Guangdong Zhongsheng Pharmaceutical Co.Ltd(002317)
About the incentive objects of the company’s restricted stock incentive plan in 2022
Announcement of granting restricted shares
The company and all members of the board of directors guarantee that the information disclosed is true, accurate and complete without false records, misleading statements or major omissions.
Important content tips:
● stock source: the company has repurchased RMB A-share common stock from the secondary market
● restricted stock grant date: March 1, 2022
● grant price of restricted shares: 5.58 yuan / share
● number of restricted stock grants: 5780000 shares
● number of restricted stock grants: 77
Guangdong Zhongsheng Pharmaceutical Co.Ltd(002317) (hereinafter referred to as “the company”) the 2022 restricted stock incentive plan (hereinafter referred to as “the incentive plan” and “the incentive plan”) has been deliberated and approved by the company’s first extraordinary general meeting in 2022, and the grant conditions specified in the incentive plan have been met. According to the authorization of the company’s first extraordinary general meeting in 2022, The 17th meeting of the 7th board of directors and the 10th meeting of the 7th board of supervisors deliberated and adopted the proposal on granting restricted shares to the incentive objects of the company’s restricted stock incentive plan in 2022, and determined that the grant date of the incentive plan is March 1, 2022. The relevant matters are explained as follows:
1、 Brief introduction of incentive plan
(I) types of underlying stocks involved in the incentive plan
The subject stock involved in this incentive plan is RMB A-share common stock.
(II) stock source of the incentive plan
The source of the underlying stock involved in the incentive plan is the company’s RMB A-share common stock that has been repurchased from the secondary market.
(III) number of restricted shares granted
The number of restricted shares granted by the incentive plan is 5840000 shares, accounting for about 0.72% of the total share capital of the company at the time of announcement of the draft incentive plan. This grant is a one-time grant without reserved rights and interests.
(IV) distribution of restricted shares granted to incentive objects
The distribution of restricted shares granted by the incentive plan among incentive objects is shown in the table below:
Proportion of restricted shares granted to the project to the number of restricted shares granted to the total number of votes (10000 shares) on the day of announcement of the plan proportion of total share capital
Middle management, core technology and business backbone
(79 persons) 584.00 100.00% 0.72%
Total 584.00 100.00% 0.72%
Note: 1. The shares of the company granted by any of the above incentive objects through all effective equity incentive plans do not exceed 1% of the total share capital of the company. The total number of subject shares involved in all effective incentive plans of the company shall not exceed 10% of the total share capital of the company when the equity incentive plan is submitted to the general meeting of shareholders.
2. The difference in mantissa between the sum of the above total and each detailed number is caused by rounding. (V) the sales restriction period of the incentive plan and the arrangement for lifting the sales restriction
The restricted stock sales period of the incentive plan is 12 months, 24 months and 36 months respectively from the date of grant of restricted stock. The restricted shares granted to the incentive object due to the conversion of capital reserve into share capital, stock dividend, stock subdivision and allotment shall be restricted at the same time, and shall not be sold in the secondary market or transferred in other ways. The release period of such shares is the same as that of restricted shares.
If the conditions for lifting the restrictions on sales in the current period are not fulfilled, the restricted shares shall not be lifted or deferred to the next period. After the expiration of the restriction, the company will handle the lifting of the restriction for the incentive objects who meet the conditions for lifting the restriction. The restricted shares held by the incentive objects who do not meet the conditions for lifting the restriction will be repurchased and cancelled by the company according to the repurchase principle stipulated in this incentive plan.
The release period of restricted shares granted by the incentive plan and the release schedule of each period are shown in the table below:
Lifting of restrictions on sales arrangement lifting of restrictions on sales time lifting of restrictions on sales proportion
The first release period is from the first trading day 12 months after the date of grant of restricted shares to 40%
Ending on the last trading day within 24 months from the date of grant of institutional shares
The second release period is from the first trading day 24 months after the date of grant of restricted shares to 30%
Ending on the last trading day within 36 months from the date of grant of institutional shares
The third release period is from the first trading day after 36 months from the date of grant of restricted shares to 30%
Ending on the last trading day within 48 months from the date of grant of institutional shares
(VI) performance assessment requirements of the incentive plan
1. Company level performance assessment requirements
The assessment year of the incentive plan is three fiscal years from 2022 to 2024, one in each fiscal year. The annual performance assessment objectives of restricted stocks are shown in the table below:
Performance evaluation objective of lifting the sales restriction arrangement
The first sales restriction lifting period is based on 2021, and the growth rate of operating revenue in 2022 is not less than 10% or the growth rate of net profit in 2022 is not less than 12%;
The growth rate of net profit in 2023 is not lower than that in 2023, or the growth rate of net profit in 2023 is not lower than that in 2023;
The third period of lifting restrictions on sales is based on 2021. The growth rate of operating revenue in 2024 is not less than 33% or the growth rate of net profit in 2024 is not less than 40%.
Note: the above “operating income” is based on the parent company Guangdong Zhongsheng Pharmaceutical Co.Ltd(002317) and its subsidiaries Guangdong Zhongsheng Pharmaceutical Trading Co., Ltd., Guangdong South China Pharmaceutical Group Co., Ltd., Guangdong Xianqiang Pharmaceutical Co., Ltd., Guangdong Yishu Pharmaceutical Co., Ltd., Yunnan Yikang Pharmaceutical Co., Ltd., Guangdong prospect ophthalmology investment management Co., Ltd Dongguan Zhongsheng Enterprise Management Co., Ltd. is the operating income within the scope of merger.
The above “net profit” refers to the share based payment expenses arising from the incentive plan and the employee stock ownership plan in 2022, which are deducted from the parent company Guangdong Zhongsheng Pharmaceutical Co.Ltd(002317) and its subsidiaries, Guangdong Zhongsheng Pharmaceutical Trading Co., Ltd., Guangdong South China Pharmaceutical Group Co., Ltd., Guangdong Xianqiang Pharmaceutical Co., Ltd., Guangdong Yishu Pharmaceutical Co., Ltd., Yunnan Yikang Pharmaceutical Co., Ltd Guangdong prospect ophthalmology Investment Management Co., Ltd. and Dongguan Zhongsheng Enterprise Management Co., Ltd. are the net profits within the scope of merger.
If the company fails to meet the above performance assessment objectives, the restricted shares that can be lifted in the corresponding assessment year of all incentive objects shall not be lifted, and the company shall repurchase and cancel them at the grant price.
2. Performance appraisal requirements at individual level
The individual performance evaluation results of incentive objects shall be organized and implemented in accordance with the relevant provisions of the company’s current salary and evaluation system. The proportion (n) of individual level sales restriction lifting corresponding to each assessment grade is as follows:
Evaluation criteria (grade): s, a, B + B, C, D
Proportion of lifting restrictions at the individual level (n) 100% 90% 0%
The sales restriction can only be lifted if the incentive object meets the above performance appraisal objectives at the company level and the individual post performance appraisal standards in the previous year. The specific proportion of lifting the sales restriction shall be determined according to the individual performance appraisal results of the incentive object.
The actual amount of sales restriction lifted by the incentive object in the current year = the amount of sales restriction lifted by the individual in the current year × Proportion of sales restrictions lifted at the individual level (n).
The incentive object shall lift the sales restriction according to the actual lifting limit of the individual in each assessment year. The restricted shares that cannot be lifted due to the assessment results shall be repurchased and cancelled by the company according to the grant price.
If the company / company’s shares change due to the economic situation, market conditions and other factors, and it is difficult to achieve the incentive purpose by continuing to implement the incentive plan, the board of directors and / or the general meeting of shareholders may decide to cancel the restriction or terminate the incentive plan for a batch / batches of restricted shares that have not been lifted.
2、 Relevant approval procedures of the incentive plan have been performed
(I) on February 11, 2022, the 16th meeting of the seventh board of directors of the company deliberated and adopted the proposal on the company’s 2022 restricted stock incentive plan (Draft) and its summary, the proposal on the measures for the administration of the implementation and assessment of the company’s 2022 restricted stock incentive plan, and the proposal on submitting the general meeting of shareholders to authorize the board of directors to handle matters related to equity incentive, The ninth meeting of the seventh board of supervisors of the company deliberated and adopted relevant proposals. The independent directors of the company expressed their independent opinions. Beijing Hairun Tianrui law firm hired by the company issued legal opinions on matters related to the incentive plan.
(II) from February 14, 2022 to February 23, 2022, the company publicized the names and positions of the incentive objects granted by the incentive plan in the company’s internal office system. As of the expiration of the publicity period, the board of supervisors of the company has not received any objection from any organization or individual to the incentive objects.
On February 25, 2022, the company disclosed the verification opinions and publicity statement of the board of supervisors on the list of incentive objects of the company’s restricted stock incentive plan in 2022.
(III) on March 1, 2022, the first extraordinary general meeting of the company in 2022 deliberated and approved the proposal on the company’s 2022 restricted stock incentive plan (Draft) and its summary, the proposal on the measures for the administration of the implementation and assessment of the company’s 2022 restricted stock incentive plan, and the proposal on requesting the general meeting of shareholders to authorize the board of directors to handle matters related to equity incentive. The company’s implementation of the restricted stock incentive plan in 2022 was approved, and the board of directors was authorized to determine the grant date, grant restricted shares to the incentive objects when the incentive objects meet the conditions, and handle all matters necessary for the grant.
(IV) on March 1, 2022, the 17th meeting of the seventh board of directors and the 10th meeting of the seventh board of supervisors of the company deliberated and approved the proposal on adjusting the list and number of incentive objects of the company’s restricted stock incentive plan in 2022 and the proposal on granting restricted shares to incentive objects of the company’s restricted stock incentive plan in 2022. The board of supervisors of the company verified the list of incentive objects granted and expressed their consent, and the independent directors expressed their consent. Beijing Hairun Tianrui law firm hired by the company issued a legal opinion on the adjustment and grant of the incentive plan.
3、 Notes of the board of directors on meeting the grant conditions
According to the provisions of the incentive plan, the company shall grant restricted shares to the incentive object only when the following conditions are met at the same time:
(I) the company is not under any of the following circumstances:
1. The financial and accounting report of the most recent fiscal year is an audit report with a negative opinion or unable to express an opinion issued by a certified public accountant;
2. The internal control of the financial report of the latest fiscal year is an audit report with a negative opinion or unable to express an opinion issued by a certified public accountant;
3. Failure to distribute profits in accordance with laws and regulations, the articles of association and public commitments within the last 36 months after listing;
4. Equity incentive is not allowed according to laws and regulations;
5. Other circumstances recognized by the CSRC.
(II) the incentive object does not have any of the following situations:
1. Being identified as an inappropriate candidate by the stock exchange within the last 12 months;
2. In the last 12 months, it has been identified as an inappropriate candidate by the CSRC and its dispatched offices;
3. Being administratively punished by the CSRC and its dispatched offices or taking market entry prohibition measures for major violations of laws and regulations in the last 12 months;
4. Those who are not allowed to serve as directors or senior managers of the company as stipulated in the company law;
5. Those who are not allowed to participate in the equity incentive of listed companies according to laws and regulations;
6. Other circumstances recognized by the CSRC.
After careful verification, the board of Directors believes that neither the company nor the incentive object has occurred or does not belong to any of the above circumstances, and the granting conditions of the incentive plan have been met.
4、 Specific circumstances of restricted stock grant
(I) grant date: March 1, 2022
(II) number of shares granted: 5780000 shares
(III) stock source: the company has repurchased RMB A-share common shares from the secondary market (IV) number of grants: 77
(V) grant price: 5.58 yuan / share
(VI) the restricted shares granted by the incentive plan are distributed among all incentive objects
