Foshan Haitian Flavouring and Food Company Ltd. (Haitian Flavouring) has approved a draft 2026 A-Share Employee Stock Ownership Scheme (ESOS) at its 12th Board meeting held on 26 March 2026. Implementation remains subject to shareholder approval at an upcoming general meeting.

The plan will deploy up to RMB184.35 million sourced entirely from the company’s dedicated incentive fund. No leverage, external subsidies or guarantees will be used.

Shares for the ESOS will come from Haitian Flavouring’s treasury stock. The company completed a buy-back programme on 31 October 2024, having repurchased 15.29 million A shares at an average price of RMB36.87, spending RMB563.65 million. Of these, 5.00 million shares—priced at the same RMB36.87 average—are earmarked for the scheme. Aggregate ESOS holdings are capped at 10% of the company’s total share capital, while each individual’s allocation is limited to 1%.

Participation is open to no more than 800 employees, including six directors and senior executives—Dai Wen, Gui Junqiang, Liu Zhiqing, Xia Zhendong, Li Jun and Ke Ying—whose combined stake under the plan cannot exceed 15%. Shareholders holding 5% or more of the company and the actual controller are excluded.

The ESOS has a 36-month term beginning when the final share transfer to the scheme is disclosed. All shares will be subject to a 12-month lock-up from that date. Vesting is linked to both corporate and individual performance during 2026-2027. For directors, senior management and specified business leaders (Category I participants), vesting requires the company to achieve a compound annual growth rate of at least 11.5% in net profit attributable to the parent by 2027 versus the 2025 base year. Other employees (Category II) are assessed solely on individual performance and contribution.

Under Hong Kong’s Listing Rules, the ESOS is classified as a share scheme under Chapter 17 and a connected transaction under Chapter 14A due to director participation; however, it benefits from exemptions that remove additional reporting and independent shareholder approval requirements. A circular containing full details and the notice of the shareholders’ meeting will be issued in due course.