Proposed Adoption of the Incentive Scheme

Proposed Adoption of the Incentive Scheme

(GDR under the symbol: "MYSE")

Important Notice:

● Form of the Incentive Scheme: Share Options

● Source of shares: the ordinary A shares of the Company to be directly issued to the Participants by the Company

● The total Share Options and the total underlying shares under the Incentive Scheme: Pursuant to the 2022 Share Option Incentive Scheme (Draft) of Ming Yang Smart Energy Group Limited (hereinafter referred to as the "Incentive Scheme" or the "Scheme"), the Company intends to grant 22,720,000 Share Options to the Participants, representing approximately 1.00% of the total share capital of the Company as at the date of the announcement of the draft of the Incentive Scheme (namely 2,272,085,706 shares). Specifically, 18,176,000 share options were granted under the first grant, representing approximately 0.80% of the total share capital of the Company as at the date of the announcement of the draft of the Incentive Scheme and approximately 80.00% of the total number of the Share Options to be granted under the Incentive Scheme; 4,544,000 share options were reserved, representing approximately 0.20% of the total share capital of the Company as at the date of the announcement of the draft of the Incentive Scheme and approximately 20.00% of the total number of Share Options to be granted under the Incentive Scheme.

The Company hereby announces that the Board has passed the resolution on, among others, the proposed adoption of the Incentive Scheme on [November 10, 2022].

The Company hereby announces the main contents of the proposed adoption of the Incentive Scheme with details as follows:

I. Basic Information of the Company

(I) Brief Introduction

Company name: Ming Yang Smart Energy Group Limited (hereinafter referred to as "MYSE" or the "Company")

Date of listing: 23 January 2019

Registered capital: RMB2,272 million

Registered address: No. 22 Huoju Road, Huoju Development Zone, Zhongshan City, Guangdong Province

Scope of business: production and operation of wind power generation host equipment and related power electronic products; wind power engineering technology and technical consulting and technology import and export business relating to wind power generation; high-tech green batteries (including solar cells), complete new energy power generation equipment, key new energy power generation equipment and related engineering technology consulting and technology import and export business; wind farm operation management, technical consulting and operation and maintenance services; energy system development; investment, development and operation management of energy projects; investment, construction and operation of new energy, distributed energy and energy storage projects; power demand side management and energy efficiency management; and installation, repair and testing of electric power facilities.

(II) Performance of the Company in the Last Three Years

Unit: RMB Yuan

(III) Composition of the Board, the Supervisory Committee and the Senior Management

The current session of the Board of the Company is comprised of 11 Directors, including Zhang Chuanwei, Shen Zhongmin, Zhang Qiying, Wang Jinfa, Zhang Rui, Han Yu, Li Yiming as non-independent Directors, and Gu Naikang, Li Zhongfei, Wang Yu and Shao Xijuan as independent Directors.

The current session of the Supervisory Committee of the Company is comprised of 3 Supervisors, including Liu Lianyu as chairman of the Supervisory Committee, Zheng Weili as Supervisor and Zhai Yongjun as employee representative Supervisor.

 The current senior management of the Company is comprised of 10 members, including Zhang Chuanwei as chief executive officer (general manager), Shen Zhongmin as chief strategy officer, Zhang Qiying as chief operating officer and chief technology officer and co-operating officer, Wang Jinfa as chief administrative officer, Liang Caifa as chief financial officer, Cheng Jiawan as vice president, Yu Jiangtao as vice president, Yang Pu as vice president, Zhang Zhonghai as vice president, Wang Dongdong as vice president, Yi Lingna as vice president, and Liu Jianjun as secretary to the Board.

II. Purpose of the Share Incentive Scheme

In order to further establish and improve the Company's long-term incentive mechanism, attract and retain talents, fully motivate the enthusiasm and creativity of the core team of the Company, effectively align the interests of shareholders, the Company and the individuals in the core team, and attach their attention to the Company's long-term development, under the premise of fully safeguarding the interests of shareholders, the Incentive Scheme is formulated following the principle that benefit is equivalent to contribution and in accordance with provisions of the relevant laws, regulations and regulatory documents, including the Company Law of the People's Republic of China("Company Law"), the Securities Law of the People's Republic of China ("Securities Law ") and the Measures for the Administration of Equity Incentives of Listed Companies ("Management Measures"), as well as the articles of association of the Company ("Articles of Association").

The Incentive Scheme is a new round of incentive measures taken by the Company at a new stage of the Company's development after some achievements have been made in the 2019 Restricted Share Incentive Scheme, targeting middle and senior management, core technical/business cadre and other employees who the Company believes should be incentivised and have a direct impact on the Company's operating results and future development, which is integral to the Company's medium- and long-term incentive mechanism.

As of the date of the announcement of the Incentive Scheme, the Company is simultaneously implementing the 2019 Restricted Share Incentive Scheme, the summary of which is as follows:

On 20 May 2020, the Company granted 23,390,000 restricted shares to 220 Participants at the grant price of RMB5.222/share under the first grant. Considering the Company's implementation of annual entitlement distribution for 2019, the price under the first grant was adjusted to RMB5.222/share from RMB5.30/share. On 9 July 2021, 5,810,100 shares that meet the unlocking conditions in the first unlocking period were listed and traded. On 7 July 2022, 5,667,600 shares that meet the unlocking conditions in the second unlocking period were listed and traded.

On 12 May 2021, the date of the reserved grant, 6,000,000 restricted shares under the reserved grant were granted to 112 Participants at the price of RMB8.39/share. Considering the Company's implementation of annual entitlement distribution for 2020, the price of the reserved grant was adjusted to RMB8.284/share from RMB8.39/share. To date, the shares under the reserved grant have not been unlocked.

The Incentive Scheme and the 2019 Restricted Share Incentive Scheme, which is currently being implemented, are independent of each other and there is no correlation between them.

III. Form of the Incentive Scheme and Source of the Underlying Shares

(I) Form of the Incentive Scheme

The incentive tool adopted under the Incentive Scheme is Share Options. The additional ordinary A shares will be issued by the Company to the Participants that meet the conditions for the grant under the Incentive Scheme in several tranches at the Exercise Price upon their satisfaction of relevant Exercise Conditions , and such shares will be registered with Shanghai Branch of China Securities Depository and Clearing Corporation Limited. Prior to the exercise, the Share Options granted to the Participants do not carry any rights of the shareholders of the Company, and such Share Options shall not be transferred, or used to guarantee or repay debts.

(II) Source of the Underlying Shares

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

IV. Number of the Share Options to be Granted under the Share Incentive Scheme

The Company intends to grant 22,720,000 Share Options to the Participants under the Incentive Scheme, representing approximately 1.00% of the total share capital of the Company as at the date of the announcement of the draft of the Incentive Scheme. Specifically, 18,176,000 options were granted under the first grant, representing approximately 0.80% of the total share capital of the Company as at the date of the announcement of the draft of the Incentive Scheme and approximately 80.00% of the total number of Share Options to be granted under the Incentive Scheme; 4,544,000 options were reserved, representing approximately 0.20% of the total share capital of the Company as at the date of the announcement of the draft of the Incentive Scheme and approximately 20.00% of the total number of Share Options to be granted under the Incentive Scheme.

As of the date of the announcement of the draft of the Incentive Scheme, the 2019 Restricted Share Incentive Scheme of the Company is still within the Validity Period. 28,838,400 restricted shares were granted for registration under the 2019 Restricted Share Incentive Scheme. So far, there are still 16,788,200 restricted shares within the Validity Period under the 2019 Restricted Share Incentive Scheme. Together with 22,720,000 shares to be granted under the 2022 Share Option Incentive Scheme, there will be a total of 39,508,200 shares, representing approximately 1.74% of the total share capital of the Company as at the date of the announcement of the draft of the Incentive Scheme.

By now, the total number of all underlying shares involved in the Share Incentive Scheme within the Validity Period has not exceeded 10.00% of the total share capital of the Company. In the Incentive Scheme, the cumulative number of the Company's shares granted to any single Participant through the Incentive Scheme in the Validity Period has not exceeded 1.00% of the total share capital of the Company.

During the period from the date of announcement of the Incentive Scheme to the completion of the exercise of Share Options by the Participants, in case of capitalisation issue, bonus issue, subdivision of share capital or share consolidation, rights issue and other matters, the number of the Share Options granted shall be adjusted accordingly.

V. Basis for Determining the Participants, Scope of Participants and Number of the Share Options to be Granted

(I) Basis for Determining the Participants

1. Legal Basis for Determining the Participants

The Participants under 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.

2. Position Basis for Determining the Participants

The Participants to be granted under the Incentive Scheme shall be middle and senior management, core technical/business cadre of the Company (including wholly-owned and controlling subsidiaries, the same below) at the time of the announcement of the Incentive Scheme by the Company and other employees who the Company believes should be incentivised and have a direct impact on the Company's operating results and future development

(II) Scope of Participants

The total number of the Participants for the first grant under the Incentive Scheme shall be not more than 200, including middle and senior management, core technical/business cadre of the Company (including wholly-owned subsidiaries and controlled subsidiaries, which shall have the same meaning hereinafter) at the time of the announcement of the Incentive Scheme by the Company and other employees who the Company believes should be incentivised and have a direct impact on the Company's operating results and future development.

All the above Participants exclude independent Directors, Supervisors, shareholders individually or collectively holding more than 5% of the shares or the de facto controllers and their spouses, parents and children. All the Participants must have an employment or labour relationship with the Company or its wholly-owned and controlling subsidiaries when the Company grants the Share Options and during the assessment period as specified in the Incentive Scheme.

The above Participants include certain foreign employees, the reasons for which they are included in the Incentive Scheme are that: the Company is committed to its strategy of international development, and the Participants who are foreign employees play an important role in areas such as the Company's daily management, technology, business and operations to varying degrees. Equity incentives are commonly used as incentives for overseas companies. Foreign employees are familiar with the compensation mode of cash wages plus equity incentives. The implementation of the Incentive Scheme can stabilise the existing foreign talents and attract new talents. The Incentive Scheme will further promote the construction and stability of the Company's talent team, thereby contributing to the long-term development of the Company.

The Participants in the reserved grant shall be determined within 12 months after the Incentive Scheme is considered and approved at a general meeting. Upon the proposal made by the Board and after the independent Directors and the Supervisory Committee have expressed unequivocal opinions and the legal advisors have expressed professional opinions and issued legal opinions, the Company shall disclose relevant information on the current Participants as required in a timely and accurate manner. If the Participants are not determined within 12 months, the reserved options shall lapse. The basis for determining the Participants in the reserved grant shall be the same as the basis for determining the Participants in the first grant.

(III) Allocation of the Share Options Granted to the Participants

Notes: 1. The total number of the shares of the Company granted to any of the above-mentioned Participants under the Share Option Incentive Scheme within the Validity Period has not exceeded 1.00% of the total share capital of the Company. The total number of the underlying shares of the Company involved under the Share Option Incentive Scheme within the Validity Period will not exceed 10.00% of the total share capital of the Company as at the date of the proposal of the Share Option Incentive Scheme at the general meeting. If any Participant voluntarily abandons the granted options due to personal reasons, the Board shall adjust the number of the Share Options granted accordingly by reallocating the Shares Options abandoned by such Participant among the other Participants or re-adjusting the same as the reserved grant, provided that the total number of the shares of the Company to be granted to any of the Participants under the Share Option Incentive Scheme within the Validity Period shall not exceed 1.00% of the total share capital of the Company after the adjustment and the percentage of the Share Options for the reserved grant after the adjustment shall not exceed 20.00% of the total number of the Share Options to be granted under the Incentive Scheme.

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

3. The Participants in the reserved grant shall be determined within 12 months after the scheme is considered and approved at the general meeting of the Company. Upon the proposal made by the Board and after the independent Directors and the Supervisory Committee have expressed unequivocal opinions and the legal advisors have expressed professional opinions and issued legal opinions, the Company shall disclose the relevant information of the Participants as required on the designated website in a timely and accurate manner.

4. Any discrepancies between the total figure and the arithmetic sum of each figure listed in the above table are due to rounding.

(IV) Verification of Participants

1. After the Board has considered and approved the Incentive Scheme, the Company shall publish the names and positions of the Participants internally for no less than 10 days.

2. The Supervisory Committee of the Company shall review the list of the Participants and thoroughly consider opinions from the public. The Company shall disclose the information regarding the review by the Supervisory Committee and the public announcement of the list of Participants 5 days before the Incentive Scheme being is considered at the general meeting. 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.

(V) During the implementation of the Incentive Scheme, if any of the circumstances where an employee is not qualified as a Participant specified in the Management Measures and the Incentive Scheme occurs, such Participant shall not be granted the Share Options and the Share Options that have been granted but not exercised shall be cancelled by the Company.

VI. The Schedule for the Incentive Scheme

(I) The Validity Period of the Incentive Scheme

The Validity Period of the Incentive Scheme shall commence on the Grant Date of the Share Options under the first grant and end on the date of exercising all the Share Options granted to the Participants or the cancellation of such Share Options, which shall not exceed 48 months.

(II) Grant Date of the Incentive Scheme

The Grant Date shall be determined by the Board after the Incentive Scheme is considered and passed at the general meeting. The Grant Date must be a trading day. The Company shall, according to relevant regulations, convene a Board meeting to grant the Share Options to the Participants under the first grant, and complete announcement, registration and other relevant procedures within 60 days from the date on which the Incentive Scheme is considered and passed at the general meeting, the failure of which will lead to a termination of the Incentive Scheme and the Share Options which have not been granted will lapse.

(III) Vesting Period of the Incentive Scheme

The Vesting Period of the Share Options in the first grant under the Incentive Scheme shall be 12 or 24 months from the Grant Date of the first grant. The Vesting Period of the Share Options in the reserved grant shall be 12 or 24 months from the Grant Date of the reserved grant. The Share Options granted to the Participants under the Incentive Scheme shall not be transferred, or used to guarantee or repay debts.

(IV) Exercise Arrangement under the Incentive Scheme

The Participants under the Incentive Scheme may not exercise their Share Options until the expiry of the Vesting Period, and the Exercisable Date must be a trading day within the Validity Period of the Incentive Scheme; however, the Participants shall not exercise the Share Options within the following periods:

1. thirty days prior to the publication of the Company's annual reports and semi-annual reports, or in the event that the publication of such reports is postponed due to special reasons, the period shall be calculated from 30 days prior to the originally scheduled date of publication until the day prior to the date of publication;

2. ten days prior to the publication of quarterly reports, the announcement of results forecast or the announcement of preliminary results of the Company;

3. the period commencing from the date of an event which may have a significant effect on the trading prices of the securities of the Company and their derivatives or the date on which a decision is to be considered and ending on the date of disclosure in accordance with laws;

4. such other period as stipulated by the CSRC and the Shanghai Stock Exchange ("Stock Exchange").

The above "significant event" refers to any transaction or any other significant matter that the Company is required to disclose under the Listing Rules.

In the event of any future changes to the relevant regulations relating to the above transaction restrictions, the Company shall comply with the amended regulations.

The exercise period of the Share Options in first/reserved grant under the Incentive Scheme and the exercise arrangement and proportion in each exercise period are shown in the table below:

After the exercise conditions of the Share Options are met, the Company shall deal with the matters in relation to the exercise of the Share Options which have met the exercise conditions for the Participants.

For the Share Options for which the exercise has not been applied or cannot be applied due to failure to meet the Exercise Conditions during the aforesaid exercise periods, the Company will cancel such Share Options having granted to relevant Participants but not exercised in accordance with the principles stipulated in the Incentive Scheme, and such Share Options shall not be deferred to be exercised in the next exercise period.

(V) Lock-up Period of the Incentive Scheme

Lock-up period refers to the period during which the shares issued to the Participants upon their exercise are restricted from selling. The lock-up arrangement of the Share Options under the Share Incentive Scheme shall be implemented in accordance with the Company Law, the Securities Law, Several Provisions on Shareholding Reduction by Shareholders, Directors, Supervisors and Senior Management of Listed Companies, Implementing Rules of the Shanghai Stock Exchange for Shareholding Reduction by Shareholders, Directors, Supervisors and Senior Management of Listed Companies, 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 Director or a member of the senior management of the Company, the number of the 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 Director or a member of the senior management of the Company, 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 the shares by a Director or a member of the senior management of the Company under the Company Law, the Securities Law, Several Provisions on Shareholding Reduction by Shareholders, Directors, Supervisors and Senior Management of Listed Companies, Implementing Rules of the Shanghai Stock Exchange for Shareholding Reduction by Shareholders, Directors, Supervisors and Senior Management of Listed Companies, and other relevant laws, regulations and regulatory documents as well as the Articles of Association, such amended requirements thereunder shall apply to the shares transferred by the Participants during the relevant times.

VII. The Exercise Price of the Share Options and the Basis of its Determination

(I) Exercise Price of the Share Options

The Exercise Price of the Share Options in the first grant and the reserved grant under the Incentive Scheme shall be RMB23.85 per Share Option. Upon fulfilment of the Exercise Conditions, each Participant is entitled to purchase one share of the Company at the price of RMB23.85 for each Share Option he/she is granted within the Validity Period.

(II) The Methodology of Determination of the Exercise Price of the Share Options

1. Price Determination Methodology

The exercise price of the Share Options shall not be less than the nominal value of the shares and shall not be less than the higher of the following:

(1) the average trading price of RMB22.35 per share on the trading day preceding the date of the announcement of the draft of the Incentive Scheme; and the Exercise Price represents 90.00% of the average trading price for the previous trading day.

(2) the average trading price of RMB23.85 per share for the last 20 trading days preceding the date of the announcement of the draft of the Incentive Scheme; and the Exercise Price represents 90.00% of the average trading price for the last 20 trading days.

2. Basis for Price Determination

Firstly, the Exercise Price and pricing methodology of the Company's Share Options are determined for the fundamental purpose of promoting the development of the Company, and safeguarding the interests of shareholders, based on the confidence in the future development prospects of the Company and the recognition of the intrinsic value of the Company, and following the principle of equal incentives and restraints. The inherent mechanism of the equity incentive determines that the implementation of the Incentive Scheme will bring positive impact on the Company's ability of sustainable operation and shareholders' interests. The Company has set a challenging performance target, the achievement of which requires the initiative and creativity of core employees, and the pricing principle of the Incentive Scheme matches the performance requirements.

Secondly, as the competition in the industry and talents intensifies, the cost of talents of the Company increases and how to attract, motivate and retain core talents becomes an important issue for technology companies. The implementation of the Incentive Scheme is an effective supplement to the existing remuneration of the staff, and the income of the Participants depends on the future performance of the Company and the share price in the secondary market.

In light of the foregoing, on the basis of complying with relevant laws and regulations and regulatory documents, the Company adopts an independent pricing method for the Exercise Price of the Share Options, and the Exercise Price of the Share Options was fixed at RMB23.85 per Share Option. The implementation of the Incentive Scheme will further stabilise its core team and align the interests of staff and the shareholders.

The independent financial adviser engaged by the Company will express its opinions on the feasibility of the Scheme, the rationale of the relevant pricing basis and pricing methodology, whether it is conducive to the sustainable development of the Company, and whether it harms the interests of the shareholders. For details, please refer to the Independent Financial Advisor's Report on the 2022 Share Option Incentive Scheme (Draft) of Ming Yang Smart Energy Group Limited issued by Ningbo Xiaoduo Information Consulting Co., Ltd. published on the website of the Shanghai Stock Exchange (www.sse.com.cn).

"After review, we, as the independent financial adviser, are of the opinion that: The 2022 Share Option Incentive Scheme of MYSE complies with the provisions of relevant laws, regulations and regulatory documents and is feasible in terms of operational procedures. The Exercise Price under the Share Option Incentive Scheme of MYSE complies with Article 29 of the Management Measures. The relevant pricing basis and pricing methodology are reasonable and feasible, and is conducive to smooth implementation of the Incentive Scheme, the stability of the Company's existing team and the introduction of talents, and the Company's sustainable development, which is not detrimental to the interests of the listed company and all shareholders."

VIII. Conditions on the Grant and Exercise of the Share Options

(I) Conditions on the Grant of the Share Options

Share Options will 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 on the grant is not satisfied.

1. There is no occurrence of any of the following events on the part of 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 last 36 months after listing;

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

(5) other circumstances as determined by the CSRC.

2. There is no occurrence of any of the following events on the part of the Participants:

(1) he or she has been determined by the Stock Exchange as an ineligible person in the last 12 months;

(2) he or she has been determined by the CSRC or 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 of a company as required by the Company Law;

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

(6) other circumstances as determined by the CSRC.

(II) Conditions on the Exercise of the Share Options

Share Options granted to the Participants can be exercised in tranches where all of the following Exercise Conditions are satisfied:

1. There is no occurrence of any of the following events on the part of 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 last 36 months after listing;

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

(5) other circumstances as determined by the CSRC.

2. There is no occurrence of any of the following events on the part of the Participants:

(1) he or she has been determined by the Stock Exchange as an ineligible person in the last 12 months;

(2) he or she has been determined by the CSRC or 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 of a company as required by the Company Law;

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

(6) other circumstances as determined by the CSRC.

In case the Company falls under 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 the Company is prohibited from implementing an equity incentive and the Participant is responsible for it, or 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.

3. Performance assessment requirements at the Company level shall be satisfied:

The assessment years of the first grant of the Share Options under the Incentive Scheme are the two accounting years of 2023 and 2024, and the assessment shall be conducted once an accounting year, to ensure that the achievement of such financial performance assessment targets set by the Company as one of Exercise Conditions for the Participants in the corresponding year.

The performance assessment target and exercise proportion of the Share Options under the first grant is as follows:

Note: The above "net profit" is calculated based on the audited net profit attributable to shareholders of the listed company and excluding the share-based payment expenses arising from the Incentive Scheme and other share incentive schemes of the Company, which also applies to the following table.

If the reserved grant is granted in 2023, the performance assessment requirements of the reserved grant will be the same as the first grant. If the reserved grant is granted in 2024, the assessment years of the reserved grant will be the two accounting years of 2024 and 2025, and the assessment shall be conducted once an accounting year. The specific performance assessment targets and exercise proportion are shown in the table below:

If the Company fails to achieve the above performance assessment targets, all the Share Options that the Participants intend to exercise in relevant assessment year shall not be exercised and shall be cancelled by the Company.

4. Performance assessment requirements at the Participants' individual level shall be satisfied:

The assessment result at the Participants' individual level is determined through comprehensive consideration of the individual performance assessment and the performance assessment of each department and business unit. The assessment result and the corresponding coefficients at individual level of the Participants are shown in the table below:

Number of Share Options a Participant actually exercises for a particular year = Number of Share Options the Participant plans to exercise for the year × exercise coefficient at the Company level × exercise coefficient at individual level. The specific assessment of the Incentive Scheme is conducted based on the Assessment Management Measures for Implementation of the 2022 Share Option Incentive Scheme of Ming Yang Smart Energy Group Limited.

If the Share Options to be exercised by the Participants in the current period cannot be exercised or fully exercised due to assessment reasons, such Share Options shall lapse and be cancelled by the Company and cannot be deferred to be exercised in the next exercise year.

(III) Explanation of Scientificity and Reasonableness of the Performance Assessment Indicators

In order to ensure and promote the implementation of the Company's development strategy and create value for the shareholders, the Company intends to sufficiently motivate the initiative of the management and core business personnel through the implementation of the Share Options Incentive Scheme. The performance assessment under the Share Options Incentive Scheme will be conducted at the Company level and at individual level. The growth rate of combined net profit of the Company will be selected as the main assessment indicator at the Company level, which can directly reflect the Company's results of operation as a whole.

The indicators are set in a forward-looking and challenging manner, with fully consideration of the changes in the cycle of the industry in which the Company operates, historical performance fluctuations and future business development plans, which will help motivate the enthusiasm of the staff, to promote the implementation and completion of the Company's business strategies and objectives, ensure the stable growth in the Company's performance, facilitate the steady increase in the Company's market capitalisation, and create value for the shareholders.

In addition to the performance assessment at the Company level, the Company will also establish a set of performance assessment indicator system for the Participants, which aims at directly and expressly evaluating the contribution of the Participants to the development of the Company and the value of the shareholders in a more accurate and all-round manner. The Company will determine whether the shares granted to the Participants can be unlocked as planned based on their performance assessment results for the previous year.

In summary, the performance assessment system for the Incentive Scheme of the Company is all-round, comprehensive and operable, and the assessment indicators are set in a scientific and reasonable manner, and meanwhile the indicators are appropriately challenging, which will have a positive incentive effect on the Participants, balancing the demands and interests of the shareholders, the Company and the Participants, so as to promote sustainable win-win results for such three-parties.

IX. Procedures for Implementing the Share Option Incentive Scheme

(I) Procedures for the Share Option Incentive Scheme to Take Effect

1. The Remuneration and Appraisal Committee of the Company shall be responsible for the preparation of the draft and summary of the Incentive Scheme.

2. The Board of the Company shall resolve on the Incentive Scheme in accordance with the laws. 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 has considered and approved the Incentive Scheme and performed the publicity and announcement procedures, it shall propose the Incentive Scheme to the general meeting for consideration and approval; at the same time, it shall propose to the general meeting for authorisation to execute the grant, exercise and cancellation of the Share Options.

3. The independent Directors and the Supervisory Committee shall issue opinions in respect of whether the Incentive Scheme is beneficial to the sustainable development of the Company or whether there is any noticeable damage to the interests of the Company and the shareholders as a whole. The Company will engage an independent financial adviser to issue professional opinions on whether the Incentive Scheme is feasible, whether it is conducive to the sustainable development of the Company, and whether it will impair the interests of the Company and the shareholders as a whole. The lawyers engaged by the Company shall issue legal opinions on the Incentive Scheme.

4. The Incentive Scheme can only be implemented after being considered and approved at the general meeting of the Company. The Company shall internally publish the names and the positions of the Participants before the general meeting is 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 disclose the information regarding the review by the Supervisory Committee and the public announcement in respect of the list of the Participants 5 days before the Incentive Scheme is considered at a general meeting. The Company shall carry out self-investigations on the trading of shares and derivatives of the Company by individuals in possession of inside information within 6 months prior to the announcement of the Incentive Scheme and explain whether there are inside trading activities.

5. When a general meeting of the Company is convened to vote on the Share Option Incentive Scheme, the independent Directors shall solicit proxy voting rights from all shareholders regarding the Incentive Scheme. At the general meeting, it is required to vote on the content of the Share Option Incentive Scheme under Article 9 of the Management Measures, and the Share Option 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 Option Incentive Scheme is considered at the Company's general meeting, shareholders who are Participants or shareholders who have a related relationship with the Participants shall abstain from voting thereon.

6. The Company shall grant the Share Options to the Participants within the prescribed period upon consideration and approval of the Incentive Scheme at the general meeting of the Company and the fulfilment of grant conditions stipulated under the Incentive Scheme. The Board shall be responsible for the implementation of the grant, exercise and cancellation of the Share Options in accordance with the authorisation at the general meeting.

(II) Procedures for the Grant of the Share Options

1. Upon consideration and approval of the Incentive Scheme at the general meeting and the approval of the resolution on the grant of the Share Options to the Participants by the Board, the Company shall sign the Agreement on Grant of the Share Options with the Participants to define their respective rights and obligations.

2. The Board shall consider and announce whether the conditions for the grant of the Share Options to the Participants as set out in the Share Option Incentive Scheme have been satisfied before the Share Options are granted to such Participants. The grant plan for reserved Share Options shall be determined, considered and approved by the Board. The independent Directors and the Supervisory Committee shall both express their views explicitly. The law firm shall issue legal opinions on whether the conditions on the grant of the Share Options to the Participants are fulfilled or not.

3. The Supervisory Committee of the Company shall verify the Grant Date of the Share Options and the list of Participants and express their opinions on such verification.

4. If there is any discrepancy between the Share Options granted to the Participants and the arrangement under the Share Option Incentive Scheme, the independent Directors, the Supervisory Committee (in case of changes of the Participants), and the law firm shall express their clear opinions thereon at the same time.

5. The Company shall grant the Share Options to the Participants under the first grant and publish the announcement within 60 days after the Share Option Incentive Scheme is considered and approved at the general meeting. In the event the Company fails to publish the announcement on the grant within such 60 days, the Incentive Scheme shall be terminated, and the Board shall disclose the reasons for such failure in a timely manner and shall not be allowed to consider the Share Option Incentive Scheme within the following three months (the period in which listed companies are not allowed to grant share options in accordance with the Management Measures and other relevant laws and regulations shall not be included in such 60 days).

The Participants of the reserved Share Options shall be determined within 12 months after the Incentive Scheme is considered and approved at the general meeting. If the Participants are not determined within 12 months, the reserved Share Options shall lapse.

6. The Company shall make an application to the Stock Exchange first after any Share Options are granted, and the securities depository and clearing institution will conduct registration and clearing procedures thereof upon confirmation by the Stock Exchange.

(III) Procedures for the Exercise of the Share Options

1. Prior to the Exercisable Date, the Company shall confirm whether the Participants have satisfied the Exercise Conditions. The Board shall consider whether the Exercise Conditions under the Incentive Scheme have been satisfied, and the independent Directors and the Supervisory Committee shall express clear opinions at the same time. The law firm shall issue legal opinions on whether the conditions on the exercise of the Share Options by the Participants have been satisfied. For the Participants who meet the Exercise Conditions, they may exercise in the method as determined by the Board and the corresponding procedures for the registration of shares will be conducted by the Company (or an entrusted securities company). For the Participants who do not meet the conditions, the corresponding Share Options held by them for such exercise shall be cancelled. The Company shall disclose the implementation thereof in a timely manner by way of announcement.

2. A Participant may transfer the exercised Share Options of the Company, but the transfer of the 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.

3. The Company shall make an application to the Stock Exchange first before the exercise of the Share Options, and the securities depository and clearing institution will conduct registration procedures thereof upon confirmation by the Stock Exchange.

4. 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. The Company may provide centralised exercise or autonomous exercise to the Participants based on actual conditions.

(IV) Procedures for Amendment to and Termination of the Incentive Scheme

1. Procedures for Amendment to the Incentive Scheme

(1) If the Company intends to amend the Incentive 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 Incentive 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:

1) accelerating the Exercise;

2) reducing the Exercise Price.

The Company shall perform its obligation of publishing announcements in a timely manner. The independent Directors and the Supervisory Committee shall give independent opinions in respect of whether the Scheme after the amendment is beneficial to the sustainable development of the Company or whether there is any noticeable damage to the interests of the Company and the shareholders as a whole. The law firm shall give professional opinions on whether the Scheme after the amendment complies with the Management Measures and relevant laws and regulations or whether there is any noticeable damage to the interests of the Company and the shareholders as a whole.

2. Procedures for Termination of the Incentive Scheme

(1) If the Company intends to terminate 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 the general meeting.

If the general meeting or the Board of the Company have considered and passed a resolution on terminating the implementation of the Incentive Scheme, the Incentive Scheme shall not be considered in three months after the date of announcement of such resolution.

(3) The law firm shall give professional opinions on whether the Company's termination of the Incentive Scheme complies with the Management Measures and relevant laws and regulations, or whether there is any noticeable damage to the interests of the Company and the shareholders as a whole.

(4) If the Incentive Scheme is terminated, the Company shall apply to the Stock Exchange and the Depository and Clearing Company for handling the procedures for the cancellation of the Share Options granted in a timely manner after performing the corresponding consideration procedures.

X. Methods of and Procedures for Adjusting the Share Option Incentive Scheme

(I) Methods of Adjusting the Number of the Share Options

In the event of any capitalisation issue, bonus issue, sub-division, rights issue or share consolidation of the Company before the exercise by the Participants, the number of the Share Options shall be adjusted accordingly. The adjustment method is as follows:

1. Capitalisation issue, bonus issue and sub-division of shares

QQ0×(1n)

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

2. Rights issue

QQ0×P1×(1n)/(P1P2×n)

Where: Q0 represents the number of the Share Options 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 Share Options.

3. Share consolidation

QQ0×n

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

4. Additional issue and dividend distribution

Under the circumstance of additional issue of new shares and dividend distribution by the Company, no adjustment will be made to the number of the Share Options.

(II) Method of Adjusting the Exercise Price of the Share Options

In the event of any dividend distribution, capitalisation issue, bonus issue, sub-division, rights issue or share consolidation of the Company before the exercise by the Participants, the Exercise Price shall be adjusted accordingly. The adjustment method is as follows:

1. Capitalisation issue, bonus issue and sub-division of shares

PP0÷(1n)

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

2. Rights issue

PP0×(P1P2×n)/[P1×(1n)]

Where: P0 represents the Exercise 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 Exercise Price.

3. Share consolidation

PP0÷n

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

4. Dividend distribution

PP0-V

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

5. Additional issue

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

(III) Adjustment Procedures of the Share Option Incentive Scheme

The Board shall consider and approve a resolution regarding the adjustment to the number and the Exercise Price of the Share Options in any of the abovementioned circumstances. The Company shall appoint a legal adviser for professional advice to the Board on whether such adjustment is in compliance with the Management Measures, the Articles of Association and the Incentive Scheme. The Company shall publish an announcement on the resolution and relevant legal opinions of the law firm immediately after such resolution is considered and passed by the Board.

XI. Accounting Treatment and Estimated Impact on Operating Performance

In accordance with the requirements of the Accounting Standards for Business Enterprises No. 11-Share-Based Payments and the Accounting Standards for Business Enterprises No. 22-Recognition and Measurement of Financial Instruments issued by the Ministry of Finance, at each balance sheet date within the Vesting Period, the Company shall revise the number of the Share Options which are expected to be exercised according to the change in the latest available number of persons eligible to exercise the Share Options, completion of the performance indicators and other subsequent information, and recognise the services acquired during such period in relevant costs or expenses and capital reserve at the fair value of the Share Options on the Grant Date.

(I) Fair Value of the Share Options and Determination Method

In accordance with relevant requirements of the Accounting Standards for Business Enterprises No. 11-Share-Based Payments and the Accounting Standards for Business Enterprises No. 22-Recognition and Measurement of Financial Instruments, the Company adopted the Black-Scholes model in calculating the fair value of the Share Options and used this model to estimate the fair value of the Share Options in the first grant on 10 November 2022 (formal calculation will be conducted upon the grant). Specific parameters selected are as follows:

1. Price of underlying shares: RMB25.08 per share

2. Validity Period: 12 months and 24 months (the period from the Grant Date to the Exercisable Date for each respective period);

3. Historical volatility: 17.35% and 15.81% (the volatility of the SSE Composite Index for the latest 12 and 24 months, respectively);

4. Risk-free rate: 1.50% and 2.10% (the benchmark deposit rate for 1-year and 2-year deposits at financial institutions formulated by the People's Bank of China);

5. Dividend yield: 0.78% (the average dividend yield of the Company for the latest two years).

(II) Estimated Impact on the Operating Results in each Period Due to the Implementation of the Share Options

The Company will estimate the fair value of the Share Options as at the Grant Date using the abovementioned valuation model, and ultimately determines the share-based payment expenses under the Scheme, which will be amortised according to the exercise ratio during the implementation of the Scheme. Incentive costs arising from the Incentive Scheme will be charged to recurring profit or loss.

Assuming that the first grant is in November 2022 and in accordance with the requirements of the PRC accounting standards, the impact of the Share Options in the first grant under the Incentive Scheme on the accounting costs for each period is shown in the table below:

Unit: RMB'0,000

Notes: 1. The above results do not represent the final accounting costs. The actual accounting costs are related to the actual Grant Date, the stock price on the Grant Date and the number of the Share Options granted, as well as the actual effective and lapsed quantities, and the possible dilutive effects are brought to the attention of shareholders.

2. Any difference in the mantissa between the above summation and the direct addition of detailed figures is caused by rounding.

3. 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 calculations above do not include the reserved Share Options, and share-based payment expenses will be incurred when the reserved portions are granted.

Based on the currently available information, the Company preliminarily estimates that the amortisation of the expenses of Share Options will have a limited impact on the net profit of each year during the Validity Period without considering the stimulating effect of the Incentive Scheme on the Company's performance. If the positive effects of the Share Option Incentive Scheme on the development of the Company are taken into consideration, such as boosting the enthusiasm of the management team, improving the operating efficiency and reducing the cost of agents, the performance improvement of the Company brought by the Incentive Scheme will outweigh the increase in expenses incurred by it.

XII. Respective Rights and Obligations of the Company and Participants and Mechanism for Resolution of Disputes

(I) 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 fulfil the Exercise Conditions required under the Incentive Scheme, the corresponding Share Options not exercised by the Participant shall be cancelled in accordance with the principles under the Incentive Scheme.

 (2) 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 under the Incentive Scheme.

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

(4) The Company shall withhold and pay the individual income tax payable by the Participants according to the relevant provisions of the national tax regulations.

(5) The Company shall actively support the Participants who have fulfilled the Exercise Conditions to exercise in accordance with the relevant requirements including those of the Incentive Scheme, the CSRC, the Stock Exchange and the Depository and Clearing Company. However, the Company disclaims any liability for losses incurred by the Participants who fail to exercise at their own will due to reasons caused by the CSRC, the Stock Exchange and the Depository and Clearing Company.

(6) 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 labour contract between the parties.

(7) If a Participant violates laws, violates professional ethics, reveals confidential information of the Company, fails to discharge his/her duties or has wilful misconduct, causing damages to the interest or reputation of the Company, the Company may cancel the Share Options not exercised by the Participants after being reviewed by the Remuneration and Appraisal Committee under the Board and approved by the Board. If the violation is serious, the Company may seek compensation for the losses incurred therefrom in accordance with relevant laws.

(8) Other relevant rights and obligations under the laws and regulations.

(II) 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.

(2) The source of funds shall be the self-raised funds of the Participants.

(3) A Participant shall have the right and shall exercise in accordance with the Incentive Scheme and buy and sell shares in accordance with the requirements.

(4) Prior to the exercise, the Share Options granted to the Participants shall not be transferred, or used to guarantee or repay debts.

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

(6) The Participants undertake that, where false statements or misleading statements in or material omissions from the information disclosure documents of the Company result in non-compliance with the conditions of the Share Options or exercise arrangements, the Participants concerned shall return to the Company all interests gained through the Incentive Scheme after it is confirmed that the relevant information disclosure documents contain false statements or misleading representations or material omissions.

(7) Share Options granted to the Participants under the Incentive Scheme shall not entitle the Participants to voting rights or distribution of share bonus or dividends prior to exercising.

(8) Upon the consideration and approval of the Incentive Scheme at the general meeting and the passing of resolution by the Board regarding the grant of interests to the Participants, the Company shall sign the Agreement on Grant of the Share Options with the Participants in order to define their respective rights and obligations and other relevant matters.

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

(III) Mechanism for Resolution of Disputes between the Company and the Participants

Any dispute arising out of or in connection with the implementation of the Incentive Scheme and/or the Agreement on Grant of the Share Options signed by the Company and the Participants shall be settled by negotiations and communications between the parties or through mediation conducted by the Remuneration and Appraisal Committee under the Board. If relevant disputes fail to be settled through the abovementioned methods or manners 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.

XIII. Measures for Unusual Changes of the Company/Participants

(I) Measures for Unusual Changes of the Company

1. The Incentive Scheme shall be terminated if any of the following events occurs to the Company, and the Share Options which have been granted to but not exercised by the Participants 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 last 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.

2. The Incentive Scheme remains unchanged if any of the following events occurs to the Company:

(1) change in control of the Company without reorganisation of major assets;

(2) merger and division of the Company where the Company continues to exist.

3. It shall determine whether to make corresponding changes or adjustments to the Incentive Scheme at the general meeting of the Company if any of the following events occurs to the Company:

(1) change in control of the Company with reorganisation of major assets;

(2) merger and division of the Company where the Company no longer exists.

4. Where false statements or misleading statements in or material omissions from the information disclosure documents of the Company result in non-compliance with the conditions of grant or arrangements for exercising, the Share Options which have not been exercised shall be cancelled by the Company. In respect of the Share Options which have been granted to and exercised by the Participants, all Participants shall return to the Company all interests generated after the exercising of the Share Options granted and the Board shall recover the interests of the Participants. The Participants who bear no responsibility for the aforementioned matters and incur losses as a result of the returning of the interests may seek compensation from the Company or responsible parties.

(II) Measures for Changes in the Personal Circumstances of the Participants

1. Change in the job position of Participants

(1) Where a Participant has changes in the job position but still works in the Company or its wholly-owned and controlling subsidiaries, the Share Options that have been granted to him/her will be exercised in accordance with the procedures as specified in the Incentive Scheme before the change of his/her job position.

(2) Where the Participant is a Supervisor or an independent Director or other person who is forbidden from holding the Share Options of the Company, the Share Options that have been exercised shall remain unchanged and the Share Options that have been granted but not exercised shall not be exercised and shall be cancelled by the Company.

(3) In case a Participant has a change in job position because he/she is not competent at his/her job, violates laws, violates professional ethics, reveals confidential information of the Company, fails to discharge his/her duties, has wilful misconduct or seriously violates the regulations of the Company, causing damages to the interest or reputation of the Company, or the Company or its subsidiaries terminates the employment or labour relationship with him/her for any of the above reasons, the Share Options that have been granted but not exercised shall not be exercised and shall be cancelled by the Company. The Participant shall pay in full the individual income tax for the exercised Share Options prior to his/her departure. Meanwhile, the Company has the right to recover the losses caused by the Participants in accordance with the provisions of relevant laws and regulations, depending on the seriousness of the circumstances.

2. Departure of Participants

In case of voluntary resignation, layoff by the Company, non-renewal of expired contracts, dismissal by the Company for personal misconduct, agreed termination of labour contract or employment agreement and other circumstances, the Share Options that have been granted to but not exercised by the Participant shall not be exercised and shall be cancelled by the Company since the date of departure. The Participant shall pay in full the individual income tax for the exercised Share Options to the Company prior to his/her departure.

Personal misconduct shall include but not be limited to the following behaviours: the violation of the employment contract, confidentiality agreement, non-competition agreement or any other similar agreements signed with the Company or its affiliated companies; or the violation of the laws of the country of residence resulting in negative conditions that affect the performance of the job.

3. The normal retirement of the Participants in accordance with national regulations and the rules of the Company shall be treated depending on the following two circumstances:

(1) If a Participant is re-hired or continues to provide labour services to the Company in any manners after retirement, the Share Options granted to him/her shall continue to be valid and shall be exercised in accordance with the procedures under the Incentive Scheme. In the event that such circumstance arises and the Participant no longer has a performance assessment, the achievement of performance assessment target shall not be included in the Exercise Conditions for the Participant; if the Participant still has a performance assessment, the achievement of performance assessment target will continue to be one of the Exercise Conditions for the Participant.

(2) If a Participant no longer holds a position in the Company or continues to provide labour services to the Company in any manners after retirement, the Share Options that have been granted to but not exercised by the Participant shall not be exercised and shall become null and void from the date of retirement. The Participant shall pay in full the individual income tax for the exercised Share Options to the Company prior to his/her retirement.

4. The resignation of the Participants due to incapacity shall be treated depending on the following two circumstances:

(1) If a Participant resigns due to incapacity resulting from performance of duty, the Share Options granted to the Participant shall be exercised subject to the procedures under the Incentive Scheme prior to the incapacity, and the Board of the Company may decide at its discretion that the individual performance assessment target will no longer be included in the Exercise Conditions and other Exercise Conditions shall continue to be valid. The Participant shall pay in full the individual income tax for the exercised Share Options to the Company prior to his/her resignation.

(2) If the Participant resigns not due to incapacity resulting from performance of duty, the Share Options that have been granted to but not exercised by the Participant shall not be exercised and shall be cancelled by the Company. The Participant shall pay in full the individual income tax for the exercised Share Options to the Company prior to his/her resignation.

5. The death of the Participants shall be treated depending on the following two circumstances:

(1) If a Participant dies due to performance of duty, the Share Options granted to the Participant shall be held by his/her designated heir or lawful heir on his/her behalf and shall be exercised subject to the procedures under the Incentive Scheme prior to the death. The Board of the Company may decide at its discretion that the individual performance assessment target will no longer be included in the Exercise Conditions. The heir shall pay in full the individual income tax for the exercised Share Options to the Company prior to the inheritance.

(2) If the Participant dies for reasons other than performance of duty, the Share Options that have been granted to but not exercised by the Participant shall not be exercised and shall be cancelled by the Company. The Company has the right to request the heir of the Participant to pay in full the individual income tax for the exercised Share Options out of the estate of the Participant.

6. Other circumstances not provided in the Incentive Scheme and the measures therefor shall be determined by the Board of the Company.

XIII. GENERAL MEETING The Incentive Scheme shall not take effect until it is approved by the general meeting. Please be noted that the Board will duly issue a notice and relevant resolutions, proposing to convene a general meeting to consider the resolutions in relation to the Incentive Scheme.

The Board of Ming Yang Smart Energy Group Limited

November 10, 2022