Guotai Junan Securities : ADJUSTMENT IN THE RESTRICTED SHARE INCENTIVE SCHEME OF A SHARES

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GUOTAI JUNAN SECURITIES CO., LTD.

國泰君安証券股份有限公司

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

(Stock Code: 02611)

ADJUSTMENT IN THE RESTRICTED

SHARE INCENTIVE SCHEME OF A SHARES

We refer to the following disclosures of Guotai Junan Securities Co., Ltd. (the "Company"):

1. the announcement dated 7 June 2020, in relation to the proposed adoption of the Restricted Share Incentive Scheme of A Shares (the "Scheme"); (ii) the announcement dated 30 June 2020, in relation to the approval on the Scheme by Shanghai SASAC; (iii) the circular of extraordinary general meeting dated 24 July 2020, in relation to, among other things, the proposed adoption of the Scheme; and (iv) the poll results announcement dated 12 August 2020, in relation to, among other things, the approval on proposed adoption of the Scheme by general meeting of the Company. Unless otherwise specified, capitalised terms used in this announcement shall have the same meanings as those defined in the above announcements and the circular.

1. ADJUSTMENT IN THE FIRST GRANT OF THE SCHEME
   1. Adjustment in the Grant Price of the First Grant
   We refer to the poll results announcement of the annual general meeting of the Company dated 15 June 2020, in relation to, among other things, the declaration of the 2019 Final Dividend. The Company will pay a final dividend of RMB3.90 (tax included) per 10 shares in cash.
   According to the provisions of the Scheme, during the period between the date of announcement of the Scheme and the completion of registration for the Restricted Shares by the Incentive Participants, if the Company distributes any dividends, the Company should make corresponding adjustments to the Grant Price of the Restricted Shares. The Company will adjust the Grant Price of the First Grant of the Scheme, and the adjustment method is as follows:
   P＝P0-V=RMB8.03 - RMB0.39=RMB7.64 per Share.
   Where P0 represents the Grant Price before the adjustment; V represents the dividend per share; P represents the adjusted Grant Price.
   As such, the Grant Price of the First Grant of the Scheme will adjust to RMB7.64 per share.

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1. 1. Adjustment in the numbers of Incentive Participants of the First Grant
      As of the date of this announcement, the number of Incentive Participants of the First Grant of the Scheme reduced from 451 to 440, due to retirement, demission and job change. The final number of the Incentive Participants of the First Grant shall be the actual number of those participating in the subscription.
   2. Adjustment in number of shares of the First Grant and the Reserved Shares
      As the number of Incentive Participants of the First Grant of the Scheme has changed, the Board adjusted the number of shares of the First Grant and the Reserved Shares to 79,300,000 shares and 9,699,990 shares, respectively.
      The final number of Restricted Shares of the First Grant shall be the actual number of Restricted Shares granted, and the ungranted shares will be allocated to the Reserved Shares, the total number of which shall not exceed 20% of the total number of shares to be granted under the Scheme. The excess will be disposed by the Company in accordance with applicable laws and regulations and the relevant procedures will be completed.
      As authorized by the 2020 first extraordinary general meeting of the Company, the above adjustment is within the scope of the authorization, can be approved by the Board and is not required to be submitted to the general meeting for consideration.
2. IMPACT OF THE ADJUSTMENT ON THE COMPANY
   The adjustment in the Grant Price of the first Grant, the number of Incentive Participants of the First Grant of the Scheme and the adjustment in number of shares of the First Grant and the Reserved Shares will not have a substantial impact on the Company's financial condition and operating results.

1. OPINION OF THE INDEPENDENT NON-EXECUTIVE DIRECTORS
   The independent non-executive directors of the Company are of the view that the adjustment in the Grant Price of the First Grant, the number of Incentive Participants of the First Grant of the Scheme and the adjustment in number of shares of the First Grant and the Reserved Shares, based on the authorization of the 2020 First extraordinary general meeting, is in compliance with the Administrative Measures for Equity Incentives of Listed Companies (the "Administrative Measures") and other laws, regulations and regulatory documents and the provisions of the Scheme and the adjustment procedures are legal and in compliance with the relevant requirements, and there is no harm to the interests of the Company and shareholders as a whole.
   The Incentive Participants of the First Grant after adjustment have satisfied the employment requirements stipulated under the Administrative Measures, the Trial Measures for Implementation of with the relevant requirements Equity Incentives in State-controlled (Domestic) Listed Companies (the "Trial Measures") and other laws and regulations, regulatory documents as well as the Articles of Association, have all met the conditions for the Incentive Participants of the Scheme and are not subject to any circumstances where a person is prohibited to be an Incentive Participant as required under the Administrative Measures and the Trial Measures. The Incentive Participants of the First Grant of the Scheme are legally and validly qualified.
   The independent non-executive directors of the Company have unanimously agreed to the adjustment in the Grant Price of the First Grant, the number of Incentive Participants of the First Grant of the Scheme and the adjustment in number of shares of the First Grant and the Reserved Shares.

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IV. OPINION OF THE SUPERVISORY COMMITTEE

The supervisory committee is of the view that:

The number of Incentive Participants of the First Grant of the Scheme, the adjustment in number of shares of the First Grant and the Reserved Shares and the adjustment in the Grant Price of the First Grant are in compliance with the Administrative Measures and other laws and regulations, regulatory documents and the provisions of the Scheme. The adjustment of the Scheme is based on the authorization of the general meeting, and the adjustment procedures are legal and in compliance with relevant laws and regulations, and there is no harm to the interests of the Company and shareholders as a whole. The number of Incentive Participants will be 440. The number of shares of the First Grant and the Reserved Shares to 79,300,000 shares and 9,699,990 shares, respectively. The Grant Price of the First Grant of the Scheme will be adjusted to RMB7.64 per share.

The Incentive Participants of the First Grant after adjustment have satisfied the conditions and scope stipulated under the Administrative Measures, the Trial Measures and other laws and regulations, regulatory documents as well as the provisions of the Scheme, and are not subject to any circumstances where a person is prohibited to be an Incentive Participant. The Incentive Participants of the First Grant of the Scheme are legally and validly qualified.

Neither the Company nor the Incentive Participants are subject to any circumstances where the implementation of the Scheme or the grant of the Restricted A Shares is prohibited by relevant laws, regulations, regulatory documents and the provisions of the Scheme. The conditions for the grant of the First Grant have been satisfied.

The determination of the Grant Date of the First Grant by the Board satisfied the relevant requirements under the Administrative Measures and other laws and regulations, regulatory documents and the provisions of the Scheme. The supervisory committee has agreed with the Company to set the Grant Date of the First Grant of the Scheme to be 17 September 2020.

In view of the above, the supervisory committee is of the view that the adjustment of the Scheme is in compliance with the laws, regulations and regulatory documents, and the adjustment procedures are legal and in compliance with the relevant requirements, and there is no harm to the interests of the Company and shareholders as a whole. The conditions for the grant of the First Grant have been satisfied. The supervisory committee has agreed with the Company to set the Grant Date of the First Grant of the Scheme to be 17 September 2020, and grant a total of 79,300,000 Restricted A Shares of the Company to 440 qualified Participants of the First Grant at the Grant Price of RMB7.64/share.

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1. THE CONCLUSION OF THE LEGAL OPINION
   Haiwen & Partners has issued a legal opinion on the adjustment of the Scheme and the First Grant and concluded as follows: the Company has obtained the required approval and authorisation in relation to the adjustment and the First Grant and satisfied the requirements under the Administrative Measures and the Scheme. The contents of the adjustment and determination of the Grant Date of the First Grant by the Board satisfied the relevant requirements under the Administrative Measures and the Scheme. The conditions for the grant of the First Grant have been satisfied. The implementation of the First Grant by the Company satisfied the relevant requirements under the Administrative Measures and the Scheme.

By order of the Board

Guotai Junan Securities Co., Ltd.

HE Qing

Chairman

Shanghai, the PRC

17 September 2020

As at the date of this announcement, the executive directors of the Company are Mr. HE Qing, Mr. WANG Song and Mr. YU Jian; the non-executive directors of the Company are Mr. LIU Xinyi, Ms. GUAN Wei, Mr. ZHOU Lei, Mr. ZHONG Maojun, Mr. WANG Wenjie, Mr. LIN Facheng, Mr. ZHOU Hao and Mr. AN Hongjun; and the independent non-executive directors of the Company are Mr. XIA Dawei, Mr. SHI Derong, Mr. CHEN Guogang, Mr. LING Tao, Mr. JIN Qingjun and Mr. LEE Conway Kong Wai.

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