Fanhua Inc. announced that a company created for the benefit of certain key employees and sales agents has purchased 7.5 million American depositary shares under Fanhua's share purchase plan as of Oct. 10.

The so-called 521 development plan was set up in June and expanded in August and is designed to allow for shares to be given to certain key employees and then locked up for five years, to be released subject to the employees meeting performance targets.

Fanhua Employees Holdings Ltd. and other employee groups have agreed to purchase 8.5 million depositary shares for $29 apiece. One depositary share is equal to 20 ordinary shares.

Fanhua Employees Holdings owns 11.6% of Fanhua's outstanding shares upon completion of the share transfer.

Additionally, CEO and Chairman Chunlin Wang bought 800,000 depositary shares, while CFO Peng Ge purchased 200,000 depositary shares, for $29 each using their personal funds. Wang raised his stake in the company to 3.0% from 1.8%, and Ge increased his holding to 3.8% from 3.5%.

The shares were purchased from Master Trend Ltd., a vehicle 100% owned by Fanhua co-founder Qiuping Lai.