Employee Stock Ownership Plan (Draft)

Stock Abbreviation: MYSE Stock Code: 601615

Ming Yang Smart Energy Group Limited ("Ming Yang Smart Energy" or "the Company") and all members of the Board of Directors warrant that the Employee Stock Ownership Plan and its summary do not contain any false representations, misleading statements or material omissions, and shall bear legal responsibility for the truthfulness, accuracy and completeness of its content in accordance with the law.

1. The 2025 Employee Stock Ownership Plan (Draft) (hereinafter referred to as the "Draft ESOP") of Ming Yang Smart Energy Group Limited is subject to the approval of the general meeting of the Company before implementation, and there is uncertainty as to whether the Draft ESOP will be approved by the general meeting of the Company.

2. The specific sources of funds, contribution amounts, expected scale, and detailed implementation plan of the Company's 2025 Employee Stock Ownership Plan (hereinafter referred to as the "ESOP") are preliminary results, and there is uncertainty as to whether the implementation can be completed.

3. If the subscription by employees is insufficient, there is a risk that the ESOP may fail to be established; if the subscribed shares by employees fall short, there is a risk that the ESOP may be implemented at a scale below expectations.

4. The share price is affected by multiple complex factors, including the Company's operating performance, macro-economic cycles, international/domestic political and economic conditions and investor sentiment. Therefore, share trading is an investment activity with certain risks, and investors should be fully prepared for such risks.

5. The descriptions of the Company's performance assessment indicators as set out in the ESOP do not represent a performance forecast of the Company, nor do they constitute a performance commitment.

6. Investors are advised to make decisions with caution and pay attention to investment risks.

1. The Draft ESOP has been formulated in accordance with the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Guiding Opinions on the Pilot Implementation of Employee Stock Ownership Plans by Listed Companies, the Guideline No. 1 of the Shanghai Stock Exchange on Self-regulatory Rules of Listed Companies- the Standardized Operation and other relevant laws, administrative regulations, rules, normative documents and the Articles of Association of Ming Yang Smart Energy Group Limited.

2. The ESOP follows the principles of legal compliance, voluntary participation, and self-assumption of risks, and there is no compulsory employee participation in the ESOP such as apportionment or forced assignment.

3. Participants of the ESOP include the directors (excluding independent directors), senior management and core employees of the Company (including its controlling subsidiaries), as well as other employees deemed necessary by the Board of Directors to be incentivized. The total number of employees participating in the ESOP shall not exceed 110, of which 9 are directors (excluding independent directors) and senior management. The specific number of participants shall be determined based on actual subscription payments. The management committee of the ESOP (hereinafter referred to as the "Management Committee") may adjust the list of participating employees and allocation ratios of the ESOP based on subscription payment status and changes in employees.

4. The shares under the ESOP shall be sourced from the Company's repurchased shares held in the dedicated securities account for share repurchase of the Company. The number of underlying shares intended to be held under the ESOP shall not exceed 10,000,000.00 shares. Upon approval by the general meeting of the Company, the shares held in the dedicated securities account for share repurchase of the Company will be available to the ESOP through non-trading transfer or other methods permitted by laws and regulations. During the period from the announcement date of the Draft ESOP to the date when the underlying shares are transferred to the Plan, the number of underlying shares shall be adjusted correspondingly in the event of any ex-rights or ex-dividend matters, such as capitalizing capital reserves, distributing stock dividends, or paying cash dividends. There is currently uncertainty as to the eventual transfer of underlying shares, and the final number of shares held is subject to the actual implementation.

5. Upon implementation of the ESOP, the total number of shares held under all effective employee stock ownership plans of the Company shall not exceed 10% of the total share capital of the Company in aggregate, and the number of shares corresponding to the units under the employee stock ownership plans held by a single holder shall not exceed 1% of the total share capital of the Company. The total number of shares held under the ESOP does not include shares acquired by employees prior to the initial public offering and listing of the Company, shares purchased by the employees themselves through the secondary market, and shares obtained through equity incentives. There is currently uncertainty as to the eventual purchase of underlying shares, and the final number of shares held is subject to the actual implementation.

6. The price for purchase of shares repurchased by the Company under the ESOP shall be RMB7.02 per share, which shall not be lower than the higher of:

   1. 50% of the average trading price of the Company's shares on the trading day immediately preceding the announcement of the Draft ESOP, i.e. RMB7.02 per share; and

   2. 50% of the average trading price of the Company's shares over the 120 trading days preceding the announcement of the Draft ESOP, i.e. RMB5.77 per share.

   During the period from the announcement date of the Draft ESOP to the date when the underlying shares are transferred to the Plan, the purchase price of the shares shall be adjusted correspondingly for any ex-rights or ex-dividend issues of the Company, such as capitalizing capital reserves, distributing stock dividends, or paying cash dividends.

7. The funding sources for the ESOP shall consist of legitimate remuneration of employees, self-raised funds, and other methods permitted by laws and regulations. The Company shall not provide financing, guarantees, loans, or other financial assistance to holders in any form.

8. The ESOP shall be managed by the Company on its own initiative. The Company shall set up the Management Committee, which acts as the managing organization of the ESOP to be responsible for the daily management of the ESOP and exercise shareholders' rights on behalf of the holders. The Company has implemented appropriate risk prevention and isolation measures to safeguard the legitimate rights and interests of the holders of the ESOP. During the validity period

   of the ESOP, the Management Committee may engage relevant professional institutions to provide management, advisory, and other services for the day-to-day administration of the ESOP.

9. The validity period of the ESOP shall not exceed 36 months, commencing from the date on which the Draft ESOP is approved by the general meeting of the Company and the date on which the Company announced the transfer of the last tranche of underlying shares to the ESOP. The underlying shares acquired under the ESOP shall be unlocked in two tranches with the unlocking points being 12 months and 24 months respectively from the date on which the Company announced the transfer of the last tranche of underlying shares to the ESOP, with the proportion of underlying shares unlocked in each tranche being 50% and 50%, respectively. The specific proportion and number of shares unlocked each year will be determined based on the achievement of Company-level performance assessment indicators and holders' assessment results.

10. Prior to the implementation of the ESOP, the Company has solicited employees' opinions through the Employee Representative Congress. Upon approval of the ESOP by the Board of Directors of the Company, the Company will issue a notice of convening the general meeting to seek approval for the ESOP and authorization to the Board to handle related matters at the general meeting. The implementation of the ESOP is subject to the approval of the general meeting of the Company. The general meeting of the Company at which the ESOP is considered shall adopt a combination of on-site voting and online voting. The Company will provide an online voting platform to the shareholders of the Company through the trading system and the Internet voting system of the Shanghai Stock Exchange, and shareholders may exercise their voting rights through the said systems within the timeframe for online voting. Related party shareholders will abstain from voting.

11. Financial, accounting, and taxation matters arising from the implementation of the ESOP by the Company shall be carried out in accordance with the provisions of the relevant financial systems, accounting standards, and tax regulations, and the relevant taxes and fees to be paid by employees as a result of the implementation of the ESOP shall be borne by the employees themselves.

12. Implementation of the ESOP will not result in the shareholding structure of the Company failing to meet listing requirements.

13. During the validity period of this ESOP, if the provisions of relevant laws, regulations, and normative documents are revised or amended, the corresponding provisions of the ESOP shall follow the latest promulgated policies and regulations.

DEFINITIONS 9

CHAPTER I PURPOSE OF THE ESOP 10

CHAPTER II BASIC PRINCIPLES OF THE ESOP 11

CHAPTER III PARTICIPANTS AND ELIGIBILITY CRITERIA OF THE ESOP 12

Unless otherwise specified, the following terms shall have the following meanings in this document:

Note: Any discrepancy between the total and the sum of individual figures in the Draft ESOP is due to rounding.

The Draft ESOP has been formulated by the Company in accordance with the Company Law, the Securities Law, the Guiding Opinions, the Standardized Operation and other relevant laws, administrative regulations, rules, normative documents, and the Articles of Association.

Employees of the Company participate in the ESOP on a voluntary, legal and compliance basis. The purpose of holding the Company's shares is to:

1. establish and improve a mechanism for sharing of interests between employees and Shareholders;

2. constantly enhance the level of corporate governance, strengthen employees' cohesion and the Company's core competitiveness, and promote the long-term, sustainable and healthy development of the Company;

3. fully motivate employees' sense of ownership towards the Company, attract and retain outstanding management talents and core backbone staff, and further strengthen employees' cohesion and the Company's development vitality.

1. Principle of Legal Compliance

   For the implementation of the ESOP, the Company shall perform the procedures in strict accordance with laws and administrative regulations and disclose information in a true, accurate, complete and timely manner. No person shall use the ESOP to engage in insider dealing, securities market manipulation and other securities fraud.

2. Principle of Voluntary Participation

   The Company's implementation of the ESOP shall follow the principles of the Company's independent decision and voluntary participation by employees. The Company shall not force employees to participate in the ESOP by way of apportionment, forced assignment or any other means.

3. Principle of Self-assumption of Risks

The Participants of the ESOP shall bear their own profits and losses, assume risks on their own, and enjoy rights and interests equal to those of other investors.

1. Eligibility Criteria for Participants of the ESOP

   Holders of the ESOP are determined by the Board of Directors of the Company in accordance with the Company Law, the Securities Law, the Guiding Opinions, the Standardized Operation and other relevant laws and regulations, as well as the relevant provisions of the Articles of Association. Employees of the Company participate in the ESOP based on the principles of legal compliance, voluntary participation and self-assumption of risks.

2. Scope of Participants of the ESOP

   Participants of the ESOP include the directors (excluding independent directors), senior management and core employees of the Company (including its controlling subsidiaries), as well as other employees deemed necessary by the Board of Directors to be incentivized.

   Unless otherwise specified in the Draft ESOP, all Participants shall enter into a labor contract or employment contract with the Company or its controlling subsidiaries during the validity period of the ESOP.

3. Participants and Allocation of the ESOP

The total amount of funds proposed to be raised under the ESOP shall not exceed RMB70,200,000, with "units" as the subscription measurement. Each unit is valued at RMB1.00. The total number of units under the ESOP shall not exceed 70,200,000, and the specific number shall be determined based on the actual contribution amount. At initial establishment, the total number of Holders shall not exceed 110, and the specific number of Participants shall be determined based on employees' actual subscription. The proposed allocation under the ESOP is set out as follows:

Note: 1. The final subscribed units of participants shall be subject to the actual subscription funds contributed by employees;

1. Any discrepancy between the decimal places of some totals in the table and the sum of the detailed figures is due to rounding of percentages.

   Holders shall pay the subscription funds for the ESOP in full and on time according to their subscribed units. The payment schedule for the ESOP will be uniformly notified and arranged by the Company. Where a Holder fails to pay the subscription funds in full and on time, the Holder shall be deemed to have automatically forfeited the right to subscribe for the remaining portion for which payment has not been made in a timely manner, and shall only be entitled to the rights corresponding to the portion for which payment has been made in a timely manner. The Management Committee may adjust the list of Participants and their subscribed units based on actual payment by employees. The final number of Participants, list of Participants, and their subscribed units under the ESOP shall be determined based on employees' actual signing of the "ESOP Subscription Agreement" and the final payment.

   ‌CHAPTER IV SOURCE OF FUNDS, SHARES, SIZE, AND PURCHASE PRICE OF THE ESOP
   1. Source of Funds

      The funding sources for the ESOP shall consist of legitimate remuneration of employees, self-raised funds, and other methods permitted by laws and regulations. The Company shall not provide advances, guarantees, loans, or other financial assistance to Holders in any form.

      The total amount of funds to be raised under the ESOP shall not exceed RMB70,200,000, with "units" as the subscription measurement. Each unit is valued at RMB1.00. The total number of units under the ESOP shall not exceed 70,200,000, and the specific number will be determined based on employees' actual capital contributions.

   2. Source of Shares

      The shares under the ESOP shall be sourced from the repurchased ordinary A Shares of Ming Yang Smart Energy held in the dedicated securities account for share repurchase of the Company. The Company has convened the 39th meeting of the second session of the Board of Directors on 4 May 2023 to consider and approve the share repurchase plan, and the 24th meeting of the third session of the Board of Directors on 25 September 2025 to consider and approve the Proposal on the Change of the Use of Repurchased Shares and Cancellation of Partial Repurchased Shares, agreeing that the Company may change the use of 89,813,484 shares in the share repurchase plan to using 10,000,000 shares for cancellation and the corresponding reduction of registered capital, and the remaining 79,813,484 shares for the ESOP or equity incentive plans.

      Upon approval of the Draft ESOP by the general meeting, the ESOP shall acquire the Company's shares held in the dedicated securities account for share repurchase of the Company through non-trading transfer or other methods permitted by laws and regulations. There is currently uncertainty as to the eventual purchase of Underlying Shares, and the specific number of shares held will be determined based on employees' actual capital contributions. The Company will fulfill its information disclosure obligations in a timely manner as required.

   3. Size of Underlying Shares

      The number of the Underlying Shares to be held under the ESOP shall not exceed 10,000,000 shares, representing approximately 0.4402% of the Company's total share capital (i.e. 2,271,496,706 shares) as of the announcement date of the Draft ESOP. During the period from the announcement date of the ESOP to the date when the underlying shares are transferred to the Plan, the number and price of the Underlying Shares shall be adjusted correspondingly in the event of any ex-rights or ex-dividend matters, such as capitalizing capital reserves, distributing stock dividends, or paying cash dividends.

      Upon implementation of the ESOP, the total number of shares held under all effective employee stock ownership plans of the Company shall not exceed 10% of the total share capital of the Company in aggregate, and the number of shares corresponding to the units under the employee stock ownership plans held by a single Holder shall not exceed 1% of the total share capital of the Company. The total number of shares held under the ESOP does not include shares acquired by employees prior to the initial public offering and listing of the Company, shares purchased by the employees themselves through the secondary market, and shares obtained through equity incentives.

   4. Purchase Price and Explanation of Reasonableness

Upon approval of the ESOP by the general meeting, the Company will transfer the repurchased shares through non-trading transfer or other methods permitted by laws and regulations at a purchase price of RMB7.02 per share, which shall not be lower than the higher of:

1. 50% of the average trading price of the Company's shares on the trading day immediately preceding the announcement of the Draft ESOP, being RMB7.02 per share; and

2. 50% of the average trading price of the Company's shares over the 120 trading days preceding the announcement of the Draft ESOP, being RMB5.77 per share.

   During the period from the announcement date of the Draft ESOP to the date when the underlying shares are transferred to the Plan, the purchase price of the shares shall be adjusted correspondingly for any ex-rights or ex-dividend issues of the Company, such as capitalizing capital reserves, distributing stock dividends, or paying cash dividends.

   Individuals participating in the ESOP include the directors (excluding independent directors), senior management and core employees of the Company (including its controlling subsidiaries), as well as other employees deemed necessary by the Board of Directors to be incentivized. In the course of the Company's development, the abovementioned individuals are employees who have a direct contribution or an important synergistic effect on the future development of the Company's core business, and are of great importance in achieving the Company's operational plans and medium- to longterm strategic goals.

   The transfer price and pricing methodology of the ESOP are determined on the basis of promoting the Company's long-term development and protecting shareholders' interests, reflecting confidence in the Company's future prospects and recognition of its intrinsic value, while upholding the principle of balancing incentives and constraints. The implementation of the ESOP is to better ensure the effectiveness of the ESOP in balancing incentives and constraints, further stabilize and motivate the core management team, and play a role in talent retention and long-term interest alignment, thereby promoting the sustained and stable development of the Company's business and ensuring that the interests of employees and shareholders are consistent and deeply aligned for the long term.

   In summary, in compliance with relevant laws, regulations, and normative documents, and taking into account the current competition for talent, expenses and costs associated with implementing the ESOP, and the willingness of core teams to participate, the shares of the Company will be available to the ESOP through non-trading transfer at RMB7.02 per share. Such pricing mechanism is expected to truly enhance the motivation of Participants, and effectively align the interests of the Participants with those of the Company and its shareholders, thereby promoting the achievement of the Company's overall goals.

   ‌CHAPTER V VALIDITY PERIOD, LOCK-UP PERIOD AND PERFORMANCE ASSESSMENT OF THE ESOP
   1. Validity period of the ESOP

      1. The validity period of the ESOP shall not exceed 36 months, commencing from the date on which the Draft ESOP is approved by the general meeting of the Company and the date on which the Company announced the transfer of the last tranche of the Company's shares to the ESOP. Upon expiry of the validity period, the ESOP shall be terminated, unless it is extended in accordance with the approval procedures prescribed under the ESOP.

      2. Upon expiry of the lock-up period of the ESOP, the ESOP may be terminated early when all shares held under the ESOP have been sold.

      3. Within one month prior to the expiration of the validity period of the ESOP, in case that there remains unsold shares of the Company held under the ESOP, the validity period of the ESOP may be extended subject to the approval of the Board of Directors of the Company with the consent of Holders representing more than half (excluding the stated number) of the units present at the Holders' Meeting.

      4. If, due to suspension of trading of the Company's shares or during sensitive information periods, all shares held under the ESOP cannot be sold before the expiry of the validity period, the validity period of the ESOP may be extended subject to the approval of the Board of Directors of the Company with the consent of Holders representing more than half (excluding the stated number)) of the units present at the Holders' Meeting.

1. Lock-up Period of the ESOP

   1. The Underlying Shares acquired under the ESOP shall be unlocked in two tranches with the unlocking points being 12 months and 24 months respectively from the date on which the Company announced the transfer of the last tranche of Underlying Shares to the ESOP, with the proportion of Underlying Shares unlocked in each tranche being 50% and 50%, respectively, as follows:

      Unlocking time of the first tranche: Upon expiry of 12 months from the date on which the Company announced the transfer of the last tranche of Underlying Shares to the ESOP, 50% of the total Underlying Shares held under the ESOP shall be unlocked.

      Unlocking time of the second tranche: Upon expiry of 24 months from the date on which the Company announced the transfer of the last tranche of Underlying Shares to the ESOP, 50% of the total Underlying Shares held under the ESOP shall be unlocked.

      The Underlying Shares acquired under the ESOP, and shares derived from distribution of share dividends, capitalization of capital reserves, or other similar events by the Company shall also be subject to the foregoing lock-up arrangements.

   2. Trading Restrictions of the ESOP

      The ESOP shall strictly comply with market trading rules and the relevant requirements of the CSRC and the SSE on share trading. The Company's shares shall not be traded during the following periods:

      1. Within 15 days before the announcement of the Company's annual/semiannual reports. If the announcement date of the reports is postponed due to special reasons, the period shall be calculated from the 15th day before the originally scheduled announcement date until the day before the actual announcement.

      2. Within 5 days before the announcement of the Company's quarterly reports, earnings preview and earnings snapshot.

      3. From the date a major event occurs, which may considerably affect the Company's stock price or the transaction price of its derivatives, or the date when the Company enters the decision-making process, to the date of its legal disclosure.

      4. Other periods stipulated by China Securities Regulatory Commission and Shanghai Stock Exchange.

      In the event that relevant laws, administrative regulations, departmental rules, regulatory rules, or policy documents are revised, the trading restrictions of the ESOP shall automatically be subject to the revised relevant provisions.

2. Performance Assessment of the ESOP

To ensure a balance between incentives and constraints, to take into account the incentive effect and the interests of shareholders and to fully motivate and inspire employees' initiative and enthusiasm, the ESOP establishes performance assessment indicators at the company level and individual level, the fulfillment of which shall constitute the unlocking conditions for the corresponding rights and interests.

(I) Company-Level Performance Assessment

The performance assessment year of the ESOP shall cover the two accounting years including 2025 and 2026, with one assessment to be conducted in each accounting year. The Company-level assessment indicators for each year are as follows:

Note: The above "Net profit" indicators shall be based on the audited net profit attributable to the Company's shareholders, excluding the impact of share-based payment expenses in the current year involved in all of the Company's equity incentive plans and/or ESOP within validity period.

If the Company fails to meet the above performance targets, the Holders' granted units for that period shall not be unlocked, and shall be recovered by the Management Committee and disposed of in accordance with relevant provisions, including but not limited to repurchase and cancellation by the Company, use for subsequent employee stock ownership plans/equity incentive plans, or other methods permitted by laws and regulations to dispose of the corresponding shares (the same below). Any proceeds from the disposal of the Underlying Shares (if any) shall belong to the Company. The Company shall return to the holders the sum of the original capital contribution corresponding to such units and the interest calculated at the bank's loan prime rate (LPR) for the same period, after deducting relevant taxes and fees (if the dividend amount has been distributed, the returned portion shall also deduct the dividend amount).

(II) Individual-Level Performance Assessment

Performance assessment at individual level shall be conducted under the ESOP in accordance with the Company's relevant performance assessment system. The assessment years are 2025 and2026. The number of Underlying Shares that can be unlocked by the Holder for a given period shall be determined based on the individual assessment results, as follows:

Subject to the fulfillment of the Company-level performance assessment conditions, the actual number of unlockable units for the current period shall be determined based on the Holder's performance assessment results for the assessment year:

Number of unlockable units for the current period = Number of units planned to be unlocked in the current year × Individual-level unlocking coefficient.

Subject to the achievement of the Company's performance targets, if the units planned to be unlocked for the corresponding assessment year cannot be unlocked due to the Holder's individual performance assessment results, such units shall be recovered and disposed by the Management Committee in accordance with the relevant provisions. Any proceeds from the disposal of the Underlying Shares (if any) shall belong to the Company. The Company shall return to the holders the sum of the original capital contribution corresponding to such units and the interest calculated at the bank's loan prime rate (LPR) for the same period, after deducting relevant taxes and fees (if the dividend amount has been distributed, the returned portion shall also deduct the dividend amount).