Notice on Beijing Jiaxun Feihong Electrical Co.Ltd(300213) gem notice [2022] No. 212 Beijing Jiaxun Feihong Electrical Co.Ltd(300213) board of directors:
Your company disclosed the 2022 employee stock ownership plan (Draft) (hereinafter referred to as the “draft”) on April 22, 2022. Our department is concerned about this. Please supplement the following matters:
1. According to the draft, the price of the shares transferred to your company’s repurchase account in this ESOP is 3 yuan / share, which is 43.5% of your company’s average repurchase price of 6.89 yuan / share. A total of 7 directors and senior managers of your company intend to participate in this ESOP, and the total share granted accounts for 70.23% of the total share of this ESOP, of which the share granted by Chairman, general manager and actual controller Lin Jing accounts for 45.91% of the total share of this ESOP. If the holder of the employee stock ownership plan waives the participation qualification, the shares he intends to participate in and hold can be declared by other qualified participants. The salary and assessment committee of the board of directors of the company can adjust the list of participants and their shares according to the actual situation of employees.
(1) Please clarify the basis, rationality and fairness of the discount in the transfer price of this ESOP, and whether it complies with the basic principle of “equal rights and interests with other investors” in the guiding opinions on the pilot implementation of ESOP by listed companies.
(2) Please explain in detail the criteria and basis for determining the shares granted to directors and senior managers in this ESOP, and whether there is a situation of transferring benefits to directors and senior managers, especially the actual controller.
(3) Please explain in detail the basis, legality and rationality of the list of participants and their shares that can be adjusted by the remuneration and assessment committee of the board of directors, and whether there is any unclear authorization and damage to the interests of other shareholders.
Independent directors are requested to check and express clear opinions.
2. The draft shows that the underlying shares involved in this ESOP are unlocked in three times, and each unlocking needs to meet the company’s performance assessment objectives of each year. If the company fails to meet the performance assessment requirements of the company level in a certain year, the unlocked shares in the corresponding unlocking period shall not be unlocked, and the unlocked part can be deferred to the next unlocking period and assessed according to the performance assessment objectives corresponding to the unlocking period. The management committee has the right to recover the unlocked shares caused by the failure to meet the assessment objectives at the individual level, and designate the object to transfer these shares according to the original contribution amount.
(1) Please explain in detail the specific meaning of “each unlocking needs to meet the company’s performance evaluation objectives of each year”. Your company will postpone the unlocked part to the next unlocking period, the basis, legality and compliance of evaluation and unlocking.
(2) Please explain whether the deferred assessment and unlocking allowed in the case of discount in the transfer price is in line with the principle of “taking responsibility for the profits and losses and taking the risks”, and whether there is a situation of transferring benefits to the participants in a disguised manner and damaging the interests of other shareholders.
(3) In combination with the above reply, please explain in detail the specific consideration of choosing the employee stock ownership plan rather than the equity incentive plan, and whether there is any deliberate circumvention of the relevant provisions of Article 25 of the administrative measures for equity incentive of listed companies on the lifting of sales restrictions.
(4) Please explain in detail the basis and legal compliance of the management committee’s right to designate the object to receive the unlocked shares caused by the failure of personal assessment.
Ask a lawyer to check and express clear opinions.
3. The draft shows that your company takes the Black Scholes model (B-S model) as the basic pricing model, and the lock-in cost that the holder needs to pay to obtain reasonable expected income after future ownership is deducted as the fair value of the employee stock ownership plan. The accounting standards for Business Enterprises No. 11 – share based payment stipulates that for equity instruments such as options granted with an active market, the enterprise shall determine their fair value according to the quotation in the active market. For equity instruments such as options granted without an active market, the enterprise shall adopt option pricing model to determine the fair value.
(1) In combination with the above provisions, please explain the specific basis and rationality of the B-S model used to determine the fair value of this ESOP, and whether it complies with the relevant provisions of the accounting standards for Business Enterprises No. 11 – share based payment.
(2) Your company is requested to supplement and calculate the fair value of the employee stock ownership plan determined by the quotation in the active market and the amortization of estimated expenses in future years, and explain the difference between the above results and the results of B-S model and its impact on the main data of financial statements.
Ask the accountant to check and give clear opinions.
Please make a written statement on the above matters, submit the relevant explanatory materials to our department for disclosure before April 29, 2022, and send a copy to the listed company supervision division of Beijing Securities Regulatory Bureau.
This is to inform you.
Gem company management department
April 22, 2022
