Shenzhen : Announcement of Shenzhen Expressway Company Limited, a subsidiary of Shenzhen International, regarding proposed adoption of the restricted A Share Incentive Scheme; proposed grant and connected transaction

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深 圳 高 速 公 路 股 份 有 限 公 司

SHENZHEN EXPRESSWAY COMPANY LIMITED

(a joint stock limited company incorporated in the People's Republic of China with limited liability)

(Stock Code: 00548)

PROPOSED ADOPTION OF THE RESTRICTED A SHARE INCENTIVE SCHEME; PROPOSED GRANT AND CONNECTED TRANSACTION

The Company hereby announces that on 15 January 2016, the Board passed a resolution in respect of the proposed adoption of the Incentive Scheme and the Proposed Grant thereunder. The Incentive Scheme and the Proposed Grant thereunder shall become effective upon obtaining all necessary approval(s) (including but not limited to the approval by the Shareholders at the general meeting of the Company).

The Company hereby announces the major contents of the proposed Incentive Scheme and the Proposed Grant thereunder, details of which are set out below:

1. PROPOSED ADOPTION OF THE INCENTIVE SCHEME

   
   
2. Purpose of the Incentive Scheme

   
   

   The purpose of the Incentive Scheme is to further establish and improve long-term corporate incentive systems of the Company, attract and retain talent, fully mobilise the motivation of senior management members, middle and core management and key technicians of the Company, effectively tying the interests of the Shareholders, the Company and the management of the Company and enabling the respective parties to become aware of the Company's long-term development, and to promote the realisation of the development strategies of the Company.

   
   

3. Basis for determining the Participants and the scope of Participants

   
   
4. Basis for determining the Participants

   
   

   The Participants of the Incentive Scheme are determined in accordance with the relevant laws, regulations and regulatory documents such as the Company Law, the Securities Law, the Administrative Measures on Share Incentives (Trial) and the relevant provisions of the Articles of Association, together with the Company's actual situations.

5. Scope of Participants




The proposed Participants of the Incentive Scheme include Directors, senior management, and key employees (including middle managers and business backbones of the Company's headquarters and leading team members (vice presidents or above) of the Company's subsidiaries) at the time of implementation of the Incentive Scheme by the Company. Independent non-executive Directors, non-executive Directors, supervisors of the Company, Shareholders holding 5% or above of the Shares and their close family members, and Directors, senior management and other key employees who have participated in the share option incentive scheme of the controlling Shareholder of the Company, Shenzhen International Holdings Limited, are not included in the scope of Participants of the Incentive scheme.




6. Source and number of Shares under the Incentive Scheme

   
   
7. Source of underlying Shares

   
   

   The Incentive Scheme adopts Restricted Shares as the motivational tool. The source of the underlying Shares to be granted shall be ordinary A Shares issued to the Participants by the Company.

   
   

8. Number of underlying Shares




The total number of Shares that may be granted under the Incentive Scheme shall be 17,191,690 A Shares, representing approximately 0.79% of the Company's total share capital of 2,180,770,326 Shares as at the date of this announcement.




9. Validity Period, Grant Date, Lock-Up Period and Unlocking Period and black-out period of the Incentive Scheme

   
   
10. Validity Period of the Incentive Scheme

    
    

    The Incentive Scheme shall be effective for five years from the Grant Date of the Restricted Shares.

    
    

11. Grant Date of the Incentive Scheme

    
    

    For the Grant Date of the Incentive Scheme, please refer to the paragraph headed "II. Proposed Grant under the Incentive Scheme - 3. Grant Date" below.

    
    

12. Lock-up Period and Unlocking Period of the Incentive Scheme

    
    

    The Restricted Shares granted pursuant to the Incentive Scheme will be locked up for 24 months from the Grant Date. During the Lock-up Period, the Restricted Shares held by the Participants pursuant to the Incentive Scheme shall not be transferred, pledged for guarantees or used for repayment of debt.

    
    

    All dividend or Shares as a result of conversion of capital reserve, dividend distribution, bonus issue, sub-division received by the Participants as a result of the Restricted Shares granted to them will be locked up in accordance with the Incentive Scheme and all such Shares are subject to the same Lock-up Period as the Restricted Shares, whereas all dividend payable in cash which the Participants are entitled to as a result of the Restricted Shares granted to them will be kept by the Company, and will be paid to the Participants when the Restricted Shares are unlocked in accordance with the Incentive Scheme.

    During the Unlocking Period, the Company shall assist the Participants who have fulfilled the Unlocking Conditions to arrange for the Restricted Shares to be unlocked, while the Company shall repurchase and cancel the Restricted Shares held by the Participants who have not fulfilled the Unlocking Conditions. The specific unlocking arrangements are as follows:

    
    

    Unlocking Arrangement	Unlocking Date	Proportion of unlocking
    First Unlocking	From the first trading day after 24 months from the Grant Date to the last trading day within 36 months from the Grant Date	40%
    Second Unlocking	From the first trading day after 36 months from the Grant Date to the last trading day within 48 months from the Grant Date	30%
    Third Unlocking	From the first trading day after 48 months from the Grant Date to the last trading day within 60 months from the Grant Date	30%

    
    

13. Black-out Period of the Incentive Scheme




Where the Participant is a Director or member of the senior management, the number of Shares which may be transferred by the Participant per year during his/her tenure of office shall not exceed 25% of the total number of the Shares held by him/her.




Where the Participant is a Director or a member of senior management, all gains from the sale of Shares within six months of purchase or from the purchase of Shares within six months of sale by the Participant shall belong to the Company and to be collected by the Board.




If, during the Validity Period of the Incentive Scheme, there is any amendment to the requirements regarding the Share transfer by a Director and senior management of the Company under relevant laws, regulations and regulatory documents such as the Company Law, the Securities Law and the Articles of Association, the transfer of the Shares held by the Participant shall comply with the provisions of relevant amended laws, regulations and regulatory documents such as the Company Law and the Securities Law and the Articles of Association at the time of the transfer.




14. Grant Price and basis of determination thereof

    
    

    For the Grant Price and basis of determination thereof, please refer to the paragraph headed "II. Proposed Grant under the Incentive Scheme - 4. Grant Price and basis of determination" below.

    
    

15. Conditions of Grant and unlocking of the Restricted Shares




1. Conditions of Grant of the Restricted Shares

   
   

   The following conditions must be fulfilled before the Participants are granted the Restricted Shares:

   
   

2. None of the following circumstances has occurred to the Company:

   
   

3. issue of the Company's financial and accounting report for the most recent

   accounting year in which a certified public accountant gives a negative opinion or indicates the inability to give an opinion;

   
   

4. the imposition of administrative penalties by the CSRC during the most recent year due to material non-compliance of laws and regulations; and

   
   

5. other circumstances as determined by the CSRC.

   
   

6. None of the following circumstances has occurred to the Participant:

   
   

7. public censure or declaration as ineligible candidate by Shanghai Stock Exchange in the most recent three years;

   
   

8. the imposition of administrative penalties by the CSRC during the most recent three years due to material non-compliance of laws and regulations;

   
   

9. occurrence of circumstances under which the Participant is prohibited from acting as a director, supervisor and member of the senior management of a company, as stipulated in the Company Law; and

   
   

10. other material breach of relevant requirements of the Company as determined by the Board.

    
    

11. The Company has achieved the following business performance:




The average return on net assets attributable to shareholders of the company, revenue growth and cash dividend payout ratio of the Company during the financial year before the Grant Date (i.e. 2014) shall not be less than the actual value during the financial year of 2013 and the average value of the most recent three years (from the financial years of 2011 to 2013), deducting the effects on the performance indicators by reason of the government (including but not limited to repurchase of the management rights of the highway by the government).




12. Conditions of unlocking of the Restricted Shares




The following conditions must be fulfilled before the Restricted Shares granted to the Participants can be unlocked:




1. None of the following circumstances has occurred to the Company:

   
   

2. issue of the Company's financial and accounting report for the most recent accounting year in which a certified public accountant gives a negative opinion or indicates the inability to give an opinion;

   
   

3. the imposition of administrative penalties by the CSRC during the most recent year due to material non-compliance of laws and regulations; and

   
   

4. other circumstances as determined by the CSRC.

   
   

5. None of the following circumstances has occurred to the Participant:

   
   

6. public censure or declaration as ineligible candidate by Shanghai Stock Exchange in the past three years;