Great Wall Motor : REPURCHASE AND CANCELLATION OF CERTAIN RESTRICTED SHARES UNDER THE FIRST GRANT AND CANCELLATION OF CERTAIN SHARE OPTIONS UNDER THE FIRST GRANT

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長 城 汽 車 股 份 有 限 公 司

GREAT WALL MOTOR COMPANY LIMITED*

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

(Stock Code: 2333)

ANNOUNCEMENT

REPURCHASE AND CANCELLATION OF CERTAIN RESTRICTED

SHARES UNDER THE FIRST GRANT AND CANCELLATION OF CERTAIN

SHARE OPTIONS UNDER THE FIRST GRANT

Reference is made to the 2020 Restricted Shares and Share Options Incentive Scheme (the "2020 Incentive Scheme") which became effective on 15 April 2020 of Great Wall Motor Company Limited (the "Company") and the announcements dated 24 July 2020 and 12 March 2021 issued by the Company in relation to adjustments to the repurchase price of certain restricted shares under the first grant.

The sixteenth meeting of the seventh session of the Board was held by the Company on 31 March 2021, during which the resolution on the Repurchase and Cancellation of Certain Restricted Shares under the First Grant and Cancellation of Certain Share Options under the First Grant by the Company under the 2020 Restricted Shares and Share Options Incentive Scheme was considered and approved, and pursuant to the above resolution, due to the resignation, job rotation or demotion of certain participants, or fail of certain participants in the annual personal performance appraisal, the Company intends to repurchase and cancel certain restricted shares and share options under the 2020 Incentive Scheme in accordance with the relevant requirements of the Management Measures for Long-term Incentive Mechanism of Great Wall Motor Company Limited and the 2020 Incentive Scheme. The total number of restricted shares under the first grant intended to be repurchased is 73,900. As the Company's profit distribution for 2019 and the first three quarters of 2020 had been completed, the repurchase price of the restricted shares under the first grant to be repurchased is RMB3.84 per share, plus the interests for bank deposits for the same period (the benchmark deposit interest rate published by the People's Bank of China for the same period) in accordance with the provisions of the 2020 Incentive Scheme. The number of certain share options to be cancelled under the first grant that have been granted but not yet exercised is 1,008,383, details of which are described as follows:

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None of the participants for the proposed cancellation of restricted shares are connected persons as defined under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules"). The relevant matters are explained as follows:

I. INFORMATION ON REPURCHASE AND CANCELLATION

(I) Basis of the repurchase and cancellation of restricted shares and cancellation of share options

According to the provisions of "Handling Unusual Changes to the Participants" under Chapter 8 of the 2020 Incentive Scheme, when the labour contract of a participant is terminated or released by the Company due to resignation (except for civil incapacity arising out of work, death arising out of work and normal retirement or early retirement of a participant), or when a participant ceases to work in the listed company but still holds a position within the Group due to job rotation, the restricted shares which have been granted but not yet unlocked shall be repurchased and cancelled by the Company and the share options which have been granted but not yet exercisable shall be cancelled by the Company. Where a participant is demoted but still meets the conditions of the incentive scheme after demotion, the number of restricted shares that can be unlocked will be re-assessed based on the corresponding standards of the new post held, and the restricted shares reduced shall be repurchased and cancelled by the Company; the number of exercisable share options will also be re-assessed, and the share options reduced shall be cancelled by the Company.

According to the provisions of "Specific Contents of the Incentive Scheme" under Chapter 5 of the 2020 Incentive Scheme:

1. Personal performance appraisal requirements for restricted shares

The annual performance evaluation of participants is classified into 5 ranks, namely A, B, C, D and E, and pass or otherwise in the personal business results appraisal of participants is determined based on the following table:

Pass or otherwise		Pass			Fail
Assessment	A	B	C	D		E
Exercisable ratio		100%			0%

Where a participant receives a pass in the personal performance appraisal, the participant's business results assessment meets the standards at the personal level, and if the Company's annual business results assessment also meets the standards at the corporate level, the participant can fully unlock the entire quota for the year under the scheme; where a participant receives a fail in the personal performance appraisal, the Company will cancel the unlocking quota of the participant for the period in accordance with the provisions of the incentive scheme, and the restricted shares shall be repurchased and cancelled by the Company.

Restricted shares corresponding to the case where personal business results fail to meet the standards cannot be unlocked and unlocking cannot be postponed to the next year, and the same shall be centrally repurchased and cancelled by the Company.

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2.	Personal performance appraisal requirements for share options
	The annual performance evaluation of participants is classified into 5 ranks,
	namely A, B, C, D and E, and pass or otherwise in the personal business results
	appraisal of participants is determined based on the following table:
	Pass or otherwise		Pass			Fail
	Assessment	A	B	C	D		E
	Exercisable ratio		100%			0%

Where a participant receives a pass in the personal performance appraisal, the participant's business results assessment meets the standards at the personal level, and if the Company's annual business results assessment also meets the standards at the corporate level, the participant can fully exercise the exercisable share options for the year under the scheme; where the participant receives a fail in the personal performance appraisal, the Company will cancel the exercisable quota of the participant for the period in accordance with the provisions of the incentive scheme, and the share options shall be cancelled by the Company.

Share options corresponding to the case where personal business results fail to meet the standards cannot be exercised and exercising cannot be postponed to the next year, and the same shall be centrally cancelled by the Company.

(II) Reasons, prices and number and sources of funds for repurchase and cancellation of the restricted shares and cancellation of share options

1. Reasons for the repurchase/cancellation

(1) As 1 participant resigned prior to the expiry of the lock-up period of restricted shares and 17 participants resigned or were reassigned before the expiry of the vesting period of share options, in accordance with the provision of "Handling Unusual Changes to the Participants" under Chapter 8 of the 2020 Incentive Scheme, the above participants no longer meet the relevant conditions of the 2020 Incentive Scheme. Upon consideration and approval by the seventh session of the Board at its sixteenth meeting, the Company intends to repurchase from the above 1 participant 73,900 restricted shares in total which were granted but not yet unlocked and cancel the same; and the Company also intends to cancel 780,500 share options in total which were granted to but not yet exercised by the above 17 participants.

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1. As 4 participants were demoted before the expiry of the vesting period, in accordance with the provision of "Handling Unusual Changes to the Participants" under Chapter 8 of the 2020 Incentive Scheme, based on the corresponding standards of the new post held, the number of exercisable share options for the period was also re-assessed, and the share options reduced will be cancelled by the Company. Upon consideration and approval
   by the seventh session of the Board at its sixteenth meeting, the Company intends to cancel 36,650 share options in total reduced for the period in respect of the above 4 participants.
2. As 11 participants of share options failed in the 2020 personal performance appraisal, according to the provisions of "Specific Contents of
   the Incentive Scheme" under Chapter 5 of the 2020 Incentive Scheme, the Company intends to cancel the exercisable quota of 11 participants for the period, and the share options will be cancelled by the Company.
   Upon consideration and approval by the seventh session of the Board at its sixteenth meeting, the Company intends to cancel 191,233 share options in total which were granted to but not yet exercised by the above 11 participants for the period.

2. Repurchase price

Pursuant to relevant provisions of the 2020 Incentive Scheme, upon completion of registration of the restricted shares granted to the participants, in case of dividend distribution and other matters affecting the share price of the Company, the repurchase price of restricted shares yet to be unlocked shall be adjusted by the Company accordingly, details of which are as follows:

P=P0-V

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

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As the Company's profit distribution for 2019 and the first three quarters of 2020 had been completed, in accordance with the relevant provisions of the 2020 Incentive Scheme, the repurchase price of the restricted shares is adjusted to RMB3.84 per share, plus the interests for bank deposits for the same period (the benchmark deposit interest rate published by the People's Bank of China for the same period) in accordance with the provisions of the 2020 Incentive Scheme.

If the repurchase price has to be adjusted accordingly due to matters that require making adjustments when the repurchase of restricted shares is implemented, the Company will make corresponding adjustments based on the 2020 Incentive Scheme.

1. Repurchase number
   The total number of restricted shares intended to be repurchased and cancelled by the Company is 73,900, representing approximately 0.15% of the aggregate 48,684,300 restricted A shares of the Company under registration, and representing approximately 0.00081% of the total share capital of the Company.
   The total number of share options intended to be cancelled by the Company is 1,008,383, representing approximately 1.16% of the aggregate 86,756,200 A share options of the Company under registration, and representing approximately 0.01%of the total share capital of the Company.
2. Source of funds for repurchase
   The source of funds for the payment of repurchase of the Restricted Shares of the Company is self-financed.

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1. TABLE ON CHANGES IN SHAREHOLDING STRUCTURE
   The changes in the shareholding structure of the Company before and after the repurchase and cancellation of the Restricted Shares are as follows:

	Before the Change			After the Change
	Number	Proportion	Current	Number	Proportion
Class of securities (Unit: Share(s))	(Share)	(%)		change	(Share)	(%)
Circulating shares subject to selling
restrictions (A shares)	48,684,300		0.53		-73,900		48,610,400		0.53
Circulating shares not subject to selling
restrictions (A shares)	6,027,729,000		65.69		0		6,027,729,000		65.69
H shares	3,099,540,000		33.78		0		3,099,540,000		33.78
Total shares	9,175,953,300		100	-73,900	9,175,879,400		100

Note: The data of total shares is up to 31 March 2021

1. EFFECT OF THE REPURCHASE AND CANCELLATION ON THE COMPANY
   The repurchase and cancellation of certain Restricted Shares will not cause the shareholding structure of the Company to become ineligible for listing, will not affect the continued implementation of the 2020 Incentive Scheme of the Company, nor have a significant impact on the operating results of the Company. The management of the Company will continue to work diligently and responsibly and strive to create value for shareholders.

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IV. THE OPINION OF INDEPENDENT NON-EXECUTIVE DIRECTORS

The Independent Directors of the Company expressed their independent opinion that the Company's repurchase and cancellation of restricted shares and cancellation of share options granted to the participants who have resigned, or have been reassigned or demoted, or failed in the annual personal performance appraisal before expiry of lock-up period or vesting period were in compliance with the provisions of the Administrative Measures on Incentive Scheme of Listed Companies and the 2020 Incentive Scheme. As the Company's profit distribution for 2019 and the first three quarters of 2020 has been completed, according to the delegation of the general meetings, the repurchase price of the restricted shares under first grant to be repurchased is adjusted to RMB3.84 per share, which is in compliance with relevant requirements of 2020 Incentive Scheme of the Company. The reasons for and the number and price of repurchase and/or cancellation of the restricted shares and share options are legal and effective, which will not cause the Company's shareholding structure to become ineligible for listing, and will not affect the continued implementation of the 2020 Incentive Scheme of the Company and there will not be any prejudice to the interest of the Company and its shareholders. The Independent Directors agreed that the Company could repurchase and cancel the restricted shares issued to some participants subject to the corresponding repurchase and cancel conditions and cancel the share options granted to some participants subject to the corresponding cancel conditions.

1. EXAMINATION OPINION OF THE SUPERVISORY COMMITTEE
   The Supervisory Committee of the Company was of the view that the Company's repurchase and cancellation of restricted shares and the cancellation of share options granted to the Participants who have resigned, or have been reassigned or demoted, or failed in the annual personal performance appraisal before expiry of lock-up period or vesting period were in compliance with the provisions of the Administrative Measures on Incentive Scheme of Listed Companies and the 2020 Incentive Scheme. As the Company's profit distribution for 2019 and the first three quarters of 2020 has been completed, according to the delegation of the general meetings, the repurchase price of the Restricted Shares under first grant to be repurchased is adjusted to RMB3.84 per share, which is in compliance with relevant requirements of 2020 Incentive Scheme of the Company. The reasons for and the number and price of repurchase and/or cancellation of the restricted shares and share options are legal and effective, which will not cause the Company's shareholding structure to become ineligible for listing, and will not affect the continued implementation of the Company's 2020 Incentive Scheme and there will not be any prejudice to the interest of the Company and its shareholders. The Supervisory Committee agreed that the Company could repurchase and cancel the restricted shares issued to some participants subject to the corresponding repurchase and cancel conditions and cancel the share options granted to some participants subject to the corresponding cancel conditions.

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VI. CONCLUSIVE VIEWS OF THE LEGAL OPINION

According to the legal opinion issued by Jincheng Tongda & Neal Law Firm, Beijing regarding the repurchase and cancellation made by the Company under the 2020 Incentive Scheme, it concluded that the necessary approval and authorization in respect of the repurchase and cancellation of certain restricted shares under the first grant and cancellation of certain share options under the first grant under the 2020 Incentive Scheme have been obtained by the Company, which were in compliance with the relevant provisions of the Administrative Measures on Incentive Scheme of Listed Companies, Articles of Association of Great Wall Motor Company Limited and the 2020 Incentive Scheme.

This announcement is available on the website of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk), the website of Shanghai Stock Exchange (www.sse.com.cn) and the official website of the Company (www.gwm.com.cn).

By order of the Board

Great Wall Motor Company Limited

Xu Hui

Company Secretary

Baoding, Hebei Province, the PRC, 31 March 2021

As at the date of this announcement, members of the Board comprise:

Executive Directors: Mr. Wei Jian Jun, Ms. Wang Feng Ying and Ms. Yang Zhi Juan.

Non-executive Director: Mr. He Ping.

Independent Non-executive Directors: Ms. Yue Ying, Mr. Li Wan Jun and Mr. Ng Chi Kit.

• For identification purposes only

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