On May 20th, the first extraordinary general meeting in 2014 was hold by Baosteel Co., Ltd. During this meeting, the company's shareholders, executives and any other members examined and adopted the motions of Restricted Stock Plan of the Company's A-classification Shares (Draft), Initial Awards Granted Scheme of Restricted Stock Plan of the Company's A-classification Shares (Draft Amendment), Interim Regulations on Management of Restricted Stock Plan of the Company's A-classification Shares, and Regulations of Implementation Assessment on the Restricted Stock Plan of the Company's A-classification Shares, suggesting that Baosteel had put the equity incentive plan for her key staff into practice. This is an important measure taken by Baosteel to explore diversified  incentive mechanism actively and to promote market-oriented operating substantially, improving the management efficiency and labor efficiency, making the management's benefit have closer connections with interests of the shareholders; In turn, it achieves the common development of the employees and the company.

Baosteel formulated a restricted stock options plan in oder to further improve the corporate governance structure, it is a payment incentive system that balances the short-term interests with long-termand interests, which was established to adapt a new round of development strategy. By setting reasonable conditions, the restricted stock plan will enable management's payment to be connected with the corporate operating performance, which fully incents the motivation of the core management and key staff, and thus, the company steps onto a way of on-going development in virtuous cycle manner. It specifies the condition for implementation, awarding conditions and exercising condition strictly in the plan, and the company's rights and obligations and those of the eligible staff to be granted with stocks. According to the regulations as set forth in the Award Agreement, Baosteel will grant the eligible staff with restricted stock as incentive measures when the company's business performance is upon the the pre-set condition. However, the restricted stock(Option) will not be allowed to transfer to any third party or person within 2 years from the date of the Option is granted. After that, within 3 years from the expiration date of two (2) years of moratorium, provided that the company's business performance is upon the the required condition, the restrictions on restricted stock  will be released gradually, at that time, that staff is entitled to transfer the stock granted. Those restricted stocks granted are Baosteel's A-classification shares which are to be repurchased from the stock market. Previously, the plan was approved by the SASAC (State-owned Assets Supervision and Administration Commission) of State Council, and then, the China's Securities Regulatory Commission issued a letter of no-objection; Finally, this plan was formally submitted to the extraordinary general meeting for approval. Meanwhile, in oder to attract the staff to focus on realizing the company's long-term strategic goal, the plan is designed to make the staff's personal interests have a closer connection with the company's development and business performance, therefore, it is expected to improve personal performance and organizational performance, in turn, it promotes the company's comprehensive competitiveness steadily. In the principle of "voluntary and equality, constraint and incentive in tandem; risk -sharing, benefit-sharing", Baosteel also launched a so-called asset management plan to the key staff. The  key staffs recognized by Baosteel are eligible to participate this plan, including: management staff, chief engineers, technical experts and the key staffs master the core technologies recognized by the company, the other employees made the outstanding contributions to the company, and those who had won the awards granted by the related authorities with the provincial and ministerial level or above.

Baosteel defines and specifies the standard of the individual financing according to how importance of the position and how great of contribution that the key staff made, after that, the company raises up a sum of special funds for management on co-financing assets as per a certain proportion; Meanwhile, the eligible employee is entitled to subscribe the Trustee Management Products offered by Ping An Annuity Insurance Company of China, Ltd. About 70% of the principal is to be used to purchase Baosteel's shares, the remaining 30% is to be used to invest in other floating assets. The financial product shall be exercisable after the expiration of 3 years from the date of the trust  is subscribed. After the date of expiration, if the key staff is qualified, he/she has the right to draw a lump sum of the principle and its benefits in one-time manner. According to the company's requirement in operation and management, launching asset management plan to the key staff is an important measure taken by Baosteel to explore the management mechanism with incentive and constraint in tandem under the guidance of the related policy.




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