Great Wall Motor Company Limited

2333

CNE100000338

Auto & Truck Manufacturers

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Great Wall Motor : PROPOSED ADOPTION OF THE RESTRICTED A SHARE AND A SHARE OPTION INCENTIVE SCHEME CONNECTED TRANSACTIONS AND APPRAISAL MEASURES FOR IMPLEMENTATION OF THE 2020 RESTRICTED SHARE AND SHARE OPTION INCENTIVE SCHEME

February 28, 2020 at 04:09 am EST

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, a bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Great Wall Motor Company Limited, you should at once pass this circular and the enclosed proxy form to the purchaser, the transferee, the bank, the stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

長城汽車股份有限公司

GREAT WALL MOTOR COMPANY LIMITED*

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

(Stock Code: 2333)

PROPOSED ADOPTION OF THE RESTRICTED A SHARE

AND A SHARE OPTION INCENTIVE SCHEME

CONNECTED TRANSACTIONS

AND

APPRAISAL MEASURES FOR

IMPLEMENTATION OF THE 2020 RESTRICTED SHARE

AND SHARE OPTION INCENTIVE SCHEME

INDEPENDENT FINANCIAL ADVISER TO

THE INDEPENDENT BOARD COMMITTEE AND

THE INDEPENDENT SHAREHOLDERS

The EGM, the H Shareholders' Class Meeting and the A Shareholders' Class Meeting of the Company are to be held on Wednesday, 15 April 2020 at 2:00 p.m., 3:00 p.m. and 4:00 p.m. respectively at the Company's Conference Room, No. 2266 Chaoyang Road South, Baoding, Hebei Province, the PRC. Notices of the EGM and the H Shareholders' Class Meeting have been sent to the Shareholders together with their respective proxy forms, the Independent Non-executive Director's Proxy Forms and the reply slip on 28 February 2020. Whether or not you are able to attend the EGM or the relevant Class Meetings in person, you are requested to complete the proxy form enclosed or the Independent Non-executive Director' s Proxy Forms in accordance with the instructions printed thereon. For H Shareholders, the proxy form or the Independent Non-executive Director's Proxy Forms should be returned, in person or by post, to the Company's H Share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong, in any event, not later than 24 hours before the designated time for the commencement of the EGM and/or the H Shareholders' Class Meeting and any adjournment thereof (as the case may be). Completion and return of the proxy form or the Independent Non-executive Director's Proxy Forms will not preclude you from attending and voting in person at the EGM and/or the H Shareholders' Class Meeting or any adjournment thereof should you so wish.

For identification purposes only

28 February 2020

	CONTENTS
		Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
1.	INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
2.	PROPOSED ADOPTION OF THE RESTRICTED A SHARE AND
	A SHARE OPTION INCENTIVE SCHEME . . . . . . . . . . . . . . . . . . . . .	7
3.	PROPOSED ADOPTION OF APPRAISAL MEASURES FOR
	IMPLEMENTATION OF THE 2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME . . . . . . . . . . . . . . . . . . . . . . .	61

4. AUTHORIZATION FROM THE GENERAL MEETING TO THE BOARD AND SUCH PERSONS AS AUTHORIZED BY THE BOARD TO

	HANDLE IN FULL DISCRETION ALL RELATED MATTERS IN
	CONNECTION WITH THE 2020 RESTRICTED SHARE AND SHARE
	OPTION INCENTIVE SCHEME . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	61
5.	THE EGM AND THE CLASS MEETINGS . . . . . . . . . . . . . . . . . . . . . . .	64
6.	BOOK CLOSURE PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	65
7.	VOTING BY WAY OF POLL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	65
8.	RECOMMENDATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	66
9.	ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	66
LETTER FROM THE INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . .	67
LETTER FROM GRAM CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	69
APPENDIX I	2020 RESTRICTED SHARE AND SHARE OPTION
		INCENTIVE SCHEME OF GREAT WALL MOTOR
		COMPANY LIMITED . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-1
APPENDIX II	APPRAISAL MEASURES FOR IMPLEMENTATION OF
		THE 2020 RESTRICTED SHARE AND SHARE OPTION
		INCENTIVE SCHEME OF GREAT WALL MOTOR
		COMPANY LIMITED . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	II-1
APPENDIX III	GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . .	III-1

- i -

DEFINITIONS

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

"A Shares"	domestic share(s) with a nominal value of RMB1.00 each
	in the share capital of the Company which are listed on
	the Shanghai Stock Exchange and traded in Renminbi
	(Stock Code: 601633);
"A Shareholder(s)"	holders of A Share(s);
"A Shareholders' Class Meeting"	the class meeting of A Shareholders;
"Appraisal Measures"	the Appraisal Measures for Implementation of the 2020
	Restricted Share and Share Option Incentive Scheme of
	Great Wall Motor Company Limited;
"Articles of Association"	articles of association of the Company, as amended,
	modified or otherwise supplemented from time to time;
"Board"	the board of directors of the Company;
"Class Meetings"	the A Shareholders' Class Meeting and the H
	Shareholders' Class Meeting;
"close associate(s)"	has the meaning ascribed to it under the Hong Kong
	Listing Rules;
"Company" or	長城汽車股份有限公司 (Great Wall Motor Company
"Great Wall Motor"	Limited*), a joint stock company incorporated in the
	PRC with limited liability, the H Shares and A Shares of
	which are listed on Hong Kong Stock Exchange and
	Shanghai Stock Exchange, respectively;
"Company Law"	the Company Law of the PRC, as amended from time to
	time;
"connected person(s)"	has the meaning ascribed to it under the Hong Kong
	Listing Rules;
"CSRC"	China Securities Regulatory Commission;
"Director(s)"	director(s) of the Company;

- 1 -

	DEFINITIONS
"EGM"	the extraordinary general meeting of the Company to be
	held on Wednesday, 15 April 2020 at 2:00 p.m. for the
	purposes of considering and approving, among other
	things, the 2020 Restricted Share and Share Option
	Incentive Scheme of the Company as defined herein;
"Exercisable Date"	the date on which the Participants are entitled to exercise
	the Share Options, which must be a trading day;
"Exercise"	the Participants' exercise of the Share Options owned by
	them according to the Share Option Incentive Scheme,
	i.e. the Participants' purchase of target Shares according
	to the conditions as stipulated in the Incentive Scheme;
"Exercise Conditions"	the conditions that must be fulfilled by the Participants to
	exercise the Share Options under the Share Option
	Incentive Scheme;
"Exercise Price"	the price determined under the Scheme, at which the
	Participants shall purchase the Shares of the Company;
"Grant Date"	the date on which the Company shall grant entitlements
	to the Participants, which must be a trading day;
"Grant Price"	the price of each Restricted Share granted to the
	Participants by the Company;
"Group"	Great Wall Motor Company Limited and its subsidiaries;
"H Shares"	the overseas-listed foreign share(s) with a nominal value
	of RMB1.00 each in the share capital of the Company
	which are listed on the Main Board of the Hong Kong
	Stock Exchange and traded in Hong Kong dollars (Stock
	Code: 2333);
"H Shareholder(s)"	holders of H Share(s);
"H Shareholders' Class Meeting"	the class meeting of H Shareholders;
"Hong Kong"	the Hong Kong Special Administrative Region of the
	PRC;
"Hong Kong dollars" or "HK$"	Hong Kong dollars, the lawful currency of Hong Kong;

- 2 -

	DEFINITIONS
"Hong Kong Listing Rules"	Rules Governing the Listing of Securities on The Stock
	Exchange of Hong Kong Limited, as amended from time
	to time;
"Hong Kong Stock Exchange"	The Stock Exchange of Hong Kong Limited;
"Incentive Scheme", "Scheme"	the 2020 Restricted Share and Share Option Incentive
	Scheme of Great Wall Motor Company Limited;
"Independent Director(s)"	the independent non-executive director(s) of the
	Company;
"Independent Financial Adviser"	Gram Capital Limited, licensed corporation to carry out
or "Gram Capital"	Type 6 (advising on corporate finance) regulated activity
	under the SFO, being the independent financial adviser to
	the Independent Board Committee and Independent
	Shareholders in respect of the first grant of Restricted A
	Shares to the Participants who are connected persons of
	the Company by the Company;
"Innovation Great Wall"	Baoding Innovation Great Wall Asset Management
	Company Limited (保定創新長城資產管理有限公司);
"Latest Practicable Date"	24 February 2020, being the latest practicable date prior
	to the issuance of this circular for ascertaining certain
	information contained herein;
"Lock-up Period"	the period during which the Restricted Shares are
	restricted to be transferred or assigned or used as
	guarantee or for repayment of debts, if the conditions for
	exercise of entitlements by the Participants as stipulated
	in the Incentive Scheme are not satisfied;
"Management Measures"	the Management Measures for Share Incentives of Listed
	Companies;
"Mandatory Provisions"	the Mandatory Provisions for the Articles of Association
	of Companies Listed Overseas;
"Participants"	senior management, core management and core technical
	(business) backbone staff of the Company and directors
	and senior management of certain subsidiaries to be
	granted the Restricted Shares and the Share Options
	pursuant to the Incentive Scheme;

- 3 -

	DEFINITIONS
"PRC"	the People's Republic of China, excluding, for the
	purpose of this circular only, Hong Kong, the Macau
	Special Administrative Region and Taiwan;
"Restricted Shares" or	a certain number of Shares of the Company granted to the
"Restricted A Shares"	Participants according to the conditions and price
	stipulated in the Scheme, which are subject to a Lock-up
	Period and can only be unlocked for trading when the
	unlocking conditions as stipulated in the Incentive
	Scheme are satisfied;
"RMB"	Renminbi, the lawful currency of the PRC;
"Securities Law"	the Securities Law of the People's Republic of China, as
	amended from time to time;
"SFO"	Securities and Futures Ordinance (chapter 571 of the
	Laws of Hong Kong) as amended from time to time;
"Share(s)"	A Share(s) and H Share(s);
"Shareholders"	holders of the Company's Shares including A Share(s)
	and H Share(s);
"Share Options", "Options"	the rights to be granted by the Company to the
	Participants to purchase a certain number of Shares of the
	Company at a predetermined price within a certain period
	of time in the future;
"SSE Listing Rules"	Rules Governing the Listing of Stocks on the Shanghai
	Stock Exchange;
"Stock Exchange"	the Shanghai Stock Exchange;
"subsidiary(ies)"	unless the context requires otherwise, has the meaning
	ascribed thereto under the Hong Kong Listing Rules;
"Supervisor(s)"	supervisor(s) of the Company;
"Supervisory Committee"	the supervisory committee of the Company;

- 4 -

	DEFINITIONS
"Unlocking Period"	the period during which the Restricted Shares of the
	Participants are unlocked and can be transferred upon the
	fulfillment of the unlocking conditions as stipulated in
	the Incentive Scheme; and
"Vesting Period"	the period commencing from the date of registration of
	the grant of the Share Options and ending on the
	Exercisable Date of the Share Options.

- 5 -

LETTER FROM THE BOARD

長城汽車股份有限公司

GREAT WALL MOTOR COMPANY LIMITED*

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

(Stock Code: 2333)

Executive Directors:	Registered office, head office and
Wei Jian Jun	principal place of business:
Wang Feng Ying	No. 2266 Chaoyang Road South
Yang Zhi Juan	Baoding
	Hebei Province
Non-executive Director:	the PRC
He Ping
Independent non-executive Directors:
Ma Li Hui
Li Wan Jun
Ng Chi Kit
	28 February 2020
To the Shareholders
Dear Sir or Madam,

PROPOSED ADOPTION OF THE RESTRICTED A SHARE

AND A SHARE OPTION INCENTIVE SCHEME

CONNECTED TRANSACTIONS

AND

APPRAISAL MEASURES FOR

IMPLEMENTATION OF THE 2020 RESTRICTED SHARE

AND SHARE OPTION INCENTIVE SCHEME

INDEPENDENT FINANCIAL ADVISER TO

THE INDEPENDENT BOARD COMMITTEE AND

THE INDEPENDENT SHAREHOLDERS

1. INTRODUCTION

This circular is issued in relation to the EGM, the H Shareholders' Class Meeting and the A Shareholders' Class Meeting to be held at 2:00 p.m., 3:00 p.m. and 4:00 p.m. respectively on Wednesday, 15 April 2020 at the Company's Conference Room, No. 2266 Chaoyang Road South, Baoding, Hebei Province, the PRC.

For identification purposes only

- 6 -

LETTER FROM THE BOARD

2. PROPOSED ADOPTION OF THE RESTRICTED A SHARE AND A SHARE OPTION INCENTIVE SCHEME

Reference is made to the announcements dated 6 September 2019 and 27 September 2019 and the circular dated 9 October 2019 of the Company in relation to the proposed adoption of the restricted A share and A share option incentive scheme by the Company. The Company convened the extraordinary general meeting, the H shareholders' class meeting and the A shareholders' class meeting on 25 October 2019. The restricted A share and A share option incentive scheme has not taken effect as the resolution in connection thereto was not passed by the H shareholders' class meeting.

The Board is pleased to announce that, on 30 January 2020, the Board considered and approved the relevant resolution in relation to proposed adoption of the Restricted A Share and A Share Option Incentive Scheme. The Incentive Scheme shall become effective upon consideration and approval of the general meeting and the Class Meetings of the Company. Before the general meeting and the Class Meetings are held for approval of the Incentive Scheme, the Company may amend the Incentive Scheme upon the request of the regulatory authorities of the PRC and/or Hong Kong.

Purpose of the Incentive Scheme

The Company has established the long-term Incentive Scheme in accordance with the Company Law, the Securities Law, the Management Measures and other relevant laws, regulations and regulatory documents, as well as provisions of the Articles of Association, for the purpose of further establishing and improving the incentive mechanism, attracting and retaining talented individuals, fully mobilizing the enthusiasm of senior management and other core backbone staff of the Company, bonding the interests of Shareholders, the Company and core individuals together effectively, improving the Company's operation and management, promoting the smooth and rapid improvement of the Company's performance and ensuring the successful achievement of the Company's long-term development goals.

Administrative Body of the Incentive Scheme
1. The general meeting, as the ultimate authority of the Company, shall be responsible for considering and approving the implementation, modification and termination of the Incentive Scheme. The general meeting may, within its powers and authority, authorise the Board to handle certain matters relating to the Incentive Scheme.
2. The Board shall act as the executive and administrative body for the Incentive Scheme and be responsible for the implementation of the Incentive Scheme. The Remuneration Committee under the Board shall be responsible for drafting and revising the Incentive Scheme, and submitting the Incentive Scheme to the Board for review and approval. Upon approval by the Board, the Incentive Scheme shall be further submitted to the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting for consideration and approval. The Board may handle other matters relating to the Incentive Scheme within its scope of authority as delegated by the general meeting.
3. The Supervisory Committee and the Independent Directors shall act as the supervisory authority for the Incentive Scheme, and shall issue opinions as to whether the Incentive Scheme is beneficial to the sustainable development of the Company or is significantly detrimental to the interests of the Company and the Shareholders as a whole. The Supervisory Committee shall supervise the implementation of the Incentive Scheme as to whether it is in compliance with the relevant laws, regulations, regulatory documents and operational rules of the Stock

- 7 -

LETTER FROM THE BOARD

Exchange, and shall be responsible for verifying the list of the Participants. The Independent Directors shall solicit voting rights by proxy from all Shareholders in respect of the Incentive Scheme.

Where amendments have been made to the Incentive Scheme before the Incentive Scheme is passed at the general meeting, the Independent Directors and the Supervisory Committee shall issue independent opinions as to whether the amended Incentive Scheme is beneficial to the sustainable development of the Company or is significantly detrimental to the interests of the Company and the Shareholders as a whole.

Before any entitlements are granted to a Participant, the Independent Directors and the Supervisory Committee shall issue clear opinions on the conditions to be fulfilled for the Participant to receive such entitlements as set out in the Incentive Scheme. In the event of any discrepancy between the entitlements granted to a Participant and the arrangement under the Scheme, the Independent Directors and the Supervisory Committee (where there is a change of the Participants) shall simultaneously issue clear opinions thereon.

Before the exercise by a Participant, the Independent Directors and the Supervisory Committee shall issue clear opinions as to whether the conditions stipulated under the Incentive Scheme for the Participant to exercise such entitlements have been fulfilled.

In accordance with Article 40 of Management Measures, when a listed company convenes a general meeting to consider the incentive scheme, independent directors are required to solicit voting rights by proxy from all shareholders in respect of the incentive scheme.

III. Basis for Determining the Participants and the Scope of Participants

1. Basis for Determining the Participants

Legal Basis for Determining the Participants

Participants of the Incentive Scheme are determined in accordance with the Company Law, the Securities Law, the Management Measures and other relevant laws, regulations and regulatory documents, as well as provisions of the Articles of Association with reference to the actual situations of the Company.

Persons who are under the following circumstances may not be Participants, if he or

she:

has been determined by any stock exchange as an ineligible person in the last 12 months;
has been determined by CSRC and its delegated agencies as an ineligible person in the last 12 months;
has been imposed by the CSRC or its delegated agencies with administrative penalties or measures prohibiting access into the market in the last 12 months due to material non-compliance of laws or regulations;
is prohibited from acting as a director or a member of the senior management as required by the Company Law;
is prohibited from participating in share incentive schemes of listed companies as required by laws and regulations;
is under other circumstances determined by the CSRC.

- 8 -

LETTER FROM THE BOARD

Position Basis for Determining the Participants

The Participants of the grant under the Incentive Scheme shall be the Company's senior management, core technical or business personnel, directors and senior management of certain subsidiaries and other employees that the Company believes should be motivated and have a direct impact on the Company's operation performance and future development (but excluding the Company's Directors, Supervisors, the Shareholders individually or in aggregate holding 5% or more of the Shares of the Company or the de facto controllers and their spouses, parents or children).

2. Scope of Participants

There are 1,966 Participants of the grant under the Incentive Scheme in total, including:

senior management of the Company;
core management personnel of the Company;
core technical (business) backbone staff of the Company;
directors and senior management of certain subsidiaries.

The Participants of the grant under the Incentive Scheme exclude the Company's Directors, Supervisors, the Shareholders individually or in aggregate holding 5% or more of the Shares of the Company or the de facto controllers and their spouses, parents or children.

Among the Participants of the grant, senior management must be appointed by the Board of the Company. All the Participants must hold positions in and enter into labour contracts with the Company (including the Company's subsidiaries listed in the consolidated statements) within the validity period of the Incentive Scheme.

The Participants of the reserved grant will be determined within 12 months after the Incentive Scheme is considered and approved by the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting. Upon the proposal by the Board and after the Independent Directors and the Supervisory Committee provide clear opinions and the legal advisors provide professional opinions and legal opinions, the Company shall disclose relevant information of the current Participants on the designated website in a timely and accurately manner. If the Participants are not determined for more than 12 months, the reserved interests will lapse. The scope of the Participants of the reserved grant only covers new Participants, including new employees of the Company and current employees that become qualified by promotion.

- 9 -

LETTER FROM THE BOARD

3. Verification of Participants

After the Board has reviewed and approved the Incentive Scheme, the Company shall internally publish the names and the positions of the Participants before the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting are convened through its website or other channels for a period of no less than 10 days.
The Supervisory Committee of the Company shall verify the list of the Participants and thoroughly consider opinions from the public. The Company shall publish the opinions of the Supervisory Committee on the verification and the public opinions in relation to the list of the Participants 5 days before the Incentive Scheme is considered at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting of the Company. Any adjustments to the list of the Participants made by the Board shall also be subject to verification by the Supervisory Committee of the Company.

IV. Specific Contents of the Incentive Scheme

The Incentive Scheme consists of the Restricted Share Incentive Scheme and the Share Option Incentive Scheme. The Restricted Shares and the Share Options shall be granted after the relevant procedures have been performed. The validity period of the Incentive Scheme shall commence on the Grant Date of the Restricted Shares and Share Options and end on the date of unlocking all the Restricted Shares or the repurchase and cancellation of such shares or the date on which the Share Options have been exercised or cancelled, which shall not exceed 48 months.

The number of Share Options to be granted to the Participants under the Incentive Scheme is 178,349,900 in total, and the underlying shares of the Share Options are RMB ordinary A Shares, representing approximately 1.954% of the total number of Shares of the Company (i.e. 9,127,269,000 Shares) as at the date of the announcement of the draft of the Incentive Scheme, of which 142,679,900 Share Options will be granted under the first grant, representing 80% of the total number of Share Options may be granted under the Incentive Scheme and 1.563% of the total number of Shares of the Company (i.e. 9,127,269,000 Shares) as at the date of the announcement of the draft of the Incentive Scheme; and 35,670,000 Share Options will be reserved, representing 20% of the total number of Share Options may be granted under the Incentive Scheme and 0.391% of the total number of Shares of the Company (i.e. 9,127,269,000 Shares) as at the date of the announcement of the draft of the Incentive Scheme.

- 10 -

LETTER FROM THE BOARD

The Restricted Shares Incentive Scheme

Source of Shares of the Incentive Scheme

The source of the underlying shares of the Restricted Share Incentive Scheme shall be ordinary A Shares to be directly issued to the Participants by the Company.

(II) Number of the Underlying Shares of the Incentive Scheme

The Company intends to grant 68,440,900 Restricted Shares to the Participants, representing 0.750% of the total number of Shares of the Company (i.e. 9,127,269,000 Shares) as at the date of the announcement of the draft of the Incentive Scheme, of which 54,752,700 shares will be granted under the first grant, representing 80% of the total number of Restricted Shares may be granted under the Incentive Scheme and 0.600% of the total number of Shares of the Company (i.e. 9,127,269,000 Shares) as at the date of the announcement of the draft of the Incentive Scheme; and 13,688,200 shares will be reserved, representing 20% of the total number of Restricted Shares may be granted under the Incentive Scheme and 0.150% of the total number of Shares of the Company (i.e. 9,127,269,000 Shares) as at the date of the announcement of the draft of the Incentive Scheme.

In addition, the Company has not engaged in the issuance of any equity securities within 12 months immediately preceding the date of this announcement.

The Allocation of the Restricted Shares Granted to the Participants (Including the Connected Persons of the Company that are Identified Pursuant to Hong Kong Regulations)

			Percentage to the
		Number of the	total number of the	Percentage to the
		Restricted	Restricted Shares	current total
Name	Position	Shares granted	granted	number of Shares
		(0'000 shares)
Hu Shu Jie#	Deputy General	200.00	2.92%	0.022%
	Manager
Zhao Guo Qing#	Deputy General	138.00	2.02%	0.015%
	Manager
Xu Hui#	Board Secretary	43.00	0.63%	0.005%
Liu Yu Xin#	Chief Financial	25.00	0.37%	0.003%
	Controller
Zheng Chun Lai*	Director of subsidiaries,	40.00	0.58%	0.004%
	General Manager
Zhang De Hui*	Director of subsidiaries,	40.00	0.58%	0.004%
	General Manager

- 11 -

LETTER FROM THE BOARD

			Percentage to the
		Number of the	total number of the	Percentage to the
		Restricted	Restricted Shares	current total
Name	Position	Shares granted	granted	number of Shares
		(0'000 shares)
Li Rui Feng*	Director of subsidiaries,	126.00	1.84%	0.014%
	General Manager
Core management, core technical (business)	4,863.27	71.06%	0.533%
backbone staff (287 people)
Reserved Grant		1,368.82	20.00%	0.150%
Total		6,844.09	100.00%	0.750%

The grantor of connected persons pursuant to Hong Kong regulations: Director or General Manager of the Company's certain significant subsidiaries, who are the connected persons of the Company as defined in the Hong Kong Listing Rules.

The related parties as defined in the laws and regulations of PRC.

Note:

The total Shares of the Company to be granted under the Share Incentive Scheme within the validity period to any one of the above-mentioned Participants will not exceed 1% of the total number of Shares of the Company. The total underlying shares of the Company involved under the fully effective Incentive Schemes will not exceed 10% of the total number of Shares of the Company as at the date of the proposal of the Share Incentive Scheme at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting.
The Participants of the Incentive Scheme exclude the Company's Directors, Supervisors, the Shareholders individually or in aggregate holding 5% or more of the Shares of the Company or the de facto controllers and their spouses, parents or children.

When determining the number of the Restricted Shares to be granted to the Participants, the Company divided the Participants into (i) president level; and (ii) other level.

For president level, the Company determined number of Restricted A Shares to be granted with reference to, among other things, standardized number of Restricted A Shares to be granted to president level staff (which is determined mainly based on the remuneration level of that staff).

For other levels, the Company determined number of Restricted A Shares to be granted with reference to the standardized number of Restricted A Shares to be granted to the president level staff, and further adjusted based on (i) the Participant's positions and seniority; (ii) the Participant's performance of company which he/she is working for; (iii) the Participant's salary level; (iv) the Participant's years of services; and (v) the Participant's capacities. The Company applied the above six assessment coefficients to calculate the numbers of Restricted A Shares to be granted to each Connected Participant.

- 12 -

LETTER FROM THE BOARD

There is no president level staff under the first grant of the Incentive Scheme. However, considering the completeness of the job rank and salary system, the Company considers the calculation of the number of Restricted A Shares of other employees based on the number of Restricted A Shares that can be granted to the president level staff.

The number of the Restricted Shares to be granted to the connected person(s) is determined on the same basis for determining the number of the Restricted Shares to be granted to the above Participants.

The Participants' list of Restricted Shares under the first grant does not include Directors of the Company. Therefore, no Director is required to abstain from voting on the proposal of Restricted A Share and other related proposals.

(IV) Validity Period, Grant Date, Lock-up Period and Unlocking Arrangement and Lock-up Period of the Restricted Share Incentive Scheme

1. Validity period of the Restricted Share Incentive Scheme

The validity period of the Incentive Scheme shall commence on the date on which the Restricted Shares have been granted and end on the date of unlocking all the Restricted Shares granted to the Participants or the repurchase and cancellation of such shares, which shall not exceed 48 months.

2. Grant Date

The Grant Date shall be determined by the Board after the Incentive Scheme is considered and passed at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting of the Company. The Company shall grant the Restricted Shares and complete the announcement and registration procedures within 60 days from the date on which the Incentive Scheme is considered and passed at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting of the Company, failing which the Company shall disclose the reasons for the failure and announce termination of the Incentive Scheme and the Restricted Shares which have not been granted will lapse. The Grant Date of part of the reserved Restricted Shares is the date of announcement of the resolutions of the Board to consider the grant of that part of Restricted Shares.

The Grant Date must be a trading day and must not fall within any of the following periods:

the period commencing from 60 days prior to the publication of annual reports or 30 days prior to the publication of semi-annual and quarterly reports of the Company, or in the event of delay in publishing the annual reports for special reasons, 60 days prior to the original date of publication and up to the date of publication of annual reports, or in the event of delay in publishing the semi-annual and quarterly reports for special reasons, 30 days prior to the original date of publication of semi-annual and quarterly reports and up to the date of publication;

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LETTER FROM THE BOARD

the period commencing from 10 days prior to the publication of the announcement of results forecast and preliminary results of the Company;

the period commencing from the date of occurrence of any significant event which may have significant effect on the trading prices of the Company's shares and their derivatives or the date on which relevant decision-making procedures start and ending on the second trading day following the publication in accordance with laws;

other periods as stipulated by the CSRC, the Shanghai Stock Exchange and The Stock Exchange of Hong Kong Limited.

The above-mentioned period during which the Company is not allowed to grant Restricted Shares is not included in the period of 60 days. In case of shareholding reduction by the Company's Directors and senior management as the Participants within six months before the grant of Restricted Shares, the grant of Restricted Shares shall be postponed for six months from the date of the last shareholding reduction in accordance with the short-swing trading provisions under the Securities Law.

Note: The dates mentioned in ① and ② above are based on whichever is longer.

3. Lock-up Period

The Lock-up Period for the Restricted Shares granted to the Participants are subject to different Lock-up Periods. The Lock-up Period for the first grant of Restricted Shares shall be 12, 24 or 36 months; the Lock-up Period for the reserved Restricted Shares shall be 12 or 24 months, both are commencing from the date of the grant. The shares and dividends obtained by the Participants due to the grant of the Restricted Shares not yet unlocked to them arising from capitalisation issue, bonus issue, share sub-division, etc. shall be subject to locking in accordance with the Incentive Scheme, and shall not be sold in the secondary market or otherwise transferred. The Unlocking Period of such shares is the same as that of the Restricted Shares. If the Company repurchases the Restricted Shares not yet unlocked, such shares shall be repurchased at the same time.

During the Lock-up Period, the Restricted Shares which are granted to the Participants under the Incentive Scheme and remain unlocked shall not be transferred, pledged for guarantees, charged or used for repayment of debt.

Upon unlocking, the Company shall proceed with the unlocking for the Participants who satisfy unlocking conditions, and the Restricted Shares held by the Participants who do not satisfy the unlocking conditions shall be repurchased and cancelled by the Company.

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LETTER FROM THE BOARD

4. Unlocking arrangement

The Unlocking Period and unlocking schedule for the Restricted Shares under the first grant of the Incentive Scheme is shown in the table below:

Unlocking arrangement

First Unlocking Period for the Restricted Shares under the first grant

Second Unlocking Period for the Restricted Shares under the first grant

Third Unlocking Period for the Restricted Shares under the first grant

	Unlocking
Unlocking time	proportion
Commencing from the first	50%
trading day upon the
expiry of 12 months from
the date of the first grant
to the last trading day upon
the expiry of 24 months
from the date of the first
grant
Commencing from the first	30%
trading day upon the
expiry of 24 months from
the date of the first grant
to the last trading day upon
the expiry of 36 months
from the date of the first
grant
Commencing from the first	20%
trading day upon the
expiry of 36 months from
the date of the first grant
to the last trading day upon
the expiry of 48 months
from the date of the first
grant

If the Restricted Shares under the reserved grant of the Incentive Scheme will be granted in 2021, the unlocking schedule for such shares shall be as follows:

		Unlocking
Unlocking arrangement	Unlocking time	proportion
First Unlocking Period for the	Commencing from the first	50%
reserved Restricted Shares	trading day upon the
	expiry of 12 months from
	the date of the reserved
	grant to the last trading
	day upon the expiry of 24
	months from the date of
	the reserved grant	50%
Second Unlocking Period for	Commencing from the first
the reserved Restricted	trading day upon the
Shares	expiry of 24 months from
	the date of the reserved
	grant to the last trading
	day upon the expiry of 36
	months from the date of
	the reserved grant

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LETTER FROM THE BOARD

For Restricted Shares that have not been applied for unlocking or cannot be applied for unlocking due to failure to meet the unlocking conditions during the aforesaid Unlocking Periods, the Company will repurchase and cancel such Restricted Shares from relevant Participants in accordance with the principles of the Scheme.

5. Lock-up period

The lock-up arrangement under this Restricted Share Incentive Scheme shall be implemented in accordance with the Company Law, the Securities Law and other relevant laws, regulations and regulatory documents as well as the requirements of the Articles of Association. Specific contents are as follows:

1. Where a Participant is a member of the senior management of the Company, the number of Shares of the Company which may be transferred by the Participant each year during his/her term of office shall not exceed 25% of the total number of the Shares of the Company held by him/her. No Shares of the Company held by him/her shall be transferred within six months after his/her termination of office.
2. Where a Participant is a member of the senior management of the Company and he/she disposes of any Shares of the Company within six months after acquisition or buys back such Shares within six months after disposal, all gains arising therefrom shall be accounted to the Company and the Board will collect all such gains.
3. If, during the validity period of the Incentive Scheme, there is any amendment to the requirements regarding transfer of shares by a member of the senior management of the Company under the Company Law, the Securities Law and other relevant laws, regulations, regulatory documents and the Articles of Association, such amended requirements thereunder shall apply to the shares transferred by the Participants during the relevant times.
The Grant Price of the Restricted Shares and the Basis of Determination for the Grant Price
1. Grant Price of the Restricted Shares under first grant
The Grant Price of the Restricted Shares under first grant shall be RMB4.37 per

Share. Upon fulfilment of the grant conditions, each Participant is entitled to acquire the Restricted Shares newly issued to the Participants by the Company at the price of RMB4.37 per Share.

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LETTER FROM THE BOARD

2. Basis of determination for the grant price of the Restricted Shares under first grant

The grant price of the Restricted Shares under first grant shall not be lower than the carrying amount of the shares, and not lower than the higher of the followings:

50% of the average trading price of the Shares (i.e. RMB4.23 per Share) on the trading day preceding the date of the announcement of the draft of the Incentive Scheme;
50% of the average trading price of the Shares (i.e. RMB4.37 per Share) for 120 trading days preceding the date of the announcement of the draft of the Incentive Scheme.

In addition, the closing price of A Shares as quoted on the Shanghai Stock Exchange on 23 January 2020 was RMB8.35 per Share.

3. Basis of determination for the grant price of the reserved Restricted Shares

The grant of the reserved Restricted Shares is subject to the consideration and approval of related resolution by the Board and the disclosure of related information. The grant price of the reserved Restricted Shares shall not be lower than the carrying amount of the shares, and not lower than the higher of the followings:

50% of the average trading price of the Shares on the trading day preceding the date of the announcement of the Board resolution on the grant of the reserved Restricted Shares;
50% of the average trading price of the Shares for 20, 60 or 120 trading days preceding the date of the announcement of the Board resolution on the grant of the reserved Restricted Shares.

The grant price is fixed in compliance with Article 23 of the Management Measures issued by the CSRC, which states that:

"When a listed company grants restricted shares to participants, it should fix the grant price or the method of determining the grant price. The grant price must not be lower than the nominal value of the share, and in principle must not be lower than the higher of:

50% of the average trading price of the company's shares on the trading day immediately before the announcement of the draft share incentive scheme;

50% of the average trading price of the company's shares for 20, 60 or 120 trading days preceding the date of the announcement of the draft share incentive scheme.

If a listed company adopts other methods to determine the grant price of restricted shares, it shall explain the pricing basis and method in the share incentive scheme."

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LETTER FROM THE BOARD

The determination of the grant price has fully taken into account the Company's current share price and market practices. The grant price represents a large discount to the corresponding A Share market price, which is intended to improve the incentive, attract and retain talented individuals, so that the interests of Shareholders and the Company as well as the personal interests of the key personnel are bonded together to better realize the interests of all Shareholders.

Meanwhile, the grant price is fixed in compliance with Article 23 of the Management Measures issued by the CSRC.

Above all, the grant price is fair and reasonable to Independent Shareholders.

4. The total funds to be raised and the proposed use of the proceeds

Based on the grant price of the Restricted Shares under the first grant, the total funds to be raised from the first grant of the Restricted Shares is estimated to be approximately RMB239,269,300. The grant of the reserved Restricted Shares shall be implemented in accordance with the aforementioned basis of determination. These proceeds are intended to be used as general working capital of the Company.

(VI) Conditions on Grant and Unlocking of the Restricted Shares

1. Conditions on grant of the Restricted Shares

Restricted Shares may be granted to the Participants by the Company upon satisfaction of all of the following conditions. In other words, Restricted Shares cannot be granted to the Participants if any of the following conditions of grant is not satisfied.

There is no occurrence of any of the following events on the part of the Company:
- issue of an auditors' report with adverse opinion or which indicates an inability to give opinion by a certified public accountant with respect to the financial report of the Company for its most recent accounting year;

issue of an auditors' report with adverse opinion or which indicates an inability to give opinion by a certified public accountant with respect to the internal control of the financial report of the Company for its most recent accounting year;

failure to conduct profit distribution in accordance with laws and regulations, the Articles of Association and public undertakings during the last 36 months after listing;

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LETTER FROM THE BOARD

prohibition from implementation of a share incentive scheme by laws and regulations;

- other circumstances determined by the CSRC.
There is no occurrence of any of the following events on the part of the Participants:
① he or she has been determined by any stock exchange as an ineligible person in the last 12 months;
② he or she has been determined by the CSRC and its delegated agencies as an ineligible person in the last 12 months;
③ he or she has been imposed by the CSRC or its delegated agencies with administrative penalties or measures prohibiting access into the market in the last 12 months due to material non-compliance of laws or regulations;
④ he or she is prohibited from acting as a director or a member of the senior management as required by the Company Law;
- he or she is prohibited from participating in share incentive schemes of listed companies as required by laws and regulations;

he or she is under other circumstances determined by the CSRC.

2. Conditions on unlocking of the Restricted Shares

During the Lock-up Period, the following conditions must be fulfilled before the

Restricted Shares granted to the Participants can be unlocked:

There is no occurrence of any of the following events on the part of the Company:

issue of an auditors' report with adverse opinion or which indicates an inability to give opinion by a certified public accountant with respect to the financial report of the Company for its most recent accounting year;

issue of an auditors' report with adverse opinion or which indicates an inability to give opinion by a certified public accountant with respect to the internal control of the financial report of the Company for its most recent accounting year;

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LETTER FROM THE BOARD

failure to conduct profit distribution in accordance with laws and regulations, the Articles of Association and public undertakings during the last 36 months after listing;

prohibition from implementation of a share incentive scheme by laws and regulations;

- other circumstances determined by the CSRC.
There is no occurrence of any of the following events on the part of the Participants:
① he or she has been determined by any stock exchange as an ineligible person in the last 12 months;
② he or she has been determined by the CSRC and its delegated agencies as an ineligible person in the last 12 months;
③ he or she has been imposed by the CSRC or its delegated agencies with administrative penalties or measures prohibiting access into the market in the last 12 months due to material non-compliance of laws or regulations;
④ he or she is prohibited from acting as a director or a member of the senior management as required by the Company Law;
- he or she is prohibited from participating in share incentive schemes of listed companies as required by laws and regulations;

he or she is under other circumstances determined by the CSRC.

In case the Company has any of the circumstances specified in the above sub-paragraph 1), all the Restricted Shares that have been granted to the Participants under the Incentive Scheme but have not been unlocked shall be repurchased and cancelled by the Company; in case of any circumstance specified in the sub-paragraph 1) under which one becomes personally liable, the repurchase price shall not exceed the grant price; in case any Participant has any of the circumstances specified in the above sub-paragraph 2), the Restricted Shares that have been granted to the Participant under the Incentive Scheme but have not been unlocked shall be repurchased and cancelled by the Company, the repurchase price shall not exceed the Grant Price.

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LETTER FROM THE BOARD

Performance appraisal at company level

The unlocking appraisal period of the Incentive Scheme covers three accounting years from 2020 to 2022. Whether the performance appraisal indicators at company level are up to standards shall be determined according to the value of the combined performance coefficient in each performance appraisal year. The annual performance appraisal targets of the Restricted Shares under first grant are as follows:

Selection of
performance
indicators	Sales volume	Net profit	Threshold
Weights of	65%	35%	-
performance
indicators
Combined	(actual value of performance indicator/target value
performance	of performance indicator) × weight of performance indicator
coefficient

First Unlocking	The sales volume of
Period	automobiles of the
	Company shall not
	be less than 1.11
	million units in
	2020

The net profit shall	Combined
not be less than	performance
RMB4.7 billion in	coefficient ≥1
2020

Second Unlocking The sales volume of

Periodautomobiles of the Company shall not be less than 1.21 million units in 2021

The net profit shall	Combined
not be less than	performance
RMB5.0 billion in	coefficient ≥1
2021

Third Unlocking	The sales volume of
Period	automobiles of the
	Company shall not
	be less than 1.35
	million units in
	2022

The net profit shall	Combined
not be less than	performance
RMB5.5 billion in	coefficient ≥1
2022

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LETTER FROM THE BOARD

The annual performance appraisal targets of the reserved Restricted Shares are as follows:

Selection of
performance
indicators	Sales volume	Net profit	Threshold
Weights of	65%	35%	-
performance
indicators
First Unlocking	The sales volume of	The net profit shall	Combined
Period	automobiles of	not be less than	performance
	Company shall not	RMB5.0 billion in	coefficient ≥1
	be less than 1.21	2021
	million units in
	2021

Second Unlocking The sales volume of

Periodautomobiles of the Company shall not be less than 1.35 million units in 2022

The net profit shall	Combined
not be less than	performance
RMB5.5 billion in	coefficient ≥1
2022

Note: The "net profit" mentioned above refers to the audited net profit attributable to Shareholders of the listed company, and the "sales volume" mentioned above refers to the audited annual sales volume.

If the combined performance coefficient of the Company is ≥ 1, the performance appraisal indicators at company level are up to standards and the number of Restricted Shares held by the Participants that may be unlocked in each Unlocking Period will be determined according to the performance appraisal result at individual level; if the performance appraisal indicators of the Company are not up to standards, all Restricted Shares held by the Participants that are planned to be unlocked in relevant appraisal year shall not be unlocked and shall be repurchased and cancelled by the Company.

If any condition of unlock cannot be satisfied in any unlock period within the Validity Period of the Incentive Scheme, such portion of the Restricted Shares which may be unlocked in such current unlock period cannot be deferred to the next year and will be repurchased and cancelled by the Company.

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LETTER FROM THE BOARD

Performance appraisal at individual level

The annual performance appraisal results of the Participants are classified into five grades, i.e., A, B, C, D and E. The individual performance appraisal results of the Participants are determined as per the table below:

Whether Qualified		Qualified		Unqualified
Appraisal results	A	B	C	D	E
Exercisable proportion		100%			0%

If the individual performance appraisal result of a Participant is qualified, the performance appraisal indicator at individual level is up to standard, and if the annual performance appraisal indicator at company level is also up to standard, the limit planned to be unlocked by the Participant in the current year may be fully unlocked. If the individual performance appraisal result of the Participant is unqualified, the Company shall cancel the limit planned to be unlocked by the Participant in the current period according to the provisions of the Incentive Scheme, and the Restricted Shares shall be repurchased and cancelled by the Company.

If a Participant fails to meet his/her performance target, no corresponding Restricted Shares shall be unlocked or deferred to the next year and will be repurchased and cancelled by the Company.

Scientificity and reasonableness of the appraisal indicators

The Restricted Shares appraisal indicators of the Company are in line with the basic requirements of laws and regulations as well as the Company's Articles of Association. The Restricted Shares appraisal indicators of the Company are categorised into two levels, i.e. performance appraisal at company level and performance appraisal at individual level.

The performance appraisal indicators at company level under the Scheme are sales volume and net profit. The sales volume is our core strategic indicator, which is designed to support the realization of the sale target; the net profit is the ultimate manifestation of the Company's profitability and corporate growth, and the increasing net profit is the basis for the survival of the enterprise and the condition for its development. The determination of the specific values takes into account the macroeconomic environment, the development of the industry, the market competition, the Company's strategic planning and other relevant factors. After comprehensively considering the possibility of their realization and the incentive effect on the Company's employees, such indicators are reasonable and scientific.

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LETTER FROM THE BOARD

In addition to the performance appraisal at company level, the Company has established a strict performance appraisal system for individuals, which evaluates the performance of Participants in an accurate and all-round manner. The Company will determine whether the Participants meet the unlocking conditions based on their performance appraisal results for the previous year.

Given the above, the appraisal system for the Incentive Scheme of the Company is all-round, comprehensive and operable, and the appraisal indicators are scientific and reasonable, which are binding on the Participants and can serve the appraisal goal of the Incentive Scheme.

(VII) Methods and Procedures for Adjustment of the Restricted Share Incentive Scheme

1. Methods of adjusting the number of Restricted Shares

In the event of any capitalisation issue, bonus issue, sub-division, rights issue or share consolidation of the Company in the period from the date of this announcement on the Incentive Scheme to the completion of registration of Restricted Shares by the Participants, the number of Restricted Shares shall be adjusted accordingly. The adjustment method is as follows:

Capitalisation issue, bonus issue and sub-division of share capital
Q=Q0×(1+n)

Where: Q0 represents the number of Restricted Shares before the adjustment; n represents the ratio of increase per share resulting from capitalisation issue, bonus issue or subdivision of share capital (i.e. the increase in number of shares per share upon capitalisation issue, bonus issue and sub-division of the share capital) or the ratio of the number of shares to be issued under the rights issue or new issue to the total share capital of the Company before the rights issue or new issue; Q represents the adjusted number of Restricted Shares.

Rights issue
Q=Q0×P1×(1+n)÷(P1+P2×n)

Where: Q0 represents the number of Restricted Shares before the adjustment; P1 represents the closing price as at the record date; P2 represents the price of the rights issue; n represents the ratio of the rights issue (i.e. the ratio of the number of shares to be issued under the rights issue to the total share capital of the Company before the rights issue); Q represents the adjusted number of Restricted Shares.

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LETTER FROM THE BOARD

Share consolidation
Q=Q0×n

Where: Q0 represents the number of Restricted Shares before the adjustment; n represents the ratio of consolidation of shares (i.e. one share shall be consolidated into n shares); Q represents the adjusted number of Restricted Shares.

Dividend distribution and additional issues

Under the above circumstances, no adjustment will be made on the number of the Restricted Shares.

2. Method of adjusting the Grant Price of the Restricted Shares

In the event that, from the date of the date of this announcement on the Incentive Scheme to the registration of the Restricted Shares by the Participants, any issue of shares by capitalisation issue, bonus issue, sub-division, rights issue or consolidation of shares or dividend distribution has been made, an adjustment to the Grant Price of Restricted Shares shall be made by the Company accordingly. The adjustment method is as follows:

Issue of shares by capitalisation issue, bonus issue and sub-division of shares
P=P0÷(1+n)

Where: P0 represents the Grant Price before the adjustment; n represents the ratio of increase per share resulting from capitalisation issue, bonus issue and sub-division of shares; P represents the adjusted Grant Price.

Rights issue
P=P0×(P1+P2×n)÷[P1×(1+n)]

Where: P0 represents the Grant Price before the adjustment; P1 represents the closing price as at the record date; P2 represents the price of the rights issue; n represents the ratio of the rights issue (i.e. the ratio of the number of shares to be issued under the rights issue to the total share capital of the Company before the rights issue); P represents the adjusted Grant Price.

Share consolidation
P=P0÷n

Where: P0 represents the Grant Price before the adjustment; n represents the ratio of consolidation of shares; P represents the adjusted Grant Price.

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LETTER FROM THE BOARD

Dividend distribution P=P0-V

Where: P0 represents the Grant Price before the adjustment; V represents the dividend per share; P represents the adjusted Grant Price. P shall be greater than 1 after the dividend distribution.

Under the circumstance of additional issue of new shares, no adjustment will be made on the Grant Price of the Restricted Shares.

3. Adjustment procedures for the Incentive Scheme of Restricted Shares

The general meeting of the Company shall authorize the Board to adjust the number

or the Grant Price of Restricted Shares for the above reasons. After the Board adjusts the Grant Price or the number of Restricted Shares according to the above provisions, it shall promptly make announcement and notify the Participants in accordance with the relevant provisions, and perform the information disclosure procedures. The Company will engage a law firm to give professional advice to the Board on whether such adjustment is in compliance with the Management Measures, the Articles of Association and the Incentive Scheme.

If, for other reasons, it is necessary to adjust the number, the Grant Price or other terms of Restricted Shares, the Company will engage a law firm to give professional advice to the Board on whether such adjustment is in compliance with the Management Measures, the Articles of Association and the Incentive Scheme, which shall be subject to consideration and approval of the general meeting.

The adjustment of the Incentive Scheme of Restricted Shares complies with the requirements of the laws and regulations of the PRC (including but not limited to Article 48 of Management Measures "when it is necessary to adjust the price or number due to the ex-right,ex-dividend of the underlying shares or other reasons, the board of directors of the listed company shall make adjustments in accordance with the principles, methods and procedures specified in the share incentive scheme").

(VIII) Accounting Treatment of the Restricted Shares

In accordance with the requirements of the Accounting Standards for Enterprises No.11-Share-based Payment and the Accounting Standards for Enterprises No.22-Recognition and Measurement of Financial Instruments, the Company shall, on each balance sheet date during the Lock-up Period, adjust the estimated number of Restricted Shares that may be unlocked in accordance with the latest number of the Participants who have fulfilled the unlocking conditions and the performance indicators, and recognize the services provided by the staff during the period as the relevant costs or expenses and capital reserve in accordance with the fair value of the Restricted Shares on the Grant Date.

1. Accounting treatment

On the Grant Date

The bank deposit, share capital, capital reserve, treasure shares and other payables shall be recognized according to the status of the grant of Restricted Shares to the Participants by the Company.

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LETTER FROM THE BOARD

On each balance sheet date during the Lock-up Period

Pursuant to the requirements of the accounting standards, the services provided by the staff during current period will be recognised as costs and the owners' equity or liability will be recognized on each balance sheet date during the Lock-up Period based on the best estimate of the number of unlockable Restricted Shares and the fair value of the equity instrument on the Grant Date.

On the unlocking date

On the unlocking date, if the unlocking conditions are fulfilled, the Restricted Shares shall be unlocked and the capital reserve recognised on each balance sheet date before the unlocking date shall be carried forward (other capital reserve); if all or part of the shares are lapsed or cancelled since the same have not been unlocked, such shares will be repurchased by the Company and dealt with pursuant to the accounting standards and relevant requirements.

2. Estimated impact on the operating performance of each of the period due to implementation of the Restricted Shares

In accordance with the requirements of the Accounting Standards for Enterprises No.11-Share-based Payment and the Accounting Standards for Enterprises No.22- Recognition and Measurement of Financial Instruments, the Company shall measure the fair value of the restricted shares based on the market prices of the shares. On the measurement date, the fair value of share-based payment per Restricted Share =market price of the shares of the Company-Grant Price.

Assuming the first grant of Restricted Shares takes place in April 2020, based on the data on 23 January 2020, the total amount of fair value of the equity instruments first granted by the Company to the Participants is RMB217,915,700.

Based on the measurement above, the total cost of 54,752,700 Restricted Shares first granted under the Scheme is RMB217,915,700 and details of amortization from 2020 to

2023 are set out below:

				Currency: RMB
Number of
Restricted Shares	Total
under the first	cost to be
grant	amortized	2020	2021	2022	2023
(0'000 shares)	(RMB0'000) (RMB0'000) (RMB0'000) (RMB0'000) (RMB0'000)
5,475.27	21,791.57	10,411.53	8,353.44	2,542.35	484.26

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LETTER FROM THE BOARD

Notes:

For the consideration of prudent accounting principle, the cost estimate and amortization above have not taken into consideration the future locking of the Restricted Shares.
The above results do not represent the final accounting costs. The actual accounting costs are related to the actual Grant Date, the Grant Price and the number of grant, as well as the actual effective and lapsed quantities, and the possible dilutive effects are brought to the attention of Shareholders.
The final result of the above impact on the Company's operating results will be subject to the annual audit report issued by the accounting firm.

The estimate is based on certain parameters and the actual costs of share incentives will vary with parameters as determined by the Board after the Grant Date. The Company will disclose specific accounting methods and the impact on the financial data of the Company in the regular reports of the Company.

3. The accounting treatment of the reserved Restricted Shares is same as the accounting treatment of the Restricted Shares under the first grant.

(IX) Principles of Repurchase and Cancellation of Restricted Shares

1. Repurchase price of the Restricted Shares

In the event that the Company repurchases and cancels the Restricted Shares in accordance with the requirements of the Incentive Scheme, save and except any adjustment required to be made to the number of the Restricted Shares to be repurchased and the repurchase price herein below, the number of the Restricted Shares to be repurchased shall be the number of the restricted shares granted but not yet unlocked and the repurchase price shall be the sum of the grant price and the interests for bank deposits during the same period. However, if any Participant assumes personal liabilities under section 1 of Article 18 of the Management Measures, or any Participant falls within section 2 of Article 18 of the Management Measures, the repurchase price shall be the Grant Price.

2. Method for adjustment of repurchase quantity

Upon completion of registration of the Restricted Shares granted to the Participants, in case of capitalisation issue, bonus issue, subdivision of share capital, rights issue, share consolidation and other matters affecting the total share capital or the number of shares of the Company, it shall make adjustments to the repurchase quantity of the Restricted Shares yet to be unlocked accordingly. The Company will repurchase such number of Restricted Shares granted to, and other shares of the Company so obtained therefrom by, the Participants based on such adjustment. The adjustment method is as follows:

Capitalisation issue, bonus issue and sub-division of share capital
Q=Q0×(1+n)

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LETTER FROM THE BOARD

Where: Q0 represents the number of Restricted Shares prior to adjustment; n represents the ratio of increase per share resulting from capitalisation issue, bonus issue and sub-division of share capital (i.e. the increase in number of shares per share upon capitalisation issue, bonus issue and sub-division of the share capital) or the ratio of the number of shares to be issued under the rights issue or new issue to the total share capital of the Company before the rights issue or new issue; Q represents the number of Restricted Shares after adjustment.

Rights issue
Q=Q0×P1×(1+n)÷(P1+P2×n)

Where: Q0 represents the number of Restricted Shares prior to adjustment; P1 represents the closing price on the record date; P2 represents the price of rights issue; n represents the ratio of the rights issue (i.e. the ratio of the number of shares to be issued under the rights issue to the total share capital of the Company prior to the rights issue); Q represents the number of Restricted Shares after adjustment.

Share consolidation
Q=Q0×n

Where: Q0 represents the number of Restricted Shares prior to adjustment; n represents the ratio of share consolidation (i.e. one share shall be consolidated into n share); Q represents the number of Restricted Shares after adjustment.

Dividend distribution and additional issues

Under the above circumstances, no adjustment will be made on the number of the Restricted Shares.

3. Method for adjustment of repurchase price

Upon completion of registration of the Restricted Shares granted to the Participants, in case of capitalisation issue, bonus issue, subdivision of share capital, rights issue, share consolidation or distribution of dividends and other issues affecting the total share capital or share price of the Company, the repurchase price of the Restricted Shares yet to be unlocked shall be adjusted by the Company accordingly. The Company will repurchase the Restricted Shares granted to, and other Shares of the Company so obtained therefrom by, the Participants at the adjusted price. The adjustment method is as follows:

Capitalisation issue, bonus issue and sub-division of share capital
P=P0÷(1+n)

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LETTER FROM THE BOARD

Where: P0 represents the Grant Price per Restricted Share; n represents the rate of increase per share resulting from capitalisation issue, bonus issue and sub-division of share capital (i.e. the increase in number of shares per share upon capitalisation issue, bonus issue and sub-division of the share capital); P represents the repurchase price per Restricted Share after adjustment.

Rights issue
P=P0×(P1+P2×n)÷[P1×(1+n)]

Where: P1 represents the closing price of shares on the record date; P2 represents the price of rights issue; n represents the ratio of the rights issue (i.e. the ratio of the number of shares to be issued under the rights issue to the total share capital of the Company prior to the rights issue).

Share consolidation
P=P0÷n

Where: P0 represents the Grant Price per Restricted Share; n represents the ratio of share consolidation per share (i.e. one share shall be consolidated into n share); P represents the repurchase price per Restricted Share after adjustment.

Dividend distribution
P=P0-V

Where: P0 represents the repurchase price per Restricted Share prior to adjustment; V represents the amount of dividends per share; P represents the repurchase price per Restricted Share after adjustment. P shall be greater than 1 after the dividend distribution.

Under the circumstance of additional issue of new shares, no adjustment will be made on the repurchase price of the Restricted Shares.

4. Procedures for adjustment of repurchase quantity and price

The Board of the Company shall be authorized at the general meeting of the Company to adjust the repurchase quantity or price of Restricted Shares based on the reasons listed above. After adjustment to the repurchase quantity or price according to the above provisions, an announcement shall be made in a timely manner.

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LETTER FROM THE BOARD

The adjustment to the repurchase quantity or price of Restricted Shares for other reasons shall be subject to resolution of the Board and approval at the general meeting.

5. Procedures of repurchase and cancellation

The Company shall promptly convene a Board meeting to consider the repurchase adjustment plan which shall be implemented in accordance with the above provisions, and submit the repurchase plan to the general meeting, A Shareholders' Class Meeting and H Shareholders' Class Meeting for approval according to law;
The Company will engage a law firm to give professional advice on whether the repurchase plan of shares is in compliance with the laws, administrative regulations, the Management Measures and the Scheme;
The Company shall apply to the stock exchange for unlocking such Restricted Shares, and the repurchase payment shall be paid to the Participants upon unlocking and the transfer of such shares shall be completed at a securities registration company as soon as possible. The Company shall cancel such portion of shares within a reasonable time after the completion of the transfer.

The Share Option Incentive Scheme

Source of Shares under the Share Option Incentive Scheme

The source of the underlying shares under the Share Option Incentive Scheme shall be ordinary A Shares directly issued to the Participants by the Company.

(II) Number of Underlying Shares under the Share Option Incentive Scheme

The Company intends to grant 109,909,000 Share Options to the Participants, representing approximately 1.204% of the total number of Shares of the Company (i.e. 9,127,269,000 Shares) as at the date of the announcement of the draft of the Incentive Scheme, of which 87,927,200 Share Options will be granted under the first grant, representing 80% of the total number of Share Options may be granted under the Incentive Scheme and approximately 0.963% of the total number of Shares of the Company (i.e. 9,127,269,000 Shares) as at the date of the announcement of the draft of the Incentive Scheme; and 21,981,800 Share Options will be reserved, representing 20% of the total number of Share Options may be granted under the Incentive Scheme and approximately 0.241% of the total number of Shares of the Company (i.e. 9,127,269,000 Shares) as at the date of the announcement of the draft of the Incentive Scheme. Each share option has the right to purchase one ordinary A share at the agreed Exercise Price within the validity period, subject to the Exercise Conditions.

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LETTER FROM THE BOARD

(III) The Allocation of Shares under the Share Option Incentive Scheme

The following table sets out the allocation of Share Options among the Participants under the first grant pursuant to the Incentive Scheme:

		Percentage to
		the total
	Number of	number of
	shares subject	shares subject	Percentage to
	to the Share	to the Share	the current
	Options to be	Options to be	total number
Position	granted	granted	of Shares
	(0'000 shares)
Core management, core
technical (business) backbone
staff (1,672 people)	8,792.72	80%	0.963%
Reserved grant	2,198.18	20%	0.241%
Total	10,990.90	100%	1.204%

Note:

The total Shares to be granted under the fully effective Share Option Scheme to any one of the above-mentioned Participants will not exceed 1% of the total number of Shares of the Company. The total underlying shares to be granted to the qualified Participants will not exceed 10% of the total number of Shares of the Company as at the date of the proposal of the Share Option Scheme at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting.
The Participants of the Incentive Scheme exclude the Company's Directors, Supervisors, the Shareholders individually or in aggregate holding 5% or more of the Shares of the Company or the de facto controllers and their spouses, parents or children.

There are no Directors of the Company on the list of the Participants under the first grant of the Incentive Scheme. Therefore, no Director is required to abstain from voting on the proposal of A Share Option Incentive Scheme and other related proposals.

(IV) Validity Period, Grant Date, Vesting Period, Exercisable Date and Lock-up Period of the Share Option Incentive Scheme

1. Validity period of the Share Option Incentive Scheme

The validity period of the Incentive Scheme shall commence from the date of the grant of the Share Options and end on the date on which all the Share Options granted to the Participants have been exercised or cancelled, which shall not be longer than 48 months.

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LETTER FROM THE BOARD

2. Grant Date

The Grant Date shall be determined by the Board after the Incentive Scheme is considered and passed at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting of the Company. The Company shall grant the Share Options and complete the announcement and registration procedures within 60 days from the date on which the Incentive Scheme is considered and passed at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting of the Company, failing which the Incentive Scheme will terminate and the Share Options which have not been granted will lapse. The Grant Date of the reserved Share Options shall be the date of announcement of the resolutions of the Board to consider the grant of that part of Share Options.

The Grant Date must be a trading day and must not fall within any of the following periods:

the period commencing from 60 days prior to the publication of annual reports or 30 days prior to the publication of semi-annual and quarterly reports of the Company, or in the event of delay in publishing the annual reports for special reasons, 60 days prior to the original date of publication and up to the date of publication of annual reports, or in the event of delay in publishing the semi-annual and quarterly reports for special reasons, 30 days prior to the original date of publication of semi-annual and quarterly reports and up to the date of publication;

the period commencing from ten days prior to the publication of the announcement of results forecast and preliminary results of the Company;

the period commencing from the date of occurrence of any significant event which may have significant effect on the trading prices of the Company's Shares and their derivatives or the date on which relevant decision-making procedures start and ending on the second trading day following the publication in accordance with laws;

other periods as stipulated by the CSRC, the Shanghai Stock Exchange and The Stock Exchange of Hong Kong Limited.

Note: The dates mentioned in ① and ② above are based on whichever is longer.

3. Vesting Period

The Vesting Period shall commence from the date of registration of the grant of the Share Options and end on the Exercisable Date of the Share Options. The Share Options granted to the Participants are subject to different Vesting Periods. The Vesting Period for the first grant of Share Options shall be 12, 24 or 36 months; the Vesting Period for part of the reserved Share Options shall be 12 or 24 months, both are commencing from the date of the grant.

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LETTER FROM THE BOARD

The Share Options which are granted to the Participants under the Incentive Scheme shall not be transferred, pledged for guarantees, charged or used for repayment of debt.

4. Exercisable Date

The Share Options to be granted shall be exercisable after expiry of 12 months commencing from the date of the grant, subject to the approval of the Scheme at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting. The Exercisable Date must be a trading day and shall not fall within any of the following periods:

the period commencing from 60 days prior to the publication of annual reports or 30 days prior to the publication of semi-annual and quarterly reports of the Company, or in the event of delay in publishing the annual reports for special reasons, 60 days prior to the original date of publication and up to the date of publication of annual reports, or in the event of delay in publishing the semi-annual and quarterly reports for special reasons, 30 days prior to the original date of publication of semi-annual and quarterly reports and up to the date of publication;

the period commencing from 10 days prior to the publication of the announcement of results forecast and preliminary results of the Company;

the period commencing from the date of occurrence of any significant event which may have significant effect on the trading prices of the Company's Shares and their derivatives or the date on which relevant decision-making procedures start and ending on the second trading day following the publication in accordance with laws;

other periods as stipulated by the CSRC, the Shanghai Stock Exchange and The Stock Exchange of Hong Kong Limited.

On the Exercisable Date, the Participants can exercise their Share Options in three tranches within 36 months after the expiry of 12 months commencing from the date of the first grant of the Share Options, upon the fulfillment of the Exercise Conditions under the Scheme.

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LETTER FROM THE BOARD

The exercise periods of the Share Options to be granted under the first grant and the schedule for each exercise period are shown in the table below:

		Exercise
Exercise arrangement	Exercise time	proportion

First exercise period for the Share Options to be granted under the first grant

Second exercise period for the Share Options to be granted under the first grant

Third exercise period for the Share Options to be granted under the first grant

Commencing from the first trading	1/3
day upon the expiry of 12 months
from the date of the first grant to
the last trading day upon the expiry
of 24 months from the date of the
first grant
Commencing from the first trading	1/3
day upon the expiry of 24 months
from the date of the first grant to
the last trading day upon the expiry
of 36 months from the date of the
first grant
Commencing from the first trading	1/3
day upon the expiry of 36 months
from the date of the first grant to
the last trading day upon the expiry
of 48 months from the date of the
first grant

The exercise periods of the Share Options to be reserved under the Incentive Scheme and the schedule for each exercise period are shown in the table below:

		Exercise
Exercise arrangement	Exercise time	proportion
First exercise period for	Commencing from the first trading	1/2
the reserved Share	day upon the expiry of 12 months
Options	from the date of the reserved grant
	to the last trading day upon the
	expiry of 24 months from the date
	of the first grant
Second exercise period for	Commencing from the first trading	1/2
the reserved Share	day upon the expiry of 24 months
Options	from the date of the reserved grant
	to the last trading day upon the
	expiry of 36 months from the date
	of the first grant

Share Options for which Exercise Conditions are not fulfilled during the above

agreed period shall not be exercised or deferred to the next exercise period, and the

Company shall cancel the underlying Share Options of the Participants according to the

principle stipulated in the Incentive Scheme. After the end of each exercise period of the

Share Options, the Share Options of the Participants for the current period that have not

been exercised shall be terminated and cancelled by the Company.

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LETTER FROM THE BOARD

5. Lock-up period

The Lock-up period refers to the period during which there is sale restriction on Shares obtained by the Participants upon the exercise. The Lock-up period arrangement under the Incentive Scheme shall be implemented in accordance with the requirements of the Company Law, the Securities Law and other relevant laws, regulations and regulatory documents as well as the Articles of Association. Specific contents are as follows:

1. Where a Participant is a member of the senior management of the Company, the number of Shares of the Company which may be transferred by the Participant each year during his/her term of office shall not exceed 25% of the total number of the Shares of the Company held by him/her. No Shares of the Company held by him/her shall be transferred within six months after his/her termination of office.
2. Where a Participant is a member of the senior management of the Company and he/she disposes of any Shares of the Company within six months after acquisition or buys back such Shares within six months after disposal, all gains arising therefrom shall be accounted to the Company and the Board will collect all such gains.
3. If, during the validity period of the Incentive Scheme, there is any amendment to the requirements regarding transfer of Shares by a member of the senior management of the Company under the Company Law, the Securities Law and other relevant laws, regulations, regulatory documents and the Articles of Association, such amended requirements thereunder shall apply to the Shares transferred by the Participants during the relevant times.
The Exercise Price of the Share Options and the Basis of Determination for the Exercise Price
1. Exercise Price of the Share Options under the first grant
The Exercise Price of the Share Options under the first grant shall be RMB8.73 per

Share.

2. Basis of determination for the Exercise Price of the Share Options under the first grant

The Exercise Price of the Share Options under the first grant shall not be lower than the carrying amount of the shares, and not lower than the higher of the followings:

the average trading price of the Shares (i.e. RMB8.45 per Share) on the trading day preceding the date of the announcement of the draft of the Incentive Scheme;
the average trading price of the Shares (i.e. RMB8.73 per Share) for 120 trading days preceding the date of the announcement of the draft of the Incentive Scheme.

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LETTER FROM THE BOARD

3. Basis of determination for the Exercise Price of the reserved Share Options

The grant of the reserved Share Options is subject to the consideration and approval of related resolution by the Board and the disclosure of related information. The Exercise Price of the reserved Share Options shall not be lower than the carrying amount of the Shares, and not lower than the higher of the followings:

the average trading price of the Shares on the trading day preceding the date of the announcement of the Board resolution on the grant of the reserved Share Options;
the average trading price of the Shares for 20, 60 or 120 trading days preceding the date of the announcement of the Board resolution on the grant of the reserved Share Options.

The Exercise Price is fixed in compliance with Article 29 of the Management Measures for Share Incentives issued by the CSRC, which states that:

"When a listed company grants share options to participants, it should fix the exercise price or the method of determining the exercise price. The exercise price must not be lower than the nominal value of the shares, and in principle, must not be lower than the higher of:

the average trading price of the company's shares on the trading day immediately before the announcement of the draft share incentive scheme;

the average trading price of the company's shares for 20, 60 or 120 trading days preceding the date of the announcement of the draft share incentive scheme.

If a listed company adopts other methods to determine the grant price of restricted shares, it shall explain the pricing basis and method in the share incentive scheme."

(VI) Conditions on Grant and Exercising of the Share Options

1. Conditions on grant of the Share Options

Share Options may be granted to the Participants by the Company upon satisfaction of all of the following conditions. In other words, Share Options cannot be granted to the Participants if any of the following conditions of grant is not satisfied.

There is no occurrence of any of the following events on the part of the Company:
- issue of an auditors' report with adverse opinion or which indicates an inability to give opinion by a certified public accountant with respect to the financial report of the Company for its most recent accounting year;

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LETTER FROM THE BOARD

issue of an auditors' report with adverse opinion or which indicates an inability to give opinion by a certified public accountant with respect to the internal control of the financial report of the Company for its most recent accounting year;

failure to conduct profit distribution in accordance with laws and regulations, the Articles of Association and public undertakings during the last 36 months after listing;

prohibition from implementation of a share incentive scheme by laws and regulations;

- other circumstances determined by the CSRC.
There is no occurrence of any of the following events on the part of the Participants:
① he or she has been determined by any stock exchange as an ineligible person in the last 12 months;
② he or she has been determined by the CSRC and its delegated agencies as an ineligible person in the last 12 months;
③ he or she has been imposed by the CSRC or its delegated agencies with administrative penalties or measures prohibiting access into the market in the last 12 months due to material non-compliance of laws or regulations;
④ he or she is prohibited from acting as a director or a member of the senior management as required by the Company Law;
- he or she is prohibited from participating in share incentive schemes of listed companies as required by laws and regulations;

he or she is under other circumstances determined by the CSRC.

2. Conditions on exercising of the Share Options

Save as disclosed above, the following conditions must be fulfilled before the Share

Options granted to the Participants can be exercised:

There is no occurrence of any of the following events on the part of the Company:
- issue of an auditors' report with adverse opinion or which indicates an inability to give opinion by a certified public accountant with respect to the financial report of the Company for its most recent accounting year;

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LETTER FROM THE BOARD

issue of an auditors' report with adverse opinion or which indicates an inability to give opinion by a certified public accountant with respect to the internal control of the financial report of the Company for its most recent accounting year;

failure to conduct profit distribution in accordance with laws and regulations, the Articles of Association and public undertakings during the last 36 months after listing;

prohibition from implementation of a share incentive scheme by laws and regulations;

- other circumstances determined by the CSRC.
There is no occurrence of any of the following events on the part of the Participants:
① he or she has been determined by any stock exchange as an ineligible person in the last 12 months;
② he or she has been determined by the CSRC and its delegated agencies as an ineligible person in the last 12 months;
③ he or she has been imposed by the CSRC or its delegated agencies with administrative penalties or measures prohibiting access into the market in the last 12 months due to material non-compliance of laws or regulations;
④ he or she is prohibited from acting as a director or a member of the senior management as required by the Company Law;
- he or she is prohibited from participating in share incentive schemes of listed companies as required by laws and regulations;

he or she is under other circumstances determined by the CSRC.

In case the Company has any of the circumstances specified in the above sub-paragraph 1), all the Share Options that have been granted to the Participants under the Incentive Scheme but have not been exercised shall be cancelled by the Company; in case any Participant has any of the circumstances specified in the above sub-paragraph 2), the Share Options that have been granted to the Participant under the Incentive Scheme but have not been exercised shall be cancelled by the Company.

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LETTER FROM THE BOARD

Performance appraisal at company level

The Share Options granted under the Incentive Scheme are subject to appraisal and shall be exercised once a year during the exercising period of three accounting years. The exercising of the Share Options is conditional on the satisfaction of performance appraisal targets.

The exercising appraisal period of the Incentive Scheme covers three accounting years from 2020 to 2022. Whether the performance appraisal indicators at company level are up to standards shall be determined according to the value of the combined performance coefficient in each performance appraisal year. The annual performance appraisal targets of the Share Options under the first grant are as follows:

Selection of performance
indicators	Sales volume	Net profit	Threshold
Weights of performance	65%	35%	-
indicators
Combined performance	(actual value of performance indicator/target value
coefficient	of performance indicator) × weight of performance indicator
First exercise period	The sales volume of	The net profit shall	Combined
	automobiles of	not be less than	performance
	the Company	RMB4.7 billion	coefficient ≥1
	shall not be less	in 2020
	than 1.11 million
	units in 2020
Second exercise period	The sales volume of	The net profit shall	Combined
	automobiles of	not be less than	performance
	the Company	RMB5.0 billion	coefficient ≥1
	shall not be less	in 2021
	than 1.21 million
	units in 2021
Third exercise period	The sales volume of	The net profit shall	Combined
	automobiles of	not be less than	performance
	the Company	RMB5.5 billion	coefficient ≥1
	shall not be less	in 2022
	than 1.35 million
	units in 2022

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LETTER FROM THE BOARD

The annual performance appraisal targets of the reserved Share Options are as

follows:

Selection of performance

indicators

Sales volume

Net profit

Threshold

Weights of performance	65%
indicators
First exercise period	The sales volume of
	automobiles of
	the Company
	shall not be less
	than 1.21 million
	units in 2021
Second exercise period	The sales volume of
	automobiles of
	the Company
	shall not be less
	than 1.35 million
	units in 2022

35%	-
The net profit shall	Combined
not be less than	performance
RMB5.0 billion	coefficient ≥1
in 2021
The net profit shall	Combined
not be less than	performance
RMB5.5 billion	coefficient ≥1
in 2022

If the combined performance coefficient of the Company is ≥ 1, the performance appraisal indicators at company level are up to standards and the number of Share Options held by the Participants that may be exercised in each exercising period will be determined according to the performance appraisal result at individual level; if the performance appraisal indicators of the Company are not up to standards, all Share Options held by the Participants that are can be exercised in relevant appraisal year shall not be exercised and shall be cancelled by the Company.

If any Exercise Conditions cannot be satisfied in any exercise period within the Validity Period of the Incentive Scheme, such portion of the shares options which may be exercisable in such current exercise period cannot be deferred to the next year to exercise. All such Share Options will be cancelled by the Company.

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LETTER FROM THE BOARD

Performance appraisal at individual level

Whether Qualified		Qualified		Unqualified
Appraisal results	A	B	C	D	E
Exercisable proportion		100%			0%

If the individual performance appraisal result of a Participant is qualified, the performance appraisal indicator at individual level is up to standard, and if the annual performance appraisal indicator at company level is also up to standard, the Options exercisable by the Participant under the Scheme in the current year may be fully exercised. If the individual performance appraisal result of the Participant is unqualified, the Company shall cancel the Options limit exercisable by the Participant for the current period according to the provisions of the Incentive Scheme, and the Share Options shall be cancelled by the Company.

If a Participant fails to meet his/her performance target, no corresponding Share Options shall be exercisable or deferred to the next year to exercise. All such Share Options will be cancelled by the Company.

Scientificity and Reasonableness of the Appraisal Indicators

The Share Options appraisal indicators of the Company are in line with the basic requirements of laws and regulations as well as the Company's Articles of Association. The Share Options appraisal indicators of the Company are categorised into two levels, i.e. performance appraisal at company level and performance appraisal at individual level.

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LETTER FROM THE BOARD

In addition to the performance appraisal at the Company level, the Company has established a performance appraisal system for the individuals, which evaluates comprehensively the performance of Participants in an accurate and all-round manner. The Company will determine whether the Participants meet the unlocking conditions based on their performance appraisal results for the previous year.

(VII) Methods and Procedures for Adjustment of the Share Option Incentive Scheme

1. Method for adjustment of the number of Share Options

In the event of any capitalisation issue, bonus issue, sub-division, rights issue or share consolidation of the Company during the period from the date of announcing the Incentive Scheme to the completion of registration of the shares under Share Options by the Participants, the number of Share Options shall be adjusted accordingly. The adjustment method is as follows:

Capitalisation issue, bonus issue and sub-division of share capital
Q=Q0×(1+n)

Where: Q0 represents the number of Share Options prior to adjustment; n represents the rate of increase per share resulting from capitalisation issue, bonus issue and subdivision of share capital (i.e. the increase in number of shares per share upon capitalisation issue, bonus issue and sub-division of the share capital); Q represents the adjusted number of restricted shares.

Rights issue
Q=Q0×P1×(1+n)÷(P1+P2×n)

Where: Q0 represents the number of Share Options prior to adjustment; P1 represents the closing price on the record date; P2 represents the price of rights issue; n represents the ratio of the rights issue (i.e. the ratio of the number of shares to be issued under the rights issue to the total share capital of the Company prior to the rights issue); Q represents the number of Share Options after adjustment.

Share consolidation
Q=Q0×n

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LETTER FROM THE BOARD

Where: Q0 represents the number of Share Options prior to adjustment; n represents the ratio of share consolidation (i.e. one share shall be consolidated into n share); Q represents the number of Share Options after adjustment.

Dividend distribution and additional issues

Under the above circumstances, no adjustment will be made on the number of the Share Options.

2. Method for adjustment of Exercise Price

In the event of any capitalisation issue, bonus issue, sub-division, rights issue, share consolidation or dividend distribution of the Company during the period from the date of announcing the Incentive Scheme to the completion of registration of the shares under Share Options by the Participants, the Exercise Price of Share Options shall be adjusted accordingly. The adjustment method is as follows:

Capitalisation issue, bonus issue and sub-division of share capital
P=P0÷(1+n)

Where: P0 represents the Exercise Price prior to adjustment; n represents the rate of increase per share resulting from capitalisation issue, bonus issue and subdivision of share capital; P represents the adjusted exercise price.

Rights issue
P=P0×(P1+P2×n)÷[P1×(1+n)]

Where: P0 represents the Exercise Price prior to adjustment; P1 represents the closing price on the record date; P2 represents the price of rights issue; n represents the ratio of the rights issue (i.e. the ratio of the number of shares to be issued under the rights issue to the total share capital of the Company prior to the rights issue); P represents the Exercise Price after adjustment.

Share consolidation
P=P0÷n

Where: P0 represents the Exercise Price prior to adjustment; n represents the ratio of share consolidation; P represents the Exercise Price after adjustment.

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LETTER FROM THE BOARD

Dividend distribution
P=P0-V

Where: P0 represents the Exercise Price prior to adjustment; V represents the dividend per share; P represents the adjusted Exercise Price. P shall be greater than 1 after the dividend distribution.

Under the circumstance of additional issue of new shares, no adjustment will be made on the Exercise Price of the Share Options.

3. Adjustment procedures for the Share Option Incentive Scheme

The general meeting of the Company shall authorize the Board to adjust the number

or the Exercise Price of Share Options for the above reasons. After the Board adjusts the Exercise Price or the number of Share Options according to the above provisions, it shall promptly make announcement and notify the Participants in accordance with the relevant provisions, and perform the information disclosure procedures. The Company will engage a law firm to give professional advice to the Board on whether such adjustment is in compliance with the Management Measures, the Articles of Association and the Incentive Scheme.

If, for other reasons, it is necessary to adjust the number, the Exercise Price or other terms of Share Options, the Company will engage a law firm to give professional advice to the Board on whether such adjustment is in compliance with the Management Measures, the Articles of Association and the Incentive Scheme, which shall be subject to consideration and approval of the general meeting.

(VIII) Accounting Treatment of the Share Options

1. Accounting treatment

On the Grant Date

No accounting treatment will be made by the Company to the Share Options on the Grant Date. The Company will use the "Black-Scholes" option pricing model to determine the fair value of the Share Options on the Grant Date.

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LETTER FROM THE BOARD

Vesting Period

The Company includes the services provided by the staff during current period in costs or expense of assets on each balance sheet date during the Vesting Period based on the best estimate of the number of exercisable Share Options and the fair value of the Share Options on the Grant Date and recognise in "Capital reserve- Other capital reserve".

Subsequent to Exercisable Date

No adjustment shall be made to the relevant costs or expense, and the total amount of the owner's equities, which have been recognized.

On the Exercisable Date

Based on the exercise of the Share Options, share capital and share premium shall be recognised and the "Capital reserve-Other capital reserve" recognized during the Vesting Period shall be transferred to "Capital reserve-Capital premium".

2. Estimate of value of the Share Options

Assuming the first grant of Share Options takes place in April 2020, the Company uses the "Black-Scholes" model to measure the fair value of the Share Options and estimate the fair value of 87,927,200 Share Options first granted by the Company using such model on 23 January 2020. The theoretical value of 87,927,200 Share Options first granted by the Company is RMB125,892,000. The value of the options in each Exercise period is as follows:

			Currency: RMB
			Total value
	Number of		of the
	options		options
	under the	Value per	under the
Exercise period	first grant	option	first grant
	(0'000)	(RMB)	(RMB0'000)
First exercise period	2,930.91	1.21	3,558.96
Second exercise period	2,930.91	1.51	4,411.40
Third exercise period	2,930.91	1.58	4,618.84

Selection of specific parameters is as follows:

Current price of underlying shares: RMB8.35 per share (assuming the closing price of shares on 23 January 2020 is the current price of shares as at the Grant Date);
Exercise Price of the Share Options: RMB8.73 per share as determined under the Management Measures;

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LETTER FROM THE BOARD

Valid period: one, two and three years, respectively (based on the period commencing from Grant Date and ending on the first Exercisable Date for each respective period);
Historical volatility: 43.83%, 39.08% and 34.65%, respectively (the volatility of the Company for the latest one, two and three years before the announcement, respectively; source: Wind database);
Risk-freerate: 2.18%, 2.48% and 2.59%, respectively (the yield of PRC treasury bond for one, two and three years);
Dividend yield: 3.47% (the average dividend yield of the Company for the latest 12 months before the announcement of the Incentive Scheme).

Note: The calculation results of the value of the Share Options are subject to a number of assumptions of the parameters used herein and the limitation of the model adopted. Therefore, the estimated value of the Share Options may be subjective and uncertain.

3. Impact on the operating performance of the Company

Based on the measurement above, the total cost of 87,927,200 Share Options first granted is RMB125,892,000 and details of amortizaton from 2020 to 2023 are set out below:

	Currency: RMB	Unit: RMB0'000
Amortized cost of the
Share Options under
the first grant	2020	2021	2022	2023
12,589.20	4,869.51	4,931.63	2,274.85	513.20

The cost of the Share Options granted under the Incentive Scheme will be estimated under the "Black-Scholes" model after the Board determines the Grant Date. Such cost estimate is only simulating estimate and does not represent final accounting cost.

4. The accounting treatment of the reserved Share Options is same as the accounting treatment of the Share Options under the first grant.

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LETTER FROM THE BOARD

Implementation Procedures of the Incentive Scheme
Procedures for the Incentive Scheme to Take Effect
1. The Remuneration Committee is responsible for preparing the draft of the Incentive Scheme, Appraisal Measures, and Management Measures for Long-term Incentive Mechanism of Great Wall Motor Company Limited.

The Board shall consider the draft of the Incentive Scheme, Appraisal Measures, and Management Measures for Long-term Incentive Mechanism of Great Wall Motor Company Limited prepared by the Remuneration Committee. When the Board considers the Incentive Scheme, any Director who is also a Participant or is a related party to a Participant shall abstain from voting. After the Board reviewed and approved the Incentive Scheme and performed the announcement procedure, it should propose the Incentive Scheme to the general meeting for review; at the same time, it shall propose to the general meeting to authorize and execute the grant, unlocking, repurchase and cancellation of the Restricted Shares, and the grant, exercise and cancellation of the Share Options.

The Independent Directors and the Supervisory Committee shall issue opinions in respect of whether the Scheme is beneficial to the sustainable development of the Company or is significantly detrimental to the interests of the Company and Shareholders as a whole.

(IV) The Company shall, within two business days after the draft of the Incentive Scheme is considered and passed by the Board, publish an announcement of the Board resolution, announcing the draft and a summary of the Incentive Scheme, opinion of the Independent Directors and opinion of the Supervisory Committee.

The Company should carry out self-investigation on the trading of Shares of the Company by insiders during the 6 months' period prior to the announcement of the Incentive Scheme.

(VI) The Company shall internally publish the names and the positions of the Participants before the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting are convened through its website or other channels for a period of no less than 10 days. The Supervisory Committee shall verify the list of the Participants and thoroughly consider opinions from the public. The Company shall publish the opinions of the Supervisory Committee on the verification and the public opinions in relation to the list of the Participants 5 days before the Incentive Scheme is considered at a general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting.

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LETTER FROM THE BOARD

(VII) When the general meeting, the A Shareholders' Class Meeting and the

H Shareholders' Class Meeting of the Company are convened to vote on the Incentive Scheme, the Independent Directors shall solicit proxy voting rights from all Shareholders regarding the Incentive Scheme. At the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting, it is required to vote on the content of the Share Incentive Scheme under Article 9 of the Management Measures, and the Incentive Scheme shall be passed by more than 2/3 of the voting rights held by the Shareholders present at the meeting. Except for the Directors, Supervisors and senior management of the Company, as well as the Shareholders individually or collectively holding more than 5% of the Company's Shares, the voting by other Shareholders shall be separately counted and disclosed.

When the Share Incentive Scheme is considered at the Company's general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting, Shareholders who are Participants or Shareholders who have a related relationship with the Participants shall abstain from voting thereon.

(VIII) The Company shall disclose the announcement on the resolutions of the general meeting, the Share Incentive Scheme as considered and approved at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting, and the self-examination report and legal opinions of the general meeting on the inside information insiders' trading of the Shares of the Company.

(IX) After the Incentive Scheme has been considered and approved at the Company's general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting, the Board of the Company shall, according to the delegation of the general meeting, grant entitlements and complete the registration and announcement procedures within 60 days from the date of consideration and approval of the Incentive Scheme at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting. The Board shall handle the grant, unlocking, repurchase, cancellation of the Restricted Shares, and the grant, exercise, cancellation of the Share Options and other matters according to the delegation of the general meeting.

Procedures for Grant of Entitlements of the Incentive Scheme

Upon consideration and approval of the Incentive Scheme at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting, the Company shall sign an Agreement on Grant/Subscription of the Share Incentive with the Participants in order to define their respective rights and obligations. If a Participant fails to sign an Agreement on Grant/Subscription of the Share Incentive, he/she shall be deemed to have automatically abandoned his/her rights and obligations.

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LETTER FROM THE BOARD

The Board shall consider and announce whether the conditions as set out in the Share Incentive Scheme for the Participant to receive entitlements have been satisfied before the Company grants such entitlements to such Participants.
The Independent Directors and the Supervisory Committee shall both express their views explicitly. The law firm shall issue legal opinions on whether the conditions for the Participants to receive such entitlements are fulfilled or not.

The Supervisory Committee of the Company shall verify the list of Participants on the Grant Date of the Restricted Shares and the Share Options and issue their views on such verification.

(IV) If there is any discrepancy between the grant of entitlements to the Participants and the arrangement of the Share Incentive Scheme, the Independent Directors, the Supervisory Committee (where there is a change of the Participants), the law firm and the independent financial adviser, if necessary, shall all express their views explicitly.

The Company shall make a first grant to the Participants and complete the announcement and registration procedures within 60 days (excluding the period during which no grant of entitlements is allowed pursuant to the requirements under laws and regulations) after the Share Incentive Scheme is considered and approved at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting. The Board of the Company shall disclose the implementation thereof timely by way of announcement after completion of the registration of the grant. In the event the Company fails to complete the procedures mentioned above within such 60 days, the Scheme shall be terminated, and the Board shall disclose the reason for such failure timely and shall not be allowed to consider the Share Incentive Scheme within the following three months.

(VI) The Participants of the Restricted Shares shall pay the consideration for subscribing for the Restricted Shares into the account designated by the Company in accordance with Agreement on Grant/Subscription of the Share Incentive. The Participant shall be deemed as having waived his or her right to subscribe for the Restricted Shares not fully paid.

(VII) The Company shall make an application to the stock exchange first before any entitlements are granted, and the securities registration and clearing institution will conduct registration procedure thereof upon confirmation by such stock exchange.

(VIII) The procedures for granting reserved entitlements of the Company are carried out with reference to procedures under the first grant. Participants eligible for the reserved entitlements shall be confirmed within 12 months after the Incentive Scheme is considered and approved at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting. If the Participants are not confirmed within 12 months, the reserved entitlements will lapse.

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LETTER FROM THE BOARD

Procedures for Unlocking of the Restricted Shares

The Company shall confirm whether the Participants satisfy the unlocking conditions before the unlocking date. The Board shall consider whether the unlocking conditions as set out in the Restricted Shares Incentive Scheme have been satisfied. The Independent Directors and the Supervisory Committee shall both express their views explicitly. The law firm shall issue legal opinions on whether the conditions for the unlocking by the Participants are fulfilled or not. For the Participants who satisfy the unlocking conditions, the Company shall handle the unlocking at its discretion, and for the Participants who fail to satisfy the unlocking conditions, the Company will repurchase and cancel the Restricted Shares corresponding to the unlocking this time. The Company shall disclose the implementation thereof timely by way of announcement.

A Participant may transfer the unlocked Restricted Shares, but the transfer of shares held by senior management of the Company shall be in compliance with the requirements of relevant laws, regulations and normative documents.

Before the unlocking of Restricted Shares of the Participants, the Company shall apply to the stock exchange. Upon confirmation by the stock exchange, the securities registration and clearing institution will handle the relevant registration and clearing matter.

Procedures for Exercise of the Share Options

The Company shall confirm whether an Participants satisfy the exercise conditions before the date of exercise. The Board shall consider and review whether the Exercise Conditions as set out in the Share Options Incentive Scheme have been satisfied. The Independent Directors and the Supervisor committee shall both express their views explicitly. The law firm shall issue legal opinions on whether the conditions for the exercise of Share Options by the Participants are fulfilled or not. For the Participants who satisfy the Exercise Conditions, the Company may provide a unified or autonomous method of exercise to the Participants according to the actual situation, and for the Participants who fail to satisfy the Exercise Conditions, the Company shall cancel their Share Options corresponding to the respective exercise. The Company shall disclose the implementation thereof timely by way of announcement.

A Participant may transfer the Shares of the Company obtained pursuant to the exercise of Share Options, but the transfer of Shares held by the Directors and senior management of the Company shall be in compliance with the requirements of relevant laws, regulations and regulatory documents.

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LETTER FROM THE BOARD

The Company shall make an application to the Stock Exchange first before any Share Option is exercised, and the securities registration and clearing institution will conduct registration procedure thereof upon confirmation by such Stock Exchange.

(IV) If the registered capital is designed to change upon the exercise of Share Options by the Participants, the Company shall handle the registration procedures in relation to the changes of the Company with the industry and commerce registration department.

Procedures for Amendment and Termination of the Incentive Scheme

Procedures for Amendment of the Incentive Scheme
1. If the Company intends to amend the Scheme before it is considered at the general meeting, such amendment shall be considered and approved by the Board.
2. If the Company intends to amend the Scheme after it is considered and approved at the general meeting, such amendment shall be considered and determined at the general meeting given that such amendment shall not result in the following:
3. 1. accelerating the unlocking/the exercise of the Share Options;
  2. reducing the grant price/exercise price.
4. The Independent Directors and the Supervisory Committee of the Company shall give independent opinions as to whether the amendments are conducive to the sustainable development of the Company or are significantly detrimental to the interests of the Company and the Shareholders as a whole.
5. A law firm shall issue professional opinions as to whether the amendments to the Scheme are in compliance with the requirements of the Management Measures and relevant laws and regulations or are significantly detrimental to the interests of the Company and the Shareholders as a whole.

Procedures for Termination of the Incentive Scheme
1. If the Company intends to terminate the implementation of the Incentive Scheme before it is considered at the general meeting, such termination shall be considered and approved by the Board.
2. If the Company intends to terminate the implementation of the Incentive Scheme after it is considered and approved at the general meeting, such termination shall be considered and approved at general meeting.
3. - 52 -

LETTER FROM THE BOARD

A law firm shall issue professional opinions as to whether the termination of the Incentive Scheme by the listed company is in compliance with the requirements of the Measures and relevant laws and regulations or is significantly detrimental to the interests of the listed company and the Shareholders as a whole.
If the Company's general meeting or the Board meeting considers and approves the resolution to terminate the implementation of the Share Incentive Scheme, it shall not be allowed to review Share Incentive Scheme in the following 3 months from the date of the announcement of the resolution.

VI. Respective Rights and Obligations of the Company/Participants

Rights and Obligations of the Company

The Company shall have the right to construe and execute the Incentive Scheme and shall appraise the performance of the Participants based on the requirements under the Incentive Scheme. If a Participant fails to fulfill the unlocking or Exercise Conditions required under the Incentive Scheme, the Company will cancel the Share Options which have not been exercised by the Participants, and repurchase and cancel the Restricted Shares which have not been unlocked by the Participants, in accordance with the principles under the Incentive Scheme.

The Company undertakes not to provide loans and financial support in any other forms, including providing guarantee for loans, to the Participants for acquiring the Share Options or Restricted Shares under the Incentive Scheme.

The Company shall discharge its obligations in a timely manner in relation to report and information disclosure under the Incentive Scheme in accordance with the relevant requirements.

(IV) The Company shall actively support the Participants who have fulfilled the exercise/unlocking conditions to exercise the Share Options/unlock the Restricted Shares in accordance with the relevant requirements including those of the Incentive Scheme, the CSRC, the Stock Exchange, China Securities Depository and Clearing Corporation Limited. However, the Company disclaims any liability for losses incurred by the Participants who fail to exercise the Share Options/unlock the Restricted Shares at their own will due to reasons caused by the CSRC, the Stock Exchange and China Securities Depository and Clearing Corporation Limited.

The Company confirms that the eligibility of the Participants under the Incentive Scheme does not represent the right of such Participants to continue to serve the Company and does not constitute a commitment of employment for a fixed term by the Company. The employment relationship between the Company and the Participants is still governed by the employment contract between the parties.
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LETTER FROM THE BOARD

Rights and Obligations of the Participants

A Participant shall comply with the requirements of his/her position as stipulated by the Company, and shall work diligently and responsibly, strictly observe professional ethics, and make contribution to the development of the Company.

(II) Source of funds shall be self-financed by the Participants.

Upon completion of registration by the Depository and Clearing Company, the Restricted Shares granted to the Participants shall have the same rights as shares, including but not limited to the rights to dividend and rights to rights issue conferred by such shares.
The Restricted Shares granted to the Participants under the Scheme shall not be transferred or used as guarantee or for repayment of debt before unlocking of the Restricted Shares.
The Share Options granted to the Participants shall not be transferred or used as guarantee or for repayment of debts.
Share Option enjoys no rights in aspects such as voting, dividends, transfer or other aspects, but securities acquired as a result of exercising Share Option are entitled to such rights.

(IV) Any gains of the Participants generated from the Incentive Scheme are subject to individual income tax and other taxes according to PRC tax laws.

The Participants undertake, where false statements or misleading statements in or material omissions from the information disclosure documents of the Company result in non-compliance with condition of grant or arrangements for exercise of the entitlements, the Participants concerned shall return to the Company all interests gained through the Share Incentive Scheme calculated from the date when it is confirmed that the relevant information disclosure documents of the Company contain false statements or misleading representations or material omissions.

(VI) Upon consideration and approval of the Incentive Scheme at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting of the Company, the Company will sign an Agreement on Grant/Subscription of the Share Incentive with each Participant in order to define their respective rights and obligations under the Incentive Scheme and other relevant matters.

(VII) Other relevant rights and obligations under the laws, regulations and the Incentive Scheme.

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LETTER FROM THE BOARD

VII. Handling Unusual Changes to the Company/Participants

Handling Unusual Changes to the Company

The Scheme shall be terminated if any of the following events occurs to the Company:
1. change in control of the Company;
2. merger and spin-off of the Company.

The Incentive Scheme shall be terminated immediately if any of the following events occurs to the Company, the Restricted Shares which have been granted to the Participants but not yet unlocked shall not be unlocked and shall be repurchased and cancelled by the Company; in case of the following events under which one becomes personally liable, the repurchase price shall not exceed the grant price; and the Share Options which have been granted to the Participants but not yet exercised shall not be exercised and shall be cancelled by the Company:
1. issue of an auditors' report with adverse opinion or which indicates an inability to give opinion by a certified public accountant with respect to the financial report of the Company for its most recent accounting year;
2. issue of an auditors' report with adverse opinion or which indicates an inability to give opinion by a certified public accountant with respect to the internal control of the financial report of the Company for its most recent accounting year;
3. failure to conduct profit distribution in accordance with laws and regulations, the Articles of Association and public undertakings during the 36 months after listing;
4. prohibition from implementation of a share incentive scheme by laws and regulations;
5. other circumstances under which the Incentive Scheme shall be terminated as determined by the CSRC.

Where false statements or misleading statements in or material omissions from the information disclosure documents of the Company result in non-compliance with grant conditions or unlocking/exercise arrangements, all the Restricted Shares that have not been unlocked shall be repurchased and cancelled by the Company uniformly and all outstanding Share Options shall be cancelled by the Company uniformly. In respect of the Restricted Shares already unlocked by the Participants and the options already exercised by relevant Participants, the Participants concerned shall return to the Company all interests granted.

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LETTER FROM THE BOARD

The Board shall recover the gain received by the Participants in accordance with the aforesaid provisions and the relevant arrangements under the Incentive Scheme.

(IV) In the event of any political and policy risks, serious natural calamities and other force majeure during the Vesting Period and the Exercise period, the occurrence of which is beyond the control of the Company's management, the Board may terminate the Incentive Scheme.

Handling Unusual Changes to the Participants

If the Participants are demoted but still meet the incentive conditions after demotion, the Restricted Shares that can be unlocked shall be re-determined according to the standards corresponding to their new positions, and the Restricted Shares so reduced shall be repurchased and cancelled by the Company; the Share Options that may be exercised shall be also re-determined accordingly, and the Share Options so reduced shall be cancelled.
If the Participants are demoted and no longer meet the incentive conditions as stipulated in the Scheme after demotion, the Restricted Shares that have been unlocked shall be vested normally, and the Restricted Shares that have been granted but not yet unlocked shall be repurchased and cancelled by the Company; the Share Options that are exercisable shall be exercisable in a normal manner, and the Share Options that have been granted but not yet exercisable shall be cancelled by the Company.

If any of the following circumstances occurs to a Participant, his/her unlocked Restricted Shares shall be vested in an accelerated manner, and the Restricted Shares which have been granted but not yet unlocked shall be accelerated and all the remaining Restricted Shares shall be vested in one tranche only; the Share Options which are exercisable shall be exercised within 3 months in an accelerated manner or be forfeited and the Share Options which have been granted but not yet exercisable shall be exercisable in an accelerated manner and exercised within 3 months; the Participant will be no longer subject to the performance conditions in respect of the exercise at company and individual level:
1. civil incapacity arising out of work;
2. death arising out of work;
3. normal retirement or early retirement.

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LETTER FROM THE BOARD

If any of the following circumstances occurs, the unlocked Restricted Shares shall be vested in an accelerated manner, and the Restricted Shares which have been granted but not yet unlocked shall be repurchased and cancelled by the Company; the Share Options which are exercisable shall be exercised within 3 months in an accelerated manner or be forfeited and the Share Options which have been granted but not yet exercisable shall be cancelled by the Company:
1. When the labor contract of a Participant is terminated or dismissed by the Company due to reasons other than the above-mentionedA-C of Article 1;
2. When a Participant ceases to work in the listed company but still holds position in the Group due to the transfer of position;
3. When a Participant holds position in a wholly-owned or holding subsidiary of Great Wall Motor Company Limited, if Great Wall Motor Company Limited loses control of the subsidiary and the Participant still work in the subsidiary;
4. When a Participant serves as a Supervisor or an Independent Director or holds other position prohibited from holding the Company's shares/Share Options due to redesignation;

(IV) Where a Participant causes serious loss to the Company due to violation of laws, regulations or the "Red Line of the Company" during his/her term of office and thus terminates his/her labor relationship with the Company, the Company shall repurchase and cancel the Restricted Shares granted but not unlocked and the Company may require the Participant to return the proceeds from the unlocked Restricted Shares; the Company shall cancel the unexercised Share Options of the Participant and the Company may require the Participant to return the proceeds from the exercised Share Options.

Where a Participant after his/her termination of office causes serious loss to the Company due to violation of competition restrictions, offending the "Red Line of the Company" or major work problems identified after his/her termination of office, the Company shall have the right to require the Participant to return all the proceeds obtained under the Incentive Scheme.

(VI) In the implementation process of the Scheme, if a Participant is prohibited from being the Participant due to the circumstances as stipulated in Article 8 of the Management Measures, the Company shall not continue to grant him/her the rights and interests, and the Restricted Shares that have been granted but not yet unlocked shall be repurchased and cancelled by the Company at a repurchase price not higher than the grant price; the Share Options that have been granted but not yet exercised shall be terminated.

(VII) Other circumstances not stated above and the handling method thereof shall be determined by the Remuneration Committee.

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LETTER FROM THE BOARD

Resolution of Disputes between the Company and the Participants

Any dispute arising out of the implementation of the Incentive Scheme and/or the share incentive agreement signed by the Company and the Participants or any dispute in relation to the Incentive Scheme and/or the share incentive agreement shall be settled by negotiation and communication between the parties or through mediation conducted by the Remuneration Committee of the Board of the Company. If relevant disputes fail to be settled through the abovementioned methods within 60 days from the date of occurrence of the disputes, either party is entitled to file a lawsuit with the people's court with jurisdiction in the place where the Company is located.

The full text of Great Wall Motor Company Limited 2020 Restricted Share and Share Option Incentive Scheme (Draft) is set out in Appendix I to this circular.

Information on the Company and Reasons for and Benefits of Adopting the Incentive

Scheme

The Company is an integrated automobile manufacturer and together with its subsidiaries, the Group also engages in the production and sales of certain automotive parts and components.

The Incentive Scheme can further establish and improve the Company's long-term incentive mechanism, attract and retain talented individuals, fully mobilize the enthusiasm of senior management, mid-level management and core technical (business) backbone staff of the Company, bond the interests of Shareholders, the Company and core individuals together effectively, help various parties to attend to the long-term development of the Company and improve operational efficiency. The Directors of the Company (including Independent Non-executive Directors) believes that the adoption of the Incentive Scheme will help the Company achieve the above objectives, and is also of the view that the terms and conditions of the Incentive Scheme are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Adopting the Restricted Share and Share Option Incentive Scheme will slightly dilute existing Shareholders' equity, but the dilution effect on the shareholding interests of the existing Shareholders of Company will be immaterial.

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LETTER FROM THE BOARD

Hong Kong Listing Rules Implication

The Restricted A Share Incentive Scheme

The Incentive Scheme does not constitute a share option scheme under Chapter 17 of the Hong Kong Listing Rules. The Company will issue the Restricted A Shares according to special mandate.

As the Participants of the Restricted A Share Incentive Scheme will include directors and general managers of significant subsidiaries of the Company, the proposed grant of Restricted A Shares to such persons will constitute a non-exempt connected transaction of the Company under the Hong Kong Listing Rules and any such grants are subject to approval by the Independent Shareholders. The Company has appointed Gram Capital to advise the Independent Board Committee and the Independent Shareholders of the Company in respect of the first grant of Restricted A Shares to Participants who are connected persons of the Company.

There are no Directors of the Company on the list of the Participants under the first grant of the Incentive Scheme. Therefore, no Director is required to abstain from voting on the proposal of Restricted A Share and the A Share Option Incentive Scheme and other related proposals.

To the extent that the Directors are aware, having made all reasonable enquiries, none of the Shareholders is required to abstain from voting on the resolution relating to the first grant of Restricted A Shares to Participants who are connected person of the Company.

The Independent Non-executive Directors are of the view that the first grant of Restricted A Shares to the Directors are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

The A Share Option Incentive Scheme

The Share Option Incentive Scheme constitutes a share option scheme under Chapter 17 of the Hong Kong Listing Rules. Pursuant to Rule 14A.92(3)(a) of the Hong Kong Listing Rules, the grant of Share Options to any Participants who are connected persons of the Company under the Share Option Incentive Scheme is exempted from reporting, announcement and Independent Shareholder's approval requirement.

Note (1) to Rule 17.03(9) of the Hong Kong Listing Rules requires that the exercise price must be at least the higher of (i) the closing price of the securities on the date of grant and (ii) the average closing price of the securities for the five business days immediately preceding the date of grant.

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LETTER FROM THE BOARD

The Company has applied for, and the Stock Exchange has granted a waiver from strict compliance with Note (1) to Rule 17.03(9) of the Hong Kong Listing Rules in respect of the Exercise Price of the Share Options on the basis that, among other things, (i) the Shares to be issued upon the exercise of the Share Options are A Shares traded on the Shanghai Stock Exchange; (ii) the basis of determination of the Exercise Price of the Share Options is required by and in accordance with the relevant laws and regulations in the PRC; and (iii) the proposed adoption of the A Share Option Incentive Scheme will be subject to the approval of the Shareholders at the Shareholders' Meetings, whereby the H Shareholders will have the opportunity to fully consider and evaluate the terms of the Share Option Incentive Scheme based on its merits and the interest of the H Shareholders will not be prejudiced.

Pursuant to the Share Option Scheme, in the event of any capitalisation issue, bonus issue, sub-division, rights issue, share consolidation or dividend distribution of the Company during the period from the date of announcing the Incentive Scheme to the completion of registration of the shares under Share Options by the Participants, the Exercise Price of Share Options shall be adjusted accordingly.

Rule 17.03(13) of the Hong Kong Listing Rules requires that the scheme document must include a provision for adjustment of the exercise price or the number of securities subject to options already granted and to the scheme in the event of a capitalisation issue, rights issue, sub-division or consolidation of shares or reduction of capital. Note to Rule 17.03(13) of the Hong Kong Listing Rules states that any adjustments required under Rule 17.03(13) must give a participant the same proportion of the equity capital as that to which that person was previously entitled.

The Stock Exchange issued a letter to issuers on 5 September 2005 to clarify the interpretation of Rule 17.03(13). It was stated in the letter that:

Rule 17.03(13) permit restricted adjustments to be made to the exercise price of share options in the event of certain corporate activities.

The overriding principle is that no adjustment to the exercise price of number of shares should be to the advantage of scheme participants without specific prior shareholders' approval. The adjustment should have a neutral impact or worse from the perspective of the scheme participants. Another way of looking at this is that no adjustments should be made that would increase the aggregate intrinsic value of the outstanding options. The intrinsic value is the difference between the market price (or theoretical ex-entitlement price) of shares under option and the exercise price (or revised exercise price) of the option.

Examples of permitted adjustments include capitalisation or bonus issue, rights issue, open offer, share sub-division and share consolidation.

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LETTER FROM THE BOARD

The Company has applied for, and the Stock Exchange has granted a waiver from strict compliance with the requirements under Rule 17.03(13) of the Listing Rules so that adjustments to the exercise price of the Options granted under the Share Option Scheme in the event of dividend distribution on the basis that, among other things, (i) the Company is a PRC issuer, the Share Option Scheme involve issue of A Shares only and the Share Option Scheme must comply with PRC law; (ii) as advised by the Company's PRC legal advisors, adjustments to the exercise price of the Options granted under the Share Option Scheme in the event of dividend distribution are required by the currently effective PRC law (i.e. Article 48 of the Management Measures for Share Incentives of Listed Companies (《上市公司股權激勵管理辦法》); (iii) the proposed adoption of the Share Option Incentive Scheme will be subject to the approval of the Shareholders at the Shareholders' Meetings, whereby the H Shareholders will have the opportunity to fully consider and evaluate the terms of the Share Option Incentive Scheme based on its merits and the interest of the H Shareholders will not be prejudiced; and

adjustments to the exercise price of the Options granted under the Share Option Scheme in the event of dividend distribution will not adversely affect interest of shareholders of the Company.

3. PROPOSED ADOPTION OF APPRAISAL MEASURES FOR IMPLEMENTATION OF THE 2020 RESTRICTED SHARE AND SHARE OPTION INCENTIVE SCHEME

To guarantee the smooth implementation of the Share Incentive Scheme, the Appraisal Measures are prepared in accordance with the Company Law, the Securities Law, the Management Measures and other relevant laws, administrative regulations, normative documents and the Articles of Association and based on the actual conditions of the Company.

The full text of Appraisal Measures for Implementation of the 2020 Restricted Share and Share Option Incentive Scheme is set out in Appendix II to this circular.

4. AUTHORIZATION FROM THE GENERAL MEETING TO THE BOARD AND SUCH PERSONS AS AUTHORIZED BY THE BOARD TO HANDLE IN FULL DISCRETION ALL RELATED MATTERS IN CONNECTION WITH THE 2020 RESTRICTED SHARE AND SHARE OPTION INCENTIVE SCHEME

In order to implement the 2020 Restricted Share and Share Option Incentive Scheme of the Company efficiently, in accordance with the Company Law of the PRC, the Securities Law of the PRC, the Management Measures for Share Incentives of Listed Companies, the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and other relevant laws and administrative regulations, and the Articles of Association, the Board proposes to the Shareholders' general meeting of the Company to authorize the Board and such persons as authorized by the Board to handle in full discretion all related matters in connection with the 2020 Restricted Share and Share Option Incentive Scheme of the Company. The details of the authorization include but not limited to:

to authorize the Board to determine the Grant Date of the Restricted Share and Share Option Incentive Scheme;

to authorize the Board to grant Restricted Shares and Share Options to the Participants upon fulfilment of the Conditions of Grant by the Company and the Participants, and to handle all matters necessary in relation to the granting of Restricted Shares and Share Options;

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LETTER FROM THE BOARD

to authorize the Board to examine and confirm the fulfilment of the exercise conditions by the Company and the Participants, and to handle all matters necessary in relation to the exercise of Share Options by the Participants;

(IV) to authorize the Board to adjust the number, Grant Price and Exercise Price of the Restricted Shares and Share Options in the event of any distribution of dividends, capitalisation issue, bonus issue, sub-division or consolidation of Shares and rights issue in accordance with the provisions of the Restricted Share and Share Option Incentive Scheme;

to authorize the Board to dispose of, pursuant to the requirements under the Restricted Share and Share Option Incentive Scheme, any Restricted Shares not yet unlocked and Share Options granted to the Participants with the right attached exercised or not, in the event of any change in control, merger and spin-off or other similar matters of the Company, or the occurrence of any special event in relation to the Participants as stipulated in the Scheme including his/her resignation, retirement or death;

(VI) to authorize the Board to decide, pursuant to the requirements under the Restricted Share and Share Option Incentive Scheme, whether to collect the Participants' income;

(VII) to authorize the Board to adjust and modify the performance indicators and levels based on the Company's strategy, market environment and other relevant factors; to remove or replace the peer benchmark companies if there is any material change to the principal businesses of the relevant peer benchmark companies so that they are no longer comparable to the Company;

(VIII) to authorize the Board to perform other necessary management over the Restricted Share and Share Option Incentive Scheme;

(IX) the Board may authorize the Remuneration Committee under the Board to deal with some matters concerning the Restricted Shares and Share Options when necessary, and the Board may authorize the Remuneration Committee to be responsible for the assessment of the Participants, and to determine the disposal of their Restricted Shares and Share Options when special circumstances arise upon the Participants;

to authorize the Board to review and confirm the unlocking qualifications or conditions and the Exercise or Exercise Conditions of the Participants and to agree with the Board for delegating such rights to the Remuneration Committee;

(XI) to authorize the Board to determine whether the Participants can be subject to unlocking or the Exercise, and handling the lock-up issue of the Restricted Shares not yet unlocked and the Share Options not yet exercised;

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LETTER FROM THE BOARD

(XII) to authorize the Board to deal with all matters necessary for the unlocking or Exercise of the Participants, including but not limited to application to the Shanghai Stock Exchange for the unlocking or Exercise, application to Shanghai Branch of China Securities Depository and Clearing Corporation Limited for conducting registration and settlement, amending the Articles of Association and handling the business registration for the changes in registered capital of the Company;

(XIII) to authorize the Board to administer and adjust the Restricted Share and Share Option Incentive Scheme, and subject to compliance with the terms of the Incentive Scheme, to formulate or modify provisions for the administration, review and implementation of the Scheme from time to time, provided that if such modifications are required by the laws, regulations or relevant regulatory authorities to be subject to the approval of the general meeting and/or relevant regulatory authorities, such modifications made by the Board must obtain the corresponding approvals;

(XIV) to authorize the Board to allocate and adjust the total quotas of the Restricted Shares and Share Options among the Grantees (except for the Directors and senior management), under established methods and procedures before the Share Options are granted;

(XV) to authorize the Board to make corresponding revisions to the Scheme when relevant amendments are made to the Company Law of the PRC, the Securities Law of the People's Republic of China, the Management Measures for Share Incentives of Listed Companies and other relevant laws and regulations;

(XVI) to authorize the Board and any person authorized by the Board to sign, execute, modify and terminate any agreements relating to the Restricted Share and Share Option Incentive Scheme;

(XVII) to authorize the Board and any person authorized by the Board to appoint receiving banks, accountants, attorneys and other intermediaries for the implementation of the Restricted Share and Share Option Incentive Scheme;

(XVIII) to authorize the Board to implement other matters as required by the Restricted Share and Share Option Incentive Scheme, except the rights to be exercised by the general meeting as explicitly required under relevant documents;

(XIX) to propose authorization to the Board at the general meeting of the Company to complete procedures with relevant governments and authorities in relation to the share Incentive Scheme including review, registration, filing, approval and consent; to sign, execute, amend and complete documents submitted to relevant governments, authorities, organizations, and individuals; and to carry out all other actions necessary, appropriate, or expedient in relation to the share Incentive Scheme, except the rights to be exercised by the general meeting as explicitly required under relevant documents;

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LETTER FROM THE BOARD

to authorize the Board to amend and terminate the incentive scheme of Share Options and Restricted Shares;

(XXI) to authorize the Board to deal with the above matters concerning part of Share Options and Restricted Shares reserved under the Incentive Scheme, including but not limited to the determination of Grant Date, Participants and Exercise Price and other relevant matters;

(XXII) the term of authorization to the Board by the general meeting shall be the validity period of the Share Option Incentive Scheme.

The abovementioned authorizations can be directly exercised by the Chairman or the appropriate person authorized by the Board on behalf of the Board other than those subject to resolution by the Board as expressly stipulated in laws, administrative regulations, rules of the CSRC, regulatory documents, the Restricted Share Incentive Scheme or the Articles of Association.

5. THE EGM AND THE CLASS MEETINGS

The EGM, the H Shareholders' Class Meeting and the A Shareholders' Class Meeting will be held at 2:00 p.m., 3:00 p.m. and 4:00 p.m. respectively on Wednesday, 15 April 2020 at the Company's Conference Room, No. 2266 Chaoyang Road South, Baoding, Hebei Province, the PRC. The notices of convening the EGM and the H Shareholders' Class Meeting have been sent to the Shareholders on 28 February 2020.

Solicitation of votes on the Share Option Scheme resolutions

Pursuant to the Management Measures, independent directors of a company listed on the Shanghai Stock Exchange should solicit votes publicly from all shareholders of the company on any proposed resolution relating to adoption of a share incentive scheme by the listed company.

The purpose of such arrangement is to encourage shareholders of a company listed on the Shanghai Stock Exchange to participate in the voting for the resolution relating to adoption of a share incentive scheme by providing them with an additional way of participation in the general meeting.

As the A Shares of the Company are listed on the Shanghai Stock Exchange, pursuant to the Management Measures, the independent non-executive Directors of the Company have nominated Mr. Ma Li Hui as a caller on their behalf to solicit votes from the Shareholders on the resolutions regarding the Schemes at the EGM and the Class Meetings. Pursuant to the Management Measures, Mr. Ma Li Hui will solicit votes from the Shareholders on the proposed resolutions relating to adoption of the Schemes and their related matters. Mr. Ma Li Hui will not solicit votes on resolutions proposed at the EGM or the Class Meetings which are not related to the Schemes. For such purposes, Mr. Ma Li Hui has prepared two Independent

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LETTER FROM THE BOARD

Non-executive Director's Proxy Forms (the "Independent Non-executiveDirector's Proxy Forms") for each of the EGM and the H Shares Class Meeting. The Independent Non-executive Director's Proxy Forms for the EGM and the H Shares Class Meeting respectively were enclosed on 28 February 2020. Mr. Ma Li Hui has, on behalf of the independent Non-executive Directors, prepared the Announcement on the Public Solicitation of Votes by the Independent Non-executive Directors, the announcement of which, dated 28 February 2020, has been published on the website of the Shanghai Stock Exchange and the website of the Hong Kong Stock Exchange.

You may appoint Mr. Ma Li Hui as your proxy by filling in the Independent Non-executive Directors' Proxy Forms to vote on the resolutions relating to the Schemes on your behalf and appoint your own proxy by filling in the usual proxy forms to vote for you on all other resolutions proposed at the EGM and the H Shares Class Meeting. Alternatively, you may simply appoint your own proxy to vote for you on all the resolutions (including those relating to the Schemes). Please refer to the Notice of the EGM and Notice of the H Shares Class Meeting for details of the solicitation of votes and voting arrangements.

6. BOOK CLOSURE PERIOD

In order to determine the list of Shareholders who will be entitled to attend and vote at the EGM and/or the Class Meetings (as the case may be), the H Share register of members of the Company will be closed from Saturday, 14 March 2020 to Wednesday, 15 April 2020 (both days inclusive), during which no transfer of H Shares will be effected. H Shareholders whose names appear on the H Share register of members of the Company at 4:30 p.m. on Friday, 13 March 2020 shall be entitled to attend and vote at the EGM and the H Shareholders' Class Meeting. In order for the H Shareholders to qualify for attending and voting at the EGM and the H shareholders' Class Meeting, all completed share transfer documents accompanied by the relevant H Share certificates must be lodged with the Company's H Share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong, and in any case no later than 4:30 p.m. on Friday, 13 March 2020.

7. VOTING BY WAY OF POLL

Pursuant to Rule 13.39 of the Hong Kong Listing Rules, all votes of the Shareholders at the general meetings must be taken by poll. The chairman of the meeting will therefore demand a poll for every resolution put to vote at the EGM and the Class Meetings in accordance with the Articles of Association. An announcement on the poll results will be made by the Company after the EGM and the Class Meetings in the manner prescribed under Rule 13.39(5) of the Hong Kong Listing Rules.

Please note that Mr. Ma Li Hui, an independent non-executive Director, has sent out the Independent Non-executive Director's Proxy Forms in accordance with the relevant regulations of the PRC to solicit votes from the Shareholders on the resolutions regarding the Schemes and their related matters at the EGM and the Class Meetings. Should you wish to appoint Mr. Ma Li Hui as your proxy to vote for you and on your behalf at the EGM and/or the H Shares Class Meeting on the resolutions regarding the Schemes and their related matters, please complete

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the Independent Non-executive Director's Proxy Forms. Alternatively, if you wish to appoint any person other than Mr. Ma Li Hui as your proxy to vote for you and on your behalf at the EGM and/or the H Shares Class Meeting on the resolutions regarding the Schemes and their related matters, you may simply disregard the Independent Non-executive Director's Proxy Forms and complete and return the proxy form for use at the EGM and the proxy form for use at the H Shares Class Meeting instead.

H Shareholders who wish(es) to appoint a proxy/proxies to attend the EGM and/or the H Shareholders' Class Meeting are requested to complete and sign the proxy form or the Independent Non-executive Director's Proxy Forms in accordance with the instructions contained therein, and deliver the forms to the Company's H Share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong, not less than 24 hours before the time designated for the commencement of the EGM and/or the H Shareholders' Class Meeting.

8. RECOMMENDATION

The Directors (including the independent non-executive Directors) believe that the proposed adoption of the Incentive Scheme, the Appraisal Measures and the authorization to the Board to handle all matters relation to the Incentive Scheme are in the best interests of the Company and the Shareholders as a whole. Accordingly, the Directors (including the independent non-executive Directors) recommend all Shareholders to vote in favour of all the resolutions as set out in the notices of the EGM and the Class Meetings.

9. ADDITIONAL INFORMATION

Your attention is drawn to the additional information set out in the appendices to this circular.

Yours faithfully,

By Order of the Board

Wei Jian Jun

Chairman

Baoding, Hebei Province, the People's Republic of China

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

長城汽車股份有限公司

GREAT WALL MOTOR COMPANY LIMITED*

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

(Stock Code: 2333)

28 February 2020

To the Independent Shareholders

Dear Sir/Madam,

CONNECTED TRANSACTIONS

We refer to the circular dated 28 February 2020 (the "Circular") issued by Great Wall Motor Company Limited* (長城汽車股份有限公司) (the "Company"), of which this letter forms a part. Terms defined in the Circular shall have the same meanings herein.

We have been appointed to constitute the Independent Board Committee to make a recommendation to the Independent Shareholders as to whether, in our view, the grant of Restricted A Shares to directors and general managers of significant subsidiaries of the Company under the First Grant of Restricted A Shares pursuant to the terms of the Restricted A Share Incentive Scheme, is fair and reasonable. Gram Capital has been appointed as an Independent Financial Adviser to advise us and the Independent Shareholders as to whether the grant of Restricted A Shares to directors and general managers of significant subsidiaries of the Company under the First Grant of Restricted A Shares pursuant to the terms of the Restricted A Share Incentive Scheme, is fair and reasonable and in the interest of the Company and the Shareholders as a whole.

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Having considered the information set out in the letter from the Board, and the principal factors, reasons and recommendation set out in the letter from Gram Capital, we are of the opinion that the grant of Restricted A Shares to directors and general managers of significant subsidiaries of the Company under the First Grant of Restricted A Shares pursuant to the terms of the Restricted A Share Incentive Scheme, is carried out in the ordinary course of business of the Company and on normal commercial terms, it is fair and reasonable and in the interest of the Company and the Shareholders as a whole. We therefore recommend that you vote in favour of the resolution(s) to be proposed at the EGM and the Class Meetings to approve the grant of the Restricted A Shares to directors and general managers of significant subsidiaries of the Company under the First Grant of Restricted A Shares.

Yours faithfully,

The Independent Board Committee of

Great Wall Motor Company Limited

Mr. Ma Li Hui

Mr. Li Wan Jun

Mr. Ng Chi Kit

Independent Non-executive Directors

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LETTER FROM GRAM CAPITAL

Set out below is the text of a letter received from Gram Capital, the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Connected Grant for the purpose of inclusion in this circular.

Room 1209, 12/F.

Nan Fung Tower

88 Connaught Road Central/

173 Des Voeux Road Central

Hong Kong

28 February 2020

To: The independent board committee and the independent shareholders of Great Wall Motor Company Limited*

Dear Sir/Madam,

CONNECTED TRANSACTIONS

INTRODUCTION

We refer to our appointment as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the grant of the restricted A Shares (the "Restricted Shares" or the "Restricted A Shares") to connected persons of the Company under the Incentive Scheme (the "Connected Grant"), details of which are set out in the letter from the Board (the "Board Letter") contained in the circular dated 28 February 2020 issued by the Company to the Shareholders (the "Circular"), of which this letter forms part. Terms used in this letter shall have the same meanings as defined in the Circular unless the context requires otherwise.

The Company announced on 30 January 2020 (the "Announcement Date") that the Board considered and approved the relevant resolution in relation to proposed adoption of, among other things, the Restricted A Share. The Incentive Scheme shall become effective upon consideration and approval at the EGM and Class Meetings of the Company.

The Company intends to grant 68,440,900 restricted shares to the Participants, representing approximately 0.75% of the Company's total number of Shares of 9,127,269,000 Shares as at date of the announcement of the draft of the Incentive Scheme, of which 54,752,700 shares will be granted under the first grant, representing 80% of the total number of restricted shares may be granted under the Incentive Scheme; and 13,688,200 shares will be reserved, representing 20% of the total number of restricted shares may be granted under the Incentive Scheme.

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LETTER FROM GRAM CAPITAL

Among the total of 54,752,700 Restricted A Shares under the first grant: (i) 2,060,000 Restricted A Shares will be granted to three connected persons of the Company (the "Connected Participants"); and (ii) 52,692,700 Restricted A Shares will be granted to 291 other Participants.

With reference to the Board Letter, the Connected Grant constitutes a non-exempt connected transaction of the Company, which is subject to reporting, announcement and independent shareholder's approval requirement under Chapter 14A of the Hong Kong Listing Rules.

The Independent Board Committee comprising Mr. Ma Li Hui, Mr. Li Wan Jun and Mr. Ng Chi Kit (all being Independent Directors) has been established to advise the Independent Shareholders on (i) whether the terms of the Connected Grant are on normal commercial terms and are fair and reasonable; (ii) whether the Connected Grant is conducted in the ordinary and usual course of business of the Group and is in the interests of the Company and the Shareholders as a whole; and (iii) how the Independent Shareholders should vote in respect of the resolution(s) to approve the Connected Grant at the EGM and Class Meetings. We, Gram Capital Limited, have been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this respect.

INDEPENDENCE

During the past two years immediately preceding the Latest Practicable Date, Mr. Graham Lam was the person signing off (i) the opinion letter from the independent financial adviser contained in the Company's circular dated 22 March 2019 in respect of continuing connected transactions; and (ii) the opinion letter from the independent financial adviser contained in the Company's circular dated 9 October 2019 in respect of connected transactions (i.e. the proposed grant of restricted A Shares to the Company's connected persons under the 2019 Restricted Share and Share Option Incentive Scheme).

Notwithstanding the aforesaid past engagements, as at the Latest Practicable Date, we were not aware of any relationships or interests between Gram Capital and the Company or any other parties that could be reasonably regarded as hindrance to Gram Capital's independence as defined under Rule 13.84 of the Listing Rules to act as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Connected Grant and the transactions contemplated thereunder.

Besides, apart from the advisory fee and expenses payable to us in connection with our appointment as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders, no arrangement exists whereby we shall receive any other fees or benefits from the Company.

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LETTER FROM GRAM CAPITAL

BASIS OF OUR OPINION

In formulating our opinion to the Independent Board Committee and the Independent Shareholders, we have relied on the statements, information, opinions and representations contained or referred to in the Circular and the information and representations as provided to us by the Directors. We have assumed that all information and representations that have been provided by the Directors, for which they are solely and wholly responsible, are true and accurate at the time when they were made and continue to be so as at the Latest Practicable Date. We have also assumed that all statements of belief, opinion, expectation and intention made by the Directors in the Circular were reasonably made after due enquiry and careful consideration. We have no reason to suspect that any material facts or information have been withheld or to doubt the truth, accuracy and completeness of the information and facts contained in the Circular, or the reasonableness of the opinions expressed by the Company, its advisers and/or the Directors, which have been provided to us. Our opinion is based on the Directors' representation and confirmation that there is no undisclosed private agreement/arrangement or implied understanding with anyone concerning the Incentive Scheme. We consider that we have taken sufficient and necessary steps on which to form a reasonable basis and an informed view for our opinion in compliance with Rule 13.80 of the Listing Rules.

The Circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in the Circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or the Circular misleading. We, as the Independent Financial Adviser, take no responsibility for the contents of any part of the Circular, save and except for this letter of advice.

We consider that we have been provided with sufficient information to reach an informed view and to provide a reasonable basis for our opinion. We have not, however, conducted any independent in-depth investigation into the business and affairs of the Company and the Participants (including the Connected Participants) or their respective associates, nor have we considered the taxation implication on the Group or the Shareholders as a result of the proposed adoption of the Incentive Scheme. Our opinion is necessarily based on the financial, economic, market and other conditions in effect and the information made available to us as at the Latest Practicable Date. Shareholders should note that subsequent developments (including any material change in market and economic conditions) may affect and/or change our opinion and we have no obligation to update this opinion to take into account events occurring after the Latest Practicable Date or to update, revise or reaffirm our opinion. In addition, nothing contained in this letter should be construed as a recommendation to hold, sell or buy any Shares or any other securities of the Company.

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LETTER FROM GRAM CAPITAL

Lastly, where information in this letter has been extracted from published or otherwise publicly available sources, it is the responsibility of Gram Capital to ensure that such information has been correctly extracted from the relevant sources while we are not obligated to conduct any independent in-depth investigation into the accuracy and completeness of those information.

Principal factors and reasons considered

In arriving at our opinion in respect of the Connected Grant, we have taken into consideration the following principal factors and reasons:

1. Background of and reasons for the Connected Grant

Information on the Company

With reference to the Board Letter, the Company is an integrated automobile manufacturer and together with its subsidiaries, the Group also engages in the production and sales of certain automotive parts and components.

Set out below is a summary of the key consolidated financial information of the Group for six months ended 30 June 2019 and the five years ended 31 December 2018 as extracted from the Company's interim report for the six months ended 30 June 2019 and relevant annual reports:

	For the six	For the	For the	For the	For the	For the
	months ended	year ended	year ended	year ended	year ended	year ended
	30 June 2019	31 December 2018	31 December 2017	31 December 2016	31 December 2015	31 December 2014
	RMB'million	RMB'million	RMB'million	RMB'million	RMB'million	RMB'million
	(unaudited)	(audited)	(audited)	(audited)	(audited)	(audited)
Total operating revenue	41,376.68	99,229.99	101,169.49	98,615.70	76,033.14	62,599.10
Net profit attributable
to the Shareholders	1,517.17	5,207.31	5,027.30	10,551.16	8,059.33	8,041.54

As depicted by the above table, during the recent five full financial years, after the Group's net profit attributable to the Shareholders reached the peak of approximately RMB10,551.16 million for the year ended 31 December 2016, the Group's net profit attributable to the Shareholders for the year ended 31 December 2017 substantially dropped, which was mainly due to the Group's promotion of sales of the then products through special offers, stepping up of efforts to promote its brands and new products. The Group recorded an increase of approximately 3.6% in net profit attributable to the Shareholders for 2018 as compared to that for 2017.

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LETTER FROM GRAM CAPITAL

With reference to the 2018 annual report, affected by factors such as macroeconomic downturn, consumer credit decline, and China-US trade friction in 2018, the automobile industry experienced its first decline in 20 years. Despite the aforesaid, the automobile sectors in most of China regions are still in the popularisation stage, and there is still much room for sales growth. China's automotive industry will enter a new era of low growth and high volatility. At the same time, with the gradual liberalisation of the proportion of foreign investment and gradual decrease in import tariffs, the competition between self-owned brands and joint-venture brands will become more intense, and changes in the market competition will cause further concentration in the industry.

The Group will adhere to its strategy of high-quality development, capitalise on the new round of technology revolutions and industry opportunities so as to enhance its soft power and hard power, and to empower China's automotive brands. The Group's four major brands will continue to roll out new models to meet market demand.

Facing the era of 5G, big data, artificial intelligence and Internet of Things, the Group will continue to commit to innovation, so as to be able to adapt to future market technology and models. The Group will also accelerate the pace of internationalization. Through institutional innovation, mechanism innovation, format innovation and cultural innovation, the Group will be well-poised for internationalization and develop the world-class international brand.

Information on the Connected Participants

With reference to the Board Letter, Participants of the Incentive Scheme are determined in accordance with the Company Law, the Securities Law, the Management Measures and other relevant laws, regulations and regulatory documents, as well as provisions of the Articles of Association with reference to the actual situations of the Company. Persons who are under the certain circumstances may not be participants, details of which are set out under the section headed "Position Basis for Determining the Participants" of the Board Letter. In addition, the Participants' list of Restricted Shares under the first grant does not include Directors of the Company.

The Directors advised us that after finalising the identities of all Participants (i.e. (i) senior management of the Company; (ii) core management personnel of the Company; (iii) core technical (business) backbone staff of the Company; and (iv) directors and senior management of certain subsidiaries), the Company further identified if such Participants are connected persons of the Company. According to the aforesaid procedures, the Company further identified Mr. Zheng Chun Lai, Mr. Zhang De Hui and Mr. Li Rui Feng as connected persons of the Company after finalising the identities of all Participants (including Mr. Zheng Chun Lai, Mr. Zhang De Hui and Mr. Li Rui Feng).

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LETTER FROM GRAM CAPITAL

Details of the Connected Participants as provided by the Company are set out as follows:

Name	Relationship with the Group
Mr. Zheng Chun Lai	Director and general manager of subsidiaries
Mr. Zhang De Hui	Director and general manager of subsidiaries
Mr. Li Rui Feng	Director and general manager of subsidiaries

Mr. Zheng Chun Lai, is director and general manager of subsidiaries. Mr Zheng joined the Company in 1991 and is responsible for the Group's research and development as well as production of seals, vibration absorbers, seats and interior and exterior decoration products.

Mr. Zhang De Hui, director and general manager of subsidiaries, is responsible primarily for research and development and manufacturing of chassis, press-welding, pressure casting, module, automation and casting products of the Group.

Mr. Li Rui Feng, director and general manager of subsidiaries, joined the Company in

2003 and is responsible primarily for sales of the Group.

Reasons for and benefits of the Connected Grant

With reference to the Board Letter, the Incentive Scheme can further establish and improve the Company's long-term incentive mechanism, attract and retain talented individuals, fully mobilize the enthusiasm of senior management, mid-level management and core technical (business) backbone staff of the Company, bond the interests of shareholders, the Company and core individuals together effectively, help various parties to attend to the long-term development of the Company and improve operational efficiency. The Directors believe that the adoption of the Incentive Scheme will help the Company achieve the above objectives, and is also of the view that the terms and conditions of the Incentive Scheme are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Based on our independent research, we noted that there were various companies (which listed in mainboard of Shanghai Stock Exchange) proposed to grant restricted shares to their directors/senior/middle managements and/or core personnel during the recent years (for instance, there were 16 announced transactions in relation to the grant of restricted shares by companies listed in mainboard of Shanghai Stock Exchange as published in December 2019). Accordingly, we consider that it is a common practice for listed companies in Shanghai to adopt restricted share incentive scheme for their personnel and employees.

With reference to the Board Letter, among other things, (i) the Board shall act as the executive and administrative body for the Incentive Scheme and be responsible for the implementation of the Incentive Scheme; (ii) the Remuneration Committee under the Board (the majority members of which are Independent Directors and the chairman of Remuneration Committee is an Independent Director) shall be responsible for drafting and revising the

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LETTER FROM GRAM CAPITAL

Incentive Scheme, and submitting the Incentive Scheme to the Board for review and approval;

upon approval by the Board, the Incentive Scheme shall be further submitted to the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting for consideration and approval; (iv) the Supervisory Committee (which comprises of all Supervisors) and the Independent Director(s) shall act as the supervisory authority for the Incentive Scheme; and (v) the Supervisory Committee shall supervise the implementation of the Incentive Scheme as to whether it is in compliance with the relevant laws, regulations, regulatory documents and operational rules of the Stock Exchange, and shall be responsible for verifying the list of the Participants. Based on the above and that the Participants' list of Restricted Shares under the First Grant does not include Directors of the Company, we consider that the Revised Incentive Scheme could be implemented fairly and impartially.

According to the Company's Articles of Association, a special resolution must be passed by votes representing more than two-thirds of the voting rights held by the shareholders (including proxies) present at the meeting. As no more than two-thirds of the votes were cast in favour of the special resolution of the 2019 Restricted Share and Share Option Incentive Scheme on the H shareholders' class meeting in October 2019 (the "Previous H Share Class Meeting"), the resolution was not duly passed on the Previous H Share Class Meeting. As the said resolution has not been considered and approved at the Previous H Share Class Meeting, the said resolution was deemed considered but not approved.

As stated in the Company's previous announcement, although the 2019 Restricted Share and Share Option Incentive Scheme was considered but not approved, the Company will continue to fully motivate the senior management and the business backbone of the Company through an optimized remuneration system and a comprehensive performance assessment system. The Company will actively communicate with Shareholders and continue to research and launch effective long-term incentive schemes when relevant conditions are fully developed so as to enhance the Company's long-term incentives mechanism, thereby attracting and retaining outstanding talents and promoting the healthy development of the Company.

Therefore, the Directors propose special resolutions at the EGM and Class Meetings to approve the Incentive Scheme (including the Connected Grant) again.

Having considered the above reasons and that (i) the Connected Grant can motivate the Connected Participants to make contributions to the Group; (ii) adopting restricted share incentive scheme for personnel and employees is a common practice for listed companies in Shanghai; (iii) there will not be any actual cash paid by the Group to the Connected Participants under the the Connected Grant; and (iv) the fairness and reasonableness of the Connected Grant depends on the structures/terms of the transaction and has no relevancy on the poll results from the Shareholders, we concur with the Directors that the Connected Grant is conducted in the ordinary and usual course of business of the Group and is in the interests of the Company and the Shareholders as a whole.

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LETTER FROM GRAM CAPITAL

2. Principal terms of the Connected Grant

Set out below are the principal terms of the Connected Grant. Details of the terms of the Connected Grant are set out under the section headed "The Allocation of the Restricted Shares Granted to the Participants (Including the Connected Persons of the Company that are Identified Pursuant to Hong Kong Regulations)" of the Board Letter.

Number of Restricted A Shares under the Connected Grant

The Company proposed to grant 2,060,000 Restricted A Shares to the Connected Participants as follows:

			Percentage to the
	Number of the	total number of	Percentage to the
	restricted shares	the restricted	current total
Name	granted (shares)	shares granted	share capital
			%	%
Mr. Zheng Chun Lai	400,000		0.58%		0.004%
Mr. Zhang De Hui	400,000		0.58%		0.004%
Mr. Li Rui Feng	1,260,000		1.84%		0.014%
Total
2,060,000		3.00%		0.022%

With reference to the Board Letter, when determining the above-mentioned numbers of Restricted A Shares to be granted, the Company classified grantees as (i) 總裁崗 (president level*); and (ii) other level.

For other level (for this case, including the Connected Participants), the Company determined number of Restricted A Shares to be granted with reference to the standardized number of Restricted A Shares to be granted to the president level staff, and further adjusted based on (i) the participant's positions and seniority; (ii) the participant's performance of company which he/she is working for; (iii) the participant's salary level; (iv) the participant's years of services; and (v) the participant's capacities. The Company applied the above six assessment coefficients to calculate the numbers of Restricted A Shares to be granted to each Connected Participant.

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LETTER FROM GRAM CAPITAL

There is no president level staff under the First Grant of the Incentive Scheme. However, considering the completeness of the job rank and salary system, the Company considers the calculation of the number of restricted A Shares of other employees based on the number of Restricted A Shares that can be granted to the president level staff.

For our due diligence purpose, we obtained assessment records of the Connected Participants and noted that such assessment records were consistent with the aforesaid basis of determining the numbers of Restricted A Shares to be granted to the Connected Participants.

To assess the fairness and reasonableness of the number of Shares to be granted to the Connected Participants, we identified those restricted A shares incentive scheme proposals which were first announced by companies listed on the mainboard of Shanghai Stock Exchange from 1 December 2019 to 30 January 2020, being approximate two months immediate before the date of Incentive Scheme, which was announced on 30 January 2020. To the best of our knowledge, we found 18 scheme proposals (the "Comparables"), which are exhaustive, fair and representative. The table below sets out the summary of the Comparables (the "Comparables Table"):

		Subject to the compliance with
		relevant PRC laws/regulations,
		was the initial grant price
		determined only refer to the
		benchmark price (being only					Percentage of
		the higher of (i) the closing					the restricted
		price/average trading price of				Conditions for	A shares to be
		the subject A shares on the				unlocking the	granted to
		trading day preceding the date				restricted	individual
		of announcement of the				A shares which	senior
		incentive scheme; and (ii) the				are based on,	management
		average closing price/average		Lock-up period	amongst others,	(excluding the
		price of the subject A shares		from the date	the	listed
		for the period of last 20/60/120		on which the	participants'	companies'
		trading days preceding the date		first grant/(if	performance	director(s)) to
		of announcement of the	Unlocking	no reserved	and/or financial	the total share
		incentive scheme (the	provision over	parts) the grant	performance of	capital of
Publication date of	Company name	"Criteria")? (Percentage will be	a period of	has been	the listed	the listed
announcement	(Stock code)	disclosed if yes)	time	registered	companies	companies
18 January 2020	志邦家居股份有限公司	No.	Yes	12	months	Yes	Nil
	(ZBOM Cabinets Co.,	(Note 1)		24	months
	Ltd.) (SH603801)
2 January 2020	昊華化工科技集團股份有	Yes.	Yes	24	months	Yes	0.01% to 0.02%
	限公司 (Haohua	60%		36 months
	Chemical Science &			48	months
	Technology Co Ltd.)
	(SH600378)
31 December 2019	中國汽車工程研究院股份	Yes.	Yes	24	months	Yes	0.03% to 0.04%
	有限公司 (China	70%		36	months
	Automotive			48	months
	Engineering Research
	Institute Co Ltd.)
	(SH601965)
31 December 2019	中航重機股份有限公司	Yes.	Yes	24	months	Yes	0.0214%
	(Avic Heavy	70%		36 months
	Machinery Co Ltd.)			48	months
	(SH600765)

- 77 -

LETTER FROM GRAM CAPITAL

		Subject to the compliance with
		relevant PRC laws/regulations,
		was the initial grant price
		determined only refer to the
		benchmark price (being only					Percentage of
		the higher of (i) the closing					the restricted
		price/average trading price of				Conditions for	A shares to be
		the subject A shares on the				unlocking the	granted to
		trading day preceding the date				restricted	individual
		of announcement of the				A shares which	senior
		incentive scheme; and (ii) the				are based on,	management
		average closing price/average		Lock-up period	amongst others,	(excluding the
		price of the subject A shares		from the date	the	listed
		for the period of last 20/60/120		on which the	participants'	companies'
		trading days preceding the date		first grant/(if	performance	director(s)) to
		of announcement of the	Unlocking	no reserved	and/or financial	the total share
		incentive scheme (the	provision over	parts) the grant	performance of	capital of
Publication date of	Company name	"Criteria")? (Percentage will be	a period of	has been	the listed	the listed
announcement	(Stock code)	disclosed if yes)	time	registered	companies	companies
31 December 2019	金石資源集團股份有限公	Yes.	Yes	12	months	Yes	0.06% to 0.07%
	司 (China Kings	50%		24	months
	Resources Group Co			36	months
	Ltd.) (SH603505)
31 December 2019	新疆冠農果茸股份有限公	Yes.	Yes	24	months	Yes	0.03%
	司 (Xinjiang Guannong	50%		36	months
	Fruit & Antler Group	(Note 2)		48	months
	Co Ltd) (SH600251)
30 December 2019	無錫上機數控股份有限公	Yes.	Yes	12	months	Yes	0.02%
	司 (Wuxi Shangji	50%		24	months
	Automation Co., Ltd.)			36	months
	(603185)
21 December 2019	江蘇金融租賃股份有限公	Yes.	Yes	24	months	Yes	0.04% to 0.05%
	司 (Jiangsu Financial	50%		36	months
	Leasing Co., Ltd.)	(Note 3)		48	months
	(600901)
21 December 2019	昆山科森科技股份有限公	Yes.	Yes	12	months	Yes	0.04% to 0.63%
	司 (Kunshan Kersen	50%		24 months
	Science & Technology			36	months
	Co., Ltd) (603626)
16 December 2019	山東金麒麟股份有限公司	No.	Yes	12	months	Yes	Nil
	(Shandong Gold	(Note 4)		24	months
	Phoenix Co., Ltd)
	(603586)
14 December 2019	寧波永新光學股份有限公	Yes.	Yes	12	months	Yes	Nil
	司 (NINGBO YONG	50%		24 months
	XIN OPTICS CO.,			36 months
	LTD.) (603297)
13 December 2019	中航資本控股股份有限公	Yes.	Yes	24	months	Yes	0.01%
	司 (AVIC Capital Co.,	60%		36	months
	Ltd) (600705)			48	months
	山東玲瓏輪胎股份有限公			60	months
11 December 2019	Yes.	Yes	12	months	Yes	0.02%
	司 (Shandong Linglong	50%		24	months
	Tyre Co., Ltd.)			36	months
	(601966)
7 December 2019	深圳市景旺電子股份有限	Yes.	Yes	12	months	Yes	Information
	公司 (Shenzhen	50%		24	months		not available
	Kinwong Electronic			36	months		(Note 5)
	Co., Ltd.) (603228)			48	months
5 December 2019	北京淳中科技股份有限公	Yes.	Yes	12	months	Yes	0.05%
	司 (Beijing Tricolor	50%		24	months
	Technology Co., Ltd.)			36	months
	(603516)

- 78 -

LETTER FROM GRAM CAPITAL

		Subject to the compliance with
		relevant PRC laws/regulations,
		was the initial grant price
		determined only refer to the
		benchmark price (being only					Percentage of
		the higher of (i) the closing					the restricted
		price/average trading price of				Conditions for	A shares to be
		the subject A shares on the				unlocking the	granted to
		trading day preceding the date				restricted	individual
		of announcement of the				A shares which	senior
		incentive scheme; and (ii) the				are based on,	management
		average closing price/average		Lock-up period	amongst others,	(excluding the
		price of the subject A shares		from the date	the	listed
		for the period of last 20/60/120		on which the	participants'	companies'
		trading days preceding the date		first grant/(if	performance	director(s)) to
		of announcement of the	Unlocking	no reserved	and/or financial	the total share
		incentive scheme (the	provision over	parts) the grant	performance of	capital of
Publication date of	Company name	"Criteria")? (Percentage will be	a period of	has been	the listed	the listed
announcement	(Stock code)	disclosed if yes)	time	registered	companies	companies
5 December 2019	廣東文燦壓鑄股份有限公	Yes.	Yes	12	months	Yes	0.23%
	司 (Guangdong	50%		24 months
	Wencan Die Casting			36	months
	Co., Ltd.) (603348)
4 December 2019	深圳市匯頂科技股份有限	Yes.	Yes	14	months	Yes	Nil
	公司 (Shenzhen	50%		26 months
	Goodix Technology			38	months
	Co., Ltd.) (603160)			50	months
3 December 2019	密爾克衛化工供應鏈服務	Yes.	Yes	12	months	Yes	0.07%
	股份有限公司	50%		24 months
	(Milkyway Chemical			36	months
	Supply Chain Service			48	months
	Co., Ltd) (603713)

Notes:

The initial grant price of ZBOM Cabinets Co., Ltd was determined based on 50% of the average repurchased prices of its A shares.
The initial grant price of Xinjiang Guannong Fruit & Antler Group Co Ltd was determined based on 50% of the higher of (i) the Criteria; (ii) the closing price of the subject A shares on the trading day preceding the date of announcement of the incentive scheme; and (iii) average closing price of the subject A shares on the trading day preceding the date of announcement of the incentive scheme.
The initial grant price of Jiangsu Financial Leasing Co., Ltd. was determined based on 50% of the higher of
1. the Criteria; (ii) the closing price of the subject A shares on the trading day preceding the date of announcement of the incentive scheme; (iii) average closing price of the subject A shares for the period of last 30 trading days preceding the date of announcement of the incentive scheme; and (iv) the latest net asset value per share of the company.
The initial grant price of Shandong Gold Phoenix Co., Ltd was determined based on 50% of the average repurchased prices of its A shares.
According to the company's incentive scheme, the numbers of restricted A shares in total to be granted to core management and core technical personnel represented approximately 1.08% to the total share capital of the listed company.

Sources: http://www.cninfo.com.cn/

- 79 -

LETTER FROM GRAM CAPITAL

As depicted from the Comparables Table, the percentage of the restricted A shares to be granted to individual senior management (excluding the listed companies' director(s)) of the Comparables (save for those did not propose to grant to senior management (excluding the listed companies' director(s)) to the total share capital of the Comparables ranged from 0.01% to 0.23% (the "Comparable Percentage Range"). The number of Restricted A Shares to be granted to each of Connected Participant ranged from approximately 0.004% to 0.014% of the total share capital of the Company as at the Announcement Date did not exceed the upper limit of Comparable Percentage Range.

Having considered the above, we are of the view that the numbers of Restricted A Shares to be granted to the Connected Participants are fair and reasonable and we also do not doubt the factors for the determination of restricted A Shares' number.

The Grant Price

With reference to the Board Letter, the grant price of the restricted shares under first grant shall be RMB4.37 per share. Upon fulfilment of the grant conditions, each participant is entitled to acquire the restricted shares newly issued to the participants by the Company at the price of RMB4.37 per share.

Under the Incentive Scheme, the Grant Price under first grant shall not be lower than the carrying amount of the shares, and not lower than the higher of the following: (i) 50% of the average trading price of the shares on the trading day preceding the date of the announcement of the draft of the incentive scheme (i.e. RMB4.23); and (ii) 50% of the average trading price of the shares for the last 120 trading days preceding the date of the announcement of the announcement of the draft of the incentive scheme (i.e. RMB4.37).

As advised by the Directors, the Grant Price has to comply with the requirements set out under the Management Measures promulgated by the CSRC, which requires the issue price of new shares (i) not to be set at a price lower than its nominal value; and (ii) principally not to be set at a price lower than the higher of the (a) 50% of the average trading price on the trading day preceding the date of announcement of the incentive scheme; and (b) 50% of the average price for the period of last 20, 60 or 120 trading days preceding the date of announcement of the A shares incentive scheme. If a listed company adopts other approaches to determine grant price of restricted A shares, detailed basis of determination of such price should be disclosed in the A shares incentive scheme. As demonstrated above, the Grant Price complies with the Management Measures.

As demonstrated in the above table, the majority of the Comparables' grant price were determined based on 50% of the benchmark price (being the higher of (i) the closing price/average trading price of the subject A shares on the trading day preceding the date of announcement of the incentive scheme; and (ii) the average closing price/average price of the subject A shares for the period of last 20, 60, and/or 120 trading days preceding the date of announcement of the incentive scheme).

- 80 -

LETTER FROM GRAM CAPITAL

Given that the above and that the Grant Price complies with the Management Measures and in line with the market practice, we are of the view that the Grant Price is fair and reasonable so far as the Independent Shareholders are concerned.

The Validity Period and unlocking conditions (the "Unlocking Conditions")

With reference to the Board Letter, the validity period of the Incentive Scheme shall commence on the date on which the Restricted Shares have been registered and end on the date of unlocking all the Restricted Shares or the repurchase and cancellation of such shares, which shall not exceed 48 months.

The Lock-up Period for the Restricted Shares granted to the Participants are subject to different Lock-up Periods. The Lock-up Period for the first grant of Restricted Shares shall be 12 months, 24 months and 36 months; the Lock-up Period for part of the reserved Restricted Shares shall be 12 or 24 months, both are commencing from the date of the grant. The shares and dividends obtained by the Participants due to the grant of the Restricted Shares not yet unlocked to them arising from capitalisation issue, bonus issue, share sub-division, etc. shall be subject to locking in accordance with the Incentive Scheme, and shall not be sold in the secondary market or otherwise transferred. The Unlocking Period of such shares is the same as that of the Restricted Shares. If the Company repurchases the Restricted Shares not yet unlocked, such shares shall be repurchased at the same time.

As demonstrated in the Comparables Table, (i) the first portions of restricted A shares to be granted under the first grant by majority of the Comparables were with locking period for 12 months from the date of which the grant has been registered; and (ii) an additional 12 months period was applied to the next portions of restricted A shares to be granted by the Comparables (e.g. from 1st portion to 2nd portion, from 2nd portion to 3rd portion). We consider that the Lock-up Period for the first grant of Restricted Shares under the Incentive Scheme were comparable to the lock-up period under the Comparables.

During the Lock-up Period, the Restricted A Shares which are granted to the Participants under the Incentive Scheme and remain unlocked shall not be transferred, pledged for guarantees, charged or used for repayment of debt.

Certain conditions must be fulfilled before the Company can grant the Restricted A Shares under the Incentive Scheme, or the Restricted A Shares granted under the Incentive Scheme can be unlocked (e.g. performance appraisal at company level, performance appraisal at individual level, etc.). Details of the Unlocking Conditions (including the performance indicators) are set out under Appendix I to the Circular.

We are of the view that the Unlocking Conditions will strengthen the incentive for the Connected Grantees to use their efforts to achieve the performance targets, which will contribute to the growth and development of the Group.

In addition, according to our observation on the Comparables, we note that it is common practice for restricted A shares incentive schemes to have conditions for unlocking the restricted A shares which are based on, amongst others, the participants' performance and/or financial performance of the listed companies.

- 81 -

LETTER FROM GRAM CAPITAL

Adjustments

Number of Restricted A Shares and the Grant Price are subject to adjustment according to various situations (e.g. capitalisation issue, bonus issue, sub-division of shares, etc.). For details, please refer to section headed "Method of adjusting the grant price of the restricted shares" as contained in Appendix I to the Circular. We noted that the calculation formulae of adjustments to number of Restricted A Shares and the Grant Price are comparable to those of the Comparables. Having considered that the adjustment mechanisms (i) will be applied to all Participants (including Connected Participants); and (ii) are comparable to those of the Comparables, we do not doubt the fairness and reasonableness of the proposed adjustment mechanisms for number of Restricted A Shares and the Grant Price.

Having considered the above and that, save as number of Restricted A Shares to be granted, other terms of the Connected Grant (i.e. Repurchase and Cancellation of Restricted Shares, adjustments, etc.) are the same as those under the Incentive Scheme, we are of the view that the terms of the Connected Grant are fair and reasonable so far as the Independent Shareholders are concerned.

3. Dilution effect on the shareholding interests of the existing shareholders of the Company

The Connected Grant involves 2,060,000 Restricted A Shares, representing approximately 0.022% of the existing total issued share capital of the Company as at the Announcement Date. Accordingly, the dilution effect on the shareholding interests of the existing shareholders of Company will be immaterial.

RECOMMENDATION

Having taken into consideration the factors and reasons as stated above, we are of the opinion that (i) the terms of the Connected Grant are fair and reasonable; (ii) the Connected Grant is conducted in the ordinary and usual course of business of the Group and is in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the resolution to be proposed at the EGM and Class Meetings to approve the Connected Grant, and we recommend the Independent Shareholders to vote in favour of the resolution(s) in this regard.

Yours faithfully,

For and on behalf of

Gram Capital Limited

Graham Lam

Managing Director

For identification purpose only

Note: Mr. Graham Lam is a licensed person registered with the Securities and Futures Commission and a responsible officer of Gram Capital Limited to carry out Type 6 (advising on corporate finance) regulated activity under the SFO. He has over 20 years of experience in investment banking industry.

- 82 -

APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

長城汽車股份有限公司

Great Wall Motor Company Limited*

2020 Restricted Share and Share Option Incentive Scheme

(Draft)

Great Wall Motor Company Limited

January 2020

- I-1 -

APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

	PRESENTATION

The Board, the Supervisory Committee and all directors and supervisors of the Company warrant that no false information, misleading statement or material omission are contained in the Incentive Scheme and its summary, and shall severally and jointly assume legal liability for the truthfulness, accuracy and completeness of the contents thereof.

- I-2 -

APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

	SPECIAL NOTICE

The 2020 Restricted Share and Share Option Incentive Scheme of Great Wall Motor Company Limited (Draft) (the "Incentive Scheme") has been formulated in accordance with, among others, the Company Law of the PRC, the Securities Law of the PRC, the Management Measures for Share Incentives of Listed Companies and other applicable laws, regulations, rules and normative documents as well as the Articles of Association of Great Wall Motor Company Limited* (長城汽車股份有限公司) (the "Company" or "Great Wall Motor").

The Incentive Scheme includes a Restricted Share Incentive Scheme and a Share Option Incentive Scheme. The source of underlying Shares shall be ordinary A shares of the Company to directly issued to the Participants by the Company.

The number of Share Options to be granted to the Participants under the Incentive Scheme is 178,349,900 in total, the class of underlying shares under which will be ordinary A Shares, representing approximately 1.954% of the total number of Shares of the Company (i.e. 9,127,269,000 Shares) as at the date of announcement of the draft of the Incentive Scheme, among which, 142,679,900 Share Options will be granted at the First Grant, representing 80% of total equity proposed to be granted under the Incentive Scheme and approximately 1.563% of the total number of Shares of the Company (i.e. 9,127,269,000 Shares) as at the date of announcement of the draft of Incentive Scheme; and 35,670,000 Share Options will be reserved, representing 20% of total equity proposed to be granted under the Incentive Scheme and approximately 0.391% of the total number of Shares of the Company (i.e. 9,127,269,000 Shares) as at the date of announcement of the draft of Incentive Scheme. The total number of underlying shares under the Share Option Incentive Scheme during the validity period will not in aggregate exceed 10% of the total number of Shares of the Company, and the number of Shares to be granted under the Share Option Incentive Scheme to any one of the Participants during the validity period will not exceed 1% of the total number of Shares of the Company, with details as set out below:

The Restricted Share Incentive Scheme: The Restricted Shares proposed to be granted to the Participants under the Incentive Scheme shall be 68,440,900, the class of underlying shares under which will be ordinary A Shares, representing

approximately 0.750% of the total number of Shares of the Company (i.e. 9,127,269,000 Shares) as at the date of announcement of the draft of Incentive Scheme, among which, 54,752,700 will be granted at the First Grant, representing 80% of the total number of Restricted Shares proposed to be granted under the Incentive Scheme and approximately 0.600% of the total number of Shares of the Company (i.e. 9,127,269,000 Shares) as at the date of announcement of the draft of Incentive Scheme; and 13,688,200 will be reserved, representing 20% of the total

- I-3 -

APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

number of Restricted Shares proposed to be granted under the Incentive Scheme and approximately 0.150% of the total number of Shares of the Company (i.e. 9,127,269,000 Shares) as at the date of announcement of the draft of Incentive Scheme.

The Share Option Incentive Scheme: The Share Options proposed to be granted to the Participants under the Incentive Scheme shall be 109,909,000, the class of underlying shares under which will be ordinary A Shares, representing approximately 1.204% of the total number of Shares of the Company (i.e. 9,127,269,000 Shares) as at the date of announcement of the draft of Incentive Scheme, among which, 87,927,200 Share Options will be granted at the First Grant, representing 80% of the total number of Share Options proposed to be granted under the Incentive Scheme and approximately 0.963% of the total number of Shares of the Company (i.e. 9,127,269,000 Shares) as at the date of announcement of the draft of Incentive Scheme; and 21,981,800 Share Options will be reserved, representing 20% of the total number of Share Options proposed to be granted under the Incentive Scheme and approximately 0.241% of the total number of Shares of the Company (i.e. 9,127,269,000 Shares) as at the date of announcement of the draft of Incentive Scheme. Each Share Option granted under the Scheme is entitled to purchase one ordinary A Share of the Company at the Exercise Price during the Validity Period upon the fulfillment of vesting conditions and arrangement.
During the period from the date of announcement of the Incentive Scheme to the completion of the registration of Restricted Shares under the first grant/the exercise of Share Options under the first grant by the Participants, or from the date of reserved grant to the completion of the registration of the reserved Restricted Shares/the exercise of the reserved Share Options, in case of any capitalisation issue, bonus issue, stock split or consolidation of shares or rights issue made by the Company, adjustment shall be made to the number of Restricted Shares and Share Options and the total number of underlying shares accordingly.

IV. The Grant Price of the Restricted Shares to be granted under the Incentive Scheme shall be RMB4.37 per share, and the Exercise Price of the Share Options shall be RMB8.73 per share. During the period from the date of announcement of the Incentive Scheme to the completion of the registration of Restricted Shares under the first grant/the exercise of Share Options under the first grant by the Participants, or from the date of reserved grant to the completion of the registration of the reserved Restricted Shares/the exercise of the reserved Share Options, in case of any capitalisation issue, bonus issue, stock split or consolidation of shares, rights issue or dividend distribution made by the Company, corresponding adjustment shall be made to the Grant Price of Restricted Shares and the Exercise Price of Share Options according to the Incentive Scheme.

- I-4 -

APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

The validity period of the Incentive Scheme shall commence on the date on which the entitlements has been first granted and end on the date of unlocking or repurchasing and cancelling all the Restricted Shares granted to the Participants and the date of exercising or cancelling all the Share Options granted to the Participants, which shall not exceed 48 months.

VI. There are 1,966 Participants of the first grant under the Incentive Scheme in total, including members of senior management, core technical (business) backbone staff and directors and senior management of certain subsidiaries of the Company but excluding the Company's directors, supervisors or the shareholders individually or in aggregate holding 5% or more of the shares of the Company or the de facto controllers and their spouses, parents or children.

The reserved Participants refer to the Participants who were not determined when the Scheme was approved at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting but have been included in the Scheme during the validity period of the Scheme and who are determined within 12 months from the date the Scheme was considered and approved at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting. The standard for determination of the reserved Participants shall be fixed with reference to that of the First Grant.

VII. The Restricted Shares under the First Grant will be unlocked in three tranches in a respective proportion of 50%, 30% and 20% for each tranche upon expiry of 12 months from the Grant Date; the reserved Restricted Shares will be unlocked in two tranches in a proportion of 50% for each tranche upon expiry of 12 months from the Grant Date.

The Share Options under the First Grant will be exercised in three tranches in a respective proportion of 1/3 for each tranche upon expiry of 12 months from the date of grant; the reserved share option will be exercised in two tranches in a proportion of 50% for each tranche upon expiry of 12 months from the date of grant.

- I-5 -

APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

The performance appraisal targets of the Restricted Shares and the Share Options under

the first grant are set out in the table below:

Selection of
performance indicators	Sales volume	Net profit	Threshold
Weights of performance	65%	35%	-
indicators
Combined performance	(actual value of performance indicator/target value of performance
coefficient	indicator) × weight of performance indicator
First exercise/Unlocking	The sales volume of	The net profit shall	Combined
Period	automobiles of the	not be less than	performance
	Company shall not	RMB4.7 billion in	coefficient ≥1
	be less than 1.11	2020
	million units in
	2020
Second	The sales volume of	The net profit shall	Combined
exercise/Unlocking	automobiles of the	not be less than	performance
Period	Company shall not	RMB5.0 billion in	coefficient ≥1
	be less than 1.21	2021
	million units in
	2021
Third	The sales volume of	The net profit shall	Combined
exercise/Unlocking	automobiles of the	not be less than	performance
Period	Company shall not	RMB5.5 billion in	coefficient ≥1
	be less than 1.35	2022
	million units in
	2022

- I-6 -

APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

The performance appraisal targets of the reserved Restricted Shares and the Share Options are set out in table below:

Selection of

performance indicators Sales volume

Net profit

Threshold

Weights of performance	65%
indicators
First exercise/Unlocking	The sales volume of
Period	automobiles of the
	Company shall not
	be less than 1.21
	million units in
	2021
Second	The sales volume of
exercise/Unlocking	automobiles of the
Period	Company shall not
	be less than 1.35
	million units in
	2022

35%	-
The net profit shall	Combined
not be less than	performance
RMB5.0 billion in	coefficient ≥1
2021
The net profit shall	Combined
not be less than	performance
RMB5.5 billion in	coefficient ≥1
2022

Note: The "net profit" mentioned above refers to the audited net profit attributable to shareholders of the Company, and the "sales volume" mentioned above refers to the audited annual sales volume.

VIII. None of the following circumstances under which the implementation of the share incentives shall not be conducted as stipulated under the Management Measures for Share Incentives of Listed Companies has occurred to the Company:

issue of an auditors' report with adverse opinion or which indicates an inability to give opinion by a certified public accountant with respect to the financial report of the Company for its most recent accounting year;

issue of an auditors' report with adverse opinion or which indicates an inability to give opinion by a certified public accountant with respect to the internal control of the financial report of the Company for its most recent accounting year;

failure to conduct profit distribution in accordance with laws and regulations, the Articles of Association and public undertakings during the 36 months after listing;

(IV) prohibition from implementation of a share incentive scheme by laws and regulations;

(V) other circumstances determined by the CSRC.

- I-7 -

APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

IX. None of the following circumstances that make the Participants of the Incentive Scheme become unqualified as stipulated under the Management Measures for Share Incentives of Listed Companies has occurred to him or her:

he or she has been determined by any stock exchange as an ineligible person in the last 12 months;

he or she has been determined by the CSRC and its delegated agencies as an ineligible person in the last 12 months;

he or she has been imposed by the CSRC or its delegated agencies with administrative penalties or measures prohibiting access into the market in the last 12 months due to material non-compliance of laws or regulations;

(IV) he or she is prohibited from acting as a director or a member of the senior management as required by the Company Law;

he or she is prohibited from participating in share incentive schemes of listed companies as required by laws and regulations;

(VI) he or she is under other circumstances determined by the CSRC.

The Company undertakes not to provide loans and financial support in any other forms, including providing guarantee for loans, to the Participants for acquiring the relevant interests under the Incentive Scheme.

XI. The Company undertakes that there are no false or misleading statements in or material omissions from the relevant information disclosure documents of the Incentive Scheme.

XII. The Participants under the Incentive Scheme undertake, where false statements or misleading statements in or material omissions from the information disclosure documents of the Company result in non-compliance with condition of grant or arrangements for exercise of the entitlements, the Participants concerned shall return to the Company all interests gained through the Incentive Scheme calculated from the date when it is confirmed that the relevant information disclosure documents of the Company contain false statements or misleading representations or material omissions.

XIII. The Incentive Scheme can only be implemented after consideration and approval at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting. The Company shall convene the board meeting for the purpose of granting the equities to the Participants and complete the announcement and registration procedures within 60 days from the date on which the Incentive Scheme is considered and passed at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

Meeting of the Company according to the relevant requirements, failing which the Company shall disclose the reasons for the failure and announce termination of the Incentive Scheme and the Restricted Shares and the Share Options which have not been granted will lapse. The reserved portion will be granted within 12 months from the date on which the Incentive Scheme is considered and passed at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting of the Company.

XIV. The implementation of the Incentive Scheme will not cause the shareholding structure of the Company to become ineligible for listing.

XV. Upon investigation, the Share Incentive Scheme of the Company involves no inside transactions.

XVI. The Board is authorized at the general meeting to be responsible for the subsequent management of the Scheme, and has the final authority to interpret the Scheme.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

	CONTENTS
PRESENTATION . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-2
SPECIAL NOTICE . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-3
CHAPTER 1 DEFINITIONS . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-11
CHAPTER 2 PURPOSES AND PRINCIPLES OF THE
INCENTIVE SCHEME . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-13
CHAPTER 3 ADMINISTRATIVE BODY OF THE INCENTIVE SCHEME . . . .	I-14
CHAPTER 4 BASIS FOR DETERMINING THE PARTICIPANTS AND THE
SCOPE OF THE PARTICIPANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-15
CHAPTER 5 SPECIFIC CONTENTS OF THE INCENTIVE SCHEME . . . . . . .	I-17
CHAPTER 6 IMPLEMENTATION PROCEDURES OF THE
INCENTIVE SCHEME . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-56
CHAPTER 7 RESPECTIVE RIGHTS AND OBLIGATIONS OF THE
COMPANY/PARTICIPANTS . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-62
CHAPTER 8 HANDLING UNUSUAL CHANGES TO THE
COMPANY/PARTICIPANTS . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-64
CHAPTER 9 SUPPLEMENTARY PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . .	I-68

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

	CHAPTER 1 DEFINITIONS

Unless the context specifies otherwise, the following expressions shall have the following meanings herein:

Great Wall Motor, Company	長城汽車股份有限公司 (Great Wall Motor Company
	Limited*)
Incentive Scheme, Scheme	the 2020 Restricted Share and Share Option Incentive
	Scheme of Great Wall Motor Company Limited
Restricted Shares	a certain number of Shares of the Company granted to the
	Participants according to the conditions and price
	stipulated in the Scheme, which are subject to a locking
	period and can only be unlocked for trading when the
	unlocking conditions as stipulated in the Incentive
	Scheme are satisfied
Share Options, Options	the rights to be granted by the Company to the
	participants to purchase a certain number of Shares at a
	predetermined price within a certain period of time in the
	future
Participants	senior management, core management and core technical
	(business) backbone staff of the Company and directors
	senior management of certain subsidiaries to be granted
	the Restricted Shares and the Share Options pursuant to
	the Incentive Scheme
Grant Date	the date on which the Company shall grant entitlements
	to the Participants, which must be a trading day
Grant Price	the price of each Restricted Share granted to the
	Participants by the Company
Lock-up Period	the period during which the Restricted Shares are
	restricted to be transferred or assigned or used as
	guarantee or for repayment of debts, if the conditions for
	exercise of entitlements by the Participants as stipulated
	in the Incentive Scheme are not satisfied
Unlocking Period	the period during which the Restricted Shares held by the
	Participants are unlocked and can be transferred upon the
	fulfillment of the unlocking conditions as stipulated in
	the Incentive Scheme

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

Vesting Period	the period between the date of registration of the grant of
	the Share Options and each Exercisable Date of the Share
	Options granted
Exercise	the Participants' exercise of the Share Options owned by
	them according to the Share Option Incentive Scheme,
	i.e. the Participants' purchase of target Shares according
	to the conditions as stipulated in the Incentive Scheme
Exercisable Date	the date on which the Participants are entitled to exercise
	the Share Options, which must be a trading day
Exercise Price	the price determined under the Scheme, at which the
	Participants shall purchase the Shares of the Company
Exercise Conditions	the conditions that must be fulfilled by the Participants to
	exercise the Share Options under the Share Option
	Incentive Scheme
Company Law	the Company Law of the People's Republic of China
Securities Law	the Securities Law of the People's Republic of China
Management Measures	the Management Measures for Share Incentives of Listed
	Companies (《上市公司股權激勵管理辦法》)
Articles of Association	articles of association of Great Wall Motor Company
	Limited
CSRC	China Securities Regulatory Commission
Stock Exchange	the Shanghai Stock Exchange
RMB	Renminbi

Notes:

Unless otherwise stated, the financial data and financial indicators referenced herein shall mean the financial data prepared on a consolidation basis and the financial indicators calculated based on such financial data, respectively.
Some figures shown as totals herein may not be an arithmetic aggregation of the figures preceding them due to rounding adjustments.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

CHAPTER 2 PURPOSES AND PRINCIPLES OF THE INCENTIVE SCHEME

For the purpose of further establishing and improving the incentive mechanism, attracting and retaining talented individuals, fully mobilizing the enthusiasm of senior management and other core backbone staff of the Company, bonding the interests of shareholders, the Company and core individuals together effectively, improving the Company's operation and management, promoting the smooth and rapid improvement of the Company's performance and ensuring the successful achievement of the Company's long-term development goals, the Company has prepared the Long-term Incentive Scheme in accordance with the Company Law, the Securities Law, the Management Measures and other relevant laws, regulations, normative documents and the Articles of Association.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

CHAPTER 3 ADMINISTRATIVE BODY OF THE INCENTIVE SCHEME

The general meeting, as the ultimate authority of the Company, shall be responsible for considering and approving the implementation, modification and termination of the Incentive Scheme. The general meeting may, within its powers and authority, authorise the Board to handle certain matters relating to the Incentive Scheme.

The Board shall act as the executive and administrative body for the Incentive Scheme and be responsible for the implementation of the Incentive Scheme. The Remuneration Committee under the Board shall be responsible for drafting and revising the Incentive Scheme, and submitting the Incentive Scheme to the Board for review and approval. Upon approval by the Board, the Incentive Scheme shall be further submitted to the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting for consideration and approval. The Board may handle other matters relating to the Incentive Scheme within its scope of authority as delegated by the general meeting.

The Supervisory Committee and Independent Directors shall act as the supervisory authority for the Incentive Scheme, and shall issue opinions as to whether the Incentive Scheme is beneficial to the sustainable development of the Company or is significantly detrimental to the interests of the Company and the shareholders as a whole. The Supervisory Committee shall supervise the implementation of the Incentive Scheme as to whether it is in compliance with the relevant laws, regulations, regulatory documents and operational rules of the Stock Exchange, and shall be responsible for verifying the list of the Participants. The Independent Directors shall solicit voting rights by proxy from all shareholders in respect of the Incentive Scheme.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

CHAPTER 4 BASIS FOR DETERMINING THE PARTICIPANTS AND THE SCOPE

OF THE PARTICIPANTS

Basis for Determining the Participants

Legal Basis for Determining the Participants

The Participants of the Incentive Scheme are determined in accordance with the Company Law, the Securities Law, the Management Measures and other relevant laws, regulations and regulatory documents, as well as provisions of the Articles of Association with reference to the actual situations of the Company.

Persons who are under the following circumstances may not be Participants, if he or she:

1. has been determined by Stock Exchange as an ineligible person in the last 12 months;
2. has been determined by CSRC and its delegated agencies as an ineligible person in the last 12 months;
3. has been imposed by the CSRC or its delegated agencies with administrative penalties or measures prohibiting access into the market in the last 12 months due to material non-compliance of laws or regulations;
4. is prohibited from acting as a director or a member of the senior management as required by the Company Law;
5. is prohibited from participating in share incentive schemes of listed companies as required by laws and regulations;
6. is under other circumstances determined by the CSRC.
Position Basis for Determining the Participants
The Participants of the grant under the Incentive Scheme shall be the Company's senior

management, core technical or business personnel, directors and senior management of certain subsidiaries and other employees that the Company believes should be motivated and have a direct impact on the Company's operation performance and future development (but excluding the Company's Directors, Supervisors, the Shareholders individually or in aggregate holding 5% or more of the shares of the Company or the de facto controllers and their spouses, parents or children).

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

Scope of the Participants

There are 1,966 Participants of the grant under the Incentive Scheme in total, including:

senior management of the Company;

(II) core management personnel of the Company;

core technical (business) backbone staff of the Company;
(IV) directors and senior management of certain subsidiaries.

The Participants of the grant under the Incentive Scheme exclude the Company's Directors, Supervisors, the Shareholders individually or in aggregate holding 5% or more of the shares of the Company or the de facto controllers and their spouses, parents or children.

Among the Participants of the grant, senior management must be elected by the general meeting or appointed by the Board of the Company. All the Participants must hold positions in and enter into labour contracts with the Company (including the Company's subsidiaries listed in the consolidated statements) within the validity period of the Incentive Scheme.

The Participants of the reserved grant will be determined within 12 months after the Scheme is considered and approved by the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting. Upon the proposal by the Board and after the Independent Directors and the Supervisory Committee provide clear opinions and the legal advisors provide professional opinions and legal opinions, the Company shall disclose relevant information of the current Participants on the designated website in a timely and accurate manner. If the Participants are not determined for more than 12 months, the reserved interests will lapse. The scope of the Participants of the reserved grant only covers new Participants, including new employees of the Company and current employees that become qualified by promotion.

Verification of the Participants
1. After the Scheme is reviewed and approved by the Board, the Company shall, before convening the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting, internally publish the names and the positions of the Participants for a period of not less than 10 days via the Company's website or by other means.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

The Supervisory Committee of the Company shall verify the list of the Participants and thoroughly consider opinions from the public. The Company shall publish the opinions of the Supervisory Committee on the verification and the public opinions in relation to the list of the Participants 5 days before the Incentive Scheme is considered at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting. Any adjustments to the lists of the Participants made by the Board shall also be subject to verification by the Supervisory Committee of the Company.

CHAPTER 5 SPECIFIC CONTENTS OF THE INCENTIVE SCHEME

The Incentive Scheme consists of the Restricted Share Incentive Scheme and the Share Option Incentive Scheme. The Restricted Shares and the Share Options shall be granted after the relevant procedures have been performed. The validity period of the Incentive Scheme shall commence on the date of grant of the Restricted Shares and the Share Options and end on the date of unlocking all the Restricted Shares or the repurchase and cancellation of such shares or the date on which the Share Options have been exercised or cancelled, which shall not exceed 48 months.

The number of the Share Options to be granted to the Participants under the Incentive Scheme is 178,349,900 in total, and the underlying shares of the Share Options are RMB ordinary A Shares, representing approximately 1.954% of the total number of Shares of the Company (i.e. 9,127,269,000 Shares) as at the date of the announcement of the draft of the Incentive Scheme, of which 142,679,900 Share Options will be granted under the first grant, representing 80% of the total number of the Share Options may be granted under the Incentive Scheme and 1.563% of the total number of Shares of the Company (i.e. 9,127,269,000 Shares) as at the date of the announcement of the draft of the Incentive Scheme; and 35,670,000 Share Options will be reserved, representing 20% of the total number of the Share Options may be granted under the Incentive Scheme and 0.391% of the total number of Shares of the Company (i.e. 9,127,269,000 Shares) as at the date of the announcement of the draft of the Incentive Scheme.

The Restricted Share Incentive Scheme

Source of Shares of the Incentive Scheme

The source of the underlying shares of the Restricted Share Incentive Scheme shall be ordinary A Shares to be directly issued to the Participants by the Company.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

(II) Number of the Underlying Shares of the Incentive Scheme

The Company intends to grant 68,440,900 Restricted Shares to the Participants, representing 0.750% of the total number of Shares of the Company (i.e. 9,127,269,000 Shares) as at the date of the announcement of the draft of the Incentive Scheme, of which 54,752,700 Shares will be granted under the first grant, representing 80% of the total number of the Restricted Shares may be granted under the Incentive Scheme and 0.600% of the total number of Shares of the Company (i.e. 9,127,269,000 Shares) as at the date of the announcement of the draft of the Incentive Scheme; and 13,688,200 Shares will be reserved, representing 20% of the total number of the Restricted Shares may be granted under the Incentive Scheme and 0.150% of the total number of Shares of the Company (i.e. 9,127,269,000 Shares) as at the date of the announcement of the draft of the Incentive Scheme.

(III) The Allocation of the Restricted Shares Granted to the Participants

			Percentage to the
		Number of the	total number of the	Percentage to the
		Restricted	Restricted Shares	current total
Name	Position	Shares granted	granted	number of shares
		(0'000 shares)
	Deputy General
Hu Shu Jie	Manager	200.00	2.92%	0.022%
	Deputy General
Zhao Guo Qing	Manager	138.00	2.02%	0.015%
Xu Hui	Board Secretary	43.00	0.63%	0.005%
	Chief Financial
Liu Yu Xin	Controller	25.00	0.37%	0.003%
	Director and general
	manager of
Zheng Chun Lai	subsidiaries	40.00	0.58%	0.004%
	Director and general
	manager of
Zhang De Hui	subsidiaries	40.00	0.58%	0.004%
	Director and general
	manager of
Li Rui Feng	subsidiaries	126.00	1.84%	0.014%
Core management, core technical (business)
backbone staff (287 people)	4,863.27	71.06%	0.533%
Reserved Grant		1,368.82	20.00%	0.150%
Total		6,844.09	100.00%	0.750%

- I-18 -

APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

Notes:

The total shares of the Company to be granted under the fully effective Share Incentive Scheme to any one of the above-mentioned Participants will not exceed 1% of the total number of shares of the Company. The total underlying shares of the Company involved under the fully effective Incentive Scheme will not exceed 10% of the total number of shares of the Company as at the date of the proposal of the Share Incentive Scheme at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting.
The Participants of the Incentive Scheme exclude the Company's directors, supervisors, the shareholders individually or in aggregate holding 5% or more of the shares of the Company or the de facto controllers and their spouses, parents or children.

(IV) Validity Period, Grant Date, Locking Period and Unlocking Arrangement and Lock-up

Period of the Restricted Share Incentive Scheme

1. Validity period of the Restricted Share Incentive Scheme

The validity period of the Incentive Scheme shall commence on the date on which the Restricted Shares have been granted and end on the date of unlocking all the Restricted Shares or the repurchase and cancellation of such shares, which shall not exceed 48 months.

2. Grant date

The Grant Date must be a trading day and shall not fall within any of the following periods:

the period commencing from 60 days prior to the publication of annual report or 30 days prior to the publication of semi-annual and quarterly reports of the Company, or in the event of delay in publishing the annual report for special reasons, 60 days prior to the original date of publication and up to the date of

- I-19 -

APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

publication of the annual report, or in the event of delay in publishing the semi-annual and quarterly reports for special reasons, 30 days prior to the original date of publication of semi-annual and quarterly reports and up to the date of publication;

the period commencing from 10 days prior to the publication of the announcement of results forecast and preliminary results of the Company;

the period commencing from the date of occurrence of any significant event which may have significant effect on the trading prices of the Company's shares and their derivatives or the date on which relevant decision-making procedures start and ending on the second trading day following the publication in accordance with laws;

other periods as stipulated by the CSRC, Shanghai Stock Exchange and The Stock Exchange of Hong Kong Limited.

The above-mentioned period during which the Company is not allowed to grant the Restricted Shares is not included in the period of 60 days. In case of shareholding reduction by the Company's directors and senior management as the Participants within six months before the grant of the Restricted Shares, the grant of the Restricted Shares shall be postponed for six months from the date of the last shareholding reduction in accordance with the short-swing trading provisions under the Securities Law.

3. Lock-up Period

The Lock-up Period for the Restricted Shares granted to the Participants are subject to different Lock-up Periods. The Lock-up Period for the first grant of Restricted Shares shall be 12, 24, or 36 months; the Lock-up Period for the reserved Restricted Shares shall be 12 or 24 months, both are commencing from the date of the grant. The shares and dividends obtained by the Participants due to the grant of the Restricted Shares not yet unlocked to them arising from capitalisation issue, bonus issue, share sub-division, etc. shall be subject to locking in accordance with the Incentive Scheme, and shall not be sold in the secondary market or otherwise transferred. The Unlocking Period of such shares is the same as that of the Restricted Shares. If the Company repurchases the Restricted Shares not yet unlocked, such shares shall be repurchased at the same time.

During the Lock-up Period, the Restricted Shares granted to the Participants under the Scheme shall not be transferred or used as guarantee or for repayment of debt before unlocking of the Restricted Shares.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

4. Unlocking arrangement

The Unlocking Period and unlocking schedule for the Restricted Shares under the first grant of the Incentive Scheme is shown in the table below:

Unlocking

Unlocking arrangement

Unlocking time

proportion

First Unlocking Period for the Restricted Shares under the first grant

Second Unlocking Period for the Restricted Shares under the first grant

Third Unlocking Period for the Restricted Shares under the first grant

Commencing from the first trading	50%
day upon the expiry of 12 months
from the date of the first grant to
the last trading day upon the
expiry of 24 months from the
date of the first grant
Commencing from the first trading	30%
day upon the expiry of 24 months
from the date of the first grant to
the last trading day upon the
expiry of 36 months from the
date of the first grant
Commencing from the first trading	20%
day upon the expiry of 36 months
from the date of the first grant to
the last trading day upon the
expiry of 48 months from the
date of the first grant

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

If the Restricted Shares under the reserved grant of the Incentive Scheme will be granted in 2021, the unlocking schedule for such shares shall be as follows:

Unlocking arrangement

First Unlocking Period for the reserved Restricted Shares

Second Unlocking Period for the reserved Restricted Shares

	Unlocking
Unlocking time	proportion
Commencing from the first trading	50%
day upon the expiry of 12 months
from the date of the reserved
grant to the last trading day upon
the expiry of 24 months from the
date of the reserved grant
Commencing from the first trading	50%
day upon the expiry of 24 months
from the date of the reserved
grant to the last trading day upon
the expiry of 36 months from the
date of the reserved grant

For the Restricted Shares that have not been applied for unlocking or cannot be applied for unlocking due to failure to meet the unlocking conditions during the aforesaid Unlocking Periods, the Company will repurchase and cancel such Restricted Shares from relevant Participants in accordance with the principles of the Scheme.

5. Lock-up Period

The lock-up arrangement under the Restricted Share Incentive Scheme shall be implemented in accordance with the requirements of the Company Law, the Securities Law and other relevant laws, regulations and regulatory documents as well as the Articles of Association. Specific contents are as follows:

Where a Participant is a member of the senior management of the Company, the number of shares of the Company which may be transferred by the Participant each year during his/her term of office shall not exceed 25% of the total number of the shares of the Company held by him/her. No shares of the Company held by him/her shall be transferred within six months after his/her termination of office.
Where a Participant is a member of the senior management of the Company and he/she disposes of any shares of the Company within six months after acquisition or buys back such shares within six months after disposal, all gains arising therefrom shall be accounted to the Company and the Board will collect all such gains.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

1. If, during the validity period of the Incentive Scheme, there is any amendment to the requirements regarding transfer of shares by a member of the senior management of the Company under the Company Law, the Securities Law and other relevant laws, regulations, regulatory documents and the Articles of Association, such amended requirements thereunder shall apply to the shares transferred by the Participants during the relevant times.
The Grant Price of the Restricted Shares and the Basis of Determination for the Grant Price
1. Grant Price of the Restricted Shares under first grant
The Grant Price of the Restricted Shares under first grant shall be RMB4.37 per

share. Upon fulfilment of the grant conditions, each Participant is entitled to acquire the Restricted Shares newly issued to the Participants by the Company at the price of RMB4.37 per share.

2. Basis of determination for the Grant Price of the Restricted Shares under first grant

The Grant Price of the Restricted Shares under first grant shall not be lower than the carrying amount of the shares, and not lower than the higher of the followings:

50% of the average trading price of the shares (i.e. RMB4.23 per share) on the trading day preceding the date of the announcement of the draft of the Incentive Scheme;
50% of the average trading price of the shares (i.e. RMB4.37 per share) for 120 trading days preceding the date of the announcement of the draft of the Incentive Scheme.

3. Basis of determination for the Grant Price of the reserved Restricted Shares

The grant of the reserved Restricted Shares is subject to the consideration and

approval of related resolution by the Board and the disclosure of related information. The Grant Price of the reserved Restricted Shares shall not be lower than the carrying amount of the shares, and not lower than the higher of the followings:

50% of the average trading price of the shares on the trading day preceding the date of the announcement of the Board resolution on the grant of the reserved Restricted Shares;
50% of the average trading price of the shares for the last 20, 60 or 120 trading days preceding the date of the announcement of the Board resolution on the grant of the reserved Restricted Shares.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

(VI) Conditions on Grant and Unlocking of the Restricted Shares

1. Conditions on grant of the Restricted Shares

The Restricted Shares may be granted to the Participants by the Company upon satisfaction of all of the following conditions. In other words, the Restricted Shares cannot be granted to the Participants if any of the following conditions of grant is not satisfied.

There is no occurrence of any of the following events on the part of the Company:
- issue of an auditors' report with adverse opinion or which indicates an inability to give opinion by a certified public accountant with respect to the financial report of the Company for its most recent accounting year;

issue of an auditors' report with adverse opinion or which indicates an inability to give opinion by a certified public accountant with respect to the internal control of the financial report of the Company for its most recent accounting year;

failure to conduct profit distribution in accordance with laws and regulations, the Articles of Association and public undertakings during the 36 months after listing;

prohibition from implementation of a share incentive scheme by laws and regulations;

⑤ other circumstances determined by the CSRC.
There is no occurrence of any of the following events on the part of the Participants:
① he or she has been determined by Stock Exchange as an ineligible person in the last 12 months;
② he or she has been determined by the CSRC and its delegated agencies as an ineligible person in the last 12 months;
③ he or she has been imposed by the CSRC or its delegated agencies with administrative penalties or measures prohibiting access into the market in the last 12 months due to material non-compliance of laws or regulations;

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

he or she is prohibited from acting as a director or a member of the senior management as required by the Company Law;

he or she is prohibited from participating in share incentive schemes of listed companies as required by laws and regulations;

he or she is under other circumstances determined by the CSRC.

2. Conditions on unlocking of the Restricted Shares

During the Lock-up Period, the following conditions must be fulfilled before the

Restricted Shares granted to the Participants can be unlocked:

There is no occurrence of any of the following events on the part of the Company:
- issue of an auditors' report with adverse opinion or which indicates an inability to give opinion by a certified public accountant with respect to the financial report of the Company for its most recent accounting year;

issue of an auditors' report with adverse opinion or which indicates an inability to give opinion by a certified public accountant with respect to the internal control of the financial report of the Company for its most recent accounting year;

failure to conduct profit distribution in accordance with laws and regulations, the Articles of Association and public undertakings during the 36 months after listing;

prohibition from implementation of a share incentive scheme by laws and regulations;

other circumstances determined by the CSRC.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

There is no occurrence of any of the following events on the part of the Participants:
- he or she has been determined by any stock exchange as an ineligible person in the last 12 months;

he or she has been determined by the CSRC and its delegated agencies as an ineligible person in the last 12 months;

he or she has been imposed by the CSRC or its delegated agencies with administrative penalties or measures prohibiting access into the market in the last 12 months due to material non-compliance of laws or regulations;

he or she is prohibited from acting as a director or a member of the senior management as required by the Company Law;

he or she is prohibited from participating in share incentive schemes of listed companies as required by laws and regulations;

he or she is under other circumstances determined by the CSRC.

In case the Company has any of the circumstances specified in the above sub-paragraph 1), all the Restricted Shares that have been granted to the Participants under the Incentive Scheme but have not been unlocked shall be repurchased and cancelled by the Company; in case of any circumstance specified in the sub- paragraph 1) under which one becomes personally liable, the repurchase price shall not exceed the Grant Price; in case any Participant has any of the circumstances specified in the above sub-paragraph 2), the Restricted Shares that have been granted to the Participant under the Incentive Scheme but have not been unlocked shall be repurchased and cancelled by the Company, the repurchase price shall not exceed the Grant Price.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

Performance appraisal at company level

Selection of
performance indicators	Sales volume	Net profit	Threshold
Weights of performance	65%	35%	-
indicators
Combined performance	(actual value of performance indicator/target value
coefficient	of performance indicator) × weight of performance
	indicator
First Unlocking Period	The sales	The net profit	Combined
	volume of	shall not be	performance
	automobiles	less than	coefficient
	of the	RMB4.7	≥1
	Company	billion in
	shall not be	2020
	less than 1.11
	million units
	in 2020
Second Unlocking Period	The sales	The net profit	Combined
	volume of	shall not be	performance
	automobiles	less than	coefficient
	of the	RMB5.0	≥1
	Company	billion in
	shall not be	2021
	less than 1.21
	million units
	in 2021
Third Unlocking Period	The sales	The net profit	Combined
	volume of	shall not be	performance
	automobiles	less than	coefficient
	of the	RMB5.5	≥1
	Company	billion in
	shall not be	2022
	less than 1.35

million units in 2022

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

The annual performance appraisal targets of the reserved Restricted Shares are

as follows:

Selection of
performance indicators	Sales volume	Net profit	Threshold
Weights of performance	65%	35%	-
indicators
First Unlocking Period	The sales	The net profit	Combined
	volume of	shall not be	performance
	automobiles	less than	coefficient
	of the	RMB5.0	≥1
	Company	billion in
	shall not be	2021
	less than 1.21
	million units
	in 2021
Second Unlocking Period	The sales	The net profit	Combined
	volume of	shall not be	performance
	automobiles	less than	coefficient
	of the	RMB5.5	≥1
	Company	billion in
	shall not be	2022
	less than 1.35
	million units
	in 2022

Note: The "net profit" mentioned above refers to the audited net profit attributable to shareholders of the listed Company, and the "sales volume" mentioned above refers to the audited annual sales volume.

If the combined performance coefficient of the Company is ≥1, the performance appraisal indicators at company level are up to standards and the number of the Restricted Shares held by the Participants that may be unlocked in each Unlocking Period will be determined according to the performance appraisal result at individual level; if the performance appraisal indicators of the Company are not up to standards, all the Restricted Shares held by the Participants that are planned to be unlocked in relevant appraisal year shall not be unlocked and shall be repurchased and cancelled by the Company.

If any condition of unlock cannot be satisfied in any Unlocking Period within the validity period of the Incentive Scheme, such portion of the Restricted Shares which may be unlocked in such current Unlocking Period cannot be deferred to the next year and will be repurchased and cancelled by the Company.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

Performance appraisal at individual level

Whether Qualified		Qualified		Unqualified
Appraisal results	A	B	C	D	E
Exercisable proportion		100%			0%

If a Participant fails to meet his/her performance target, no corresponding Restricted Shares shall be unlocked or deferred to the next year and will be repurchased and cancelled by the Company.

Scientificity and reasonableness of the appraisal indicators

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

competition, the Company's strategic planning and other relevant factors. After comprehensively considering the possibility of their realization and the incentive effect on the Company's employees, we are of view that such indicators are reasonable and scientific.

In addition to the performance appraisal at company level, the Company has established a performance appraisal system for individuals, which evaluates the performance of the Participants in an accurate and all-round manner. The Company will determine whether the Participants meet the unlocking conditions based on their performance appraisal results for the previous year.

(VII) Methods and Procedures for Adjustment of the Restricted Share Incentive Scheme

1. Methods of adjusting the number of the Restricted Shares

In the event of any capitalisation issue, bonus issue, sub-division, rights issue or share consolidation of the Company in the period from the date of the announcement of the Incentive Scheme to the completion of registration of the Restricted Shares by the Participants, the number of the Restricted Shares shall be adjusted accordingly. The adjustment method is as follows:

Issue of shares by capitalisation issue, bonus issue and sub-division of shares
Q=Q0×(1+n)

Where: Q0 represents the number of the Restricted Shares before the adjustment; n represents the ratio of increase per share resulting from capitalisation issue, bonus issue and sub-division of shares (i.e. the increase in number of shares per share upon capitalisation issue, bonus issue and sub-division of shares) or the ratio of the number of shares to be issued under the rights issue or new issue to the total share capital of the Company before the rights issue or new issue; Q represents the adjusted number of the Restricted Shares.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

Rights issue
Q=Q0×P1×(1+n)÷(P1+P2×n)

Where: Q0 represents the number of the Restricted Shares before the adjustment; P1 represents the closing price as at the record date; P2 represents the price of the rights issue; n represents the ratio of the rights issue (i.e. the ratio of the number of shares to be issued under the rights issue to the total share capital of the Company before the rights issue); Q represents the adjusted number of the Restricted Shares.

Share consolidation
Q=Q0×n

Where: Q0 represents the number of the Restricted Shares before the adjustment; n represents the ratio of consolidation of shares (i.e. one share shall be consolidated into n shares); Q represents the adjusted number of the Restricted Shares.

Dividend distribution and additional issues

Under the above circumstances, no adjustment will be made on the number of the Restricted Shares.

2. Method of adjusting the Grant Price of the Restricted Shares

In the event that, from the date of the announcement of the Incentive Scheme to the registration of the Restricted Shares by the Participants, any issue of shares by capitalisation issue, bonus issue, sub-division, rights issue or consolidation of shares or dividend distribution has been made, an adjustment to the Grant Price of the Restricted Shares shall be made by the Company accordingly. The adjustment method is as follows:

Issue of shares by capitalisation issue, bonus issue and sub-division of shares
P=P0÷(1+n)

Rights issue
P=P0×(P1+P2×n)÷[P1×(1+n)]

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

Share consolidation
P=P0÷n

Where: P0 represents the Grant Price before the adjustment; n represents the ratio of consolidation of shares; P represents the adjusted Grant Price.

Dividend distribution
P=P0-V

Where: P0 represents the Grant Price before the adjustment; V represents the dividend per share; P represents the adjusted Grant Price. P shall be greater than 1 after the dividend distribution.

Under the circumstance of additional issue of new shares, no adjustment will be made on the Grant Price of the Restricted Shares.

3. Adjustment procedures for the Restricted Share Incentive Scheme

The general meeting of the Company shall authorize the Board to adjust the number

or the Grant Price of the Restricted Shares for the above reasons. After the Board adjusts the Grant Price or the number of the Restricted Shares according to the above provisions, it shall promptly make announcement and notify the Participants in accordance with the relevant provisions, and perform the information disclosure procedures. The Company will engage a law firm to give professional advice to the Board on whether such adjustment is in compliance with the Management Measures, the Articles of Association and the Incentive Scheme.

If, for other reasons, it is necessary to adjust the number, the Grant Price or other terms of the Restricted Shares, the Company will engage a law firm to give professional advice to the Board on whether such adjustment is in compliance with the Management Measures, the Articles of Association and the Incentive Scheme, which shall be subject to consideration and approval of the general meeting.

- I-32 -

APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

(VIII) Accounting Treatment of the Restricted Shares

In accordance with the requirements of the Accounting Standards for Enterprises No. 11

Share-basedPayment and the Accounting Standards for Enterprises No. 22 - Recognition and Measurement of Financial Instruments, the Company shall, on each balance sheet date during the Lock-up Period, adjust the estimated number of the Restricted Shares that may be unlocked in accordance with the latest number of the Participants who have fulfilled the unlocking conditions and the performance indicators, and recognize the services provided by the staff during the current period as the relevant costs or expenses and capital reserve in accordance with the fair value of the Restricted Shares on the Grant Date.
1. Accounting treatment
1. On the Grant Date

The bank deposit, share capital, capital reserve, treasure shares and other payables shall be recognized according to the status of the grant of the Restricted Shares to the Participants by the Company.

On each balance sheet date during the Lock-up Period

On the unlocking date

2. Estimated impact on the operating performance of each of the periods due to implementation of the Restricted Shares

- I-33 -

APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

fair value of the Restricted Shares based on the market prices of the shares. On the measurement date, the fair value of share-based payment per Restricted Share = market price of the shares of the Company-Grant Price.

Assuming the first grant of the Restricted Shares takes place in April 2020, based on the data on 23 January 2020, the total amount of fair value of the equity instruments first granted by the Company to the Participants is RMB217,915,700.

Based on the measurement above, the total cost of 54,752,700 Restricted Shares first granted under the Scheme is RMB217,915,700 and details of amortization from 2020 to

2023 are set out below:

				Currency: RMB
Number of the
Restricted Shares	Total
under the first	cost to be
grant	amortized	2020	2021	2022	2023
(0'000 shares)	(RMB0'000) (RMB0'000) (RMB0'000) (RMB0'000) (RMB0'000)
5,475.27	21,791.57	10,411.53	8,353.44	2,542.35	484.26

Notes:

For the consideration of prudent accounting principle, the cost estimate and amortization above have not taken into consideration the future locking of the Restricted Shares.
The above results do not represent the final accounting costs. The actual accounting costs are related to the actual Grant Date, the Grant Price and the number of grant, as well as the actual effective and lapsed quantities, and the possible dilutive effects are brought to the attention of shareholders.
The final result of the above impact on the Company's operating results will be subject to the annual audit report issued by the accounting firm.

- I-34 -

APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

3. The accounting treatment of the reserved Restricted Shares is same as the accounting treatment of the Restricted Shares under the first grant.

(IX) Principles of Repurchase and Cancellation of Restricted Shares

1. Repurchase price of the Restricted Shares

In the event that the Company repurchases and cancels the Restricted Shares in accordance with the requirements of the Incentive Scheme, save and except any adjustment required to be made to the number of the Restricted Shares to be repurchased and the repurchase price herein below, the number of the Restricted Shares to be repurchased shall be the number of the Restricted Shares granted but not yet unlocked and the repurchase price shall be the sum of the Grant Price and the interests for bank deposits during the same period. However, if any Participant assumes personal liabilities under section 1 of Article 18 of the Management Measures, or any Participant falls within section 2 of Article 18 of the Management Measures, the repurchase price shall be the Grant Price.

2. Method for adjustment of repurchase quantity

Upon completion of registration of the Restricted Shares granted to the Participants, in case of capitalisation issue, bonus issue, sub-division of shares, rights issue, share consolidation and other matters affecting the total share capital or the number of shares of the Company, it shall make adjustments to the repurchase quantity of the Restricted Shares yet to be unlocked accordingly. The Company will repurchase such number of the Restricted Shares granted to, and other shares of the Company so obtained therefrom by, the Participants based on such adjustment. The adjustment method is as follows:

Issue of shares by capitalisation issue, bonus issue and sub-division of shares
Q=Q0×(1+n)

Where: Q0 represents the number of the Restricted Shares prior to adjustment; n represents the ratio of increase per share resulting from capitalisation issue, bonus issue and sub-division of shares (i.e. the increase in number of shares per share upon capitalisation issue, bonus issue and sub-division of shares) or the ratio of the number of shares to be issued under the rights issue or new issue to the total share capital of the Company before the rights issue or new issue; Q represents the number of the Restricted Shares after adjustment.

- I-35 -

APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

Rights issue
Q=Q0×P1×(1+n)÷(P1+P2×n)

Where: Q0 represents the number of the Restricted Shares prior to adjustment; P1 represents the closing price on the record date; P2 represents the price of rights issue; n represents the ratio of the rights issue (i.e. the ratio of the number of shares to be issued under the rights issue to the total share capital of the Company prior to the rights issue); Q represents the number of the Restricted Shares after adjustment.

Share consolidation
Q=Q0×n

Where: Q0 represents the number of the Restricted Shares prior to adjustment; n represents the ratio of share consolidation (i.e. one share shall be consolidated into n share); Q represents the number of the Restricted Shares after adjustment.

Dividend distribution and additional issues

Under the above circumstances, no adjustment will be made on the number of the Restricted Shares.

3. Method for adjustment of repurchase price

Upon completion of registration of the Restricted Shares granted to the Participants, in case of capitalisation issue, bonus issue, sub-division of shares, rights issue, share consolidation or dividend distribution and other issues affecting the total share capital or share price of the Company, the repurchase price of the unlocked Restricted Shares shall be adjusted by the Company accordingly. The Company will repurchase the Restricted Shares granted to, and other shares of the Company so obtained therefrom by, the Participants at the adjusted price. The adjustment method is as follows:

Issue of shares by capitalisation issue, bonus issue and sub-division of shares
P=P0÷(1+n)

Where: P0 represents the Grant Price per Restricted Share; n represents the rate of increase per share resulting from capitalisation issue, bonus issue and subdivision of shares (i.e. the increase in number of shares per share upon capitalisation issue, bonus issue and sub-division of shares); P represents the repurchase price per Restricted Share after adjustment.

- I-36 -

APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

Rights issue
P=P0×(P1+P2×n)÷[P1×(1+n)]

Share consolidation
P=P0÷n

Dividend distribution
P=P0-V

Where: P0 represents the repurchase price per Restricted Share prior to adjustment; V represents the amount of dividends per share; P represents the repurchase price per Restricted Share after adjustment. After the adjustment through dividend distribution, P shall still be larger than 1.

Under the circumstance of additional issue of new shares, no adjustment will be made on the repurchase price of the Restricted Shares.

4. Procedures for adjustment of repurchase quantity and price

The Board of the Company shall be authorized at the general meeting of Company to adjust the repurchase quantity or price of the Restricted Shares based on the reasons listed above. After adjustment to the repurchase quantity or price according to the above provisions, an announcement shall be made in a timely manner.
The adjustment to the repurchase quantity or price of the Restricted Shares for other reasons shall be subject to resolution of the Board and consideration and approval at the general meeting.

- I-37 -

APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

5. Procedures of repurchase and cancellation
1. The Company shall promptly convene a Board meeting to consider the repurchase adjustment plan which shall be implemented in accordance with the above provisions, and submit the repurchase plan to the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting for approval according to law;
2. The Company will engage a law firm to give professional advice on whether the repurchase plan of shares is in compliance with the laws, administrative regulations, the Management Measures and the Scheme;
3. The Company shall apply to the Stock Exchange for unlocking such Restricted Shares, and the repurchase payment shall be paid to the Participants upon unlocking and the transfer of such shares shall be completed at a securities registration company as soon as possible. The Company shall cancel such portion of shares within a reasonable time after the completion of the transfer.
The Share Option Incentive Scheme

Source of Shares under the Share Option Incentive Scheme

The source of the underlying shares under the Share Option Incentive Scheme shall be ordinary A Shares issued to the Participants by the Company.

(II) Number of Underlying Shares under the Share Option Incentive Scheme

The Company intends to grant 109,909,000 Share Options to the Participants, representing approximately 1.204% of the total number of Shares of the Company (i.e. 9,127,269,000 Shares) as at the date of the announcement of the draft of the Incentive Scheme, of which 87,927,200 Share Options will be granted under the first grant, representing 80% of the total number of the Share Options may be granted under the Incentive Scheme and approximately 0.963% of the total number of Shares of the Company (i.e. 9,127,269,000 Shares) as at the date of the announcement of the draft of the Incentive Scheme; and 21,981,800 Share Options will be reserved, representing 20% of the total number of the Share Options may be granted under the Incentive Scheme and approximately 0.241% of the total number of Shares of the Company (i.e. 9,127,269,000 Shares) as at the date of the announcement of the draft of the Incentive Scheme. Each Share Option has the right to purchase one ordinary A share at the agreed Exercise Price within the validity period, subject to the Exercise Conditions.

- I-38 -

APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

(III) The Allocation of Shares under the Share Option Incentive Scheme

The following table sets out the allocation of the Share Options among the Participants under the first grant pursuant to the Incentive Scheme:

		Percentage to
		the total
	Number of	number of
	shares subject	shares subject	Percentage to
	to the Share	to the Share	the current
	Options to be	Options to be	total number
Position	granted	granted	of shares
	(0'000 shares)
Core management, core
technical (business) backbone
staff (1,672 people)	8,792.72	80%	0.963%
Reserved Grant	2,198.18	20%	0.241%
Total	10,990.90	100%	1.204%

Notes:

The total Shares to be granted under the fully effective Share Option Scheme to any one of the above-mentioned Participants will not exceed 1% of the total number of shares of the Company. The total underlying shares to be granted to the qualified Participants will not exceed 10% of the total number of shares of the Company as at the date of the proposal of the Share Option Scheme at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting.
The Participants of the Incentive Scheme exclude the Company's directors, supervisors, the shareholders individually or in aggregate holding 5% or more of the shares of the Company or the de facto controllers and their spouses, parents or children.

(IV) Validity Period, Grant Date, Vesting Period, Exercisable Date and Lock-up Period of

the Share Option Incentive Scheme

1. Validity period of the Share Option Incentive Scheme

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

2. Grant Date

The Grant Date shall be determined by the Board after the Incentive Scheme is considered and approved at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting of the Company. The Company shall grant the Share Options and complete the announcement and registration procedures within 60 days from the date on which the Incentive Scheme is considered and passed at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting of the Company, failing which the Incentive Scheme will terminate and the Share Options which have not been granted will lapse. The Grant Date of the reserved Share Options shall be the date of announcement of the resolutions of the Board to consider the grant of that part of Share Options.

The Grant Date must be a trading day and must not fall within any of the following periods:

the period commencing from 60 days prior to the publication of annual report or 30 days prior to the publication of semi-annual and quarterly reports of the Company, or in the event of delay in publishing the annual report for special reasons, 60 days prior to the original date of publication and up to the date of publication of the annual report, or in the event of delay in publishing the semi-annual and quarterly reports for special reasons, 30 days prior to the original date of publication of semi-annual and quarterly reports and up to the date of publication;

the period commencing from 10 days prior to the publication of the announcements of results forecast and preliminary results of the Company;

the period commencing from the date of occurrence of any significant event which may have significant effect on the trading prices of the Company's shares and their derivatives or the date on which relevant decision-making procedures start and ending on the second trading day following the publication in accordance with laws;

other periods as stipulated by the CSRC, Shanghai Stock Exchange and The Stock Exchange of Hong Kong Limited.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

3. Vesting Period

The Vesting Period shall commence from the date of registration of the grant of the Share Options and end on the Exercisable Date of the Share Options. The Share Options granted to the Participants are subject to different Vesting Periods. The Vesting Period for the first grant of Share Options shall be 12, 24 or 36 months; the Vesting Period for the reserved part of Share Options shall be 12 or 24 months, both are commencing from the date of the grant.

The Share Options which are granted to the Participants under the Incentive Scheme shall not be transferred, pledged for guarantees, charged or used for repayment of debt.

4. Exercisable Date

the period commencing from 60 days prior to the publication of annual report or 30 days prior to the publication of semi-annual and quarterly reports of the Company, or in the event of delay in publishing the annual report for special reasons, 60 days prior to the original date of publication and up to the date of publication of the annual report, or in the event of delay in publishing the semi-annual and quarterly reports for special reasons, 30 days prior to the original date of publication of semi-annual and quarterly reports and up to the date of publication;

the period commencing from 10 days prior to the publication of the announcement of results forecast and preliminary results of the Company;

the period commencing from the date of occurrence of any significant event which may have significant effect on the trading prices of the Company's shares and their derivatives or the date on which relevant decision-making procedures start and ending on the second trading day following the publication in accordance with laws;

other periods as stipulated by the CSRC, the Shanghai Stock Exchange and The Stock Exchange of Hong Kong Limited.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

The exercise periods of the Share Options to be granted under the first grant and the schedule for each exercise period are shown in the table below:

		Exercise
Exercise arrangement	Exercise time	proportion

First exercise period for the Share Options to be granted under the first grant

Second exercise period for the Share Options to be granted under the first grant

Third exercise period for the Share Options to be granted under the first grant

Commencing from the first trading	1/3
day upon the expiry of 12 months
from the date of the first grant to
the last trading day upon the expiry
of 24 months from the date of the
first grant
Commencing from the first trading	1/3
day upon the expiry of 24 months
from the date of the first grant to
the last trading day upon the expiry
of 36 months from the date of the
first grant
Commencing from the first trading	1/3
day upon the expiry of 36 months
from the date of the first grant to
the last trading day upon the expiry
of 48 months from the date of the
first grant

The exercise periods of the Share Options to be reserved under the Incentive Scheme and the schedule for each exercise period are shown in the table below:

		Exercise
Exercise arrangement	Exercise time	proportion
First exercise period for	Commencing from the first trading	1/2
the reserved Share	day upon the expiry of 12 months
Options	from the date of the reserved grant
	to the last trading day upon the
	expiry of 24 months from the date
	of the first grant
Second exercise period for	Commencing from the first trading	1/2
the reserved Share	day upon the expiry of 24 months
Options	from the date of the reserved grant
	to the last trading day upon the
	expiry of 36 months from the date
	of the first grant

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

The Share Options for which the Exercise Conditions are not fulfilled during the above agreed period shall not be exercised or deferred to the next exercise period, and the Company shall cancel the underlying Share Options of the Participants according to the principle stipulated in the Incentive Scheme. After the end of each exercise period of the Share Options, the Share Options of the Participants for the current period that have not been exercised shall be terminated and cancelled by the Company.

5. Lock-up Period

The Lock-up Period refers to the period during which there is sale restriction on Shares obtained by the Participants upon the Exercise. The Lock-up Period arrangement under the Incentive Scheme shall be implemented in accordance with the requirements of the Company Law, the Securities Law and other relevant laws, regulations and regulatory documents as well as the requirements of the Articles of Association. Specific contents are as follows:

1. Where a Participant is a member of the senior management of the Company, the number of shares of the Company which may be transferred by the Participant each year during his/her term of office shall not exceed 25% of the total number of the shares of the Company held by him/her. No shares of the Company held by him/her shall be transferred within six months after his/her termination of office.
2. Where a Participant is a member of the senior management of the Company and he/she disposes of any shares of the Company within six months after acquisition or buys back such shares within six months after disposal, all gains arising therefrom shall be accounted to the Company and the Board will collect all such gains.
3. If, during the validity period of the Incentive Scheme, there is any amendment to the requirements regarding transfer of shares by a member of the senior management of the Company under the Company Law, the Securities Law and other relevant laws, regulations, regulatory documents and the Articles of Association, such amended requirements thereunder shall apply to the shares transferred by the Participants during the relevant times.
The Exercise Price of the Share Options and the Basis of Determination for the Exercise Price
1. Exercise Price of the Share Options under first grant
The Exercise Price of the Share Options under first grant shall be RMB8.73 per

share.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

2. Basis of determination for the Exercise Price of the Share Options under first grant

The Exercise Price of the Share Options under first grant shall not be lower than the carrying amount of the shares, and not lower than the higher of the followings:

the average trading price of the shares (i.e. RMB8.45 per share) on the trading day preceding the date of the announcement of the draft of the Incentive Scheme;
the average trading price of the shares (i.e. RMB8.73 per share) for the last 120 trading days preceding the date of the announcement of the draft of the Incentive Scheme.

3. Basis of determination for the Exercise Price of the reserved Share Options

The grant of the reserved Share Options is subject to the consideration and approval

of related resolution by the Board and the disclosure of related information. The Exercise Price of the reserved Share Options shall not be lower than the carrying amount of the shares, and not lower than the higher of the followings:

the average trading price of the shares on the trading day preceding the date of the announcement of the Board resolution on the grant of the reserved Share Options;
the average trading price of the shares for the last 20, 60 or 120 trading days preceding the date of the announcement of the Board resolution on the grant of the reserved Share Options.

(VI) Conditions on Grant and Exercising of the Share Options

1. Conditions on grant of the Share Options

There is no occurrence of any of the following events on the part of the Company:
- issue of an auditors' report with adverse opinion or which indicates an inability to give opinion by a certified public accountant with respect to the financial report of the Company for its most recent accounting year;

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

issue of an auditors' report with adverse opinion or which indicates an inability to give opinion by a certified public accountant with respect to the internal control of the financial report of the Company for its most recent accounting year;

failure to conduct profit distribution in accordance with laws and regulations, the Articles of Association and public undertakings during the 36 months after listing;

prohibition from implementation of a share incentive scheme by laws and regulations;

- other circumstances determined by the CSRC.
There is no occurrence of any of the following events on the part of the Participants:
① he or she has been determined by Stock Exchange as an ineligible person in the last 12 months;
② he or she has been determined by the CSRC and its delegated agencies as an ineligible person in the last 12 months;
③ he or she has been imposed by the CSRC or its delegated agencies with administrative penalties or measures prohibiting access into the market in the last 12 months due to material non-compliance of laws or regulations;
④ he or she is prohibited from acting as a director or a member of the senior management as required by the Company Law;
- he or she is prohibited from participating in share incentive schemes of listed companies as required by laws and regulations;

he or she is under other circumstances determined by the CSRC.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

2. Conditions on exercising of the Share Options

The following conditions must be fulfilled before the Share Options granted to the Participants can be exercised:

There is no occurrence of any of the following events on the part of the Company:
- issue of an auditors' report with adverse opinion or which indicates an inability to give opinion by a certified public accountant with respect to the financial report of the Company for its most recent accounting year;

issue of an auditors' report with adverse opinion or which indicates an inability to give opinion by a certified public accountant with respect to the internal control of the financial report of the Company for its most recent accounting year;

failure to conduct profit distribution in accordance with laws and regulations, the Articles of Association and public undertakings during the 36 months after listing;

prohibition from implementation of a share incentive scheme by laws and regulations;

⑤ other circumstances determined by the CSRC.
There is no occurrence of any of the following events on the part of the Participants:
① he or she has been determined by any stock exchange as an ineligible person in the last 12 months;
② he or she has been determined by the CSRC and its delegated agencies as an ineligible person in the last 12 months;
③ he or she has been imposed by the CSRC or its delegated agencies with administrative penalties or measures prohibiting access into the market in the last 12 months due to material non-compliance of laws or regulations;
④ he or she is prohibited from acting as a director or a member of the senior management as required by the Company Law;

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

he or she is prohibited from participating in share incentive schemes of listed companies as required by laws and regulations;

he or she is under other circumstances determined by the CSRC.

In case the Company has any of the circumstances specified in the above sub-paragraph 1), all the Share Options that have been granted to the Participants under the Incentive Scheme but have not been exercised shall be cancelled by the Company; in case any participant has any of the circumstances specified in the above sub-paragraph 2), the share options that have been granted to the Participant under the Incentive Scheme but have not been exercised shall be cancelled by the Company.

Performance appraisal at company level

Selection of
performance indicators	Sales volume	Net profit	Threshold
Weights of performance	65%	35%	-
indicators
Combined performance	(actual value of performance indicator/target value
coefficient	of performance indicator) × weight of performance
	indicator
First exercise period	The sales	The net profit	Combined
	volume of	shall not be	performance
	automobiles	less than	coefficient
	of the	RMB4.7	≥1
	Company	billion in
	shall not be	2020
	less than 1.11
	million units
	in 2020

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

Selection of
performance indicators	Sales volume	Net profit	Threshold
Second exercise period	The sales	The net profit	Combined
	volume of	shall not be	performance
	automobiles	less than	coefficient
	of the	RMB5.0	≥1
	Company	billion in
	shall not be	2021
	less than 1.21
	million units
	in 2021
Third exercise period	The sales	The net profit	Combined
	volume of	shall not be	performance
	automobiles	less than	coefficient
	of the	RMB5.5	≥1
	Company	billion in
	shall not be	2022
	less than 1.35
	million units
	in 2022

The annual performance appraisal targets of the reserved Share Options are as follows:

Selection of
performance indicators	Sales volume	Net profit	Threshold
Weights of performance	65%	35%	-
indicators
First exercise period	The sales	The net profit	Combined
	volume of	shall not be	performance
	automobiles	less than	coefficient
	of the	RMB5.0	≥1
	Company	billion in
	shall not be	2021
	less than 1.21
	million units
	in 2021

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

Selection of
performance indicators	Sales volume	Net profit	Threshold
Second exercise period	The sales	The net profit	Combined
	volume of	shall not be	performance
	automobiles	less than	coefficient
	of the	RMB5.5	≥1
	Company	billion in
	shall not be	2022
	less than 1.35
	million units
	in 2022

If the combined performance coefficient of the Company is ≥1, the performance appraisal indicators at company level are up to standards and the number of Share Options held by the Participants that may be exercised in each exercising period will be determined according to the performance appraisal result at individual level; if the performance appraisal indicators of the Company are not up to standards, all Share Options held by the Participants that are can be exercised in relevant appraisal year shall not be exercised and shall be cancelled by the Company.

If any Exercise Conditions cannot be satisfied in any exercise period within the validity period of the Incentive Scheme, such portion of the shares options which may be exercisable in such current exercise period cannot be deferred to the next year to exercise. All such Share Options will be cancelled by the Company.

Performance appraisal at individual level

Whether Qualified		Qualified		Unqualified
Appraisal results	A	B	C	D	E
Exercisable
proportion		100%			0%

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

If the individual performance appraisal result of a participant is qualified, the performance appraisal indicator at individual level is up to standard, and if the annual performance appraisal indicator at company level is also up to standard, the Options exercisable by the participants under the Scheme in the current year may be fully exercised. If the individual performance appraisal result of the participant is unqualified, the Company shall cancel the Options limit exercisable by the participant for the current period according to the provisions of the Incentive Scheme, and the Share Options shall be cancelled by the Company.

If a participant fails to meet his/her performance target, no corresponding Share Options shall be exercisable or deferred to the next year to exercise. All such Share Options will be cancelled by the Company.

Scientificity and Reasonableness of the Appraisal Indicators

In addition to the performance appraisal at the Company level, the Company has established a performance appraisal system for the individuals, which evaluates comprehensively the performance of incentive participants in an accurate and all-round manner. The Company will determine whether the incentive participants meet the unlocking conditions based on their performance appraisal results for the previous year.

Given the above, the appraisal system for the Incentive Scheme of the Company is all-round, comprehensive and operable, and the appraisal indicators are scientific and reasonable, which are binding on the incentive participants and can serve the appraisal goal of the Incentive Scheme.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

(VII) Methods and Procedures for Adjustment of the Share Option Incentive Scheme

1. Method for adjustment of the number of Share Options

Issue of shares by capitalisation issue, bonus issue and sub-division of shares
Q=Q0×(1+n)

Where: Q0 represents the number of Share Options prior to adjustment; n represents the rate of increase per share resulting from capitalisation issue, bonus issue and sub-division of shares (i.e. the increase in number of shares per share upon capitalisation issue, bonus issue and sub-division of shares); Q represents the adjusted number of Share Options.

Rights issue
Q=Q0×P1×(1+n)÷(P1+P2×n)

Where: Q0 represents the number of share options prior to adjustment; P1 represents the closing price on the record date; P2 represents the price of rights issue; n represents the ratio of the rights issue (i.e. the ratio of the number of shares to be issued under the rights issue to the total share capital of the Company prior to the rights issue); Q represents the number of Share Options after adjustment.

Share consolidation
Q=Q0×n

Dividend distribution and additional issues

Under the above circumstances, no adjustment will be made on the number of the Share Options.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

2. Method for adjustment of Exercise Price

Issue of shares by capitalisation issue, bonus issue and sub-division of shares
P=P0÷(1+n)

Where: P0 represents the Exercise Price prior to adjustment; n represents the rate of increase per share resulting from capitalisation issue, bonus issue and sub-division of shares; P represents the adjusted Exercise Price.

Rights issue
P=P0×(P1+P2×n)÷[P1×(1+n)]

Share consolidation
P=P0÷n

Where: P0 represents the Exercise Price prior to adjustment; n represents the ratio of share consolidation; P represents the Exercise Price after adjustment.

Dividend distribution
P=P0-V

Where: P0 represents the Exercise Price prior to adjustment; V represents the dividend per share; P represents the adjusted Exercise Price. P shall be greater than 1 after the dividend distribution.

Under the circumstance of additional issue of new shares, no adjustment will be made on the Exercise Price of the Share Options.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

3. Adjustment procedures for the Share Option Incentive Scheme

The general meeting of the Company shall authorize the Board to adjust the number or the Exercise Price of Share Options for the above reasons. After the Board adjusts the Exercise Price or the number of Share Options according to the above provisions, it shall promptly make announcement and notify the Participants in accordance with the relevant provisions, and perform the information disclosure procedures. The Company will engage a law firm to give professional advice to the Board on whether such adjustment is in compliance with the Management Measures, the Articles of Association and the Incentive Scheme.

(VIII) Accounting Treatment of the Share Options

In accordance with the requirements of the Accounting Standards for Enterprises No. 11

Share-basedPayment and the Accounting Standards for Enterprises No. 22 - Recognition and Measurement of Financial Instruments, the Company shall measure and account for the cost of the Share Option Incentive Scheme of the Company:
1. Accounting treatment
1. On the Grant Date

Vesting Period:

Subsequent to Exercisable Date

No adjustment shall be made to the relevant costs or expense, and the total amount of the owner's equities, which have been recognized.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

On the Exercisable Date

Based on the exercise of the Share Options, share capital and share premium shall be recognised and the "Capital reserve - Other capital reserve" recognized during the Vesting Period shall be transferred to "Capital reserve - Capital premium".

2. Estimate of value of the Share Options

Assuming the first grant of Share Options takes place in April 2020, the Company uses the "Black-Scholes" model to measure the fair value of the Share Options and estimate the fair value of 87,927,200 Share Options first granted by the Company using such model based on the data as at 23 January 2020. The theoretical value of 87,927,200 Share Options first granted by the Company is RMB125,892,000. The value of the options in each exercise period is as follows:

			Currency: RMB
			Total value of
	Number of		the options
	options under	Value per	under the
Exercise period	the first grant	option	first grant
	(0'000)	(RMB)	(RMB0'000)
First exercise period	2,930.91	1.21	3,558.96
Second exercise period	2,930.91	1.51	4,411.40
Third exercise period	2,930.91	1.58	4,618.84

Selection of specific parameters is as follows:

Current price of subject shares: RMB8.35 per share (assuming the closing price of shares on 23 January 2020 is the current price of shares as at the Grant Date);
Exercise Price of the Share Options: RMB8.73 per share as determined under the Management Measures;
Valid period: one, two and three years, respectively (based on the period commencing from Grant Date and ending on the first Exercisable Date for each respective period);
Historical volatility: 43.83%, 39.08% and 34.65%, respectively (the volatility of the Company for the latest one, two and three years before the announcement, respectively; source: Wind database);

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

Risk-freerate: 2.18%, 2.48% and 2.59%, respectively (the yield of PRC treasury bond for one, two and three years);
Dividend yield: 3.47% (the average dividend yield of the Company for the latest 12 months before the announcement of the Incentive Scheme).

3. Impact on the operating performance of the Company

Based on the measurement above, the total cost of 87,927,200 Share Options first granted is RMB125,892,000 and details of amortizaton from 2020 to 2023 are set out below:

		Currency: RMB	Unit: RMB0'000
Amortized cost of
the Share Options
under the first
grant	2020	2021	2022	2023
12,589.20	4,869.51	4,931.63	2,274.85	513.20

The cost of the Share Options granted under the Scheme will be estimated under the "Black-Scholes" model after the Board determines the Grant Date. Such cost estimate is only simulating estimate and does not represent final accounting cost.

4. The accounting treatment of the reserved Share Options is same as the accounting treatment of the Share Options under the first grant.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

CHAPTER 6 IMPLEMENTATION PROCEDURES OF THE INCENTIVE SCHEME

Procedures for the Incentive Scheme to Take Effect

The Remuneration Committee is responsible for preparing the draft of the Incentive Scheme, Appraisal Measures and Management Measures for Long-term Incentive Mechanism of Great Wall Motor Company Limited.

The Board shall consider the draft of the Incentive Scheme, Appraisal Measures and Management Measures for Long-term Incentive Mechanism of Great Wall Motor Company Limited prepared by the Remuneration Committee. When the Board considers the Scheme, any director who is also a participant or is a related party to a participant shall abstain from voting. After the Board reviewed and approved the Incentive Scheme and performed the announcement procedure, it should propose the Incentive Scheme to the general meeting for review; at the same time, it shall propose to the general meeting to authorize and execute the grant, unlocking, repurchase and cancellation of the Restricted Shares, and the grant, exercise and cancellation of the Share Options.

The Independent Directors and the Supervisory Committee shall issue opinions in respect of whether the Scheme is beneficial to the sustainable development of the Company or whether there is any noticeable damage to the interests of the Company and all Shareholders.

The Company should carry out self-investigation on the trading of shares of the Company by insiders during the 6 months' period prior to the announcement of the Scheme.

(VI) The Company shall internally publish the names and the positions of the Participants before the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting are convened through its website or other channels for a period of no less than 10 days. The Supervisory Committee shall verify the list of the Participants and thoroughly consider opinions from the public. The Company shall publish the opinions of the Supervisory Committee on the verify and the public opinions in relation to the list of the Participants 5 days before the Incentive Scheme is considered at a general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

(VII) When the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting of the Company are convened to vote on the Incentive Scheme, the Independent Directors shall solicit proxy voting rights from all shareholders regarding the Incentive Scheme. At the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting, it is required to vote on the content of the Share Incentive Scheme under Article 9 of the Management Measures, and the Incentive Scheme shall be passed by more than 2/3 of the voting rights held by the shareholders present at the meeting. Except for the directors, supervisors and senior management of the Company, as well as the shareholders individually or collectively holding more than 5% of the Company's shares, the voting by other shareholders shall be separately counted and disclosed.

When the Share Incentive Scheme is considered at the Company's general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting, shareholders who are Participants or shareholders who have a related relationship with the Participants shall abstain from voting thereon.

(IX) After the Incentive Scheme has been considered and approved at the Company's general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting, the Board of the Company shall, according to the delegation of the general meeting, grant entitlements and complete the registration and announcement procedures within 60 days from the date of consideration and approval of the Incentive Scheme at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting. The Board shall handle specific grant, unlocking, repurchase, cancellation in relation to the Restricted Shares and the grant, exercise and cancellation and other matters in relation to the Share Options according to the delegation of the general meeting.

Procedures for Grant of Entitlements of the Incentive Scheme
1. Upon consideration and approval of the Incentive Scheme at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting, the Company shall sign an Agreement on Grant/Subscription of the Share Incentive with the Participants in order to define their respective rights and obligations. If a participant fails to sign an Agreement on Grant/Subscription of the Share Incentive, he/she shall be deemed to have automatically abandoned his/her rights and obligations.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

The Board shall consider and announce whether the conditions as set out in the Share Incentive Scheme for the Participant to receive entitlements have been satisfied before the Company grants such entitlements to such Participants.

The Independent Directors and the Supervisory Committee shall both express their views explicitly. The law firm shall issue legal opinions on whether the conditions for the Participants to receive such entitlements are fulfilled or not.

The Supervisory Committee of the Company shall verify the list of Participants on the Grant Date of the Restricted Shares and the Share Options and issue their views on such verification.

The Company shall make a first grant to the Participants and complete the announcement and registration procedures within 60 days (excluding the period during which no grant of entitlements is allowed pursuant to the requirements under laws and regulations) after the Share Incentive Scheme is considered and approved at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting. The Board of the Company shall disclose the implementation thereof timely by way of announcement after completion of the registration of the grant. In the event the Company fails to complete the procedures mentioned above within such 60 days, the Scheme shall be terminated, and the Board shall disclose the reason for such failure timely and shall not be allowed to consider the Share Incentive Scheme within the following three months.

(VI) The Participants of the Restricted Shares shall pay the consideration for subscribing for the Restricted Shares into the account designated by the Company in accordance with the Agreement on Grant/Subscription of the Share Incentive. The participant shall be deemed as having waived his or her right to subscribe for the Restricted Shares not fully paid.

(VII) The Company shall make an application to the Stock Exchange first before any entitlements are granted, and the securities registration and clearing institution will conduct registration procedure thereof upon confirmation by such Stock Exchange.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

Procedures for Unlocking of the Restricted Shares
1. The Company shall confirm whether the Participants satisfy the unlocking conditions before the unlocking date. The Board shall consider whether the unlocking conditions as set out in the Scheme have been satisfied. The Independent Directors and the Supervisory Committee shall both express their views explicitly. The law firm shall issue legal opinions on whether the conditions for the unlocking by the Participants are fulfilled or not. For the Participants who satisfy the unlocking conditions, the Company shall handle the unlocking at its discretion, and for the Participants who fail to satisfy the unlocking conditions, the Company will repurchase and cancel the Restricted Shares corresponding to the unlocking this time. The Company shall disclose the implementation thereof timely by way of announcement.

A Participant may transfer the unlocked Restricted Shares, but the transfer of shares held by the senior management of the Company shall be in compliance with the requirements of relevant laws, regulations and normative documents.

Before the unlocking of Restricted Shares of the Participants, the Company shall apply to the Stock Exchange. Upon confirmation by the Stock Exchange, the securities registration and clearing institution will handle the relevant registration and clearing matter.

IV. Procedures for Exercise of the Share Options

The Company shall confirm whether the Participants satisfy the exercise conditions before the date of exercise. The Board shall consider and review whether the exercise conditions as set out in the Scheme have been satisfied. The Independent Directors and the supervisor committee shall both express their views explicitly. The law firm shall issue legal opinions on whether the conditions for the exercise of Share Options by the Participants are fulfilled or not. For the Participants who satisfy the exercise conditions, the Company may provide a unified or autonomous method of exercise to the Participants according to the actual situation, and for the Participants who fail to satisfy the exercise conditions, the Company shall cancel their Share Options corresponding to the respective exercise. The Company shall disclose the implementation thereof timely by way of announcement.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

A Participant may transfer the Shares of the Company obtained pursuant to the exercise of Share Options, but the transfer of shares held by the Directors and senior management of the Company shall be in compliance with the requirements of relevant laws, regulations and regulatory documents.

The Company shall make an application to the Stock Exchange first before any share option is exercised, and the securities registration and clearing institution will conduct registration procedure thereof upon confirmation by such Stock Exchange.

Procedures for Amendment and Termination of the Incentive Scheme

Procedures for Amendment of the Incentive Scheme
1. If the Company intends to amend the Scheme before it is considered at the general meeting, such amendment shall be considered and approved by the Board.
2. If the Company intends to amend the Scheme after it is considered and approved at the general meeting, such amendment shall be considered and determined at the general meeting given that such amendment shall not result in the following:
3. 1. accelerating the unlocking/the exercise of the Share Options;
  2. reducing the Grant Price/Exercise Price.
4. The Independent Directors and the Supervisory Committee of the Company shall give independent opinions as to whether the amendments are conducive to the sustainable development of the Company or are significantly detrimental to the interests of the Company and the Shareholders as a whole.
5. A law firm shall issue professional opinions as to whether the amendments to the Scheme are in compliance with the requirements of the Management Measures and relevant laws and regulations or are significantly detrimental to the interests of the Company and the Shareholders as a whole.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

Procedures for Termination of the Incentive Scheme
1. If the Company intends to terminate the implementation of the Incentive Scheme before it is considered at the general meeting, such termination shall be considered and approved by the Board.
2. If the Company intends to terminate the implementation of the Incentive Scheme after it is considered and approved at the general meeting, such termination shall be considered and approved at general meeting.
3. A law firm shall issue professional opinions as to whether the termination of the Incentive Scheme by the listed company is in compliance with the requirements of the Measures and relevant laws and regulations or is significantly detrimental to the interests of the listed company and the Shareholders as a whole.
4. If the Company's general meeting or the Board meeting considers and approves the resolution to terminate the implementation of the Share Options Incentive Scheme, it shall not be allowed to review Share Option Incentive Scheme in the following 3 months from the date of the announcement of the resolution.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

CHAPTER 7 RESPECTIVE RIGHTS AND OBLIGATIONS OF THE

COMPANY/PARTICIPANTS

Rights and Obligations of the Company
1. The Company shall have the right to construe and execute the Incentive Scheme and shall appraise the performance of the Participants based on the requirements under the Incentive Scheme. If a Participant fails to fulfill the unlocking or exercise conditions required under the Incentive Scheme, the Company will cancel the Share Options, which have not been exercised by the Participants, and repurchase and cancel the Restricted Shares, which have not been unlocked by the Participants, in accordance with the principles under the Incentive Scheme.

The Company undertakes not to provide loans and financial support in any other forms, including providing guarantee for loans, to the Participants for acquiring the Share Options or Restricted Shares under the Incentive Scheme.

The Company shall discharge its obligations in a timely manner in relation to report and information disclosure under the Incentive Scheme in accordance with the relevant requirements.

1. The Company confirms that the eligibility of the Participants under the Incentive Scheme does not represent the right of such Participants to continue to serve the Company and does not constitute a commitment of employment for a fixed term by the Company. The employment relationship between the Company and the Participants is still governed by the employment contract between the parties.
Rights and Obligations of the Participants
1. A Participant shall comply with the requirements of his/her position as stipulated by the Company, and shall work diligently and responsibly, strictly observe professional ethics, and make contribution to the development of the Company.

(II) Source of funds shall be self-financed by the Participants.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

Upon completion of registration by the Depository and Clearing Company, the Restricted Shares granted to the Participants shall have the same rights as shares, including but not limited to the rights to dividend and rights to rights issue conferred by such shares.
The Restricted Shares granted to the Participants under the Scheme shall not be transferred or used as guarantee or for repayment of debt before unlocking of the Restricted Shares.
The Share Options granted to the Participants shall not be transferred or used as guarantee or for repayment of debts.

(IV) Any gains of the Participants generated from the Incentive Scheme are subject to individual income tax and other taxes according to PRC tax laws.

The Participants undertake, where false statements or misleading statements in or material omissions from the information disclosure documents of the Company result in non-compliance with condition of grant or arrangements for exercise of the entitlements, the Participants concerned shall return to the Company all interests gained through the Share Incentive Scheme calculated from the date when it is confirmed that the relevant information disclosure documents of the Company contain false statements or misleading representations or material omissions.

(VII) Other relevant rights and obligations under the laws, regulations and the Incentive Scheme.

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

CHAPTER 8 HANDLING UNUSUAL CHANGES TO THE

COMPANY/PARTICIPANTS

Handling Unusual Changes to the Company
1. The Scheme shall be terminated if any of the following events occurs to the Company:
2. 1. change in control of the Company;
  2. merger and spin-off of the Company.

The Incentive Scheme shall be terminated immediately if any of the following events occurs to the Company, the Restricted Shares which have been granted to the Participants but not yet unlocked shall not be unlocked and shall be repurchased and cancelled by the Company; in case of the following events under which one becomes personally liable, the repurchase price shall not exceed the Grant Price; and the Share Options which have been granted to the Participants but not yet exercised shall not be exercised and shall be cancelled by the Company:
1. issue of an auditors' report with adverse opinion or which indicates an inability to give opinion by a certified public accountant with respect to the financial report of the Company for its most recent accounting year;
2. issue of an auditors' report with adverse opinion or which indicates an inability to give opinion by a certified public accountant with respect to the internal control of the financial report of the Company for its most recent accounting year;
3. failure to conduct profit distribution in accordance with laws and regulations, the Articles of Association and public undertakings during the 36 months after listing;
4. prohibition from implementation of a share incentive scheme by laws and regulations; and
5. other circumstances under which the Incentive Scheme shall be terminated as determined by the CSRC.

Where false statements or misleading statements in or material omissions from the information disclosure documents of the Company result in non-compliance with grant conditions or unlocking/exercise arrangements, all the Restricted Shares that have not been unlocked shall be repurchased and cancelled by the Company

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

uniformly and all outstanding Share Options shall be cancelled by the Company uniformly. In respect of the Restricted Shares already unlocked by the Participants and the options already exercised by relevant Participants, the Participants concerned shall return to the Company all interests granted.

The Board shall recover the gain received by the Participants in accordance with the aforesaid provisions and the relevant arrangements under the Incentive Scheme.

(IV) In the event of any political and policy risks, serious natural calamities and other force majeure during the Vesting Period and the exercise period, the occurrence of which is beyond the control of the Company's management, the Board may terminate the Incentive Scheme.

Handling Unusual Changes to the Participants
1. If the Participants are demoted but still meet the incentive conditions after demotion, the Restricted Shares that can be unlocked shall be re-determined according to the standards corresponding to their new positions, and the Restricted Shares so reduced shall be repurchased and cancelled by the Company; the Share Options that may be exercised shall be also re-determined accordingly, and the Share Options so reduced shall be cancelled.
  If the Participants are demoted and no longer meet the incentive conditions as stipulated in the Scheme after demotion, the Restricted Shares that have been unlocked shall be vested normally, and the Restricted Shares that have been granted but not yet unlocked shall be repurchased and cancelled by the Company; the Share Options that are exercisable shall be exercisable in a normal manner, and the Share Options that have been granted but not yet exercisable shall be cancelled by the Company.

If any of the following circumstances occurs to a participant, his/her unlocked Restricted Shares shall be vested in an accelerated manner, and the Restricted Shares which have been granted but not yet unlocked shall be accelerated and all the remaining Restricted Shares shall be vested in one tranche only; the Share Options which are exercisable shall be exercised within 3 months in an accelerated manner or be forfeited and the Share Options which have been granted but not yet exercisable shall be exercisable in an accelerated manner and exercised within 3 months; the participant will be no longer subject to the performance conditions in respect of the exercise at company and individual level:
A. civil incapacity arising out of work;

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APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

1. death arising out of work;
2. normal retirement or early retirement.
If any of the following circumstances occurs, the unlocked Restricted Shares shall be vested in an accelerated manner, and the Restricted Shares which have been granted but not yet unlocked shall be repurchased by the Company; the Share Options which are exercisable shall be exercised within 3 months in an accelerated manner or be forfeited and the Share Options which have been granted but not yet exercisable shall be cancelled by the Company:
1. When the labor contract of a participant is terminated or dismissed by the Company due to reasons other than the above-mentionedA-C of Article 1;
2. When a participant ceases to work in the listed company but still holds position in the Group due to the transfer of position;
3. When a participant holds position in a wholly-owned or holding subsidiary of Great Wall Motor Company Limited, if Great Wall Motor Company Limited loses control of the subsidiary and the participant still work in the company;
4. When a participant serves as a supervisor or an Independent Director or holds other position prohibited from holding the Company's share/Share Options due to redesignation.

(IV) Where a participant causes serious loss to the Company due to violation of laws, regulations or the "Red Line of the Company" during his/her term of office and thus terminates his/her labor relationship with the Company, the Company shall repurchase and cancel the Restricted Shares granted but not unlocked and the Company may require the participant to return the proceeds from the unlocked Restricted Shares; the Company shall cancel the unexercised Share Options of the participant and the Company may require the participant to return the proceeds from the exercised Share Options.

Where a participant after his/her termination of office causes serious loss to the Company due to violation of competition restrictions, offending the "Red Line of the Company" or major work problems identified after his/her termination of office, the Company shall have the right to require the participant to return all the proceeds obtained under the Incentive Scheme.

- I-66 -

APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

(VI) In the implementation process of the Scheme, if a participant is prohibited from being the participant due to the circumstances as stipulated in Article 8 of the Management Measures, the Company shall not continue to grant him/her the rights and interests, and the Restricted Shares that have been granted but not yet unlocked shall be repurchased and cancelled by the Company at a repurchase price not higher than the Grant Price; the Share Options that have been granted but not yet exercised shall be terminated.

(VII) Other circumstances not stated above and the handling method thereof shall be determined by the Remuneration Committee.

III. Resolution of Disputes between the Company and the Participants

- I-67 -

APPENDIX I	2020 RESTRICTED SHARE AND
	SHARE OPTION INCENTIVE SCHEME OF
	GREAT WALL MOTOR COMPANY LIMITED

	CHAPTER 9 SUPPLEMENTARY PROVISIONS

The Incentive Scheme shall take effect subject to the consideration and approval at the general meeting, the A Shareholders' Class Meeting and the H Shareholders' Class Meeting of the Company.

The Incentive Scheme shall be construed by the Board of the Company.

Great Wall Motor Company Limited

The Board

30 January 2020

- I-68 -

APPENDIX II	APPRAISAL MEASURES FOR IMPLEMENTATION OF THE
	2020 RESTRICTED SHARE AND SHARE OPTION INCENTIVE
	SCHEME OF GREAT WALL MOTOR COMPANY LIMITED

GREAT WALL MOTOR COMPANY LIMITED

APPRAISAL MEASURES FOR IMPLEMENTATION OF THE 2020 RESTRICTED

SHARE AND SHARE OPTION INCENTIVE SCHEME

In order to further establish and improve the long-term incentive mechanism of Great Wall Motor Company Limited (the "Company"), attract and retain excellent talents, fully mobilize the enthusiasm of the Company's senior management, middle management and core backbone employees, effectively combine the interests of Shareholders, the Company and core employees, so as to improve the operation and management level of the Company, the Company has prepared the 2020 Restricted Share and Share Option Incentive Scheme of Wall Motor Company Limited (Draft) (the "Share Incentive Scheme" or "Incentive Scheme") under the premise of fully safeguarding the interests of Shareholders.

To guarantee the smooth implementation of the Share Incentive Scheme, these measures are prepared in accordance with the Company Law, the Securities Law, the Management Measures for Share Incentives of Listed Companies and other relevant laws, administrative regulations, normative documents and the Articles of Association and based on the actual conditions of the Company.

Article 1 Purpose of Appraisal

The purposes of these measures are to help the Company to further improve the corporate governance structure, establish and improve the Company's incentive and restraint mechanism, to ensure successful implementation of the 2020 Restricted Share and Share Option Incentive Scheme, to maximize the role of this incentive plan, so as to ensure the Company's development strategy and business objectives are met.

Article 2 Principles of Appraisal

Appraisal and evaluation of the Participants shall be conducted in strict accordance with these measures following the principles of justice, openness and fairness.
The appraisal indicators shall be combined with the Company's medium and long-term development strategy and annual business objectives; as well as the key working performance, competence and attitude of the Participants.

- II-1 -

APPENDIX II	APPRAISAL MEASURES FOR IMPLEMENTATION OF THE
	2020 RESTRICTED SHARE AND SHARE OPTION INCENTIVE
	SCHEME OF GREAT WALL MOTOR COMPANY LIMITED

Article 3 Scope of Appraisal

These measures apply to all Participants as determined by the Incentive Scheme, including senior management, middle management, core backbone employees serving in the Company and other employees that the Board of the Company believes should be motivated (but excluding any Independent Directors, Supervisors, the Shareholders individually or in aggregate holding 5% or more of the shares of the Company or the de facto controllers and their spouses, parents or children).

All Participants are employees who have signed a labour contract with the Company or its subsidiaries listed in the consolidated statements.

Article 4 Appraisal Agency and Implementing Agency

The Remuneration Committee of the Board is responsible for leading and organizing of the Incentive Scheme;
The Human Resources Department of each entity is responsible for the execution and implementation of the appraisal and is responsible for the authenticity and reliability of the data;
The Board of the Company is responsible for reviewing the Appraisal Measures.

Article 5 Appraisal Indicators and Standards

Performance appraisal at company level

The performance appraisal indicators at company level mainly include sales volume and net profit.

In the accounting year of 2020 to 2022, the Incentive Scheme evaluates the Company's performance indicators by years and the achievement of the performance appraisal targets is one of the conditions for unlocking the Restricted Shares in that year.

- II-2 -

APPENDIX II	APPRAISAL MEASURES FOR IMPLEMENTATION OF THE
	2020 RESTRICTED SHARE AND SHARE OPTION INCENTIVE
	SCHEME OF GREAT WALL MOTOR COMPANY LIMITED

The performance appraisal targets of the Restricted Shares and Share Options under first grant are shown in the following table:

Selection of
performance indicators	Sales volume	Net profit	Threshold
Weights of performance	65%	35%	-
indicators
Combined performance	(actual value of performance indicator/target value of
coefficient	performance indicator) × weight of performance indicator
First exercise	The sales volume of	The net profit shall	Combined
period/Unlocking	automobiles of the	not be less than	performance
Period	Company shall not	RMB4.7 billion in	coefficient ≥1
	be less than 1.11	2020
	million units in
	2020
Second exercise	The sales volume of	The net profit shall	Combined
period/Unlocking	automobiles of the	not be less than	performance
Period	Company shall not	RMB5.0 billion in	coefficient ≥1
	be less than 1.21	2021
	million units in
	2021
Third exercise	The sales volume of	The net profit shall	Combined
period/Unlocking	automobiles of the	not be less than	performance
Period	Company shall not	RMB5.5 billion in	coefficient ≥1
	be less than 1.35	2022
	million units in
	2022

- II-3 -

APPENDIX II	APPRAISAL MEASURES FOR IMPLEMENTATION OF THE
	2020 RESTRICTED SHARE AND SHARE OPTION INCENTIVE
	SCHEME OF GREAT WALL MOTOR COMPANY LIMITED

The annual performance appraisal targets of the reserved Restricted Shares and Share Options are as follows:

Selection of

performance indicators Sales volume

Net profit

Threshold

Weights of performance	65%
indicators
First exercise	The sales volume of
period/Unlocking	automobiles of the
Period	Company shall not
	be less than 1.21
	million units in
	2021
Second exercise	The sales volume of
period/Unlocking	automobiles of the
Period	Company shall not
	be less than 1.35
	million units in
	2022

35%	-
The net profit shall	Combined
not be less than	performance
RMB5.0 billion in	coefficient ≥1
2021
The net profit shall	Combined
not be less than	performance
RMB5.5 billion in	coefficient ≥1
2022

Note: The "net profit" mentioned above refers to the audited net profit attributable to shareholders of the listed company, and the "sales volume" mentioned above refers to the audited annual sales volume.

If the combined performance coefficient of the Company is ≥1, the performance appraisal indicators at company level are up to standards, the number of Share Options held by the Participants that may be exercised in each exercise period and the number of Restricted Shares held by the Participants that may be unlocked in each Unlocking Period will be determined according to the performance appraisal result at individual level.

If the performance appraisal indicators of the Company are not up to standards, all Share Options held by the Participants that are planned to be exercised in relevant appraisal year shall not be exercised and shall be cancelled by the Company; and all Restricted Shares held by the Participants that are planned to be unlocked in relevant appraisal year shall not be unlocked and shall be repurchased and cancelled by the Company at a price specified in the incentive scheme (draft).

- II-4 -

APPENDIX II	APPRAISAL MEASURES FOR IMPLEMENTATION OF THE
	2020 RESTRICTED SHARE AND SHARE OPTION INCENTIVE
	SCHEME OF GREAT WALL MOTOR COMPANY LIMITED

Performance appraisal at individual level

The annual performance appraisal results of the Participants at individual level are based on the year-end appraisal results in the previous year. The individual performance appraisal results of the Participants are determined based on the annual appraisal results as per the table below:

Whether Qualified		Qualified		Unqualified
Appraisal results	A	B	C	D	E
Exercisable proportion		100%			0%

Under the premise of achievement of the Company's performance targets, if the year-end appraisal results of a Participant in the previous year is qualified, the Share Options exercisable by the Participants in the current year may be fully exercised, and all Restricted Shares held by the Participants that can be unlocked in relevant appraisal year shall be unlocked;

According to provisions of the Incentive Scheme, if the year-end appraisal results of a Participant in the previous year is unqualified, the Share Options exercisable by the Participants in the current year shall not be exercised, and such Share Options shall be cancelled by the Company; and all Restricted Shares held by the Participants that can be unlocked in relevant appraisal year shall not be unlocked, and shall be repurchased and cancelled by the Company at a price specified in the incentive scheme (draft).

Article 6 Period and Times of Appraisal

Appraisal Period

The accounting year prior to unlocking/locking of each installment of Restricted Shares/Share Options of the Participants.

Times of appraisal

The appraisal year of the Incentive Scheme is three accounting years of 2020-2022, and the appraisal shall be conducted once a year.

- II-5 -

APPENDIX II	APPRAISAL MEASURES FOR IMPLEMENTATION OF THE
	2020 RESTRICTED SHARE AND SHARE OPTION INCENTIVE
	SCHEME OF GREAT WALL MOTOR COMPANY LIMITED

Article 7 Appraisal Procedures

The appraisal of each Participant shall be annually organized and implemented by the Human Resources Department of each entity, and the appraisal results shall be saved and submitted to the long-term incentive management executive team.

The long-term incentive management executive team determines whether the Participants are entitled to exercise/unlock and the exercise/unlocking ratio based on the appraisal results.

Article 8 Management of Appraisal Records

Feedback and complaint of appraisal results
1. The appraisal objects are entitled to know the appraisal results. The Human Resources Department of each entity shall inform the appraisal objects of appraisal results within 5 working days after the completion of the appraisal.
2. If the appraisal objects have objections against the results of the appraisal, they can complain with the Human Resources Department within 10 working days from receiving the appraisal results. The Human Resources Department will complete reviewing the appraisal results within 2 working days and make corresponding corrections to such appraisal results.
3. The appraisal results shall be the basis for the exercise of Share Options/unlocking of Restricted Shares.
Filing of appraisal results
1. After the completion of appraisal, the Human Resources Department of each entity shall retain all the records of the performance appraisal. The appraisal results shall be kept as confidential information.
2. In order to ensure the validity of the performance records, the performance records are not allowed to be altered. If the records are to be revised or re-recorded, it must be signed by the parties concerned.
3. The performance appraisal records shall be kept for 5 years. For documents and records that exceed the storage period shall be uniformly destroyed by the Human Resources Department of each entity upon the approval by the Remuneration Committee.

- II-6 -

APPENDIX II	APPRAISAL MEASURES FOR IMPLEMENTATION OF THE
	2020 RESTRICTED SHARE AND SHARE OPTION INCENTIVE
	SCHEME OF GREAT WALL MOTOR COMPANY LIMITED

Article 9 Supplementary Provisions

These measures shall be formulated, interpreted and amended by the Board of the Company. If these measures conflict with laws, administrative regulations and department rules which will be promulgated in future, such laws, administrative regulations and department rules shall prevail.
These measures take effect on the date of consideration and approval at the general meeting, A Shareholders' Class Meeting and the H Shareholders' Class Meeting of the Company.

The Board of Directors of Great Wall Motor Company Limited

30 January 2020

- II-7 -

APPENDIX III

GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Hong Kong Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTERESTS

Directors' and Supervisors' Interests in Securities

As at the Latest Practicable Date, the interests and short positions of each of the Directors, Supervisors and chief executives of the Company in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning as defined in Part XV of the SFO), which were required to be notified to the Company and the Hong Kong Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including the interests and short positions which they were taken or deemed to have under such provisions of the SFO), or which were required to be recorded in the register required to be kept as referred to in Section 352 of the SFO (including the interests and short positions which they were taken or deemed to have under such provisions of the SFO) or were otherwise required to be notified to the Company and the Hong Kong Stock Exchange pursuant to the Model Code as set out in Appendix 10 to the Hong Kong Listing Rules, were as follows:

					Approximate
			Approximate	Approximate	percentage of
Name of Director/	Capacity/Nature	Number	percentage of	percentage of	total number
Supervisor	of interest	of shares	A Shares	H Shares	of shares
			(%)	(%)	(%)
Mr. Wei Jian Jun	Interests in	5,115,000,000 (L)	84.86	-	56.04
	controlled	(A Shares)
	companies
Mr. Wei Jian Jun	Interests in	30,018,500 (L)	-	0.97	0.33
	controlled	(H Shares)
	companies
Total		5,145,018,500 (L)	-	-	56.37
		(A Shares and
		H Shares)

Note: (L) denotes a long position in shares of the Company

- III-1 -

APPENDIX III

GENERAL INFORMATION

Interests in Controlled Companies

As at the Latest Practicable Date, Innovation Great Wall was controlled by Great Wall Holdings, which was in turn controlled by Mr. Wei Jian Jun. Accordingly, pursuant to the SFO, Mr. Wei Jian Jun was deemed to be interested in the 5,115,000,000 A Shares held by Innovation Great Wall.

Save as disclosed above, so far as the Directors of the Company are aware, and as at the Latest Practicable Date, none of the Directors, Supervisors or chief executives of the Company had any interests or short positions in any shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO), which were required to be notified to the Company and the Hong Kong Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including the interests or short positions which they were taken or deemed to have under such provisions of the SFO), or which were required to be recorded in the register required to be kept as referred to in Section 352 of the SFO or were otherwise required to be notified to the Company and the Hong Kong Stock Exchange pursuant to the Model Code. For this purpose, the relevant provisions of the SFO shall be construed as if they were applicable to the Supervisors.

3. SUBSTANTIAL SHAREHOLDERS

Shares Held by Substantial Shareholders

As at the Latest Practicable Date, the following Shareholders (excluding the Directors, Supervisors and chief executives of the Company) had interests or short positions in any shares and underlying shares of the Company as recorded in the register required to be kept under Section 336 of the SFO:

				Approximate
		Approximate	Approximate	percentage of
		percentage of	percentage of	total number
Name	No. of shares	A Shares	H Shares	of shares
		(%)	(%)	(%)
Baoding Innovation Great Wall Asset	5,115,000,000 (L)	84.86	-	56.04
Management Company Limited	(A Shares)
(Note 1)
Baoding Great Wall Holdings	5,145,018,500 (L)	-	-	56.37
Company Limited (Note 2)	(A Shares and
	H Shares)
Citigroup Inc.	302,922,769 (L)	-	9.77 (L)	3.32 (L)
	(H Shares)
	145,419,852 (S)		4.69 (S)	1.59 (S)
	(H Shares)
	146,977,244 (P)		4.74 (P)	1.61 (P)
	(H Shares)

- III-2 -

APPENDIX III		GENERAL INFORMATION
				Approximate
		Approximate	Approximate	percentage of
		percentage of	percentage of	total number
Name	No. of shares	A Shares	H Shares	of shares
		(%)	(%)	(%)
JPMorgan Chase & Co.	186,375,623 (L)	-	6.01 (L)	2.04 (L)
	(H Shares)
	55,822,520 (S)		1.80 (S)	0.61 (S)
	(H Shares)
	101,730,930 (P)		3.28 (P)	1.11 (P)
	(H Shares)
BlackRock, Inc.	173,854,282 (L)	-	5.61 (L)	1.90 (L)
	28,558,500 (S)		0.92 (S)	0.31 (S)
Han Xue Juan (Note 3)	5,115,000,000 (L)	84.86	-	56.04
	(A Shares)
Management Centre of Collective	5,115,000,000 (L)	84.86	-	56.04
Assets of Nandayuan Town, Lianchi	(A Shares)
District, Baoding (保定市蓮池區南大
園鄉集體資產經管中心) (Note 4)

denotes a long position in shares of the Company

denotes a short position in shares of the Company

denotes shares available for lending

Notes:

Innovation Great Wall (formerly known as Baoding Woerte Management Consultant Company Limited (保定市沃爾特管理諮詢有限公司) was established on 1 December 2005. Its place of incorporation is Baoding, Hebei Province, the PRC and its registered address is 2066 Chaoyang South Street, Lianchi District, Baoding. Its business scope covers investments in manufacturing, real estate and horticulture industries, as well as corporate planning and management consultancies (operations that require pre-approvals according to laws and administrative regulations or as prescribed by the State Council can only be conducted after obtaining approvals). As at the Latest Practicable Date, 62.854%, 0.125%, 0.001% and 37.02% equity interest in Innovation Great Wall were held by Great Wall Holdings, Mr. Wei Jian Jun, Ms. Han Xue Juan and Management Centre of Collective Assets of Nandayuan Town, Lianchi District, Baoding (保定市蓮池區南大園鄉集體資產經管中心), respectively. Further, 99% and 1% equity interest in Great Wall Holdings (長城控股) were held by Mr. Wei Jian Jun and Ms. Han Xue Juan, respectively. Therefore, Innovation Great Wall is a company controlled by Great Wall Holdings (長城控股), which is in turn controlled by Mr. Wei Jian Jun and Mr. Wei Jian Jun is deemed to be interested in all the shares of the Company held by Innovation Great Wall pursuant to the SFO.
As at the Latest Practicable Date, Great Wall Holdings (長城控股) held 62.854% equity interest in Innovation Great Wall and is deemed to be interested in all the shares of the Company held by Innovation Great Wall for the purposes of the SFO and at the same time, Great Wall Holdings held interests in 30,018,500 H shares.
As at the Latest Practicable Date, Ms. Han Xue Juan held 0.001% equity interest in Innovation Great Wall and 1% equity interest in Great Wall Holdings (長城控股), and is the spouse of Mr. Wei Jian Jun. Ms. Han Xue Juan is deemed to be interested in all the shares of the Company in which Mr. Wei Jian Jun is interested for the purposes of the SFO.
As at the Latest Practicable Date, Management Centre of Collective Assets of Nandayuan Town, Lianchi District, Baoding (保定市蓮池區南大園鄉集體資產經管中心) held 37.02% equity interest in Innovation Great Wall and is deemed to be interested in all the shares of the Company held by Innovation Great Wall for the purposes of the SFO.

- III-3 -

APPENDIX III

GENERAL INFORMATION

Save as disclosed above, as at the Latest Practicable Date, so far as the Directors, Supervisors and chief executives of the Company are aware, no other person (excluding the Directors, Supervisors and chief executives of the Company) had interests or short positions in the shares and underlying shares of the Company as recorded in the register required to be kept under Section 336 of the SFO.

4. MATERIAL ADVERSE CHANGE

As of the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading positions of the Group since 31 December 2018, being the date to which the latest published audited consolidated financial statements of the Company have been made up.

5. SERVICE CONTRACTS OF THE DIRECTORS

As of the Latest Practicable Date, none of the Directors had entered into any service contract with the Company or any member of the Group referred to in Rule 13.68 of the Hong Kong Listing Rules (excluding contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation)).

6. INTERESTS OF THE DIRECTORS

The Directors are not aware that any Director or his respective associates had, as at the Latest Practicable Date, any interest in any business which competes or is likely to compete, either directly or indirectly, with the business of the Group which would be required to be disclosed under the Hong Kong Listing Rules.
No Director was materially interested in any contract or arrangement subsisting at the Latest Practicable Date which was significant to the business of the Group taken as a whole.
Since 31 December 2018, being the date of the latest published audited consolidated accounts of the Company, none of the Directors has, or has had, any direct or indirect interest in any assets which have been acquired, disposed of by or leased to or which are proposed to be acquired, disposed of by or leased to, any member of the Group.

- III-4 -

APPENDIX III

GENERAL INFORMATION

7. QUALIFICATION AND CONSENT OF EXPERT

The following is the qualification of the expert who has given opinion and advice contained in this circular:

Name	Qualification
Gram Capital Limited	A licensed corporation to carry out Type 6 (advising
	on corporation finance) regulated activity under the
	SFO

Gram Capital did not have any shareholding, directly or indirectly, in the Company or any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in the Company or any member of the Group as at the Latest Practicable Date;
Gram Capital has given and has not withdrawn its written consent to the issue of this circular with the inclusion herein of its letter/report and reference to its name in the form and context in which they are included; and
Gram Capital did not have any direct or indirect interest in any asset which had been acquired, or disposed of by, or leased to the Company or any members of the Group, or was proposed to be acquired, or disposed of by, or leased to any member of the Group since 31 December 2018, the date to which the latest published audited consolidated accounts of the Company were made up.

8. GENERAL

The registered office of the Company is situated at No. 2266 Chaoyang Road South, Baoding, Hebei Province.
The Company's share registrar is Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Center, 183 Queen's Road East, Wan Chai, Hong Kong.
As at the Latest Practicable Date, Mr. Wei Jian Jun is a director of Innovation Great Wall and Great Wall Holdings; Ms. Yang Zhi Juan is a director of Innovation Great Wall and general manager of Management Centre of Collective Assets of Nandayuan Town. Save as the aforesaid, there is no Director or proposed Director is a director or employee of the substantial Shareholders of the Company as at the Latest Practicable Date.
Mr. Xu Hui is the Company Secretary of the Company, and Mr. Xu Hui is a member of the Hong Kong Institute of Chartered Secretaries.
In the event of any inconsistencies, the English text of this circular will prevail over the Chinese text.

- III-5 -

APPENDIX III

GENERAL INFORMATION

9. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours within 14 days (other than public holidays in Hong Kong) at the offices of Herbert Smith Freehills at 23/F, Gloucester Tower, 15 Queen's Road Central, Hong Kong from the date of this circular.

the memorandum and Articles of Association of the Company;
the letter from the Board to the Shareholders, the text of which is set out in the section headed "Letter from the Board" of this circular;
the letter of recommendation from the Independent Board Committee to the Independent Shareholders, the text of which is set out in the section headed "Letter from the Independent Board Committee" of this circular;
the letter of advice from Gram Capital to the Independent Board Committee and the Independent Shareholders, the text of which is set out in the section headed "Letter from Gram Capital" of this circular;
the written consent from Gram Capital referred to in the paragraph headed "Qualification and Consent of Expert" in this Appendix;
the 2018 Annual Report, the 2017 Annual Report and the 2016 Annual Report of the Company;
this circular; and
the service contracts referred to in the section headed "Service Contracts of the Directors" in this Appendix III.

- III-6 -

NOTICE OF THE EXTRAORDINARY GENERAL MEETING

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.

長城汽車股份有限公司

GREAT WALL MOTOR COMPANY LIMITED*

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

(Stock Code: 2333)

NOTICE OF THE EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the extraordinary general meeting (the "EGM") of Great Wall Motor Company Limited (the "Company") will be held at 2:00 p.m. on Wednesday, 15 April 2020 at the Company's Conference Room, No. 2266 Chaoyang Road South, Baoding, Hebei Province, the People's Republic of China (the "PRC") to consider, approve and authorise the following:

SPECIAL RESOLUTIONS

To consider and approve 2020 Restricted Share and Share Option Incentive Scheme (draft) of Great Wall Motor Company Limited and its summary in the circular (published on the websites of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company (www.gwm.com.cn) on 28 February 2020);
To consider and approve Appraisal Measures for Implementation of the 2020 Restricted Share and Share Option Incentive Scheme of Great Wall Motor Company Limited in the circular (published on the websites of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company (www.gwm.com.cn) on 28 February 2020);
To consider and approve the proposal to general meeting to authorize the board of directors or its authorized persons to deal with matters regarding 2020 Restricted Share and the Share Option Incentive Scheme of the Company in the circular (published on the websites of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company (www.gwm.com.cn) on 28 February 2020).

By Order of the Board

Wei Jian Jun

Chairman

Baoding, Hebei Province, the People's Republic of China

28 February 2020

- 1 -

NOTICE OF THE EXTRAORDINARY GENERAL MEETING

Notes:

The register of members of the Company will be closed from Saturday, 14 March 2020 to Wednesday, 15 April 2020 (both days inclusive), during which no transfer of shares will be effected. H shareholders of the Company, whose names appear on the Company's register of members at the close of business on Friday, 13 March 2020, are entitled to attend and vote at the EGM after completing the registration procedures for attending the EGM. In order to be entitled to attend and vote at the EGM, all completed share transfer documents should be lodged with the Company's H share registrar not later than 4:30 p.m. on Friday, 13 March 2020 (Hong Kong time).
The address of the share registrar for the Company's H shares is as follows:
Computershare Hong Kong Investor Services Limited Shops 1712-1716
17th Floor, Hopewell Centre 183 Queen's Road East Wanchai
Hong Kong
Holders of H shares, who intend to attend the EGM, must complete the reply slips for attending the EGM and return them to the office of the secretary to the Board not later than 20 days before the date of the EGM, i.e. no later than Thursday, 26 March 2020.
Details of the office of the secretary to the Board are as follows:
No. 2266 Chaoyang Road South Baoding
Hebei Province
the People's Republic of China Tel: (86-312) 2197813
Fax: (86-312) 2197812
Each holder of H shares who has the right to attend and vote at the EGM is entitled to appoint in writing one or more proxy(ies), whether a shareholder or not, to attend and vote on his/her behalf at the EGM. A proxy of a shareholder who has appointed more than one proxy may only vote on a poll.
The instrument appointing a proxy must be in writing under the hand of the appointor or his/her attorney duly authorized in writing. If the instrument is signed by an attorney of the appointor, the power of attorney authorising that attorney to sign, or other documents of authorisation, must be notarially certified.
To be valid, the proxy form, and if the proxy form is signed by a person under a power of attorney or other authority on behalf of the appointor, a notarially certified copy of that power of attorney or other authority, must be delivered to the Company's H share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong, not less than 24 hours before the time fixed for holding the extraordinary general meeting or any adjournment thereof.
If a proxy attends the extraordinary general meeting on behalf of a shareholder, he/she should produce his/her ID card and the instrument signed by the proxy or his/her legal representative, which specifies the date of its issuance. If the legal representative of a legal person shareholder attends the extraordinary general meeting, such legal representative should produce his/her ID card and valid documents evidencing his/her capacity as such legal representative. If a legal person shareholder appoints a representative of the company other than its legal representative to attend the extraordinary general meeting, such representative should produce his/her ID card and an authorisation instrument affixed with the seal of the legal person shareholder and duly signed by its legal representative.
The on-site registration for attending the extraordinary general meeting will be open from 1:00 p.m. to 1:50 p.m. on Wednesday, 15 April 2020, after which no registration in respect of Shareholders' attendance of the meeting will be accepted. The place of registration is at the Conference Room of Great Wall Motor Company Limited, No. 2266 Chaoyang Road South, Baoding, Hebei Province, the PRC.

- 2 -

NOTICE OF THE EXTRAORDINARY GENERAL MEETING

The extraordinary general meeting is expected to last for half a day. Shareholders attending the extraordinary general meeting are responsible for their own transportation and accommodation expenses.
For A shareholders, please refer to the Notices of the 2020 First EGM, 2020 First H Shareholders' Class Meeting and 2020 First A Shareholders' Class Meeting of Great Wall Motor Company Limited (長城汽車股份有限公司關於召開2020年第一次臨時股東大會、2020年第一次H股類別股東會議、2020年第一次A股類別股東會議的通知) published on the website of the Shanghai Stock Exchange (website: www.sse.com.cn) and the official website of the Company (website: www.gwm.com.cn) on 28 February 2020.

As at the date of this announcement, members of the Board comprise:

Executive Directors: Mr. Wei Jian Jun, Ms. Wang Feng Ying and Ms. Yang Zhi Juan.

Non-executive Director: Mr. He Ping.

Independent Non-executive Directors: Mr. Ma Li Hui, Mr. Li Wan Jun and Mr. Ng Chi Kit.

- 3 -

NOTICE OF THE H SHAREHOLDERS' CLASS MEETING

長城汽車股份有限公司

GREAT WALL MOTOR COMPANY LIMITED*

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

(Stock Code: 2333)

NOTICE OF THE H SHAREHOLDERS' CLASS MEETING

NOTICE IS HEREBY GIVEN that a class meeting of the holders of H shares (the "H Shareholders' Class Meeting") of Great Wall Motor Company Limited (the "Company") will be held at 3:00 p.m. on Wednesday, 15 April 2020 (or as soon as the extraordinary general meeting of the Company shall have been concluded or adjourned) or any adjournment thereof at the Company's Conference Room, No. 2266 Chaoyang Road South, Baoding, Hebei Province, the People's Republic of China (the "PRC") for the purpose of considering and, if thought fit, passing (with or without amendments) the following resolution:

SPECIAL RESOLUTION

To consider and approve 2020 Restricted Share and Share Option Incentive Scheme (draft) of Great Wall Motor Company Limited and its summary in the circular (published on the websites of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company (www.gwm.com.cn) on 28 February 2020);
To consider and approve Appraisal Measures for Implementation of the 2020 Restricted Share and Share Option Incentive Scheme of Great Wall Motor Company Limited in the circular (published on the websites of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company (www.gwm.com.cn) on 28 February 2020);
To consider and approve the proposal to general meeting to authorize the board of directors or its authorized persons to deal with matters regarding 2020 Restricted Share and the Share Option Incentive Scheme of the Company in the circular (published on the websites of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company (www.gwm.com.cn) on 28 February 2020).

By Order of the Board

Wei Jian Jun

Chairman

Baoding, Hebei Province, the People's Republic of China

28 February 2020

- 1 -

NOTICE OF THE H SHAREHOLDERS' CLASS MEETING

Notes:

Eligibility for attending the H Shareholders' Class Meeting
Holders of H shares whose names appear on the H shares register maintained by Computershare Hong Kong Investor Services Limited as at 4:30 p.m. on Friday, 13 March 2020 (Hong Kong time) are eligible to attend the H Shareholders' Class Meeting.
To qualify for attendance and vote at the H Shareholders' Class Meeting to be held on Wednesday, 15 April 2020, all transfers of H shares accompanied by the relevant share certificates must be lodged with the Company's share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong, not later than 4:30 p.m. on Friday, 13 March 2020 (Hong Kong time).
Proxy
1. A member eligible to attend and vote at the H Shareholders' Class Meeting is entitled to appoint, in written form, one or more proxies to attend and vote on his behalf. A proxy needs not be a shareholder.
2. A proxy shall be appointed by a written instrument signed by the appointor or its attorney duly authorised in writing. If the form of proxy is signed by the attorney of the appointor, the power of attorney authorising that attorney to sign or other authorisation document(s) shall be notarized.
3. To be valid, the power of attorney or other authorisation document(s) which have been notarized together with the completed form of proxy must be delivered to the Company's Hong Kong share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong, not less than 24 hours before the time designated for holding of the H Shareholders' Class Meeting.
Registration procedures for attending the H Shareholders' Class Meeting
1. A shareholder or his/her proxy shall produce proof of identity when attending the H Shareholders' Class Meeting. If a shareholder is a legal person, its legal representative or other persons authorised by the board of directors or other governing body of such shareholder may attend the H Shareholders' Class Meeting by producing a copy of the resolution of the board of directors or other governing body of such shareholder appointing such person(s) to attend the meeting.
2. Holders of H shares who intend to attend the H Shareholders' Class Meeting (or any adjournment thereof) should complete the reply slips for attending the H Shareholders' Class Meeting (or any adjournment thereof) and return them to the office of the secretary to the Board not later than 20 days before the date of the H Shareholders' Class Meeting, i.e. no later than Thursday, 26 March 2020.
3. Shareholders may send the reply slip to the Company in person, by post or by fax.
Closure of register of members

The register of members of the Company will be closed from Saturday, 14 March 2020 to Wednesday, 15 April 2020 (both days inclusive).

5. Other businesses

The on-site registration for attending the H Shareholders' Class Meeting will be open from 1:00 p.m. to 1:50 p.m. on Wednesday, 15 April 2020, after which no registration in respect of Shareholders' attendance of the meeting will be accepted. The place of registration is at the Conference Room of Great Wall Motor Company Limited, No. 2266 Chaoyang Road South, Baoding, Hebei Province, the PRC.
The H Shareholders' Class Meeting will last for approximately half a day. Shareholders who attend shall bear their own travelling and accommodation expenses.

- 2 -

NOTICE OF THE H SHAREHOLDERS' CLASS MEETING

The address of the H Share registrar of the Company, Computershare Hong Kong Investor Services Limited, is at:
Shops 1712-1716, 17th Floor Hopewell Centre
183 Queen's Road East Wanchai
Hong Kong
The registered address of the Company is at:
No. 2266 Chaoyang Road South Baoding
Hebei Province the PRC
Telephone: (86-312) 2197813
Fax: (86-312) 2197812
In this notice, the following expression shall have the following meaning unless the context otherwise requires:
"RMB" means Renminbi, the lawful currency of the People's Republic of China

As at the date of this announcement, members of the Board comprise:

Executive Directors: Mr. Wei Jian Jun, Ms. Wang Feng Ying and Ms. Yang Zhi Juan.

Non-executive Director: Mr. He Ping.

Independent Non-executive Directors: Mr. Ma Li Hui, Mr. Li Wan Jun and Mr. Ng Chi Kit.

- 3 -

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Great Wall Motor Co. Ltd. published this content on 28 February 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 February 2020 09:08:02 UTC

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Chart Great Wall Motor Company Limited

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Company Profile

Great Wall Motor Company Limited is a sport utility vehicle (SUV) manufacturer in the People's Republic of China (the PRC). The Company is principally engaged in the design, research and development, manufacture and sale, as well as distribution of SUVs, sedans, pick-up trucks and automobile-related parts and components. The Company has three brands, Great Wall, Havel and WEY, and its products include SUVs, sedans and pick-up trucks. The Company also manufactures and supplies relative automotive parts and components. The Company's vertically integrated parts and components production unit manufactures various products, including engines, transmissions, chassis, electronics, interior and exterior decoration parts and molds. The Company manufactures cars, which include Great Wall C50 and Great Wall C30. The Company's SUVs include Great Wall H6, Great Wall H5-E and Great Wall M4. The Company's pick up vehicles are Wingle 5, Wingle 6 and Wingle 5 Upgrade.

Sector

Auto & Truck Manufacturers

Calendar

2024-05-10 - Annual General Meeting

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ESG Refinitiv

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Sell

Buy

Mean consensus

BUY

Number of Analysts

Last Close Price

10.38 CNY

Average target price

11.76 CNY

Spread / Average Target

+13.31%

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Great Wall Motor Company Limited

Equities

2333

CNE100000338

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Great Wall Motor : PROPOSED ADOPTION OF THE RESTRICTED A SHARE AND A SHARE OPTION INCENTIVE SCHEME CONNECTED TRANSACTIONS AND APPRAISAL MEASURES FOR IMPLEMENTATION OF THE 2020 RESTRICTED SHARE AND SHARE OPTION INCENTIVE SCHEME

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