On September 22, 2014, the Shanghai Stock Exchange promulgated the Work Guidelines for the Disclosure of Employee Stock Option Plans by Listed Companies (hereinafter, the "Guidelines"). Consisting of five sections, namely, the General Provisions, the Formulation of Employee Stock Option Plans, the Implementation of Employee Stock Option Plans, and Other Requirements and Supplemental Provisions, the Guidelines came into effect on the day of their promulgation.

With respect to the formulation of an employee stock option plan, the Guidelines provide that an employee stock option plan of a listed company shall be approved by the board of directors and the shareholders' meeting with opinions solicited in the employees' representatives' meeting, and that relevant directors and shareholders involving in the employee stock option plan shall recuse themselves. In addition, a listed company shall retain a law firm to issue and release a legal opinion regarding the legality of the employee stock option plan and its relevant matters as well as the performance of necessary polices and the review procedure. After the employee stock option plan of a listed company is approved by its shareholders' meeting, the company shall timely announce the resolution adopted during its shareholders' meeting and disclose the full text of the employee stock option plan as adopted on the website of the Shanghai Stock Exchange.

With respect to the implementation of the employee stock option plan, the Guidelines stipulate that a listed company may implement its employee stock option plan via multiple approaches such as secondary market purchase, buyback, non-public offering, and voluntary granting of shares by shareholders. However, the obligation to timely disclose information shall be performed pursuant to law. A listed company seeking to amend or terminate an employee stock option plan shall carry out decision-making procedures such as the plan holders' meeting, the board meeting and shareholders' meeting and make timely disclosure. In addition, a listed company shall disclose the number of shares held under the employee stock option plan six months prior to the expiration of the plan. If an employee stock option plan is to be extended after its expiration, the listed company shall conduct the corresponding decision-making procedures and make timely disclosure.