603337: Explanation on the revision of 2022 stock option and restricted stock incentive plan (Revised Draft)

Securities code: 603337 securities abbreviation: Jack Sewing Machine Co.Ltd(603337) Announcement No.: 2022-012

Jack Technology Co., Ltd

Notes on the revision of 2022 stock option and restricted stock incentive plan (Revised Draft)

The board of directors and all directors of the company guarantee that there are no false records, misleading statements or major omissions in the contents of this announcement, and bear legal responsibility for the authenticity, accuracy and integrity of its contents according to law.

Jack Technology Co., Ltd. (hereinafter referred to as “the company”) held the 23rd Meeting of the 5th board of directors and the 17th meeting of the 5th board of supervisors on January 20, 2022, deliberated and adopted the proposal on the company’s stock option and restricted stock incentive plan in 2022 (Draft) and its summary, It was posted on the website of Shanghai Stock Exchange (www.sse. Com. CN.) on January 21, 2022 And the designated media disclosed the 2022 stock option and restricted stock incentive plan (Draft) of Jack Technology Co., Ltd. (hereinafter referred to as “incentive plan (Draft)”) and its abstract and other relevant announcement documents. After comprehensive evaluation and careful consideration, the company held the 24th Meeting of the 5th board of directors and the 18th meeting of the 5th board of supervisors on February 10, 2022, considered and adopted the proposal on the company’s stock option and restricted stock incentive plan in 2022 (Revised Draft) and its summary, It is agreed to revise the relevant contents of the stock option exercise price in the incentive plan (Draft) and other relevant documents, and formulated the 2022 stock option and restricted stock incentive plan of Jack Technology Co., Ltd. (Revised Draft) (hereinafter referred to as “incentive plan (Revised Draft)”). This proposal needs to be submitted to the general meeting of shareholders of the company for deliberation. The specific amendments are as follows:

1、 Revision of exercise price of stock option

Before revision:

The exercise price of stock options is 18.17 yuan per share, that is, each share granted to the incentive object after meeting the exercise conditions

The option has the right to purchase one share of the company’s shares at the price of 18.17 yuan per share during the validity period.

Revised:

The exercise price of stock options is 19.38 yuan per share, that is, each share granted to the incentive object after meeting the exercise conditions

The option has the right to purchase one share of the company’s shares at the price of 19.38 yuan per share during the validity period.

2、 Revision of the method for determining the exercise price of stock options

Before revision:

The exercise price of stock option shall not be lower than the par value of the stock, and shall not be lower than 75% of the higher of the following prices:

(1) The average trading price of the company’s shares on the trading day before the announcement of the draft incentive plan (total trading volume of shares on the previous trading day / total trading volume of shares on the previous trading day) is 24.22 yuan per share;

(2) The average trading price of the company’s shares in the 120 trading days before the announcement of the draft incentive plan (total stock trading volume in the first 120 trading days / total stock trading volume in the first 120 trading days) is 24.12 yuan per share.

Revised:

The exercise price of stock option shall not be lower than the par value of the stock, and shall not be lower than 80% of the higher of the following prices:

(1) The average trading price of the company’s shares on the trading day before the announcement of the draft incentive plan (total trading volume of shares on the previous trading day / total trading volume of shares on the previous trading day) is 24.22 yuan per share;

(2) The average trading price of the company’s shares in the 120 trading days before the announcement of the draft incentive plan (total stock trading volume in the first 120 trading days / total stock trading volume in the first 120 trading days) is 24.12 yuan per share.

3、 Amendments to share based payment fees

Before revision:

According to the relevant provisions of the accounting standards for Business Enterprises No. 11 – share based payment, the company will, on each balance sheet date of the waiting period, revise the number of stock options that are expected to be exercisable according to the latest changes in the number of exercisable persons, the completion of performance indicators and other follow-up information, and according to the fair value on the date of grant of stock options, The services obtained in the current period shall be included in relevant costs or expenses and capital reserve.

Assuming that the company grants stock options in March 2022, the amortization of the cost of some stock options granted for the first time in 2022-2025 is shown in the following table:

Total expenses to be amortized for shares granted for the first time 2022 2023 2024 2025

Number of options (10000 copies) (10000 yuan) (10000 yuan) (10000 yuan) (10000 yuan) (10000 yuan)

385.70 2,818.31 1,312.08 957.37 480.55 68.31

Note: 1. The above results do not represent the final accounting cost. The actual accounting cost is not only related to the actual grant date, exercise price and grant quantity, but also related to the actual effective and invalid quantity. At the same time, shareholders are reminded of the possible dilution impact.

2. The final result of the above impact on the company’s operating results will be subject to the annual audit report issued by the accounting firm.

3. The difference in mantissa between the sum of the above total and each detailed number is caused by rounding.

Assuming that the company grants restricted shares in March 2022, the amortization of the cost of restricted shares from 2022 to 2025 is shown in the following table:

Total expenses to be amortized for the first grant of restricted shares (10000 yuan, 2022, 2023, 2024, 2025)

Quantity (ten thousand shares) (ten thousand yuan) (ten thousand yuan) (ten thousand yuan) (ten thousand yuan) (ten thousand yuan)

385.70 4,686.26 2,278.04 1,562.09 741.99 104.14

Note: 1. The above results do not represent the final accounting cost. The actual accounting cost is not only related to the actual grant date, grant price and grant quantity, but also related to the actual effective and invalid quantity. At the same time, shareholders are reminded of the possible dilution impact.

2. The final result of the above impact on the company’s operating results will be subject to the annual audit report issued by the accounting firm.

3. The difference in mantissa between the sum of the above total and each detailed number is caused by rounding.

The total amortization expenses of the stock options granted for the first time and the restricted shares granted for the first time in the incentive plan are predicted as follows:

Total expenses to be amortized 2022 2023 2024 2025

(ten thousand yuan) (ten thousand yuan) (ten thousand yuan) (ten thousand yuan) (ten thousand yuan)

7,504.56 3,590.12 2,519.46 1,222.54 172.45

Based on the current information, the company preliminarily estimates that the amortization of stock options and restricted stock expenses will have an impact on the net profit of each year within the validity period without considering the incentive effect of the incentive plan on the company’s performance.

If we consider the positive effect of the incentive plan on the development of the company, so as to stimulate the enthusiasm of the management team and improve business efficiency, the improvement of the company’s performance brought by the incentive plan will be much higher than the increase of expenses brought by it.

Revised:

According to the relevant provisions of the accounting standards for Business Enterprises No. 11 – share based payment, the company will, on each balance sheet date of the waiting period, revise the number of stock options that are expected to be exercisable according to the latest changes in the number of exercisable persons, the completion of performance indicators and other follow-up information, and according to the fair value on the date of grant of stock options, The services obtained in the current period shall be included in relevant costs or expenses and capital reserve.

Assuming that the company grants stock options in March 2022, the amortization of the cost of some stock options granted for the first time in 2022-2025 is shown in the following table:

Total expenses to be amortized for shares granted for the first time 2022 2023 2024 2025

Number of options (10000 copies) (10000 yuan) (10000 yuan) (10000 yuan) (10000 yuan) (10000 yuan)

385.70 2,495.48 1,146.39 853.04 434.17 61.88

Note: 1. The above results do not represent the final accounting cost. The actual accounting cost is not only related to the actual grant date, exercise price and grant quantity, but also related to the actual effective and invalid quantity. At the same time, shareholders are reminded of the possible dilution impact.

2. The final result of the above impact on the company’s operating results will be subject to the annual audit report issued by the accounting firm.

3. The difference in mantissa between the sum of the above total and each detailed number is caused by rounding.

Assuming that the company grants restricted shares in March 2022, the amortization of the cost of restricted shares from 2022 to 2025 is shown in the following table:

Total expenses to be amortized for the first grant of restricted shares (10000 yuan, 2022, 2023, 2024, 2025)

Quantity (ten thousand shares) (ten thousand yuan) (ten thousand yuan) (ten thousand yuan) (ten thousand yuan) (ten thousand yuan)

385.70 4,686.26 2,278.04 1,562.09 741.99 104.14

Note: 1. The above results do not represent the final accounting cost. The actual accounting cost is not only related to the actual grant date, grant price and grant quantity, but also related to the actual effective and invalid quantity. At the same time, shareholders are reminded of the possible dilution impact.

2. The final result of the above impact on the company’s operating results will be subject to the annual audit report issued by the accounting firm.

3. The difference in mantissa between the sum of the above total and each detailed number is caused by rounding.

The total amortization expenses of the stock options granted for the first time and the restricted shares granted for the first time in the incentive plan are predicted as follows:

Total expenses to be amortized 2022 2023 2024 2025

(ten thousand yuan) (ten thousand yuan) (ten thousand yuan) (ten thousand yuan) (ten thousand yuan)

7,181.74 3,424.43 2,415.13 1,176.16 166.02

Based on the current information, the company preliminarily estimates that the amortization of stock options and restricted stock expenses will have an impact on the net profit of each year within the validity period without considering the incentive effect of the incentive plan on the company’s performance. If we consider the positive effect of the incentive plan on the development of the company, so as to stimulate the enthusiasm of the management team and improve business efficiency, the improvement of the company’s performance brought by the incentive plan will be much higher than the increase of expenses brought by it.

The relevant parts of the 2022 stock option and restricted stock incentive plan (Draft) of Jack Technology Co., Ltd. related to the above statements have been revised simultaneously. See the company’s website at Shanghai Stock Exchange (www.sse. Com. CN.) Summary announcement of 2022 stock option and restricted stock incentive plan of Jack Technology Co., Ltd. (Revised Draft) disclosed.

In view of the above amendments, the proposal on the company’s stock option and restricted stock incentive plan in 2022 (Draft) > and its summary, which was deliberated and adopted at the 23rd Meeting of the 5th board of directors and the 17th meeting of the 5th board of supervisors, will not be submitted to the general meeting of shareholders for deliberation.

It is hereby announced.

Board of directors of Jack Technology Co., Ltd

February 11, 2022

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