Notice of Beijing Zhonglun law firm on Tonghua Dongbao Pharmaceutical Co.Ltd(600867) incentive share price adjustment and repurchase cancellation
Legal opinion
November, 2001
catalogue
1、 The approval and authorization of this price adjustment and this cancellation 2. Details of this price adjustment 4 III. details of this cancellation 5 IV. conclusion five
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Website: www.zhonglun.com com.
Beijing Zhonglun law firm
About Tonghua Dongbao Pharmaceutical Co.Ltd(600867)
Incentive share price adjustment and repurchase cancellation
Legal opinion
To: Tonghua Dongbao Pharmaceutical Co.Ltd(600867)
Beijing Zhonglun law firm (hereinafter referred to as “the firm”) has accepted the entrustment of Tonghua Dongbao Pharmaceutical Co.Ltd(600867) (hereinafter referred to as ” Tonghua Dongbao Pharmaceutical Co.Ltd(600867) ” and “the company”) to act as the special legal adviser on matters related to the company’s 2020 stock option and restricted stock incentive plan (hereinafter referred to as “the incentive plan” or “the incentive plan”).
In accordance with the company law of the people’s Republic of China, the securities law of the people’s Republic of China, the measures for the administration of equity incentive of listed companies (hereinafter referred to as the “measures”) and other relevant laws, regulations and normative documents, and in accordance with the business standards, ethics and diligence recognized by the lawyer industry, The lawyer of this firm issues this legal opinion on the price adjustment of this equity incentive plan (hereinafter referred to as “this price adjustment”) and the cancellation and repurchase of some options and restricted shares (hereinafter referred to as “this cancellation”).
The firm and its lawyers have obtained the following guarantee from the company: they have provided the firm with relevant information and documents (including but not limited to the original written materials, copy materials or oral testimony, etc.) about this price adjustment and this cancellation, and ensure that the originals of the documents and materials provided are true, the copies or copies are consistent with the originals or originals, and the signatures and The seals are authentic and the signatories of such documents are legally authorized to sign the documents effectively; Guarantee the authenticity, accuracy and completeness of the information and documents provided, and ensure that there are no false records, misleading statements or major omissions, and bear individual and joint legal liabilities.
With regard to this legal opinion, our lawyer makes the following statement:
1. This legal opinion is issued in accordance with the applicable Chinese laws, regulations and normative documents based on the facts that have occurred or existed before the date of issuance of this legal opinion.
2. Our firm and our lawyers’ understanding of the relevant facts involved in this legal opinion ultimately depends on the documents, materials and statements provided by the company to our firm and our lawyers, and the company has guaranteed its authenticity, completeness and accuracy to our firm and our lawyers.
3. We and our lawyers are convinced that there are no false records, misleading statements and major omissions in this legal opinion.
4. This legal opinion only expresses opinions on the legal issues related to this price adjustment and this cancellation. The exchange and the handling lawyer are not qualified to express professional opinions on professional matters such as accounting and auditing. When accounting and audit matters are involved in this legal opinion, they are quoted in strict accordance with the professional documents and company instructions issued by relevant intermediaries.
5. We and our lawyers agree to submit this legal opinion as a necessary legal document for this price adjustment and this cancellation together with other materials, and are willing to bear corresponding legal liabilities for this legal opinion.
6. The firm and its lawyers agree that the company shall quote the relevant contents of this legal opinion in the relevant documents prepared for this price adjustment and this cancellation, but when the company makes the above quotation, it shall not cause legal ambiguity or misinterpretation due to the quotation. The company has the right to review and confirm the corresponding contents of the above relevant documents again.
7. This legal opinion is only for the purpose of this price adjustment and this cancellation, and shall not be used for any other purpose without the written consent of the exchange and its lawyers.
8. The company has carefully read this legal opinion and confirmed that the facts quoted or cited in this legal opinion are true, accurate and complete without any false or misleading statements or conclusions.
Based on the above, the exchange issues the following legal opinions on Tonghua Dongbao Pharmaceutical Co.Ltd(600867) this price adjustment and this cancellation:
1、 Approval and authorization of this price adjustment and this cancellation
1. On September 29, 2020, The sixth meeting of the 10th board of directors deliberated and adopted the proposal on the incentive plan for stock options and restricted stocks in 2020 (Draft) and its summary, the proposal on the measures for the implementation and assessment of the incentive plan for stock options and restricted stocks in 2020, and Proposal on requesting the general meeting of shareholders to authorize the board of directors to handle matters related to the company’s 2020 stock option and restricted stock incentive plan.
2. On September 29, 2020, Tonghua Dongbao Pharmaceutical Co.Ltd(600867) independent directors expressed their independent opinions on the Tonghua Dongbao Pharmaceutical Co.Ltd(600867) 2020 stock option and restricted stock incentive plan (Draft).
3. On September 29, 2020, the sixth meeting of the 10th board of supervisors deliberated and adopted the proposal on Tonghua Dongbao Pharmaceutical Co.Ltd(600867) 2020 stock option and restricted stock incentive plan (Draft) and its summary, the proposal on Tonghua Dongbao Pharmaceutical Co.Ltd(600867) 2020 stock option and restricted stock incentive plan implementation assessment management measures Proposal on verifying the list of incentive objects in Tonghua Dongbao Pharmaceutical Co.Ltd(600867) 2020 stock option and restricted stock incentive plan (Draft).
4. On October 24, 2020, the board of supervisors of the company issued the explanation and review opinions of the board of supervisors on the publicity of the list of incentive objects of the company’s 2020 stock option and restricted stock incentive plan.
5. On October 30, 2020, The second extraordinary general meeting of shareholders in Tonghua Dongbao Pharmaceutical Co.Ltd(600867) 2020 deliberated and approved the proposal on Tonghua Dongbao Pharmaceutical Co.Ltd(600867) 2020 stock option and restricted stock incentive plan (Draft) and its summary, the proposal on Tonghua Dongbao Pharmaceutical Co.Ltd(600867) 2020 stock option and restricted stock incentive plan implementation assessment management measures, and Proposal of the board of directors on the authorization of stock options and related matters in 2020.
6. On November 26, 2020, the 9th meeting of the 10th board of directors of the company deliberated and approved the proposal on adjusting the list and number of incentive objects granted under the 2020 stock option and restricted stock incentive plan and the proposal on granting stock options and restricted stocks to the incentive objects of the company’s 2020 stock option and restricted stock incentive plan.
7. On November 26, 2020, the 8th meeting of the 10th board of supervisors of the company deliberated and approved the proposal on adjusting the list and number of incentive objects granted under the 2020 stock option and restricted stock incentive plan and the proposal on granting stock options and restricted stocks to the incentive objects of the company’s 2020 stock option and restricted stock incentive plan.
8. On November 26, 2020, the independent directors of the company expressed their independent opinions on the relevant matters of this adjustment and this grant, agreed that the grant date of the company’s incentive plan was November 26, 2020, and agreed to grant 53.235 million stock options to 378 incentive objects who met the grant conditions, with an exercise price of 14.31 yuan / share; 6.99 million restricted shares were granted to 92 incentive objects who met the grant conditions, and the grant price was 8.50 yuan / share.
9. On November 23, 2021, the 21st Meeting of the 10th board of directors of the company deliberated and approved the proposal on adjusting the exercise price of stock option and restricted stock incentive plan and the grant price of restricted stock in 2020, and the proposal on canceling some stock options that have not been exercised in 2020 stock option and restricted stock incentive plan Proposal on the repurchase and cancellation of some unlocked restricted shares under the 2020 stock option and restricted stock incentive plan.
10. On November 23, 2021, the 14th meeting of the 10th board of supervisors of the company deliberated and adopted the proposal on adjusting the exercise price of stock option and restricted stock incentive plan and the grant price of restricted stock in 2020, and the proposal on canceling some stock options that have not been exercised in 2020 stock option and restricted stock incentive plan Proposal on the repurchase and cancellation of some unlocked restricted shares under the 2020 stock option and restricted stock incentive plan.
11. On November 23, 2021, the independent directors of the company issued independent opinions and agreed that the board of directors of the company would adjust the exercise price of stock options and the repurchase price of restricted shares, and agreed that the company would repurchase and cancel some restricted shares and cancel some stock options.
In conclusion, our lawyers believe that the price adjustment and cancellation have obtained the necessary approval and authorization at this stage, and comply with the relevant provisions of the administrative measures and the Tonghua Dongbao Pharmaceutical Co.Ltd(600867) 2020 stock option and restricted stock incentive plan (hereinafter referred to as the “incentive plan”).
2、 Details of this price adjustment
According to the incentive plan, during the period from the date of announcement of the plan to the completion of the exercise of stock options by the incentive object, if the company has matters such as conversion of capital reserve into share capital, distribution of stock dividends, stock subdivision, allotment or reduction of shares, dividend distribution, etc., the exercise price of stock options will be adjusted accordingly. After the restricted shares granted to the incentive object are registered, if the company has matters that affect the total amount of the company’s share capital or the company’s stock price, such as the conversion of capital reserve into share capital, the distribution of stock dividends, the division of shares, the allotment or reduction of shares, and the distribution of dividends, the company shall adjust the repurchase price of the restricted shares that have not been lifted.
(I) method of this price adjustment
1. Adjustment of exercise price of stock options
After the occurrence of dividend distribution, the company shall adjust the exercise price in the following ways:
P＝P0-V
Where: P0 is the exercise price before adjustment; V is the dividend per share; P is the adjusted exercise price. After dividend adjustment, P must still be positive.
2. Adjustment of repurchase price of restricted shares
After the occurrence of dividend distribution, the company adjusts the repurchase price of restricted shares in the following ways:
P＝P0-V
Where: P0 is the repurchase price of restricted shares per share before adjustment; V is the dividend per share; P is the adjusted repurchase price of restricted shares per share. After dividend adjustment, P must still be greater than 1.
(II) specific contents of this price adjustment
On May 7, 2021, the company held the 2020 annual general meeting of shareholders, reviewed and approved the 2020 profit distribution plan, and agreed to distribute cash dividends of RMB 2.10 (including tax) to all shareholders for every 10 shares. The company has completed the 2020 profit distribution plan on May 31, 2021.
According to the above adjustment method and Tonghua Dongbao Pharmaceutical Co.Ltd(600867) the authorization of the general meeting of shareholders to the board of directors, the board of directors of the company decided to adjust the exercise price of stock options and the repurchase price of restricted shares. After this adjustment, the exercise price of stock options is adjusted from 14.31 yuan / share to 14.10 yuan / share; The repurchase price of restricted shares was adjusted from 8.50 yuan / share to 8.29 yuan / share.
In conclusion, our lawyers believe that the contents of this price adjustment comply with the relevant provisions of the management measures and the incentive plan.
3、 Details of this cancellation
(I) cancellation of stock options
According to the incentive plan, Wang Mingyan and other 13 incentive objects of stock options resigned for personal reasons and did not meet the incentive conditions. The board of directors of the company decided to cancel a total of 1.44 million stock options granted but not exercised.
After the cancellation, the incentive objects of stock options were adjusted from 378 to 365, and the stock options were adjusted from 53.235 million to 51.795 million.
(II) repurchase and cancellation of restricted shares
According to the incentive plan, seven restricted stock incentive objects, including Wang Mingyan, resigned for personal reasons and did not meet the incentive conditions. The board of directors of the company decided to repurchase and cancel all the restricted shares granted but not lifted.
The number of restricted shares repurchased this time is 400000, and the repurchase price is 8.29 yuan / share. After the cancellation of this repurchase, the incentive objects of restricted shares were adjusted from 92 to 85, and the restricted shares were adjusted from 6.99 million shares to 6.59 million shares. The repurchase price of restricted shares is the company’s own funds.
In conclusion, our lawyers believe that the contents of this cancellation comply with the relevant provisions of the management measures and the incentive plan.
4、 Conclusion
In conclusion, our lawyers believe that:
1. As of the date of issuance of this legal opinion, the company’s current price adjustment and cancellation have obtained the necessary approval and authorization at this stage;
2. The contents of this price adjustment and this cancellation comply with the relevant provisions of the administrative measures and the incentive plan;
3. Matters related to the reduction of registered capital and the amendment of the articles of association due to this cancellation need to be submitted to the general meeting of shareholders for deliberation. After the deliberation and approval of the general meeting of shareholders, the company shall perform the corresponding information disclosure obligations and go through the procedures of reducing registered capital in accordance with the provisions of relevant laws, regulations and normative documents.
This legal opinion is made in triplicate.
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