Shanghai Guangfa law firm
About Tellgen Corporation(300642)
Issues related to stock options and restricted stock incentive plan in 2020
Legal opinion
Tel: 02158358013 | Fax: 02158358012
website: http://www.gffirm.com. |Email: [email protected].
Office address: 26th floor, Taikang Insurance Building, No. 429, Nanquan North Road, Shanghai Postal Code: 200120
Shanghai Guangfa law firm
About Tellgen Corporation(300642)
Legal opinions on matters related to 2020 stock option and restricted equity incentive plan
To: Tellgen Corporation(300642)
Shanghai Guangfa law firm (hereinafter referred to as “the firm”) has accepted the entrustment of Tellgen Corporation(300642) (hereinafter referred to as “the company”) as the special legal adviser for the adjustment and cancellation of some stock options and the repurchase and cancellation of some restricted shares involved in the 2020 stock option and restricted stock incentive plan (hereinafter referred to as “the 2020 stock incentive plan”) The repurchase and cancellation of some restricted shares shall be carried out in accordance with the securities law of the people’s Republic of China (hereinafter referred to as the “Securities Law”), the company law of the people’s Republic of China (hereinafter referred to as the “company law”), the measures for the Administration of equity incentive of listed companies (hereinafter referred to as the “administrative measures”) and other laws and regulations issued by the China Securities Regulatory Commission (hereinafter referred to as the “CSRC”) This legal opinion is issued in accordance with the relevant provisions of normative documents, the Tellgen Corporation(300642) articles of Association (hereinafter referred to as the “articles of association”), the Tellgen Corporation(300642) 2020 stock option and restricted equity incentive plan (Draft) (hereinafter referred to as the “2020 equity incentive plan (draft)”), and in accordance with the business standards, ethics and the spirit of diligence recognized by the lawyer industry.
The exchange issues legal opinions in accordance with the facts that have occurred or exist before the issuance date of this legal opinion, the current laws and regulations of China and the relevant provisions of the CSRC, and declares as follows: the exchange and its handling lawyers in accordance with the securities law In accordance with the provisions of the measures for the administration of securities legal business of law firms and the rules for the practice of securities legal business of law firms (for Trial Implementation) and the facts that have occurred or exist before the date of issuance of this legal opinion, they have strictly performed their statutory duties, followed the principles of diligence and good faith, and conducted sufficient verification and verification to ensure that the facts identified in this legal opinion are true, accurate and complete, The concluding opinions issued are legal and accurate, without false records, misleading statements or major omissions, and shall bear corresponding legal liabilities.
In the process of investigation for the issuance of this legal opinion, the company guarantees that it has provided the original written materials and duplicate materials deemed necessary by the exchange for the issuance of this legal opinion, and ensures that the above documents are true, accurate and complete, that all signatures and seals on the documents are true, and that the copies are consistent with the original.
The exchange agrees to take this legal opinion as a necessary legal document for the company’s equity incentive plan, report or announce it together with other materials, and bear corresponding legal liabilities for the legal opinion issued in accordance with the law. This legal opinion is only for the purpose of adjusting and canceling some stock options, adjusting and repurchasing and canceling some restricted shares, and shall not be used for any other purpose without the prior written consent of the exchange.
In accordance with the requirements of the law and in accordance with the business standards, ethics and the spirit of diligence recognized by the lawyer industry, our lawyers issue the following legal opinions on the adjustment of the company.
1、 Approval and authorization of matters related to this equity incentive plan
The lawyer of the firm consulted the relevant meeting materials of the company on the matters of the equity incentive plan. According to the verification of our lawyers, the matters related to the equity incentive plan of the company have been approved and authorized as follows:
(I) approval and authorization of 2020 equity incentive plan
1. On December 14, 2020, the company held the second meeting of the third board of directors and the second meeting of the third board of supervisors, deliberated and adopted the proposal on the company’s 2020 stock option and restricted stock incentive plan (Draft) and its summary, and the proposal on the company’s measures for the implementation and assessment of 2020 stock option and restricted stock incentive plan. Independent directors have expressed their independent opinions on the incentive plan. The board of supervisors checked the list of incentive objects and issued verification opinions.
2. The company publicized the list of incentive objects within the company from December 15, 2020 to December 24, 2020. During the publicity period, the board of supervisors of the company did not receive any objection related to the proposed incentive objects of the incentive plan, and disclosed the verification opinions and publicity statement of Tellgen Corporation(300642) board of supervisors on the list of objects of the company’s 2020 stock option and restricted stock incentive plan on December 25, 2020.
3. On December 30, 2020, the company held the fourth extraordinary general meeting of shareholders in 2020, The proposal on the company’s 2020 stock option and 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 2020 stock option and restricted stock incentive plan, and the proposal on submitting the general meeting of shareholders of the company to authorize the board of directors to handle matters related to the company’s 2020 stock option and restricted stock incentive plan were reviewed and approved. On the same day, the company disclosed Tellgen Corporation(300642) the self inspection report on the trading of the company’s shares by insiders and incentive objects of the 2020 stock option and restricted stock incentive plan.
4. On January 15, 2021, the company held the third meeting of the third board of directors and the third meeting of the third board of supervisors, deliberated and adopted the proposal on adjusting the relevant matters of the 2020 stock option and restricted stock incentive plan and the proposal on granting stock option and restricted stock to incentive objects. In view of one incentive object voluntarily giving up 60000 stock options and 10000 restricted shares to be granted to him by the company for personal reasons, the board of directors of the company agreed to adjust the list of incentive objects and the number of rights and interests granted in the equity incentive plan. The number of incentive objects was adjusted from 36 to 35, the number of stock options was adjusted from 1.79 million to 1.73 million, and the number of restricted shares was adjusted from 390000 to 380000; In view of the achievement of the grant conditions specified in the equity incentive plan, it is agreed to grant 1.73 million stock options and 380000 restricted shares to 35 incentive objects on January 15, 2021.
Independent directors have expressed their independent opinions on matters related to the equity incentive plan.
5. On August 20, 2021, the company held the seventh meeting of the third board of directors and the fifth meeting of the third board of supervisors, deliberated and adopted the proposal on adjusting the relevant matters of 2020 stock option and restricted stock incentive plan. In view of the company’s implementation of the equity distribution plan in 2020, it is agreed that the option exercise price of 2020 equity incentive plan will be adjusted from 54.02 yuan / share to 53.62 yuan / share, and the repurchase price of restricted shares will be adjusted from 27.01 yuan / share to 26.61 yuan / share. Independent directors have expressed their independent opinions on this adjustment.
6. On October 26, 2021, the company held the 8th meeting of the 3rd board of directors and the 6th meeting of the 3rd board of supervisors, deliberated and approved the proposal on adjusting the relevant matters of 2020 stock option and restricted stock incentive plan and the proposal on canceling some stock options and repurchasing and canceling some restricted shares. In view of the company’s implementation of the 2021 semi annual equity distribution plan, it is agreed that the number of options in the 2020 equity incentive plan will be adjusted from 1.73 million to 3.114 million, the exercise price will be adjusted from 53.62 yuan / share to 29.79 yuan / share, the number of restricted shares will be adjusted from 380000 shares to 684000 shares, and the repurchase price will be adjusted from 26.61 yuan / share to 14.78 yuan / share; Since one incentive object of the company resigned for personal reasons and no longer qualified as an incentive object, it was agreed to adjust the number of incentive objects and rights and interests and cancel 108000 stock options granted but not yet exercised. At the same time, the Company repurchased and cancelled all restricted shares granted but not yet lifted. The number of restricted shares repurchased and cancelled was 18000 and the repurchase price was 14.78 yuan / share, The repurchase funds are the company’s own funds. Independent directors have expressed their independent opinions on the above matters.
On April 22, 2022, the company held the 10th meeting of the third board of directors and the 8th meeting of the third board of supervisors, The proposal on adjusting the relevant matters of 2020 stock option and restricted stock incentive plan, the proposal on canceling some stock options and repurchasing and canceling some restricted stocks, and the proposal on the achievement of the first exercise of stock option and restricted stock incentive plan in 2020 / lifting of restrictions on sale period / lifting of restrictions on sale conditions were reviewed and approved. In view of the fact that the conditions for exercise / release of restrictions on sale in the first exercise / release period stipulated in the equity incentive plan have been partially met, the proportion of exercise / release of restrictions on sale at the company level is 58.23%, and the proportion of exercise / release of restrictions on sale at the individual level is 100%. It is agreed that the total number of stock options that can be exercised by 34 incentive objects this time is adjusted to 437596, and the exercise price is 29.79 yuan / share, and the total number of restricted shares this time is 96942; In view of the company’s plan to implement the profit distribution plan for 2021, it is agreed that the option exercise price of 2020 equity incentive plan will be adjusted from 29.79 yuan / share to 29.54 yuan / share, and the restricted stock repurchase price will be adjusted from 14.78 yuan / share to 14.53 yuan / share; In view of the fact that the conditions for exercise / release of restrictions in the first exercise / release period stipulated in the equity incentive plan are partially met, the proportion of exercise / release of restrictions at the company level is 58.23%, the proportion of exercise / release of restrictions at the individual level is 100%, a total of 313904 options are agreed to be cancelled, 69558 restricted shares are repurchased, and the repurchase price is 14.53 yuan / share. The independent directors expressed their independent opinions on the adjustment and repurchase cancellation.
It is considered that the necessity of the stock repurchase plan and the adjustment / cancellation of the restrictions on the exercise of stock rights in 2020 have been in line with the provisions of the stock repurchase plan and the administrative rules for the year 2020, and the relevant restrictions on the exercise of stock rights have been obtained.
2、 Specific arrangements for partial achievements of the first exercise / lifting of restrictions on sale period of 2020 equity incentive plan
(I) expiration of waiting / lock up period
According to the provisions of the 2020 equity incentive plan (Draft), the first exercise / lifting of the restriction period of the 2020 equity incentive plan implemented by the company is from the first trading day 15 months after the completion of the grant registration to the last trading day 27 months after the completion of the grant registration. The grant date of stock option and restricted stock in 2020 equity incentive plan is January 15, 2021, and the registration of stock option is completed
The listing date of restricted shares is January 29, 2021, and the listing date of restricted shares is February 5, 2021. The first waiting period / lock up period of 2020 equity incentive plan is about to expire.
(II) conditions for exercise / release of restrictions
1. 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, 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.
2. 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.
3. Company level performance assessment requirements
According to the management measures for the implementation and assessment of 2020 stock option and restricted stock incentive plan, the assessment year of the incentive plan is four fiscal years from 2021 to 2024, and one assessment is made in each fiscal year. The corresponding assessment year of the first exercise period / release period is 2021, and the target value (AM) and trigger value (an) set to compare the growth rate in the same period in 2019 are 70% and 44% respectively. According to the audit report (xksbz [2022] No. za11088) issued by Lixin Certified Public Accountants (special general partnership), the company realized an operating revenue of 65458860663 yuan in 2021, with an increase rate of 48.28% over the same period in 2019, meeting the trigger value of the first exercise period / lifting the restriction period, and the exercise / lifting the restriction ratio at the company level was 58.23%.
4. Performance appraisal requirements at individual level
According to the measures for the administration of the assessment of the implementation of the 2020 stock option and restricted stock incentive plan, the incentive objects can exercise their rights in part or in full only if the performance assessment of the previous year meets the trigger conditions
