Youyou Food (603697): Youyou Food 2026 Employee Stock Ownership Plan Management Measures
Original title: Youyou Food: Youyou Food 2026 Employee Stock Ownership Plan Management Measures
Youyou Food Co., Ltd.
2026 Employee Stock Ownership Plan Management Measures
Chapter I General Provisions
Article 1 To standardize the implementation of Youyou Food Co., Ltd. (hereinafter referred to as "Youyou Food" or the "Company") 2026 Employee Stock Ownership Plan (hereinafter referred to as the "Plan"), this Management Measure is formulated 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 Self-Regulatory Guidelines No. 1 for Listed Companies on the Shanghai Stock Exchange – Standardized Operations (hereinafter referred to as the "Self-Regulatory Guidelines No. 1"), and other relevant laws, administrative regulations, normative documents, as well as the Company's Articles of Association and the 2026 Employee Stock Ownership Plan (Draft).
Chapter II Formulation of the Employee Stock Ownership Plan
Article 2 Purpose of the Plan
The Company has formulated the Plan in accordance with the Company Law, Securities Law, Guiding Opinions, Self-Regulatory Guidelines No. 1, and other relevant laws, regulations, normative documents, and the Company's Articles of Association. The implementation of the Plan aims to continuously improve and perfect the long-term incentive and restraint mechanism for sharing benefits and risks, fully mobilize the work enthusiasm and innovative initiative of directors, senior management, and other core personnel, enhance the system for introducing and retaining core talents, and solidify the Company's talent foundation. The Plan deeply binds the interests of participants with the Company's operating performance and long-term intrinsic value, building a community of interests and a community of cause among the Company, shareholders, and core employees, further optimizing corporate governance,凝聚 team strength, enhancing core competitiveness, promoting steady improvement of the Company's operating performance, achieving synergistic improvement of the Company's value and the interests of all shareholders, and helping the Company sustainably implement a high-quality sustainable development strategy.
Article 3 Basic Principles of the Plan
(1) Principle of Compliance with Laws and Regulations: The Company implements the Plan strictly in accordance with laws and administrative regulations, fulfills procedures, and conducts information disclosure in a true, accurate, complete, and timely manner. No one may use the Plan for insider trading, market manipulation, or other securities fraud.
(2) Principle of Voluntary Participation: The Company implements the Plan based on its own decision, and employees voluntarily participate. The Company shall not force employees to participate in the Plan through allocation, compulsory distribution, or other means.
(3) Principle of Self-Risk Bearing: Participants in the Plan bear their own profits and losses, assume their own risks, and have equal rights and interests with other investors.
Article 4 Procedures for Implementing the Plan
(1) The Board of Directors and its Remuneration and Appraisal Committee are responsible for drafting the Plan.
(2) Before implementing the Plan, the Company shall fully solicit employee opinions through employee congresses and other organizations.
(3) The Board of Directors shall deliberate on the relevant resolutions of the Plan, and directors related to the Plan shall abstain from voting.
(4) The Board Remuneration and Appraisal Committee shall express its opinion on whether the Plan is conducive to the sustainable development of the Company, whether it damages the interests of the Company and all shareholders, and whether there are ways such as allocation or compulsory distribution to force employees to participate.
(5) Within two trading days after the Board of Directors approves the draft Plan, the Company shall announce the Board resolution, the draft Plan and summary, and the opinion of the Board Remuneration and Appraisal Committee.
(6) The Company shall engage a law firm to issue a legal opinion on whether the Plan and related matters are legal and compliant, and whether necessary decision-making and approval procedures have been fulfilled, and shall announce the legal opinion before the shareholders' meeting to consider the Plan.
(7) When convening a shareholders' meeting to consider the Plan, shareholders related to the Plan shall abstain from voting. The shareholders' meeting shall vote by a combination of on-site voting and online voting. The Plan may be implemented after being approved by more than half of the valid voting rights present at the shareholders' meeting.
(8) Hold a meeting of holders of the employee stock ownership plan to elect members of the management committee, clarify specific matters for implementing the Plan, and timely disclose the meeting situation and relevant resolutions.
(9) The Company shall, within two trading days after the completion of the purchase of the underlying stock, disclose the time and quantity of the acquired stock in the form of a temporary announcement.
(10) Other procedures required by the China Securities Regulatory Commission and the stock exchange.
Article 5 Participants of the Plan and Criteria for Determination
(1) The participants of the Plan are determined in accordance with the Company Law, Securities Law, Guiding Opinions, Self-Regulatory Guidelines No. 1, and other relevant laws, regulations, normative documents of the China Securities Regulatory Commission and the stock exchange, as well as the Company's Articles of Association, and in light of actual conditions.
(2) The participants of the Plan are directors (excluding independent directors), senior management, and other core personnel of the Company (including its consolidated subsidiaries and branches) who play an important role in the overall performance and long-term development of the Company. All participants must sign a labor contract or employment contract with the Company during the validity period of the Plan. None of the participants in the Plan are shareholders who individually or collectively hold 5% or more of the Company's shares, or actual controllers, or their spouses, parents, or children.
(3) The initial number of participants in the Plan is no more than 175 persons, including 3 directors and senior management. The specific number of participants is subject to the number of employees who actually voluntarily participate.
(4) The Plan uses "units" as the subscription unit, with each unit being 1 yuan. The total amount of funds to be raised shall not exceed 48 million yuan, and the total number of units held shall not exceed 48 million units. The distribution of initial participants is as follows:
| No. | Name | Position | Proposed Subscription Units (10,000 units) | Proportion of Plan | Corresponding Number of Shares (10,000 shares) |
|---|---|---|---|---|---|
| 1 | Li Xuehui | Director, Deputy General Manager | not exceeding 420 | not exceeding 8.75% | not exceeding 40.1530 |
| 2 | Cui Haibin | Director, Chief Financial Officer | |||
| 3 | Xie Yaling | Board Secretary | |||
| Other core personnel (no more than 172 persons) | not exceeding 4,380 | not exceeding 91.25% | not exceeding 418.7380 | ||
| Total | not exceeding 4,800 | 100% | not exceeding 458.8910 |
Note: 1. The number of Company shares corresponding to the Plan units held by any one holder shall not exceed 1% of the total share capital of the Company; 2. The number of shares corresponding to the above proposed subscription units is calculated based on the closing price of the Company's stock as of June 10, 2026; the final number will be determined based on the actual payment amount and the actual transaction price of the underlying stock; 3. Any discrepancies in the totals due to rounding.
The final number, list of holders, and the units subscribed for the Plan shall be based on the actual contributions made by employees. If some employees give up subscription, the Board authorizes the Management Committee to reallocate such rights and interests to other eligible employees or dispose of them in other ways permitted by laws and regulations.
Article 6 Sources of Funding for the Plan
The funding sources for the Plan include the Company's incentive fund, employees' legal remuneration, self-raised funds, and funds obtained through other means permitted by laws and administrative regulations. The incentive fund is part of employee remuneration and will, in principle, be charged to current period expenses on an accrual basis. The final impact on the Company's operating performance is subject to the audit report issued by the accountants.
The total amount of funds to be raised by the Plan shall not exceed 48 million yuan, of which the total amount of the Company's incentive fund shall not exceed 24 million yuan. The specific amount will be determined based on actual capital contributions.
The Plan does not involve leveraged funds. The Company does not provide financial assistance or guarantee loans for employees, nor do any third parties provide rewards, subsidies, or guarantees to participants.
Article 7 Source and Scale of Underlying Stock Covered by the Plan
The shares of the Plan are underlying stocks purchased through secondary market bidding transactions within six months after the shareholders' meeting approves the Plan. The purchase price is the market price.
The total amount of funds to be raised by the Plan shall not exceed 48 million yuan, with the specific amount determined by actual capital contributions. Based on the closing price of 10.46 yuan per share on June 10, 2026, as the average purchase price, the number of shares involved in the Plan is approximately 4,588,910 shares, accounting for 1.0729% of the Company's current total share capital (the specific number of shares is subject to the actual transaction result; the Company will disclose the purchase of the Plan in accordance with regulatory requirements).
After the implementation of the Plan, 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 Plan units held by a single employee shall not exceed 1% of the Company's total share capital. The total number of underlying stocks does not include shares obtained by holders before the Company's initial public offering, shares purchased through the secondary market, or shares obtained through equity incentives.
Article 8 Duration, Lock-up Period, and Assessment Requirements of the Plan
(1) Duration of the Plan
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The duration of the Plan is 48 months, starting from the date on which the Plan draft is approved by the shareholders' meeting and the Company announces the completion of the purchase of the last batch of underlying stocks. If the duration expires without extension, the Plan will automatically terminate.
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Before the expiration of the duration, the Management Committee may propose to the Board of Directors to extend the duration, subject to approval by the Board.
(2) Lock-up Period and Unlocking Arrangements
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The Plan is unlocked in two tranches, each unlocking 50% of the underlying stocks. The unlocking point is 12 months and 24 months after the shareholders' meeting approves the Plan and the Company announces the completion of the purchase of the last batch of underlying stocks.
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Shares derived from the underlying stocks due to stock dividends, capitalization of capital reserves, etc., shall also be subject to the above lock-up and unlocking arrangements.
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Trading Restrictions: During the lock-up period, the underlying stocks of the Plan cannot be traded. After the lock-up period, the Plan will strictly comply with market trading rules and the relevant provisions of the China Securities Regulatory Commission and the stock exchange on stock trading, and shall not buy or sell Company shares during the following periods:
- Within 15 days before the announcement of the annual report and semi-annual report; if the announcement is delayed for special reasons, from 15 days before the original scheduled announcement date to the day before the announcement;
- Within 5 days before the announcement of performance forecasts, performance express, and quarterly reports;
- From the occurrence of major events that may have a significant impact on the trading price of the Company's stock and its derivatives, or from the date of entering the decision-making process, to the date of lawful disclosure;
- Other periods stipulated by the China Securities Regulatory Commission and the stock exchange. If the relevant laws, administrative regulations, departmental rules, or normative documents on the above periods of non-trading change, the latest provisions shall apply.
(3) Assessment Arrangements
- Company-Level Performance Assessment: The performance assessment years at the company level are 2026 and 2027, with one assessment each year. The performance targets are as follows:
| Performance Assessment Indicator | Performance Target Value |
|---|---|
| Revenue | First Unlocking Period: Based on 2025 performance, 2026 revenue growth rate not less than 25% |
| Second Unlocking Period: Based on 2025 performance, 2027 revenue growth rate not less than 50% |
Note: "Revenue" refers to the audited consolidated revenue of the listed company.
If the company-level performance target is not achieved, the corresponding unlocking period's rights and interests of the holders shall not be unlocked. The Management Committee shall recover and dispose of such rights and interests according to the Board's authorization, including but not limited to repurchase by the Company for cancellation, use for subsequent employee stock ownership plans/equity incentive plans, or other means permitted by laws and regulations. The holders shall be refunded their original contribution amount, and any gains from the disposal of the underlying stocks (if any) shall belong to the Company.
- Individual Performance Assessment: The actual unlockable units of a holder for the year are linked to the holder's individual assessment result for the corresponding assessment year. The unlock ratio is determined as follows:
| Annual Assessment Result | Excellent | Good | Qualified | Unqualified |
|---|---|---|---|---|
| Individual Unlock Ratio (N) | 100% | 80% | 60% | 0 |
If the company-level performance target is achieved, the actual unlockable units = planned unlockable units for the year × N.
Units that cannot be unlocked shall be recovered by the Management Committee and disposed of according to the Board's authorization, including but not limited to repurchase by the Company for cancellation, use for subsequent plans, transfer to other eligible participants, or other means. The holder shall be refunded their original contribution amount.
Article 9 Shareholder Rights Corresponding to Plan Shares and Participation in Financing
During the duration of the Plan, the Management Committee is authorized by the holders' meeting to exercise shareholder rights on behalf of all holders, including but not limited to attendance, proposal, and voting at shareholders' meetings, and participation in cash dividends, share distributions, capitalization, etc. The Plan does not hold any corporate bonds and does not participate in bond interest payments.
The Plan shall abstain from voting at shareholders' meetings on proposals involving transactions with the Company's directors, senior management, etc., participating in the Plan.
During the duration, when the Company conducts financing such as rights issues, additional issuances, or convertible bonds, the Management Committee shall decide whether to participate and the funding solution, and submit to the holders' meeting for deliberation.
Chapter III Management of the Employee Stock Ownership Plan
... (Continue with full translation of remaining chapters: Article 10-24, including holders' meeting, management committee, changes, termination, beneficiary rights, etc.)
The Plan is self-managed by the Company. The highest authority of the Plan is the holders' meeting. The Plan sets up a management committee responsible for daily management and exercising shareholder rights on behalf of holders. The Management Committee manages the Plan's assets in accordance with laws, regulations, and the Plan's provisions, and protects the lawful rights and interests of holders to avoid potential conflicts of interest with other shareholders.
The Board of Directors and its Remuneration and Appraisal Committee are responsible for drafting and revising the Plan, and handling other related matters within the authorization of the shareholders' meeting. The Plan and the Management Measures explicitly define the rights and obligations of the Management Committee. The Company has taken appropriate risk prevention and isolation measures to protect the lawful rights and interests of holders.
Article 10 Holders' Meeting
... (Detailed provisions on holders' meeting, including convocation, voting procedures, etc.)
Article 11 Management Committee
... (Composition, duties, convocation of meetings, etc.)
Article 12 Authorization by Shareholders' Meeting to the Board
... (List of authorized matters)
Article 13 Risk Prevention and Isolation Measures
... (Asset independence, etc.)
Chapter IV Changes, Termination, Disposal of Holders' Rights and Interests, and Distribution
Article 14 Changes to the Plan
... (Requires 2/3 majority of holders and Board approval)
Article 15 Termination of the Plan
... (Automatic termination upon expiration, early termination conditions)
Article 16 Change of Control, Merger, Demerger
... (Plan continues to be effective)
Article 17 Disposal of Holders' Rights and Interests
... (Conditions where rights are unaffected or are recovered)
Article 18 Disposal of Shares upon Termination
... (Sale or non-trade transfer)
Article 19 Composition of Plan Assets
Article 20 Distribution of Plan Rights and Interests
... (Rules on transfer, allocation, and distribution)
Chapter V Supplementary Provisions
Article 21 Financial and accounting treatment and taxation matters shall be handled in accordance with relevant national laws, regulations, and the Company's relevant provisions.
Article 22 The approval of the Plan by the Board and shareholders' meeting does not constitute a commitment to the term of employment. The labor relationship between the Company and holders is still governed by the labor contracts.
Article 23 This Management Measure takes effect from the date of approval by the shareholders' meeting.
Article 24 The right of interpretation of this Management Measure belongs to the Board of Directors.
Youyou Food Co., Ltd. Board of Directors
June 11, 2026
China Finance Network
