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Extraordinary Announcement

Announcement on Resolutions of the Thirty Third Meeting of the Sixth Board of Di

2011-12-2710685次
Stock Codes: 600801, 900933  Stock Abbreviations: Huaxin Cement, Huaxin B Share  Ref: Lin 2011-028
 
Huaxin Cement Co., Ltd.
Announcement on Resolutions of the Thirty Third Meeting of the Sixth Board of Directors
 
To the best of our knowledge, the Board of Directors of the Company and its members confirm that there is no material false or misleading statement or material omission in this announcement and shall be severally and jointly liable for the truthfulness, accuracy and completeness of its content.
 
The Thirty Third Meeting of the Sixth Board of Directors of Huaxin Cement Co., Ltd. (hereinafter called “the Company”) was convened on Dec 26, 2011 in circular resolution.  All the 9 Directors reviewed the proposal of this Meeting.  The Company sent the Meeting Notification to all the Directors on Dec 19, 2011 by fax.  The Meeting was in compliance with the provisions contained in relevant laws, rules and regulations and the Articles of Association of the Company, so it was legitimate and valid.
 
Through reviewing and voting, this Board Meeting adopted the Performance Unit Incentives Plan of Huaxin Cement Co., Ltd. (Voting result: affirmative 6, negative 0, abstention: 0)
 
Mr. Chen Musen, Mr. Li Yeqing and Mr. Ji Changhua are the beneficiaries of the Performance Unit Incentives Plan of Huaxin Cement Co., Ltd., so they have abstained from voting.  The rest 6 Directors have all agreed this proposal.
 
For detailed information, please refer to the Annex.
 
The Performance Unit Incentives Plan of Huaxin Cement Co., Ltd. is yet to be submitted to the Shareholders’ General Meeting for approval.  Regarding the convening of the Shareholders’ General Meeting, the Board of the Company shall disclose the announcement according to the relevant procedures.
 
 
It is herewith announced.
 
Huaxin Cement Co. Ltd.
Board of Directors
Dec 27, 2011
 

Performance Unit Incentives Plan of Huaxin Cement Co., Ltd.
 
Connotation
The following words shall have the following connotation if there is no special specification:
 
Huaxin Cement, company
Refers to
Huaxin Cement Co., Ltd.
This plan, this incentives plan
Refers to
Performance unit incentives plan of Huaxin Cement Co., Ltd.
Performance unit
Refers to
Unit that represents certain amount in this plan
Incentives object
Refers to
Personnel that obtains performance unit according to this plan
Senior Management
Refers to
President, vice president, financial Director, Board secretary of Huaxin Cement
Target value of performance unit
Refers to
Target amount represented by every performance unit, the target value of the performance unit in the initial plan is the accumulated EPS of Huaxin Cement in 2011-2013
Actual value of performance unit
Refers to
Actual amount represented by every performance unit, the actual value of the performance unit in the initial plan is the actual accumulated EPS of Huaxin Cement in 2011-2013
Granting quantity of performance unit
Refers to
At the beginning of the period, the quantity of performance unit granted to the incentives object
Attribution quantity of performance unit
Refers to
At the end of the period, the quantity of the performance unit that belongs to the incentives object, which is the granting quantity of performance unit multiplied by achievement multiplier
Total granting value of individual performance unit
Refers to
Product of granting quantity of individual performance unit and target value of performance unit
Total attribution value of individual performance unit
Refers to
Product of attribution quantity of individual performance unit and actual value of performance unit
Performance multiplier
Refers to
Intermediate factor for the performance result to act on the attribution quantity of performance unit
Performance assessment period, 2011-2013
Refers to
2011 financial year to 2013 financial year
Threshold value
Refers to
The payment threshold of performance unit, the performance unit can be paid only when the achievement indicators of the performance unit reaches the threshold value; the payment amount of the performance unit shall be zero if the achievement indicators cannot reach the threshold value
Granting day
Refers to
Date when the Company grants the incentives object with performance unit
Financial year, year
Refers to
January 1~December 31 of a calendar year
Shareholders’ General Meeting
Refers to
Shareholders’ General Meeting of Huaxin Cement
Board
Refers to
Board of Huaxin Cement
The Remuneration Committee of the Board
Refers to
Remuneration and Appraisal committee of the Board of Huaxin Cement
Yuan
Refers to
RMB Yuan
 

Chapter I General Principles

 
Article 1 Objective and starting point to develop this plan:
(1) Base on the medium and long-term development objective of the Company, and closely combine the performance with remuneration;
(2) Attract, inspire, retain the executives and core personnel of Huaxin Cement through incentives mechanism;
(3) Further improve the consistency of the interests of key staff, Director and shareholder.
 

Chapter II Incentives Tool—Performance Unit

 
Article 2 The performance unit plan is an incentives plan to reward according to the achievement completed at a specific performance assessment stage. The unit quantity or unit value will be changed according to the performance completion. The quantity result of performance unit in the initial plan will be confirmed according to the performance assessment result of the Company or business unit/region and individual in 2011-2013, and the actual value of performance unit will be the actual EPS accumulated in 2011-2013.
 
Article 3 The performance assessment period covered by this plan is from 2011 financial year to 2013 financial year. The whole plan is based on the realization of the strategic objective of the Company in the three years.
 
Article 4 Plan framework:
(1) After this plan is approved at the Shareholders’ General Meeting, the Shareholders’ General Meeting will authorize the Board to confirm the granting date of performance unit, and the Company will grant the incentives object with certain amount of performance unit.
(2) For the initial performance unit, in early 2014, the performance completion situation during the performance assessment period (2011-2013) will be assessed, according to the realization degree of the performance assessment indicators of the Company or business unit/region in 2011-2013 confirmed by the Board and the performance assessment situation of individual staff, the attribution quantity of performance unit of incentives object and actual value of performance unit will be confirmed, the product of the two will be the total attribution value of the individual performance unit of the incentives object, and the Company will realize the performance unit income obtained by the incentives object by cash.
(3) This performance unit incentive plan is the sustainable long-term incentive measures for the management team and core backbone of Huaxin Cement. The Shareholders’ General Meeting authorizes the Remuneration Committee of the Board to review the incentive plan every three years and propose the implementation scheme of the performance unit incentive plan that covers the next three years, including relevant company performance assessment indicators, etc.
 

Chapter III Scope of Incentives Object

 
Article 5 The scope of incentives object granted by this plan includes:
(1) Full-time Director, Supervisor of Huaxin Cement.
2. Senior Management of Huaxin Cement;
3. Core professional talent and management backbone with direct influence on the overall performance and sustainable development of Huaxin Cement, mainly including:
1) Assistant vice president;
2) Personnel at the level of Director;
3) Part of nominated personnel at the level of manager and Supervisor.
4) Other core professional talent and management backbone with direct influence on the overall achievement and sustainable development of the Company.
The aforesaid incentives object is required to continuously work for more than one year in Huaxin Cement till the granting day.
 
Article 6 The specific list of incentive object granted by the initial performance unit plan is confirmed by the Remuneration Committee of the Board authorized by the Shareholders’ General Meeting within the aforesaid incentive objective scope.
 

Chapter IV Confirmation of Granting Quantity of Performance Unit

 
Article 7 The granting quantity of individual performance unit is confirmed by the total granting value of individual performance unit and target value of performance unit, and the specific formula is:
Granting quantity of individual performance unit= total granting value of individual performance unit/target value of performance unit
 
Article 8 The total granting value of individual performance unit is calculated through confirming the different proportions of the total granting value of individual performance unit in the total remuneration according to different levels of the incentives object, the proportion range from 20% to 40%.
Above total remuneration including base salary, annual target cash bonus and long term incentive.
The specific value of incentive object granted under the initial performance unit plan will be confirmed by the Remuneration Committee of the Board authorized by the Shareholders’ General Meeting within the aforesaid principle.
 
Article 9 The target value of performance unit is the accumulated target EPS of Huaxin Cement in 2011-2013 confirmed by the Board.
 

Chapter V Performance Assessment Requirement

 
Article 10 The Remuneration Committee of the Board selects the specific performance assessment indicators linked with the initial performance unit plan according to the planning and strategic of Huaxin Cement in 2011~2013, and decides the attribution quantity of the granted performance unit through the achievement multiplier confirmed according to the realization degree of the indicators and the performance assessment result of the individual staff.
 
Article 11 The achievement multiplier that affects the attribution quantity of performance unit is decided by the performance assessment of the Company or business unit/region, and individual performance assessment, in which the performance assessment of the Company or business unit/region aims at the realization of the planning and strategic key objective of Huaxin Cement in 2011~2013, the individual assessment is linked with the individual comprehensive assessment result in the three years, and the specific formula for confirming the achievement multiplier:
Achievement multiplier= (performance assessment multiplier of the Company or business unit/region) *individual performance assessment multiplier
 
Article 12 The confirmation of the performance assessment multiplier of the Company or business unit/region is as follows:
Completion rate of performance objective of the Company or business unit/region K
Performance assessment multiplier of the Company or business unit/region
K<80%
0
80%≤K<150%
K
K ≥150%
1.5
 
Article 13 The performance assessment matrix of the Company or business unit/region is as follows:
Incentives object
Company performance assessment weight
 Performance assessment weight of business unit/region
Company Board chairman, CEO and headquarters incentives object without taking charge of business unit or region
100%
0%
The Company vice president in charge of business unit or region
40%
60%
Business or region incentives object
0%
100%
Besides being affected by the attribution quantity of performance unit confirmed by the achievement multiplier, the total attribution value of performance unit granted to all incentives objects is also affected by the actual value of performance unit confirmed by the actual accumulated EPS of Huaxin Cement in 2011-2013.  Therefore, in the table above, the Company performance is not assessed to the business unit or region incentives object, however, the total attribution value of actual performance unit is still directly linked with the overall company performance.
 
The Company performance assessment indicators and assessment weight are as follows, all covers the performance result from 2011-2013 years:
Performance assessment standard
Assessment weight
Performance assessment objective
Average annual growth rate of sales revenue
25%
20%
Average annual growth rate of EBITDA
25%
25%
Average annual ROE rate
25%
Exceed the average level of cement industry
Average net cash flow liability rate
(Cash Flow/ Net Financial Debt Ratio)
25%
Exceed the average level of cement industry
 
The specific benchmarking company in the cement industry in the table above is confirmed by the Board Remuneration Committee authorized by the Shareholders’ General Meeting every year according to the Company strategic objective, change of industrial company.
The weighing basis for performance assessment of business unit or region is the performance of business unit/region, the specific indicators and assessment weight, assessment objective are developed by the Company president, reported to the Board for approval and the specific performance agreement is signed with the incentives object for implementation.
 
Article 14 Considering that this plan is mainly based on the long-term performance assessment of the Company or business unit/region in the three years, the requirement on individual performance assessment is simple, the individual annual comprehensive assessment result in the three years is qualified, and the confirmation of individual performance assessment multiplier is as follows:
Individual annual comprehensive assessment result in 2011-2013
Unqualified
Qualified and above
Individual performance assessment multiplier
0
1
 

Chapter VI Realization of Incentives Income

 
Article 15 For the initial performance unit, in early 2014, the performance completion situation during the performance assessment period (2011-2013) will be assessed, according to the realization degree of the performance assessment indicators of the Company or business unit/region in 2011-2013 confirmed by the Board and the performance assessment situation of individual staff, the attribution quantity of performance unit of incentives object and actual value of performance unit will be confirmed, the product of the two will be the total attribution value of the individual performance unit of the incentives object, and the Company will realize the performance unit income obtained by the incentives object by cash. The specific calculation formula is:
Total attribution value of individual performance unit= granting quantity of individual performance unit *achievement multiplier *actual value of performance unit
 

Chapter VII Treatment of Incentives Plan When Company, Incentives Object Have Important Issues

 
Article 16 Treatment of special situation when relevant condition changes
When the modification, merger, split of company control right occur; the shareholder increases the capital income outside the plan; the market external environment has significant change and other special situation, etc., the Shareholders’ General Meeting shall authorize the Board to confirm the continuous execution, revision, suspension or termination of this plan according to the change degree of relevant condition.
 
Article 17 Treatment when the incentives object has position modification, dismission or death
(1) In the following situation, the performance unit granted to the incentives object is not changed:
1) The position of incentives object is changed, but is still within the scope of incentives object confirmed by this plan, and in the same internal level;
2) Other circumstance recognized by the Company Board.
 
(2) In the following situation, the performance unit granted to incentives object but not realized shall be cancelled:
1) The position modification caused for the incentives object is incompetent to the position, professional ethics, reveals company secret, neglects or breaches duties, which seriously damages the Company interest or reputation;
2) The incentives object is dismissed for violating against laws, professional ethics, revealing company secret, neglecting or breaching duties, which seriously damages the Company interest or reputation;
3) The incentives object leaves the office due to resignation;
4) Other circumstance recognized by the Company Board.
 
(3) In the following situation, for the performance unit granted to the incentives object but not realized, the specific payment standard shall be confirmed by the Board according to the actual situation and relevant laws:
1) The position of incentives object is changed, but is still within the scope of incentives object confirmed by this plan, but in the different internal level;
2) The position of incentives object is changed, and the new position is not within the scope of incentives object confirmed by this plan;
3) The incentives object leaves the office for reaching the retirement age regulated by the country and company;
4) The incentives object dies or loses labor ability due to exercising the duty;
5) Other circumstance recognized by the Company Board.
 

Chapter VIII Supplementary Articles

 
Article 18 The Remuneration Committee of the Board will draw a detail plan of implementation, which will include the internal management process and other specific provisions for implementation.
 
Article 19 The implementation of finance, accounting treatment and tax, etc. in this plan shall be executed according to relevant laws, financial system, accounting standard, and tax system.
 
Article 20 The payable individual income tax due to this plan shall be executed according to relevant national laws.
 
Article 21 The right to interpret this incentives plan belongs to the Remuneration Committee of the Board. 
 
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