disposal of Holders' Rights

(1) Changes to this ESOP must be approved by more than two-thirds of shares held by attending holders' meeting and then by the board of directors.

(2) Termination: 1. Automatic termination upon expiry; 2. Early termination if all shares are sold; 3. Extension or early termination as per procedure.

(3) Disposal of Holders' Rights:

1. Vesting: (1) Salary system employees: 20% per year from 2027 to 2031; (2) Stock-based salary system employees: 50% per year in 2027 and 2028. Distribution after lock-up and vesting.
2. No performance assessment indicators.
3. During term, holders may not withdraw, pledge, guarantee or repay debts with their shares except as otherwise provided.
4. Transfer of ESOP shares without management committee consent is invalid.
5. Dishonest or disloyal conduct: cancellation of qualification and mandatory recovery of shares in the year of conduct and thereafter. Specific situations include: corruption, embezzlement, bribery, causing losses, falsifying resumes, leaking secrets, malicious attacks on information security, concealing incidents, damaging reputation, violating integrity systems.
6. Termination of employment for any reason: cancellation of qualification and mandatory recovery of unallocated shares. Specific situations include: resignation, dismissal, retirement without re-employment agreement, contract expiration without renewal, termination due to personal reasons, failure to meet performance standards, death.
7. No change in cases: position change still meeting conditions, retirement with re-employment agreement, retirement without re-employment agreement, other cases recognized by management committee.
8. During lock-up: no distribution; bonus shares locked; cash dividends recorded as monetary assets; no separate distribution.
9. Management committee handles cancellation and disposal.

14. Rights and Obligations of Company and Holders

(1) Company's Rights: Cancel qualification if holder engages in dishonest acts. Company's Obligations: Timely and accurate information disclosure.

(2) Holder's Rights: Participate in holders' meeting and vote; enjoy relevant rights according to shareholding. Holder's Obligations: Comply with ESOP provisions; bear investment risks; comply with holders' meeting resolutions.

15. Implementation Procedures

1. Board of directors formulates draft plan. 2. Company solicits opinions from employee representatives. 3. Board approves draft; compensation committee issues opinion. 4. Announce board resolution, draft plan, compensation committee opinion within 2 trading days. 5. Engage lawyer to issue legal opinion; announce before shareholders' meeting. 6. Shareholders' meeting approval with combined on-site and online voting; related parties abstain. 7. Within 2 trading days after shares are transferred to ESOP account, disclose details. 8. Holders' meeting within 10 days after establishment to specify implementation details.

16. Other Important Matters

1. Approval of this ESOP does not imply employment commitment; employment relationships are governed by individual contracts.
2. Financial and tax treatment per relevant systems; taxes borne by employees.
3. No concerted action with directors, senior management, controlling shareholders or actual controllers; waives voting rights.
4. Interpretation by board of directors.

Board of Directors of SANY Heavy Industry Co., Ltd. June 2026