Cheerwin Group Limited — Remuneration Information 2021

Jun 3, 2021

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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Cheerwin Group Limited 朝雲集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 6601)

(1) PROPOSED ADOPTION OF SHARE OPTION SCHEME; AND

(2) ADOPTION OF THE RESTRICTED SHARE AWARD SCHEME

(1) PROPOSED ADOPTION OF SHARE OPTION SCHEME

The Board is pleased to announce that on June 3, 2021, it has resolved to propose the adoption of the Share Option Scheme.

(2) ADOPTION OF THE RESTRICTED SHARE AWARD SCHEME

The Board further announces that on June 3, 2021, it has resolved to adopt the Restricted Share Award Scheme which aims to reward the Eligible Participants their past, present or expected contribution and loyalty to the Group and align their interests with those of the Shareholders through the grant of Award Shares. Given that the Restricted Share Award Scheme does not involve the grant of options over any new Shares, it does not constitute a share option scheme or an arrangement analogous to a share option scheme for the purpose of Chapter 17 of the Listing Rules and is not required to comply with the rules thereunder. No Shareholders’ approval is required to adopt the Restricted Share Award Scheme.

(1) PROPOSED ADOPTION OF SHARE OPTION SCHEME

The Board is pleased to announce that on June 3, 2021, it has resolved to propose the adoption of the Share Option Scheme to further improve the governance structure of the Company and to attract, motivate and retain talents.

The Share Option Scheme will constitute a share option scheme under Chapter 17 of the Listing Rules. The Share Option Scheme is conditional upon:

• (i) the passing of the relevant resolution(s) by the Shareholders at the EGM to approve and adopt the Share Option Scheme, authorize the Board to grant Options under the Share Option Scheme, to issue and allot Shares pursuant to the exercise of any Options to be granted pursuant to the Share Option Scheme; and

• (ii) the Listing Committee granting approval for the listing of, and permission to deal in, any Shares to be issued and allotted pursuant to the exercise of the Options under the Share Option Scheme.

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An application will be made to the Listing Committee for the listing of, and permission to deal in, the Shares which may fall to be issued and allotted pursuant to the exercise of the Options granted under the Share Option Scheme.

SHARE OPTION SCHEME

A summary of key terms of Share Option Scheme is set out below. Further details of the terms of the Share Option Scheme will be set out in a circular to be despatched to the Shareholders in due course.

• Purpose : The purpose of the Share Option Scheme is to attract, retain and motivate talented employees to strive towards long term performance targets set by the Group and to provide them with an incentive to work better for the interest of the Group. The Share Option Scheme will link the value of the Company with the interests of the Share Option Participants, enabling the Share Option Participants and the Company to develop together and promote the Company’s corporate culture.

• Maximum quantity : (a) The total number of Shares which may be issued upon exercise of of grant Options to be granted under the Share Option Scheme or any other share option schemes adopted by the Company (and to which the provisions of Chapter 17 of the Listing Rules are applicable) shall not exceed 10% of the total number of the Shares in issue on the Share Option Scheme Adoption Date. Options which have lapsed shall not be counted in calculating the 10% limit.

• (b) The Company may refresh the 10% limit with Shareholders’ approval provided that each such limit (as refreshed) may not exceed the 10% of the total number of the Shares in issue as at the date of the Shareholders’ approval. Options previously granted under the Share Option Scheme and any other share option schemes adopted by the Company (and to which the provisions of Chapter 17 of the Listing Rules are applicable) (including those outstanding, cancelled or lapsed in accordance with the relevant scheme or exercised options) will not be counted for the purpose of calculating the limit to be refreshed.

• (c) The Company may seek separate approval by Shareholders in general meeting of the Company for granting Options beyond the 10% limit provided that the Options in excess of the limit are granted only to Share Option Participants specially identified by the Company before such approval is sought.

• (d) Total number of Shares which may be issued upon exercise of all Options granted and yet to be exercised under the Share Option Scheme or any other share option schemes adopted by the Company (and to which the provisions of Chapter 17 of the Listing Rules are applicable) must not exceed 30% of the total number of the Shares in issue from time to time. No Options may be granted under the Share Option Scheme and any other share option schemes of the Company if this will result in such limit being exceeded.

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• Payment on : HK$1.00 acceptance of the grant of Options

• Exercise : Subject to any adjustments made pursuant to the terms of the Share price Option Scheme, the Exercise Price shall be at a price determined by the Board at its absolute discretion and notified to the Share Option Participant and shall be at least the highest of:

• (i) the closing price of the Shares as stated in the daily quotation sheet issued by the Stock Exchange on the Offer Date;

• (ii) the average closing price of the Shares as stated in the daily quotation sheets issued by the Stock Exchange for the five Business Days immediately preceding the Offer Date; and

• (iii) the nominal value of a Share on the Offer Date.

Offer Date

• : Each Offer Date shall be a trading day, and shall be determined by the Board.

Restriction period

• : The Board shall not grant any Options after inside information has come or inside information has been the subject of a decision until such inside information has been announced pursuant to the requirements of the Listing Rules and Part XIVA of the SFO. In particular, no Option shall be granted during the period commencing one month immediately preceding the earlier of:

• (i) the date of the Board meeting (as such date is first notified to the Stock Exchange in accordance with the Listing Rules) for approving the Company’s results for any year, half-year, quarterly or any other interim period (whether or not required under the Listing Rules); and

• (ii) the deadline for the Company to announce its results for any year or half-year under the Listing Rules, or quarterly or any other interim period (whether or not required under the Listing Rules), and ending on the date of the publication of the results announcement.

No Option shall be granted during any period of delay in publishing a results announcement.

Validity period of : Ten (10) years commencing on the Share Option Scheme Adoption Date. Share Option Scheme

Exercise period of Options

• : The Board may specify the exercise period and/or the vesting schedule of the Options in the grant letter, and in all circumstances all Options shall automatically lapse upon the expiry of the tenth (10th) anniversary of the date of grant.

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• Minimum holding : Save as determined by the Board and provided in the offer of the grant period and of the relevant Options, there is no minimum period for which a Option performance targets must be held before it can be exercised.

Save as determined by the Board and provided in the offer of the grant of the relevant Options, there is no performance target which must be achieved before any of the Options can be exercised.

• Authorization of : The Board will seek Shareholders’ approval at the EGM to consider and the Board approve the adoption of the Share Option Scheme and authorize the Board to be responsible for the implementation and management of the Share Option Scheme, such that the Board shall be the executive management body of the Share Option Scheme.

SHAREHOLDERS’ APPROVAL

The Board will convene the EGM for the purposes of, among other things, seeking the approval from the Shareholders for the adoption of the Share Option Scheme.

A circular containing, among other things, details of the Share Option Scheme, and other matters to be transacted at the EGM, together with the notice of the EGM and proxy form, will be despatched to the Shareholders as soon as practicable.

As at the date of this announcement, the Share Option Scheme remain subject to the approval by the Shareholders. Shareholders and potential investors of the Company are advised to exercise caution when dealing in the Company’s securities.

(2) ADOPTION OF THE RESTRICTED SHARE AWARD SCHEME

The Board further announces that on June 3, 2021, it has resolved to adopt the Restricted Share Award Scheme, pursuant to which the Eligible Participants will be entitled to participate.

SUMMARY OF THE RESTRICTED SHARE AWARD SCHEME RULES

(a) Purpose and Objective

The purpose and objective of the Restricted Share Award Scheme are (i) to realize the binding of the management team with the Shareholders and the Company’s interests in the long run; (ii) to incentivize the management team to achieve the Company’s performance goals, supporting the Company’s rapid growth in the future; (iii) to send positive signals to the capital market and increase the market’s confidence in the Company’s development; and (iv) to attract external talents and enhance talent competitiveness.

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(b) Term of the Restricted Share Award Scheme

The Restricted Share Award Scheme shall be effective from the Restricted Share Award Scheme Adoption Date and shall continue in full force and effect for a term of ten (10) years or until such date of early termination as determined by the Board, whichever is the earlier, after which period no further Award Shares shall be granted or accepted, but the provisions of the Restricted Share Award Scheme shall remain in full force and effect in order to give effect to the vesting of Award Shares granted and accepted prior to the expiration or termination of the Restricted Share Award Scheme.

(c) Selected Participants for the Restricted Share Award Scheme

Pursuant to the Restricted Share Award Scheme, the Board may, from time to time, in its absolute discretion, decide the Selected Participants after taking into consideration various factors as they deem appropriate and determine the number of Award Shares to be granted to each of the Selected Participants.

(d) Maximum Number of Award Shares

The maximum number of Award Shares that may be granted under the Restricted Share Award Scheme in aggregate shall be no more than 25,000,000 Shares, representing 1.87% of the total number of the issued Shares as at the date of this announcement, subject to the compliance of the Listing Rules, including, the requirement concerning the maintenance of the public float.

(e) Administration of the Restricted Share Award Scheme

The Restricted Share Award Scheme shall be subject to the administration of the Board and the Trustee (which should be a third party independent of the Company) in accordance with the Restricted Share Award Scheme Rules and the Trust Deed. The Trustee shall hold the trust fund in accordance with the Restricted Share Award Scheme Rules and the terms of the Trust Deed. For the purpose of the Restricted Share Award Scheme, the Company will appoint two Trustees to hold shares separately for the respective benefit of the connected persons and other non-connected persons of the Company.

(f) Operation

The Board may, from time to time, in its absolute discretion select the Selected Participants after taking into consideration various factors as they deem appropriate and determine the number of Award Shares to be granted to each of the Selected Participants. In determining the number of Award Shares for each Selected Participant, the Board shall take into consideration matters, including but not limited to, the Selected Participant’s position, experience, years of service, performance and contribution to the Group and the market price of the Shares.

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(g) Issue of Shares to the Trustee and Acquisition of Shares by the Trustee

The Company shall, for the purposes of satisfying the grant of Award Shares:

• (i) allot and issue Shares to the Trustee under the general or specific mandate granted or to be granted by the Shareholders at the general meetings of the Company from time to time save that no Shares shall be allotted and issued to the Trustee within six months from the Listing Date;

• (ii) pay to the Trustee such monies and instruct the Trustee to acquire Shares through on-market transactions at the prevailing market price;

• (iii) direct and procure the Trustee to receive existing Shares from any Shareholder save that no transfer of existing Shares from the Controlling Shareholders and Bestart BVI shall be made within six months from the Listing Date; and/or

• (iv) instruct the Trustee to apply any Returned Shares held in the Trust.

Where the Trustee has received instructions from the Company to acquire Shares through on-market transactions, the Trustee shall acquire such number of Shares as instructed by the Company on-market at the prevailing market price as soon as reasonably practicable after receiving the necessary funds from the Company. Any excess amount of the funds provided shall be returned by the Trustee to the Company forthwith after completion of the purchase of the Shares. Where the amount paid or caused to be paid by the Company or where the amount that the Trustee is directed by the Company to use is not sufficient to purchase all of the Shares it is instructed to purchase, the Trustee shall acquire the maximum number of board lots of Shares that it is able to acquire with the net cash available in the fund of the Trust and the Company undertakes to provide further funds to the Trustee to purchase all of the Shares required to satisfy the Award Notice. The purchase of Shares is subject to the maintenance of an orderly market and the Shares so purchased shall form part of the capital of the trust fund of the Trust.

The Company shall comply with the relevant Listing Rules when issuing new Award Shares and application will be made to the Stock Exchange for the listing of and permission to deal in, the new Award Shares to be issued. The Company shall not issue or allot Shares in excess of the amount permitted in the general and specific mandates approved by the Shareholders in general meeting of the Company from time to time. The Company shall neither issue, allot Shares nor instruct the Trustee to acquire Shares through on-market transactions at the prevailing market price, where such action (as applicable) is prohibited under the Listing Rules, the SFO or other applicable laws from time to time. Where such a prohibition causes the prescribed timing imposed by the Restricted Share Award Scheme Rules or the Trust Deed to be missed, such prescribed timing shall be treated as extended until as soon as reasonably practicable after the first Business Day on which the prohibition no longer prevents the relevant action.

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(h) Restrictions on Award Shares

The Award Shares and any rights and interests (including voting rights) therein may not be sold, transferred, hypothecated, pledged, charged, repaid or otherwise disposed of by the Selected Participants before the Award Shares are vested. The Board may also impose additional restrictions as it deems appropriate and set out the same in the Award Notice.

No award of the Award Shares (“ Award ”) shall be made by the Board and no instructions to acquire any Shares shall be given to the Trustee under the Restricted Share Award Scheme where dealings in the Shares are prohibited under any code or requirement of the Listing Rules and all applicable laws from time to time. Without limiting the generality of the foregoing, no such instruction is to be given and no such grant is to be made:

• (i) after an event involving inside information in relation to affairs or securities of the Company has occurred or a matter involving inside information in relation to the securities of the Company has been the subject of a decision, until such inside information has been publicly announced in accordance with the application laws and the Listing Rules;

• (ii) during the period of 60 days immediately preceding the publication date of the annual results for any financial period of the Company or, if shorter, the period from the end of the relevant financial period up to the publication date of the results;

• (iii) during the period of 30 days immediately preceding the publication date of the interim results for any financial period of the Company or, if shorter, the period from the end of the relevant half-year period of the financial period up to the publication date of the results; or

• (iv) in any circumstance which is prohibited under the Listing Rules, the SFO or any other laws or regulations or where any requisite approval from any governmental or regulatory authority has not been granted.

The Board will also not make further Award, should it involve allotment of new Share or purchase of existing Share from public shareholders, rendering the Company fail to meet the minimum public float requirement under Rule 8.08(1)(a) of the Listing Rules.

(i) Vesting and lapse of Award Shares

A Selected Participant shall be entitled to receive the Award Shares on the vesting dates in accordance with the vesting schedule and upon the Selected Participant has satisfied all other vesting conditions as determined by the Board in its absolute discretion, if any.

Vesting of the Award Shares will be conditional on the Selected Participant remaining as an employee of the Group until and on each of the relevant vesting date and his/her execution of the relevant documents to effect the transfer from the Trustee. In the event that the Selected Participant ceases to be an employee of the Group before all Award Shares are vested, the relevant part of an award made to such Selected Participant shall automatically lapse forthwith and the relevant Award Shares and Related Income shall not vest on the relevant vesting date but shall become Returned Shares for the purposes of the Restricted Award Shares Scheme.

If there occurs any special circumstances which may affect the eligibility of the Selected Participant or the vesting of Award Shares, the Award Shares shall be dealt with in accordance with the Restricted Share Award Scheme Rules. However, for those which are not currently covered therein, the remuneration committee of the Company shall, from time to time, have sole discretion to determine how such Award Shares should be handled.

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(j) Voting Rights

The Trustee shall not exercise the voting rights in respect of any Shares held under the Trust including but not limited to the Award Shares.

(k) Termination

The Restricted Share Award Scheme shall terminate on the earlier of the 10th anniversary date of the Restricted Share Award Scheme Adoption Date or such date of early termination as determined by the Board provided that such termination shall not affect any subsisting rights of the Selected Participants.

Upon termination of the Restricted Share Award Scheme,

• (i) no further grant of Award Shares may be made under the Restricted Share Award Scheme;

• (ii) all the Award Shares of the Selected Participants granted under the Restricted Share Award Scheme shall continue to be held by the Trustee and become vested in the Selected Participants according to the conditions of the Award, subject to the receipt by the Trustee of the transfer documents prescribed by the Trustee and duly executed by the Selected Participants;

• (iii) upon the expiration of the Trust Period, all Shares (except for any Award Shares subject to vesting on the Selected Participants) remaining in the trust fund shall be sold by the Trustee within 28 Business Days (on which the trading of the Shares has not been suspended) (or such longer period as the Trustee and the Board may otherwise determine) (“ Sale of Remaining Shares ”); and

• (iv) upon the expiration of the Trust Period all net proceeds of Sale of Remaining Shares and such other funds and properties remaining in the trust fund managed by the Trustee (after making appropriate deductions in respect of all disposal costs, liabilities and expenses) shall be remitted to the Company forthwith. For the avoidance of doubt, the Trustee may not transfer any Shares to the Company nor may the Company otherwise hold any Shares whatsoever other than its interest in the proceeds of Sale of Remaining Shares.

(l) Alteration of the Restricted Share Award Scheme

The Restricted Share Award Scheme may be altered in any respect from time to time by a resolution of the Board.

REASONS FOR ADOPTION OF SHARE OPTION SCHEME AND RESTRICTED SHARE AWARD SCHEME

As the proposed Share Option Scheme and Restricted Share Award Scheme may have different vesting schedule and different vesting conditions as determined by the Board from time to time, the adoption of two schemes will provide the Board more flexibility to determine and employ a combination of different share incentive to suit business needs of the Company. The Board will select the Share Option Participant(s) and Eligible Participant(s) based on the employee performance, salary grade/level and job title, etc. in accordance to the internal human resource policy of the Company in effect from time to time.

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LISTING RULES IMPLICATIONS

Given that the Restricted Share Award Scheme does not involve the grant of options over any new Shares, it does not constitute a share option scheme or an arrangement analogous to a share option scheme for the purpose of Chapter 17 of the Listing Rules and is not required to comply with the rules thereunder. No Shareholders’ approval is required to adopt the Restricted Share Award Scheme.

The Trustee will become a connected person of the Company if the number of Awarded Shares held by the Trustee for the benefit of the connected persons of the Company exceeds 30% of the aggregate number of the Awarded Shares held by the Trustee. There is no restriction in the Restricted Share Award Scheme on the aggregate interests of the Company’s connected persons held by the Trustee, the Company will comply with the relevant provisions under Chapter 14A of the Listing Rules where appropriate.

In the event that the Board selects a Director as a Selected Participant for the Restricted Share Award Scheme, the grant of the Award Shares pursuant to the Restricted Share Award Scheme may constitute a connected transaction under Chapter 14A of the Listing Rules. However, given the grant of the existing Award Shares to a Director will form part of the remuneration of the relevant Director under his/her service contract, such grant of existing Award Shares is exempted from all the reporting, announcement and independent Shareholders’ approval requirements pursuant to Rule 14A.95 of the Listing Rules. However, any grant of Award Shares to any Director shall be subject to the prior approval of the independent non-executive Directors and the remuneration committee of the Company.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following expressions shall have the following meanings:

• “Award Notice” a notice to be sent by the Board to the Selected Participants upon the making of an award under the Restricted Share Award Scheme pursuant to the Restricted Share Award Scheme Rules;

• “Award Share(s)” the Share(s) provisionally awarded to a Selected Participant pursuant to an Award Notice;

• “Bestart BVI” Bestart International Holdings Company Limited (百思達國際控股有 限公司), a company incorporated in the BVI with limited liability on December 13, 2018, one of the shareholders of the Company;

• “Board” the board of Directors;

“Business Day(s)” any day on which the Stock Exchange is open for the business of dealing in securities;

“Controlling has the meaning ascribed to the Listing Rules, and unless the context Shareholders” otherwise requires, refers to Mr. Chen Kaixuan, Mr. Chen Kaichen, Ms. Li Ruohong, Ms. Ma Huizhen and Cheerwin Global Limited;

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“Company”	Cheerwin Group Limited (朝雲集團有限公司), an exempted company
	incorporated in the Cayman Islands with limited liability, the Shares of
	which are listed on the Main Board of the Stock Exchange (stock code:
	6601);
“Director(s)”	the director(s) of the Company, and for the purpose of the proposed
	adoption of the Share Option Scheme and Restricted Share Award
	Scheme, the director(s) of the Group;
“EGM”	the extraordinary general meeting of the Company, to approve, among
	other things, the adoption of the Share Option Scheme;
“Eligible Participant(s)”	key management personnel of the Group including Directors, senior
	management and core employees of the Group;
“Employees(s)”	any employee(s) or officer(s) of any member of the Group;
“Exercise Price”	the price per Share at which a Grantee may subscribe for the Shares on
	the exercise of an Option;
“Further Shares”	Shares purchased by the Trustee out of cash income or net proceeds of
	sale of non-cash and non-scrip distributions declared and distributed by
	the Company in respect of Shares held upon the Trust;
“Grantee(s)”	any Share Option Participant who accepts an Offer in accordance
	with the terms of the Share Option Scheme, or (where the context so
	permits) any person who is entitled to any Option in consequence of
	the death of the original Grantee;
“Group”	the Company and its subsidiaries;
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong;
“Listing Committee”	the listing committee of the Stock Exchange;
“Listing Date”	March 10, 2021, being the date on which dealings in the Shares first
	commence on the Main Board of the Stock Exchange;
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock Exchange;
“Offer(s)”	the offer(s) of the grant of Option(s) made by the Board in accordance
	with the Share Option Scheme;
“Offer Date”	the date on which an Offer(s) is/are made to the Share Option
	Participant(s), which date must be a Business Day;
“Option(s)”	a right grant to subscribe for the Share pursuant to the Share Option
	Scheme;

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“Related Income”

all income derived from a Share held upon the Trust in the form of Shares (including but not limited to, the Further Shares, and any bonus Shares and scrip Shares received in respect of the Share);

• “Restricted Share Award Scheme”

• the restricted share award scheme adopted by the Board whereby awards of Shares may be made to the Selected Participants (such Shares being purchased by the Trustee) in accordance with the Restricted Share Award Scheme Rules and the Trust Deed on the Restricted Share Award Scheme Adoption Date;

• “Restricted Share the rules relating to the Restricted Share Award Scheme adopted by the Award Scheme Rules” Board;

• “Restricted Share June 3, 2021, the date on which the Restricted Share Award Scheme Award Scheme was conditionally adopted by the Board; Adoption Date”

• “Returned Shares”

• the Related Income in the form of Shares that the Selected Participants have no entitlement pursuant to the Restricted Share Award Scheme, and such Awarded Shares which are not vested and/or forfeited in accordance with the terms of the Restricted Share Award Scheme, or are forfeited in accordance with the terms of the Restricted Share Award Scheme, or such Shares being deemed to be Returned Shares in accordance with the terms of the Restricted Share Award Scheme;

• “Selected Participant(s)” means Eligible Participant(s) selected by the Board in accordance with the terms of the Restricted Share Award Scheme;

• “SFO”

• the Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong) (as amended from time to time);

• “Share(s)”

• ordinary share(s) in the capital of the Company with a nominal value of US$0.0000002 each;

• “Share Option Scheme” the share option scheme proposed to be adopted by the Shareholders at the EGM;

• “Share Option Scheme the date on which the Share Option Scheme is conditionally adopted by Adoption Date” an ordinary resolution to be passed by the Shareholders at the EGM;

• “Share Option Participant(s)”

• any director(s) of the Group (including any Director(s)) or Employee(s) who the Board considers, in its sole discretion, have contributed or will contribute to the Group in accordance with the terms of the Share Option Scheme;

• “Shareholder(s)”

the holder(s) of the Share(s);

• “Stock Exchange”

The Stock Exchange of Hong Kong Limited;

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“Trust” the trust constituted by the Trust Deed; “Trustee(s)” trustee(s) to be appointed by the Company for administration of the Restricted Share Award Scheme or any additional or replacement trustee(s); “Trust Deed” the trust deed between the Company and the Trustee in relation to the Restricted Share Award Scheme (as restated, supplemented and amended from time to time); “Trust Period” the period beginning with the Restricted Share Award Scheme Adoption Date and ending upon the first to happen of the following, namely (a) June 2, 2031, being the expiry of the period of 10 years beginning from the Adoption Date; or (b) such date of early termination as determined by the Board; “US$” United States dollars, the lawful currency of the United States; and “%” per cent. By order of the Board Cheerwin Group Limited Chen Danxia Executive Director, Chairman and Chief Executive Officer Hong Kong, June 3, 2021

As at the date of this announcement, the Board comprises Ms. Chen Danxia, Mr. Xie Rusong and Mr. Zhong Xuyi as executive Directors; Mr. Chen Zexing as non-executive Director and Dr. DeChao Michael Yu, Mr. Guo Sheng and Mr. Chan Wan Tsun Adrian Alan as independent nonexecutive Directors.

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